PDS Biotechnology Corporation (NASDAQ:PDSB) Q3 2023 Earnings Call Transcript

PDS Biotechnology Corporation (NASDAQ:PDSB) Q3 2023 Earnings Call Transcript November 14, 2023

Operator: Greetings and welcome to the PDS Biotechnology Third Quarter 2023 Earnings Call and Webcast. At this time, all participants are in a listen-only mode. [Operator Instructions]. As a reminder, this conference is being recorded. I’d now like to turn the conference over to your host, Nicole Jones, Investor Relations for PDS Biotechnology. Thank you. You may begin.

Nicole Jones: Good morning and welcome to PDS Biotechnology’s third quarter 2023 earnings conference call and webcast. On the call from the company are Dr. Frank Bedu-Addo, Chief Executive Officer; Matt Hill, Chief Financial Officer, and Dr. Lauren V. Wood, Chief Medical Officer. Earlier this morning, PDS Biotech issued a press release announcing financial results for the quarter ended September 30, 2023. We encourage everyone to read the press release as well as PDS Biotech’s report on Form 10-Q, which will be filed with the SEC shortly. The company’s press release is available on the PDS website at pdsbiotech.com. In addition, this conference call is being webcast and will be archived on the company website for future reference.

A biomedical laboratory with a molecular biologist wearing a lab coat studying test samples under a microscope.

Before we begin, we need to remind everyone that on today’s call, the company will be making forward-looking statements regarding regulatory and clinical candidate development plans, as well as research activities. Certain information in this presentation may include forward-looking statements, including within the meaning of Section 21(e) of the United States Securities Exchange Act of 1934, as amended, and Section 27(a) of the United States Securities Act of 1933, as amended, concerning PDS Biotechnology Corporation and other matters. These statements may discuss goals, intentions, and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise based on the current beliefs of the company’s management, as well as assumptions made by and information currently available to management.

These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted. A description of these risks can be found in PDS Biotech’s most recent filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this conference call. Except to the extent required by applicable law or regulation, PDS Biotech undertakes no obligation to update the forward-looking statements included today to reflect subsequent events or circumstances. I’ll now hand the call over to Dr. Frank Bedu-Addo. Frank?

Frank Bedu-Addo : Thank you, Nicole, and welcome to everyone to our third quarter 2023 conference call. We are excited about the strides we are making, fueled by our commitment to developing groundbreaking therapies that revolutionized cancer treatments based on our proprietary reverse immune platform. And IL 12 fused antibody-drug conjugate PDS01ADC, formerly known as PDS0301 or M9241. The clinical data stemming from the PDS01ADC asset, which we acquired nearly a year ago from Merck KGaA Darmstadt, Germany, continues to advance and mature, reinforcing our belief that this innovative ADC could potentially address the safety and efficacy limitations that have been observed with cytokine therapy to date. The combination of adverse immune-based approaches and our IL 12 ADC has demonstrated the potential to overcome the limitations of effectively treating advanced cancer and extending patients’ lives with immunotherapy.

Currently, we have safety data for over 250 patients who have been treated with PDS01ADC, supporting the early data, suggesting that this innovative ADC effectively directs the IL 12 into the tumor, therefore reducing its presence in the circulating blood and subsequently limiting the adverse events that have been reported with other Cytokines. In addition, the increased and sustained presence of IL 12 in the tumor has been shown in our ongoing trials to enhance the clinical activity. This novel modification of IL 12 therefore presents us with a unique opportunity to address a broad range of cancers. We continue to move this ADC forward with various promising approaches. It is being developed as a monotherapy. It’s also being developed in combination with Versamune-based approaches and also in combination with other standards of care.

