Earnings Call Transcript - AIM Q1 2023

Operator, Operator

Hello, and welcome to the AIM ImmunoTech Quarterly Update Conference Call and Webcast. As a brief reminder, all participants are currently in a listen-only mode. Note that this webcast is being recorded at the company's request and a replay will be made available on the company's website following the end of the event. At this time, I'd like to remind our listeners that remarks made during this webcast may state management's intentions, beliefs, expectations or future projections. These are forward-looking statements and involve risks and uncertainties. Forward-looking statements on this call are made pursuant to the Safe Harbor provisions of the federal securities laws that are based on AIM's current expectations and actual results could differ materially. As a result, you should not place undue reliance on any forward-looking statements. Some of the factors that could cause actual results to differ materially from these contemplated by such forward-looking statements are discussed in the periodic reports AIM filed with the Securities and Exchange Commission. These documents are available on the Investors section of the company's website and on the Securities and Exchange Commission's website. We encourage you to review these documents carefully. Additionally, certain information contained in this webcast relates to or is based on studies, publication, surveys and other data obtained from third-party sources and the company's own estimates and research. While the company believes these third-party resources to be reliable as of the date of this presentation, it is not independently verified and makes no representation as to the accuracy, adequacy, fairness, accuracy or completeness of or that any independent source has verified any information obtained from the third-party sources. Joining us on today's call from AIM's leadership team are Thomas Equels, Chief Executive Officer; and Dr. Christopher McAleer, Scientific Officer. I'd now like to turn the call over to Mr. Equels. Please proceed.

Thomas Equels, CEO

Thank you, Operator. As mentioned, I'm Tom Equels, the CEO of AIM ImmunoTech. At AIM ImmunoTech, our motto for the company is 'Immunology for a Better Future.' We're working not just for the financial rewards that come from the type of research and development we do, but primarily to bring not just hope, but a cure to people with lethal malignancies and diseases such as long COVID through our experimental drug Ampligen. We're on target in these serious disease areas where there's a complete unmet medical need. In doing that, again, we're trying to create a better future for those, many of whom have no hope right now. With regard to our quarterly call today, those of you who attended our last call, which was just a month and a half ago, recognize that we've had significant improvement over the past 18 months in terms of progress in our clinical trials, especially in our key priority areas of pancreatic cancer, advanced recurrent ovarian cancer, and long COVID. Now I want to talk a little bit about our late-stage pancreatic cancer program, because we had a tremendous amount of data coming through our Early Access part of that program, which establishes a very clear measure and de-risks our future clinical work because, in those subjects, we're approaching 50 subjects at this point. We're seeing clear evidence of progression-free survival and overall survival. That is a cancer that is malignancy, which is projected for 2023 to be one of the top causes of cancer-related deaths in the world. So it's a big market. Advanced recurrent ovarian cancer, our data that we've gathered over the past several months, going back to April of last year, has a very strong indicator of Ampligen's potential as a therapeutic in a number of different solid tumors. In addition to the progress that we made in the clinic, we've had a number of different regulatory approvals of INDs authorizing us to go forward with placebo-controlled clinical trials, for example, in long COVID, expressing chronic fatigue-like symptoms, and for a randomized controlled Phase 2 in pancreatic cancer. So we're making strong regulatory progress that parallels these advances in the clinics, and we've also made some structural changes. We have made a world-renowned biotechnology pioneer W. Neal Burnette, the Chairman of our Scientific Advisory Board, and Nancy Bryan has joined our Board of Directors. She has a deep and strong pharmaceutical industry background, including a lot of activity that we think will be very valuable in mergers, acquisitions, and licensing. So we've improved the depth and quality of our management team significantly. Now, as to our pipeline, if you go to our website, you can get the details for this, but we have prioritized repurposing Ampligen several years ago into oncology. We have prioritized two areas of clinical development that are extremely important to the future of our company. First is pancreatic cancer. We have an Early Access Program with almost 50 subjects having been treated. This was a use authorization by the Dutch government, which has been underway since late 2016. In that program, we have demonstrated progression-free survival and overall survival based on comparison with well-matched historical controls, both in locally advanced pancreatic cancer as well as metastatic pancreatic cancer. And then advanced recurrent ovarian cancer; as you know, late-stage pancreatic cancer is almost like a death sentence, while advanced recurrent ovarian cancer is very much the same. And in advanced recurrent ovarian cancer, we're involved in a Phase 2 at the University of Pittsburgh, combining our drug Ampligen with Merck's drug pembrolizumab, also known as KEYTRUDA. In that study, we're seeing remarkable results from the preliminary data that was posted, and we're expecting a protocol-driven interim report in just a few months. It's our hope that preliminary data will be sustained in this data report set by the protocol because the preliminary data published at the AACR convention is an abstract, a late-breaking abstract, showing that Ampligen combined with pembrolizumab in cisplatin-sensitive patients is creating significant survival advantages, including complete responses and significant partial responses in a disease where that is rarely seen at all. So we're very excited about that. Our long COVID program, we've received FDA authorization to commence that. We have numerous sites that are in the final stages of getting up and running. We hope to see not only those sites open but also very rapid enrollment and dosing of subjects with the site selection we have. We have a reasonable expectation that we'll have all of these subjects treated by the end of this year or certainly in the first quarter of next year. I'm very excited about where we're at today. I’d like to take a moment now to introduce our Scientific Officer. One of the things that we've done recently too is promote Dr. McAleer to Scientific Officer for the company, and he's going to do a deep dive into some of these programs. Take it on, Chris.

