Earnings Call Transcript - AIM Q3 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. Following the presentation, there will be a question-and-answer session. 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 and 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 those contemplated by such forward-looking statements are discussed in the periodic reports AIM files with the Securities and Exchange Commission. These documents are available in 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, publications, surveys, and other data obtained from third-party sources and the company's own estimates and research. While the company believes these third-party sources to be reliable as of the date of this presentation, it has not independently verified and makes no representation as to the adequacy, fairness, accuracy, or completeness of or that any independent source has verified any information obtained from third-party sources. Joining us on today's call from the AIM leadership team are Thomas Equels, Chief Executive Officer; and Dr. Christopher McAleer, Scientific Officer. I would now like to turn the call over to Mr. Equels. Please proceed.

Thomas Equels, CEO

I just want to say thank you very much to our stockholders, investors, and all those certified financial analysts that are attending this call. We deeply appreciate your interest and support for AIM ImmunoTech. We have had great progress over the past 18 months. 2022 was a spectacular year in terms of our clinical development, and the first three quarters of this year have been in touch with that same level of progress as we move forward towards multiple value-driving milestones. You can see what we've accomplished as well as what we have in front of us that we expect to accomplish on our website, and also the Q we just filed lays out the clinical progress that we've made in great detail. I'm happy to announce, well, I’m not announcing it, just to reconfirm that we’re moving into the next phase of our business development with the addition of Azenova as merger and acquisition business development specialists to our team. So, in addition to the clinical progress that we’re making, we’re bringing in people to help us specialize expertise to move forward in oncology, especially with big pharma. Now, the primary object of our attention, our priority drug is Ampligen or rintatolimod. Based on the extensive and consistently positive clinical progress we've had, we have given it a priority space in our lineup. It’s unique because it's a toll-like receptor agonist which stimulates the immune system and has immunomodulatory qualities, but it's very unique and somewhat rare because it does not have the systemic inflammation that other TLR drugs show. It has broad-spectrum application as an antiviral, an antitumor agent, as an immunologic modulator for immunodeficiency diseases. So we have a lot of potential over a wide space of opportunity. Now, our pipeline—and this addresses just a few of the major things on our pipeline—is extensive, and we've been laying down a lot of important data over the past year that supports the proposition that we have extremely good potential in oncology. If you look at what we've done historically in the early access program in pancreatic cancer, which involved both locally advanced and metastatic patients. We're building on that with a locally advanced pancreatic cancer Phase 2 trial AMP-270, as well as combination therapy, Ampligen plus durvalumab, AstraZeneca’s drug, durvalumab. If you go to our website, you can read about the collaboration agreement we entered into with AstraZeneca, and that study should be rolling out any time now. We've made tremendous progress, not just in pancreatic cancer, but also in advanced recurrent ovarian cancer and Stage 4 triple-negative breast cancer where we're seeing dramatic clinical impacts with Ampligen. And these are in highly lethal cancers where it's a complete—at many cases—a complete unmet medical need because there is no therapy for people once they reach this stage. Further, our work in ME/CFS and long COVID expressing chronic fatigue-like conditions is moving very rapidly as well, with a major Phase 2 where we’ve completed our enrollment. We’ve completed treatment. We’re moving forward at work speed there with the expectation of data within the next six months. So the pipeline is broad. The pipeline is strong, and there are a number of other clinical trials that are underway that you can see in detail, and Dr. McAleer is going to discuss as well. So, I’m going to turn it over to Dr. Christopher McAleer. He’s our Science Officer. Chris?