I will talk more about these updates on PDS01ADC later on the call. We are pleased with our current progress driven by our mission to develop groundbreaking therapies that transform cancer treatment. Our immediate objective revolves around progressing our primary clinical candidate, PDS0101 to the market. PDS0101 represents a novel investigational HPV16 targeted immunotherapy that triggers a potent and precise T-cell response against HPV16 positive cancers. This quarter, we made significant progress on our adverse immune platform. Specifically, with our Phase II VERSATILE-002 trial. We hosted a positive key opinion leader or KOL event that included key opinion leaders who have been part of the VERSATILE-002 trial and others who have not been part of the trial and are leaders in the head and neck cancer field.

It was important to understand how head and neck cancer expert oncologist view the trial results and the potential for PDS0101 in KEYTRUDA to become the standard of care for recurrent or metastatic head and neck cancer. Overall, the experts were enthusiastic about the updated VERSATILE-002 data and the planned initiation of the Phase III VERSATILE-003 trial. At this event, we presented data from both the immune checkpoint inhibitor naive or ICI naive, and the ICI resistance patient cohorts, both of which demonstrated impressive patient overall survival. For today’s discussion on the VERSATILE-002 trial, we will focus on the ICI naive group. With this population. We reported a 24-month overall survival rate of 74%, which means that on the combination of PDS0101 in KEYTRUDA, the probability that a patient will live at least two years is 74%.

To put this number into perspective, published 24 months overall survival rates for approved ICIs is less than 30%, meaning that, on today’s approved therapies, the probability that the patient will live for at least two years is only about 30%. The VERSATILE-002 data suggests that patients are living longer when treated with the PDS0101 plus KEYTRUDA combination. It is important to note that disease control, which includes stable disease and tumor shrinkage was seen in 81% of patients. Tumor Shrinkage was reported in 60% of patients, and a confirmed objective response rate or ORR of 27% was reported based on investigator assessment. With respect to safety, the combination continues to be well tolerated with 13% of patients having Grade 3 treatment-related toxicities and no patients having any Grade 4 or Grade 5 treatment-related events.

To put this in context, in KEYNOTE-048, it is reported that 17% of patients on KEYTRUDA monotherapy experience Grade 3 to Grade 5 treatment-related toxicities, and 72% of patients on KEYTRUDA plus chemotherapy experience Grade 3 to Grade 5 treatment-related toxicities. With this data, we believe that we are on track to revolutionize the treatment of head and neck cancer with improved clinical outcomes and better tolerability. Furthermore, in October 2023, preliminary biomarker data from the VERSATILE 002 trial was presented at the European Society for Medical Oncology or ESMO Congress 2023. The combination of PDS0101 in KEYTRUDA appears to be promoting a predominant TH1 immunologic profile that is associated with enhanced CD8 killer T-cell induction and activity.

The combination also led to subsequent decreases in the population of CD8 killer T-cells in the circulating blood. We are encouraged that these observations align with other Phase II studies reporting that PDS0101 induced poly functional CD8 killer T-cells do not reside in the blood, but rather traffic to tumors. These data support the two-year 74% overall survival rate reported in VERSATILE 002. Beyond the VERSATILE 002 trial, our focus has remained on steadily advance in preparations for our Phase III VERSATILE 003 trial. In October, 2023, we announced feedback from the FDA regarding the amended investigational new drug application, and thereafter feedback on the final clinical trial protocol. We currently have up to 60 sites selected globally and are going through the qualifying process.

As anticipated, the FDA reviewed Phase III clinical trial design has been pivotal to our business development discussions, which has yielded positive insights from prospective partners. Our clinical and medical teams are assessing final details of the trial, and therefore we anticipate VERSATILE 003 will now start in the first quarter of 2024. We’ll keep you updated on our next steps as we progress toward trial initiation. Now, turning to IMMUNOCERV, in October, 2023, data from the Phase II clinical trial were featured in an oral presentation of the American Society for Radiation Oncology Annual Meeting known as ASTRO. These data demonstrated that PDS0101 in combination with standard-of-care chemoradiotherapy was associated with a rapid decline in HPV positive circulating tumor DNA.