Christopher McAleer, Scientific Officer

Thank you, Tom. I’m happy to be here. As Tom just pointed out, pancreatic cancer is our primary focus and that is in large part due to the positive data that was collected as part of that Early Access Program in the Netherlands. As you recall, the EAP was Ampligen as a single therapy following FOLFIRINOX in patients with both locally advanced pancreatic cancer and metastatic pancreatic ductal adenocarcinoma. That original data published in the Journal Cancers highlights the improvements in progression-free survival and overall survival over historical controls, and this graph is a reminder of that positive data. These promising results have led to the design of both our AMP-270 locally advanced study, as well as the study in metastatic cancer that I'll be discussing shortly. As we'll be opening the Erasmus Medical Center as part of both AMP-270 and the DURIPANC study, we expect new patients to be enrolled in each of those studies. We will leave this Early Access Program open as an option for patients that don't qualify for either ongoing study. While these data has led to the design of these two new studies, the EAP has continued to enroll additional subjects beyond that published in Cancers. We expect to have an updated analysis including updated Kaplan Meier Plots for progression-free and overall survival during our Q2 call. I’ll be really excited to share that data; it's quite promising. Additionally, the subsequent analysis of patient blood samples has revealed differences in gene expression profiles between patients who had stable disease after six weeks of treatment and those who had progressed. As an example of that, those with stable disease express markers of immune upregulation such as IRF4, LTB, and CD83. More importantly, it has given us insight into differential gene regulation in those who have progressed, such as ARG1 upregulation, which may mediate T-cell suppression, and ATG12 upregulation, which is implicated in autophagy. Armed with that information, we can continue to advance our understanding of Ampligen's mechanism of action as well as find additional potential targets for combinatorial therapies to ultimately improve patient outcomes. In addition to the data, the most striking information is that patients taking Ampligen have shown an increase in Ki67 positive populations of both cytotoxic T lymphocytes and T helper cells, as well as an increase in the population of CD69 positive cytotoxic T lymphocytes and T helper cells, indicating that these cells can continue to proliferate and be activated. While we need to explore these findings further, it points to the potential of Ampligen to sustain the pool of T cells and mitigate T cell exhaustion known to occur with checkpoint inhibitors, and that data has been extremely exciting. A press release and a link to that data presentation will be forthcoming as these data were recently presented by our colleagues at Erasmus Medical Center at the 2023 Pancreas Club Meeting in Chicago. These data give me evermore confidence that AMP-270 in locally advanced pancreatic cancer and the DURIPANC study in metastatic PDAC will be successful. I want to take a moment to address the AMP-270 study in more detail. We currently have the Gabrail Cancer Center in Canton, Ohio, open and they are actively screening patients. Enrollment at that site has been slower than we expected, but we are working diligently to open additional sites, as well as looking at different methodologies to increase advertisement for the Gabrail Center site that we hope will increase their enrollment. A site initiation visit will occur at the University of Nebraska Medical Center next week, and we expect that site to be open and enrolling patients before the end of May. Shortly after that, we will have an additional site initiation visit at Virginia Mason Medical Center in Seattle. Beyond that, we are in open contract negotiations with approximately 20 different sites, and plan to have additional sites in the U.S. and Europe opening by year-end. While I do expect the first patient to be enrolled in Q2, the first patient dosing may not occur