Christopher McAleer, Scientific Officer

Thank you, Tom. As Tom stated, we are making progress in our clinical programs, and I'd like to take a few minutes to discuss that progress in a little more detail. We are still awaiting the first patient enrollment in AMP-270. As I discussed in the last quarterly earnings call, our focus at AIM has been on recruiting and opening new sites. To that end, in the last quarter, we opened the Virginia Mason Cancer Institute in Seattle, and we also identified and contacted an additional 33 sites for a total of 103. 30 of those sites are interested and are in some stage of the activation process, of which 18 of those sites are in the preselection visit stage. We do expect Erasmus Medical Center to be open for recruitment in Q4 and we expect to have an additional 12 or so sites to be opened in the first half of 2024. In terms of the first patient in, the current sites are monitoring many patients; for example, the University of Nebraska is monitoring multiple patients that have recently completed FOLFIRINOX, as well as Gabriel Cancer Research Institute, which is also monitoring patients on FOLFIRINOX. The Virginia Mason Comprehensive Cancer Center has multiple additional patients that they're following with one potential subject coming for a follow-up visit for eligibility this month. So, with all the initial enrollment is imminent at any point in this juncture in AMP-270, and I think with the additional sites opening in the next few months, we hope for patient recruitment to increase exponentially. Our colleagues at Roswell Park Comprehensive Cancer Center recently published a manuscript in the Journal for ImmunoTherapy of Cancer. Some highlights of this data were published previously at AACR, but the manuscript provides a full insight into that study. In summary, the data shows that when patients with metastatic triple-negative breast cancer were given the chemokine modulation therapy that contains Ampligen prior to pembrolizumab treatment, they showed an increase in cytotoxic T lymphocyte markers, specifically CD8 alpha and Granzyme B in the tumor microenvironment. The cytotoxic T lymphocyte chemotaxin, CCL5 and CXCL10, were also increased intratumorally. So, I want you to take notice of the CXCL10 and Granzyme B, as I will bring them up again when we discuss ovarian cancer. Additionally, the Treg markers, FoxP3 and the Treg-attracted CCL22 were not increased. So when you look at that ratio of cytotoxic T lymphocyte infiltrating chemotaxins and the lack of infiltration of CCL22 and attraction of Treg, the data highlights the importance of modulating cold to hot tumors. They also highlight the importance of the timing of Ampligen therapy and pembrolizumab treatment, and we are anxious to get that next phase of the trial going with a modified treatment regime. Concerning Ampligen as part of neoadjuvant treatment for triple-negative breast cancer, that data was posted to clinicaltrials.gov a few weeks ago. To summarize the data: it was a Phase 1 trial to replace INTRON A, which was discontinued by Merck, with an interferon alfa-2b in the combination therapy consisting of Ampligen and standard chemotherapy. It was a dose escalation of interferon that showed no adverse safety profile. Of the nine patients, there was a response rate of 67%. That was five complete responses, which is the absence of tumor cells, or 56%, and one YP thymic, which is essentially the presence of only a small number of scattered invasive cells considered lack of tumor, at 11%. This study provides us with a unique opportunity, and how we navigate that opportunity from a regulatory strategy is still being discussed. Since the first approval of this study, pembrolizumab plus chemotherapy has replaced standard chemotherapy alone as the neoadjuvant standard of care. That’s mostly on the back of the I-SPY 2 and KEYNOTE-522 study. The pathological complete response in KEYNOTE-522 was approximately 65% compared to about 50% PCR of chemotherapy alone. However, that increase in efficacy comes at a substantial cost of toxicity to the patient. The incidence of Grade 3 or higher treatment-emergent adverse events was 78% in the pembro group. Those side effects of the pembro treatment are well established and for many, can be harsh and really long-lasting. So when you look at the response rate using Ampligen-containing therapy, there is an opportunity for patients to potentially see some equivalent efficacy to the current standard of care without those pembro side effects. How we best navigate that IND strategy is still being discussed. The combination of durvalumab and Ampligen in metastatic pancreatic cancer, referred to as durapanc, is on track to open for patient recruitment in Q4. The largest hurdle was getting QP release for the European Union and import approval for the drug, which we have received. The drug is planned to be shipped to the EU this week, followed by final QP release. Based on discussions with Erasmus and their current population pool, we expect recruitment to go rather quickly. Multiple patients have already been identified for potential enrollment, and that should be up and running in the next few weeks. Regarding Ampligen for the treatment of advanced recurrent ovarian cancer, we are still awaiting the interim report for this trial from pit. However, a poster and abstract were recently presented at the 2023 SITC conference in San Diego that highlights the immune-modulating aspects of this therapy. The things I want to highlight from these data are the increase over time in the baseline value of CXCR3 ligands, which is the top row for those following the presentation, and the ability of these to be increased acutely after a dosing regimen. These data presented here are not dissimilar to data we've seen before using CKM in ovarian cancer and the chemokine modulation therapy in triple-negative breast cancer. But here, that's without the celecoxib and interferon showing that Ampligen itself is likely sufficient to modulate these properties and can do so across multiple solid tumor types. Broadly speaking, these data together show that this regimen is capable of creating a more hostile localized environment and that immune exhaustion does not occur. In addition, the heat maps indicated that not only is there a general localized intraperitoneal increase, which we showed on the last slide in the CXCR3 ligands, there is also a chronic increase in the CXCR3 ligand gene expression in the tumor microenvironment itself. These data again are promising as they show Ampligen-containing therapies can modulate the tumor microenvironment to create a hotter tumor state. Finally, I'd like to discuss our Phase 2 study in long COVID. As we stated earlier, we have fully enrolled all subjects. The last subject’s last dose was last week, and the last visit will occur this week. After this will be verification of source data and rectification of data with the sites, after which the database can be locked and the unblinding can occur, allowing data extraction. We are hoping for the database lock to occur this quarter, and we still expect to have top-line data in early Q1, with full data sometime around the Q1, Q2 transition. What we do have currently is the safety report, and as of the last report I received on November 9, there have been over 1,600 doses administered, with a total of 28 adverse events and no serious adverse events, which highlights the impeccable safety profile of Ampligen. I read an article yesterday in Nature Medicine that followed patients over a multi-year period, discussing the staggering number of patients that have lingering symptoms after two years and how potential reinfection by different variants can increase that burden. There is an extremely large market and a significant unmet medical need here. We are advancing in our clinical agenda. From a scientific and clinical perspective, I think stockholders should be excited about the short- and long-term future of AIM, and potentially patients can be excited about future therapy. I'll hand it back to Tom to discuss the future of AIM from a financial perspective.