At five weeks of treatment, ctDNA clearance of 92% was reported with PDS0101, whereas 53% clearance was observed in patients receiving standard-of-care chemoradiotherapy alone. These biomarker data support the 100% response rate in patients receiving PDS0101 and standard of care, which was reported at SITC 2022. As this trial continues to — as PDS010ADC. PDS010ADC is a novel ADC or antibody-drug conjugate that enhances the proliferation, potency, and longevity of T-cell and IL 12 in the tumor. Let’s begin by discussing the compelling updated data from the National Cancer Institute LED triple combination trial that was reported on November 9th. This study is a Phase II trial of PDS0101, PDS01ADC, and uninvestigational ICI. This combination has undergone evaluation across multiple HPV positive cancers, encompassing anal, cervical, head and neck, vaginal, and vulva cancers in two groups of advanced cancer patients.

The ICI naive group constituted patients unresponsive to standard of care treatments that have not yet received ICI therapy. The ICI resistant group included individuals who had shown no response to multiple prior treatments, including ICI therapy. Regarding the ICI naive group, the chart shows the confirmed objective responses reported in VERSATILE-002 and the triple combination based on investigator assessment, both shown in green as well as published KEYNOTE-048 data. Notable is the objective response rate of 75% with the triple combination, and 27% with the dual combination. With KEYTRUDA monotherapy and KEYTRUDA plus chemotherapy, the published objective response rates were 19% and 36% respectively. The next figure contains updated survival data from VERSATILE-002 and the triple combination trial in green, as well as published data from KEYNOTE-048.

What is notable here is the fact that despite the lower objective response rate with PDS0101 plus KEYTRUDA, the survival benefit seen with PDS0101 plus KEYTRUDA combination as well as the triple combination appears to be similar with 24 months survival rates up 74% and 75% respectively. The triple combination also shows a compelling three-year survival of 75%. These data suggest that PDS0101 may play a significant role in extended survival in the ICI naive population, independent of objective response rate, while PDS01ADC appears to promote strong objective responses in this population. The median overall survival has not yet been reached in either the VERSATILE-002 or the triple combination studies. To contextualize published data on standard-of-care immune checkpoint inhibitors or ICIs, report that at 12 months, only 30% to 50% of these patients would typically be expected to remain alive, and less than 30% of the patients could be expected to remain alive at 24 months.

Therefore, survival associated with the PDS0101 combination rate at two years for VERSATILE-002 and three years for the triple combinations is notable. Now looking at the ICI resistant group where there’s a significant unmet medical need and no FDA-approved product. These are the patients who have failed all treatment options, including ICIs. In these ICI resistant patients with HPV positive cancers, the reported median overall survival is only about three to four months. In the ICI resistant patients, this slide shows that the published objective response rate with systemic therapies, including high-dose chemotherapy is 42%. The objective response rate was 0% with PDS0101 plus KEYTRUDA in VERSATILE-002, 5% in patients who received PDS0101 with low doses of PDS01ADC and ICI therapy, and 63% in patients who received PDS0101 with initial high doses of PDSS01ADC and ICI therapy.

Again, these data appear to demonstrate the role of PDS01ADC in promoting strong and compelling objective response rates even in late stage ICI resistant cancer patients. Let’s now take a look at the overall survival rate in ICI resistant patients. On this slide, we will see that the irrespective of objective response rate, the PDS0101 containing therapies shown by the green bars provide durable survival results. Despite the lack of confirmed objective responses with PDS0101 plus KEYTRUDA, the 12-month overall survival rate was 56% for VERSATILE-002 and 72% in the triple combination. With systemic therapies, the published 12-month overall survival rate is 36%. This data provides compelling evidence regarding the role of PDS0101 in the survival of ICI naive and ICI refractory HPV16 positive patients, and the potential role of PDS01ADC in further extending survival and also, promoting objective responses in this population.