until Q3 given that control patients in this particular study do not receive dosing. However, I am cautiously optimistic with the additional sites opening in the near future that we may still reach that timeline. The investigator-sponsored DURIPANC study will combine AstraZeneca's durvalumab with Ampligen following FOLFIRINOX. This is a Phase 1/2 study to investigate the safety and efficacy of that treatment. As you may know, Ampligen has shown a high combinatorial benefit with checkpoint inhibitors, specifically with the PD-1 inhibitor KEYTRUDA in both triple-negative breast cancer and advanced recurrent ovarian cancer. We believe the combination of the immune-modulating properties of Ampligen and Ampligen's ability to maintain the pools of T cells we discussed earlier, when combined with high PD-L1 expression in pancreatic cancer, makes for a very intriguing synergistic combination that we believe is likely to show great promise in extending both progression-free survival and overall survival in patients with metastatic pancreatic cancer who are desperate for a cure. There are some minor comments to the Ethics Committee that need to be addressed, but otherwise, the major hurdles for the initiation of this study have been resolved. We have speculated previously that the study will commence in Q4 of 2023, but I am cautiously optimistic about our chances of actually beating that projected timeline. To further investigate the mechanism of Ampligen's efficacy in treating cancer, we have secured a small lab facility at the Sid Martin Biotechnology hub associated with the University of Florida's UF Innovate Program. This space will allow us to update and improve protocols and methodologies pertaining to the chemistry manufacturing control sections of what we expect to be our future NDA in pancreatic cancer. This lab will supplement the chemistry lab that we have in New Jersey and will provide us with the necessary lab space to solicit NIH funding, which I am actively pursuing to help offset costs at a relatively low burden to the stockholders. I believe that the approximately $20,000 per year that we're spending for this facility is a bargain price to give us access to almost everything we need, including lab space, analytical equipment, microscopes, incubators, and the infrastructure of a world-class research facility. I think this acquisition will help to advance the fundamental biology and chemistry behind Ampligen and ensure that we are prepared for regulatory scrutiny when that day comes. While oncology is our primary focus, I would be remiss not to mention the advancements we have made in the post-COVID condition of fatigue. The AMP-518 study intends to enroll 80 patients, with 40 control and 40 Ampligen-treated in a randomized double-blind placebo-controlled fashion. The primary outcome is the PROMIS Fatigue Score with other secondary outcomes, including exploratory biomarkers such as immune cell monitoring and advanced exploratory biomarker panel analysis that we hope will shed light on disease etiology as well as provide some insight into responder population characteristics. We are hopeful that this responder population will be high based on the preliminary data we collected as part of the AMP-511 study amendments to treat patients with post-COVID conditions. The small population of patients showed improvements in their general fatigue, ability to exercise, as well as decreases in the post-exertional malaise associated with that exercise. Additionally, these patients demonstrated improvements in focus, concentration, and memory. We have agreed upon budgets and clinical trial agreements with 10 sites and expect to have all those contracts signed within the next 2 to 3 weeks. Our expectation is to ship drug in the first 2 weeks of June and have all 10 sites open and treating patients in mid to late June. Based on the site feasibility questionnaires, we anticipate enrollment will take no longer than 3 to 4 months, and the last patient will be enrolled in Q4. That’s a broad overview of the scientific and clinical advancements we've made thus far. I'll hand it back to Tom to discuss the company finances.