Thomas Equels, CEO

Well, thank you very much, Chris. Great job articulating the clinical progress we've made in fine detail. As you can see from what Chris described, we have a lot to look forward to based upon what’s happened already. That potential and the vision of that success is closer and clearer than ever. We have met, as you can see, the milestones that we have in Q3 successfully, and going into Q4, some of these milestones have already been met, and there are significant ones coming up as the year-end approaches. When we move into Q1, we're going to have a number of these clinical trials that are discussed in Europe up and running. In pancreatic cancer, we believe we'll see significant progress in the United States as well because of the expansion of the sites, and we're expecting data from the post-COVID trial. These things are all good. I also want to mention where we are today because of our collaborators. We have a great team here at AIM, a very committed team, but we also have been working with top-notch collaborators like AstraZeneca, Merck, the Erasmus Medical Center in the Netherlands, Roswell Park Comprehensive Cancer Center in New York, University of Pittsburgh in Pennsylvania, and the Buffett Cancer Center at the University of Nebraska. The investigators at those facilities are world-class. We've got the best of the best working on these projects and helping us to move forward. In terms of value, the COVID—post-COVID conditions are extremely important because that's an ever-burgeoning market. Anyone familiar with deals in biotech knows the volume and the value of deals is extremely high in the oncology space. That’s why we brought in Azenova to assist us with a focused outreach to big pharma in that particular space. For our financial snapshot, we have cash in hand with every expectation of being able to fund ourselves through the key milestones outlined in this presentation. As of September 30, we had approximately $22.4 million in cash and marketable investments. Our expenses are very much in line with our projections. Our ability to move forward is unimpaired, and we intend to move forward as rapidly as possible with our clinical undertakings because it is through data that we create long-term stockholder value. We can’t be mistaken—this is where the rubber meets the road in our industry. We must continue to push and develop our data, and once we have a data set in any disease, especially oncology and several different solid tumors, the value equation is driven by that data. You may ask yourself, why AIM and why now? There are a number of reasons why this is a very important time. Our team at AIM continues to build on a solid foundation, driving AIM forward. We have a growing body of highly encouraging positive clinical data with Ampligen in several important indications of significant, often unmet medical needs. We have never been more confident in the potential of Ampligen and our ability to work globally with regulatory bodies to ultimately bring Ampligen to patients in need. That is what drives our team at AIM every single day. We believe what we're witnessing now in our later-stage clinical studies not only gives us confidence in our lead programs but also a line of sight into the broad utility we believe Ampligen possesses. We are leveraging the scientific and medical communities supported by preeminent key opinion leaders and institutions, top research institutions that play an important role in development and the guiding light for Ampligen. We're also involved in a strategy to further engage with industry for licensing partnerships and M&A opportunities, which we believe has the potential to unlock significant value as we continue to expand our reach across the investment community to garner further validation and support from what we believe represents an exciting investment opportunity. We are grateful for your time today, and we believe we are well positioned for an exciting 2024 and beyond. With that, I'd like to open up this call for questions and answers. Thank you very much for your consideration of AIM and Ampligen.