This study provides compelling evidence that supports the potential synergy between our adverse immune-based targeted T-cell immunotherapies and our IL 12 fused antibody drug conjugate that provides the sustained presence of IL 12 in the tumor, thus providing further expansion and activation of the Versamune-induced multifunctional killer T-cells within the patient’s tumor. We believe that this data supports broader application of this combination beyond HPV positive cancer and provides a unique potential to effectively address multiple advanced. As a reminder, a safety update for this trial was announced in late December, 2022 in 50 patients. 48% of patients experienced Grade 3 treatment-related adverse events or AEs, and 4% of patients experienced Grade 4-related adverse events.

To put the safety profile in context, in the keynote 048 study. It is reported that the combination of KEYTRUDA and chemotherapy resulted in 72% of patients having Grade 3 through Grade 5 treatment-related adverse events. We are therefore pleased with a tolerability profile that is emerging for PDS01ADC, even when administered in combination with other oncology agents. As I mentioned earlier, to date, we have safety data from over 250 patients dosed with PDS01ADC. This provides further evidence that this novel modification of IL-12 may be effective in mitigating previously observed cytokine side effects while promoting improved clinical benefit and further justifies its continued development by PDS Biotech. PDS01ADC is also being studied independently of reverse immune immunotherapies.

The National Cancer Institute recently presented data for the ongoing Phase II clinical trial of PDS01ADC in combination with docetaxel chemotherapy in advanced metastatic castration-sensitive and castration-resistant prostate cancer patients at the Cytokines 2023 annual meeting. This trial is the first clinical study of an immune cytokine with docetaxel in prostate cancer. The study is investigating the safety, immune responses, and preliminary clinical activity of the combination in advanced prostate cancer patients. The trial evaluated three doses of PDS01ADC in combination with docetaxel and showed that the combination was well tolerated at all tested doses with less than 10% of patients having a Grade 4 toxicity. Most importantly, over 60% of patients had a prostate specific antigen for PSA level reduction of greater than 60%, with some patients having a 90 to 100 PSA reduction.

As shown, reduced PSA levels were documented in all 18 patients. PDS01ADC activates T-cells, natural killer cells, and natural killer T-cells while reducing the presence of immune suppressive regulatory T-cell. As a result, we believe that we now also have an opportunity to apply PDS01ADC for advanced and difficult to treat tumors by combining PDS01ADC with standard of care chemotherapy and radiation therapy. PDS01ADC is also being investigated by the National Cancer Institute in a Phase I two study in patients with intermediate and high-risk locally advanced prostate cancer in combination with radiation therapy. As mentioned previously, PDS01ADC is also being studied as a monotherapy by the National Cancer Institute in an ongoing Phase II clinical trial in Kaposi Sarcoma.

At PDS Biotech, we are highly optimistic about the potential of these novel PDS01ADC assets in cancer therapy. Switching now to preclinical development studies. The National Cancer Institute has developed a second novel approach to treating immune checkpoint inhibitor-resistant cancers by using verse immune-based immunotherapy and PDS01ADC in combination with histone deacetylase or HDAC inhibitors, another oncology standard of care. The preclinical data were presented during the recently concluded 2023 annual meeting of the Society for Immunotherapy of Cancer or SITC. In this preclinical study, superior anti-tumor activity was observed in ICI resistant tumor models with adverse immune-based immunotherapy, PDS01ADC, and acetylase, a Class 1 HDAC inhibitor.

This novel triple combination proof of concept study is under consideration as a potential approach for initial clinical studies of PDS0103 to treat Mach one specific cancers. We are encouraged by the potential of this combination. The National Cancer Institute will lead this clinical trial under our established co-operative Research and Development agreement, and we anticipate that it’ll begin in the first half of 2024. TDS Biotech has had a fruitful quarter and we are preparing to finish out the year strong as we move into 2024. To summarize, we hosted AK successful KOL event where we announced positive updated overall survival and safety data from the VERSATILE-002 trial and gained important insights from head and neck oncology leaders about the potential of PDS0101 in the treatment of HPV Positive head and neck cancer.