Thomas Equels, CEO

Thank you, Chris. Well done. To our financial position, I think you can see that we're in a very robust position, given the accomplishments that we have demonstrated over the past two years. One of the reasons for that is that much of the clinical work we've done, for example, at Erasmus, through the Early Access Program was funded through various governmental mechanisms in the Netherlands. We were actually paid a little over $600,000 for the Ampligen that we contributed to the study, and the cost of that study was funded through these other sources. Similarly, at Roswell, many of the tremendous current clinical achievements that we've made there were funded through various governmental grants, NIH, DoD, that type of thing. At the University of Pittsburgh Medical Center, the tremendous advances that we've made in advanced recurrent ovarian cancer, the Phase 2 trial with cisplatin-sensitive Ampligen plus pembrolizumab or KEYTRUDA is principally funded by a Merck Grant. That's a very significant Phase 2 study with a projected 45 subjects. So we're not talking about small potatoes here. Our financial situation is strong, and we believe we have sufficient cash to move through the end of 2024 and accomplish our clinical and regulatory goals. You can see how we've used our dollars wisely. We are moving our clinical programs at an extremely rapid pace, especially considering the size of our company. We have the cash, but we also have the partners and collaborators that we need to make this happen. You can see on this slide where we're working with AstraZeneca to combine Ampligen with its drug durvalumab for advanced pancreatic cancer, and with Merck in two areas at the University of Pittsburgh in advanced recurrent ovarian cancer: Ampligen plus KEYTRUDA at Roswell Comprehensive Cancer Center and Ampligen plus KEYTRUDA in Stage 4 triple-negative breast cancer. We’re seeing fabulous results as the data comes in from those programs. We have top-notch collaborators, research centers, and world-class researchers. Dr. Edwards is at the top of his field in ovarian cancer, Dr. Kalinsky is one of the top immuno-oncologists in the world, and Dr. Van Eijck at Erasmus is the world's preeminent pancreatic cancer specialist. We have a good team internally, and we're collaborating with the best of the best. You may ask yourself, why Ampligen? Why AIM? Why now? The reason is that we have an opportunity that presents itself right now. The biotech microcap sector has taken a beating across the board, and this allows an opportunity to take advantage of where AIM is right now. I do not believe you're going to see another company positioned like we are, with the cash, personnel, and collaborators to achieve long-term clinical successes in diseases where there are extremely serious unmet medical needs in large market segments. That's why AIM. That's why now. Our focus is on creating successes that have the opportunity to lead to big opportunities and deal opportunities down the road. One of the reasons we repurposed into oncology is that there was a tremendous unmet medical need that we thought we might be able to address, but also for the purposes of our investors and our stockholders. Look at the volume of deals in biopharma; the largest volume area is oncology deals, and the richest deals are oncology deals. We have put our focus on that target. We're aiming for a target that creates long-term value. Thank you very much. Now, if anybody has any questions, we’ll open the floor for questions.

Operator, Operator

Thank you. Our first question comes from Jim Molloy with Alliance Global Partners. Please go ahead with your questions.

James Molloy, Analyst

Hey, good morning. Thank you for taking my question. I had a question on the top three on Slide 6 on the deck you have sent out with the presentation this morning. On the top three oncology opportunities, ignoring the fourth because it's an Early Access, which of the three defined clinical trials you walk through has the nearest-term catalyst or interim catalyst? And which of those are investigator-sponsored versus AIM is controlling entirely those trials?

Christopher McAleer, Scientific Officer

The DURIPANC study is investigator-sponsored, so is the advanced recurrent ovarian cancer. The AMP-270 locally advanced pancreatic cancer is AIM controlled. In terms of the best interim data, that'll be in the advanced recurrent ovarian cancer. That's an optimal stage design. The number of patients enrolled for that Stage 1, Stage 2 design has been completed. The formal interim report is currently being drafted, and it is expected to come sometime in June. I couldn't get an exact date, but it should be in June. So in terms of the immediate timeline, it would be the recurrent ovarian cancer followed by the DURIPANC. That's the Phase 1, Phase 2 running. We expect that it's a three and three design in the Phase 1, with safety data coming in and some preliminary efficacy data likely in mid Q2 of 2024. I hope that answers your question.

James Molloy, Analyst

Thank you. And DURIPANC, that's the Ampligen, durvalumab…?

Christopher McAleer, Scientific Officer

Yes, DURIPANC is the metastatic pancreatic ductal study.

James Molloy, Analyst

All right.

Christopher McAleer, Scientific Officer

I expect it to be open-labeled. We'll have data as it progresses. For instance, I expect, based on the enrollment we have at Erasmus, for a likely transition from Phase 1 to Phase 2 to occur at the end of Q2 of 2024. That may bleed into Q3, and I should just say Q3 to be safe, but those are my expectations.

James Molloy, Analyst

Understood. Thank you very much. And then a quick follow-up on the locally advanced pancreatic adenocarcinoma with FOLFIRINOX. The first patient enrollment is expected in second quarter ’23. This trial, I believe, was opened in third quarter ’22. Was there a sort of delay in the first patient coming in?