Operator, Operator

Thank you. At this time, we will be conducting a question-and-answer session. Our first question comes from the line of James Molloy with Alliance Global Partners.

Unidentified Analyst, Analyst

Hello. This is Laura on for Jim. Thank you for taking the questions. So with all the clinical milestones that you have planned ahead and bringing in Azenova as well, have you seen any increased interest from potential partners? And how may do you describe the overall current partnership environment?

Thomas Equels, CEO

Well, we're just beginning this phase of development and outreach. The interactions in these initial stages would be premature to make any announcements publicly regarding any talks or initial discussions. However, Azenova is a highly skilled group, and we’re using two top people in the M&A space for oncology. So we have high hopes and reasonable but optimistic expectations as to the progress we’ll make.

Unidentified Analyst, Analyst

Got it. And then are there also any updates on your planned confirmatory Phase III trial of Ampligen for chronic fatigue syndrome?

Thomas Equels, CEO

Well, at the moment, the chronic fatigue space has been flooded with post-COVID chronic fatigue conditions. So in focusing on our long COVID trial, we are simultaneously developing usable data for traditional chronic fatigue syndrome.

Unidentified Analyst, Analyst

Understood. And then just one more question from us, in regards to your early access program for Ampligen in the Erasmus Medical Center, how many patients have been included in this program so far? And have you seen any additional data?

Thomas Equels, CEO

Yes, we're over 50. How many patients exactly, Chris?

Christopher McAleer, Scientific Officer

I believe the number is 57, but please don't quote me on that exact.

Thomas Equels, CEO

Yes, it's over 50 for sure. Dr. McAleer will talk to the data, but it's been increasingly positive. The more subjects we've had, the better the survival—progression-free survival and overall survival data gets. Chris, do you want to talk about that a little bit?

Christopher McAleer, Scientific Officer

I'd be happy to. For an update on that data, I believe on our website there is the presentation that I presented at the Marie Curie Sklodowska Symposium at Roswell Park. In that presentation, there are a few slides on the updated data. The original 27 patients showed considerable improvements in progression-free survival and overall survival. We included what I believe is an additional 30, but it might have been 29. It may be 56 patients. Regardless, it's an equivalent number of patients. That second cohort only confirms the original data. The overall survival, both short-term and long-term, seems to actually improve with the addition of the patients over those historical controls. With that additional data, it only makes me more confident that this trial, AMP-270, will be exactly how we thought. I remind you that this massive improvement in the EAP involves patients with metastatic disease. I think when we localize this, when we look at this just with locally advanced cancer patients in AMP-270, it might be even better, but that's just speculation.