Preliminary biomarker data presented at ESMO from the VERSATILE-002 trial supports the reported overall survival results. The biomarker data from the IMMUNOCERV trial presented at demonstrates the role of PDS0101 in eliminating circulating tumor HPV DNA. The updated triple combination data demonstrates the role of PDS01ADC in promoting durable overall survival and objective responses even in difficult-to-treat ICI resistance patients. Data from the PDS01ADC and docetaxel trial presented at Cytokines, demonstrated tolerability of the combination and encouraging PSA biomarker results and immune responses. With that, I’d now like to turn the call over to Matt to discuss the financial summary. Matt?

Matthew Hill : Now turning to our financial results for the three months ended September 30th, 2023. Net loss for the period was approximately $10.8 million or $0.35 per basic and deleted share compared to a net loss of approximately $7.4 million or $0.26 per basic and diluted share for the three months ended September 30th, 2022. The higher net loss this quarter was primarily due to cost incurred in connection with our research and development and clinical programs. Research and development costs, which includes clinical and manufacturing expenses for the quarter ended September 30th, 2023 increased to approximately $6.4 million compared to $4.3 million for the same period of 2022. The increase of $2 million is primarily attributable to an increase of $1.3 million in clinical trial costs and $0.7 million in personnel costs, which includes $0.3 million in non-cash stock-based compensation.

General and administrative expenses for the second quarter of 2023 increased to approximately $4.1 million compared to $2.9 million for the same period of 2022. The increase of $1.2 million is primarily attributable to an increase of $0.7 million in personal costs, including $0.5 million in non-cash stock base compensation and $0.5 million investor relations costs. Our cash and cash equivalent as of September 30th, 2023 totaled approximately $54.3 million. We continue to be prudent with our cash expenditures and we believe that with initiating the VERSATILE-003 Phase III clinical trial in the first quarter of 2024. Our available cash resources will sustain our operational and research and development endeavors into the third quarter of 2024.

We expect to execute our current operational and research and development endeavors by obtaining additional capital, principally through running into collaborations, strategic alliances or license agreements with third parties and or public or private debt and or equity financing. We’ve had and continue to provide what we believe to be favorable development milestones to the market and have upcoming development milestones we believe may provide additional Catalysts to investors. At this time, this completes my financial discussion. I would like to hand the call back over to the operator for the Q&A session. Operator?

See also 30 Most Important Scientific Discoveries of All Time and 12 Cheap High Dividend Stocks To Buy Right Now.

Q&A Session

Operator: [Operator Instructions]. Our first question comes from the line of Louise Chen with Cantor Fitzgerald. Please proceed with your question.

Louise Chen : Hi, congratulations on all the progress this quarter, and thank you for taking my questions. So, I had a few questions for you. As you think about 2024, and we table set for next year, what are the key milestones, catalyst readouts that you think we should have on our radar? Secondly, how do you think about OPEX for fourth quarter ‘23 and 2024 in light of the fact that you’re going to start this VERSATILE-003 Phase III? And the last question is, when do you think we’ll see data on VERSATILE-003? Thank you.

Frank Bedu-Addo : Thank you, Louis. Thank you very much for your questions. I’ll answer two, and I’ll hand over the OPEX to Matt. But in terms of the key milestones and Catalysts, as we move into 2024, as I mentioned, key will be getting VERSATILE-003 up and running. We also have announced and stated that we do anticipate and expect the final data readouts from VERSATILE-002 sometime in the second quarter of 2024. As I also just mentioned, we do expect to initiate the PDS0103 clinical trial in Mach 1-related cancers early in 2024, at least in the first half of 2024. We also are hopeful that we will have the preliminary data from our neoadjuvant trial ongoing at the Mayo Clinic in early-stage oral cancer HPV positive oral cancer, where we are looking at PDS0101 both as a monotherapy and also in combination with KEYTRUDA.