Christopher McAleer, Scientific Officer

Yes, we had IRB approval in Q3 of 2022. The first site, Gabrail Cancer Center, opened in Q4 of 2022. We were optimistic based on their site feasibility questionnaires that they would be able to enroll approximately one patient every month, but that has not come to fruition. The holidays were obviously an issue; nobody wants to start treatment over that timeframe. The legalities of clinical trial agreements were also taking longer than we expected with these larger institutions. One or two sites dropped out due to our inability to pay the per patient costs, which were three or four times the average for negotiated budgets. However, as I stated earlier, we do have University of Nebraska opening in the next 2-3 weeks, and Virginia Mason Medical Center will follow that by another week or two. We are finalizing budgets and clinical trial agreements with at least three or four other sites now, which I expect to finalize in June or July. Based on those site feasibility questionnaires, if they prove accurate, we should see enrollment speed up drastically in the second half of the year.

Thomas Equels, CEO

Regarding that point, James, at Erasmus, they typically have a backlog of subjects, because Dr. Van Eijck and his team are renowned in this area and serve as a focal point for treatment in Europe. I expect the Erasmus Medical Center to open as part of the AMP-270 study sometime in the summer. We have quality release and drug supply that needs to go over, but that should be done, and sometime this summer, Erasmus will open up and they are typically high enrollers.

James Molloy, Analyst

What’s taking Erasmus so long to start enrolling?

Thomas Equels, CEO

The regulatory process, even though we have an FDA-authorized trial, they have to go through the European regulatory process to conduct that trial in the Netherlands. That is taking longer than the FDA process, and there are certain arrangements we need to make for drug delivery and that type of thing. Everybody is moving as fast as possible to get Erasmus as a part of AMP-270. The Early Access Program has been continuing, so we haven't stopped treating people at Erasmus. Once the studies are open, however, those patients that would previously flow into the Early Access Program will be directed into the clinical trials.

James Molloy, Analyst

Great. Thank you very much. Thanks for taking the questions.

Thomas Equels, CEO

Thank you. You're welcome.

Operator, Operator

Thank you. Our next question comes from the line of Ed Woo with Ascendiant Capital. Please proceed with your questions.

Ed Woo, Analyst

Yes. Thank you. Congratulations on the progress. My question is about your inventory of Ampligen. What does your inventory look like? How hard or easy would it be to get additional supplies for your tasks in your clinical trials?

Thomas Equels, CEO

Currently, we always budget our clinical activity against existing inventory, so we don't overextend ourselves. But we are in the process of creating new lots of Ampligen, which I'll let Dr. McAleer address in further detail.

Christopher McAleer, Scientific Officer

Yes, we currently have enough Ampligen. All these things depend on Ampligen continuing to meet its stability testing, which we do every six months. Projections still look promising for all the Ampligen to continue for quite some time. We have enough Ampligen to conduct both the DURIPANC study and AMP-270 based on projections of how long patients will be on Ampligen, with a 25% buffer. For the long COVID trial, we currently have approximately 8,000 to 9,000 vials, which would be enough for another Phase 2 or a small Phase 2. I have enough polymer intermediate active ingredients to produce the final Ampligen, which we will do around December to prepare another approximately 9,000 to 10,000 vials. We have contracted out manufacturers to help us produce Ampligen as well as improve the process—currently, our yields are not as high as they could be. The next lot of polymer should be made sometime in mid-2024, so we have enough Ampligen to continue the trials. If we want to carry on beyond that, the long COVID program could potentially become promising. We should be primed to do additional studies as the data supports it, and we have backfill of Ampligen in the pipeline.

Ed Woo, Analyst

Thanks for answering my questions. I wish you guys good luck.

Thomas Equels, CEO

Thank you very much. We appreciate your interest.

Operator, Operator

I will now hand the call back to Mr. Equels for any closing remarks.

Thomas Equels, CEO

In closing, I want to reaffirm that we have been striving to move forward as rapidly as possible with our lead product Ampligen. We're making strong and steady progress in the area of pancreatic cancer in all aspects. We're also on track for the opening of an important pancreatic cancer program in conjunction with AstraZeneca, which could lead to some breakthrough results if we’re successful there. We expect that the program interim report in advanced recurrent ovarian cancer will confirm the preliminary data, which was spectacular, published as a late-breaking abstract at the American Association of Cancer Research Convention in New Orleans. We're moving forward, we have the cash and the team to execute, and we are very fortunate to have the data coming in that supports our program.

Operator, Operator

Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.