Thomas Equels, CEO

Remember, the safety information as well as the data flowing from that early access program was the basis for our application for orphan drug designations from both the United States FDA and Europe's Medicines Agency. Those orphan drug designations, which look at a different level of scrutiny compared to a new drug application, consider safety and efficacy and were both granted relatively rapidly by both agencies.

Christopher McAleer, Scientific Officer

I also want to point out that in that presentation, we looked at selection criteria for patients. Those who have a CA99 less than 1,000 seemed to respond better, where the overall survival improves by two to three months when we select out that specific cohort of patients. This has to do with progression and the intactness as well as those who have a systemic immune inflammation index below 900 which points to their health of their immune system. Typically, those patients with locally advanced pancreas cancer meet those criteria. I think they go to my previous statement: the AMP-270 might respond better, even better than what we have from the EAP.

Unidentified Analyst, Analyst

Great. Thanks for the answers and for taking the questions.

Thomas Equels, CEO

Well, thank you very much for your interest.

Operator, Operator

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

Edward Woo, Analyst

Yes. Congratulations on the progress. My question is on Ampligen. Can you talk about your supply of it? And is there any need for you to manufacture any more of it anytime soon?

Thomas Equels, CEO

Well, we’re expanding our clinical programs, and we have Ampligen budgeted—in-stock budgeted for that clinical activity. But we are in the process of manufacturing more Ampligen, so we always want to have a sufficient reserve to allow for any contingency that might arise where we need additional drug, and that process is underway.

Christopher McAleer, Scientific Officer

To that end, Ed, we have over 16,000 units in-house. The AMP-270 trial is expected to use approximately 10,000 of those units. We shipped a pilot of 1,350, which actually goes out tomorrow for the first approximate year at Erasmus Medical Center for AMP-270 and to do the Phase 1 of the DURIPANC Study. We expect that DURIPANC Study to go well based on the EAP data and all the science behind it. We expect the Phase 2 to transition rapidly, recruitment at Erasmus seems to go rather quickly. Based on the end of the Phase 2 study in long COVID, we currently have and the drug allotment we have, we believe it’s pertinent to get another production run of Ampligen, approximately somewhere between 9,000 and 10,000 vials, which is slated to finish in early December.

Edward Woo, Analyst

Great. As you manufacture this 10,000 vial lock, is the cost about the same as it was before? Has it gone up? Has it gone down?

Thomas Equels, CEO

Unfortunately, inflation has impacted our industry significantly. Both clinical costs and manufacturing costs have gone up. However, we are managing those expenses prudently. It's important to remember that the manufacturing—while it may sound like a lot of Ampligen—this is not a mass production type of manufacturing. These are small batches, which cost significantly more to manufacture than it would if it were mass production. The price of Ampligen—its cost—would drop significantly if it were picked up by a company positioned to make large amounts of it.

Edward Woo, Analyst

Great. Well, thanks for answering my questions, and I wish you guys good luck. Thank you.

Thomas Equels, CEO

Well, thank you very much, Ed.

Operator, Operator

Thank you. This concludes our question-and-answer session. I'll turn the floor back to Mr. Equels for any final comments.

Thomas Equels, CEO

As always, we are grateful for your time and interest in AIM and in Ampligen. We're very proud of our accomplishments and the accomplishments of our collaborators as we go forward. On that foundation, we'll continue to build progress through 2023. We are very much looking forward to pursuing and heightening this momentum in 2024 and providing—and this is perhaps the most important thing to us—providing hope and opportunity for patients who have unmet medical needs in these serious diseases. We look forward to working with our medical collaborators, our scientific collaborators, and those universities that are so important to what we're doing and creating long-term value for our stockholders. Thank you very much.

Operator, Operator

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.