We have not had any readouts from that study yet, and we are hopeful that we will get that in some time the first half of 2024 based upon what we’ve been informed by the PI and their goal of presenting at an upcoming conference. And also, we do expect to have additional data readouts on the immunotherapy cervical cancer trial. And so, we do have a number of potential milestones coming up as well as readouts for, and as you know, we don’t talk too much about the trials going on. Also, at the National Cancer Institute, we had the readout from the docetaxel as well as the PDS01ADC. We also have those studies ongoing in earlier stage prostate cancer locally advanced prostate cancer. We’d hopeful that we’ll see some data from that trial in 2024.

We have the monotherapy trial going to Kaposi Sarcoma. Hopefully, we’ll see some data from that trial in 2024. And so, I think we will have hopefully a pretty busy 2024 and hopefully, we’ll be able to provide quite a number of data readouts as we go through the year. In terms of the VERSATILE-003 trial, then we’ll have much more clarity on when we’ll have the data readouts. As you know, when we will be able to provide the data readout, we’ll be at our first interim data readout. Now, when we get to the first interim data readout, depends on the number of sites that we have open at the start, as well as the enrollment rates that we will encounter or that we’ll be able to achieve as the trial goes initiates, and progresses. What we are currently doing, as I mentioned, we have 60 sites that have been identified so far.

The goal is to get to a hundred sites, and what we are trying to understand now is how rapidly each site will come on board. And as we understand better how we will open the sites, and the sequence of open the sites, and how many sites will be open at any particular time, we will then able to provide much more confident in the timelines. We’ll be able to provide you as to when we will get to that interim data readout, but we are working aggressively on that now and hopefully should be able to provide that information very soon. Matt, I’ll hand over to you for the operating costs.

Matthew Hill : Thank you, Frank. I want to let you know that it’s a good question. I would say, we’ve been extremely prudent with the use of the company’s cash and capital. When you look over the last probably seven quarters or so, we burned about little north at $6 million per quarter. And with the significant number of studies that we have ongoing, not only the VERSATILE-002 trial, but also the trials with the NCI, the Its, with MD Anderson as well as Mayo. We’ve been extremely frugal in our opinion, in how we manage these costs. But as we prepare to move forward into Phase III clinical trial, obviously those costs are going to increase. Now, from the perspective of OpEx, the administrative costs will grow slightly, but we could expect that the company will incur costs in R&D of somewhere around overall costs — I’m sorry, will be somewhere around between $12 million to $15 million once the study starts up with some of that being front-loaded for the normal deposits that are need to be made to get the consultant CROs and the likes set up, which is why we — under the current circumstances of us looking at a trial beginning in Q1, we’ve got cash into Q3 of ‘24, which also gives us additional time to go out and look for the business development deals.

We had the — data come out, we’ve had the versus the NCI triple data come out. We’ve had the docetaxel data come out, we’ve had the KOL meeting, so there has been a significant number of data readouts and we’re hopeful that will be a catalyst for potential business development deals as well.

Louise Chen : Thank you. Can I just ask you one follow-up question? So, for fourth quarter ‘23, then you would expect OPEX to be similar to third quarter, or would there be some ramp-up for the start?

Frank Bedu-Addo: There will be some ramp-up in Q4 of this year. So, we spent about $10.5 million in total in Q3. So, my expectation would be around there or a little higher.

Louise Chen : Okay. Thank you.

Operator: Thank you. Our next question comes from the line of Mayank Mamtani with B. Riley Securities. Please proceed with your question.

Mayank Mamtani: Appreciate the comprehensive pipeline update. So maybe a high-level question quickly for you guys. So, given 0101 prolonged survival and the higher ORR, you seem to have the driven by 01ADC investor, one investor generally wonders if perhaps it makes sense to also evaluate triplet in first line or should we think of triplet to be more in the ICI resistance patients or maybe even being HTV agnostic? Could you just clarify how you’re thinking, relative positioning of these two programs? And then I have a couple of follow-ups.

Operator: Frank, if you’re speaking, you may be on mute.