Earnings Call Transcript - AIM Q2 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 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 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 those 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, 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 accurate 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 Christopher McAleer, Ph.D, Scientific Officer. I would now like to turn the call over to Mr. Equels. Please proceed.

Thomas Equels, CEO

I'm extremely pleased with the progress we have made for the first half of this year. We are meeting and in many cases exceeding our expectations on timing and execution related to our clinical programs. Fundamentally, the company has never been stronger and we are clearly in line with what our belief is and the vast potential of Ampligen. It's a belief that is shared by me, the team at AIM, and our many collaborators. And I want to take just a moment now to thank my team at AIM. Both our Florida and New Jersey operations deserve a big thank you for the incredible strides made over the past two years, including in this last quarter, developing our clinical programs and achieving fantastic clinical progress. Now at AIM, we are focused. Execution in the clinical trials is our priority and we have a number of important trials going forward. But let's take a look at what we accomplished in this past quarter. In our Phase II trial in long COVID or post-COVID chronic fatigue-like conditions, we have met and exceeded our milestones not only by enrolling all of the subjects, but as of just a day or two ago, we've begun treatment of all subjects that have been enrolled. So dosage is underway and that study is expected to end by the end of Q4. Top line data, which we hope will be favorable, will be coming out in Q1 of 2024 according to our current best projection. We've published preclinical data as well as clinical data related to pancreatic cancer. It's very compelling. Our top line data from the Early Access Program, where we've treated over 50 subjects, is extremely positive. Furthermore, we are working with one of our top collaborators, AstraZeneca, on a metastatic pancreatic cancer program at Erasmus MC, one of Europe's top research facilities in pancreatic cancer. We've received all necessary approvals and are just waiting to get started. They're finishing some of the numerous steps required in a complicated cancer protocol. Finally, we are opening sites and recruiting new sites for our locally advanced pancreatic cancer program in the United States. We have just signed up and when we say signed up, it's not as simple as signing a paper; there are many steps to go through. We have to go through the Buffett Cancer Center at the University of Nebraska. So you can see, based on what we've done over the past two years and just by looking at what we've accomplished in this past quarter, that the team at AIM gets things done. And when it comes to our goals, we deliver. Now let's look at our broad pipeline. We have a broad pipeline because Ampligen has a broad spectrum of impact in oncology and diseases like long COVID or actual COVID as an antiviral treatment. Our work in the clinic includes locally advanced pancreatic cancer, metastatic pancreatic cancer, and advanced recurrent ovarian cancer. This is cutting-edge work in oncology, addressing highly lethal malignancies with clear unmet medical needs. In long COVID, all subjects are enrolled and dosage has begun. As mentioned, we expect top line data in Q1. There's a lot of activity going on, but it all involves progress. You've heard the saying that just because the wheels are turning doesn't mean you're going forward. Well, it's the same with progress. Just because it looks like there's a lot of activity doesn't mean you're moving forward. But here, you can see that we not only have the wheels turning, but we're traveling at 90 miles an hour in the right direction. Now, regarding chronic fatigue syndrome, we are going to be guided very much by the results we'll see in Q1 next year from our post-COVID chronic fatigue-like conditions data. All these programs are moving forward. Now with that, I want to go into the scientific detail, and our Science Officer, Dr. Christopher McAleer, is here to talk with you today on those points. Thank you, Chris.

Christopher McAleer, Scientific Officer

Thank you, Tom. As Tom pointed out, we have a broad pipeline across multiple unmet needs, with our primary focus area being cancer, specifically our lead indication in pancreatic cancer. As discussed in the last earnings call, we have continued to enroll patients in the Early Access Program in the Netherlands, leading to additional data beyond what was presented in the cancers paper. I do want to caveat that any graphs you'll see are comprised of data collected up until June 12th of this year, but the addition of 30 patients, for a total of 57, confirms the improvements in the progression-free survival that we're seeing in the original cohort of patients. That improvement is a four to five-month extension over historical control, and the analysis of the overall survival confirms improvements in patient survival in comparison to those historical controls. In fact, if you look at the graph on the left, there appear to be improvements in both short and long-term survival with the addition of these 30 patients, shown by the comparison of the red and green Kaplan-Meier curves. We are also doing further data analysis to determine subsets of the population that might respond better to Ampligen. For instance, a subset of patients with CEA levels less than 1000 encompasses 49 of those 57 patients and shows further increases in progression-free survival—an additional month beyond the four to five months—and also in overall survival, which is an additional four months beyond the previous data. Those data points are compelling. If the control data in the AMP-270 trial compares favorably to the data in the EAP, which we have no reason to believe it won't, improvements we see in progression-free and overall survival should be sufficient for regulators. It may be unlikely that the subset analyses will be necessary for moving forward and for future approval for that matter. But they are good to have and they help further our understanding of Ampligen's multifaceted effects. The AMP-270 trial is currently ongoing, awaiting enrollment of the first patient. The Gabriel Cancer Center in Ohio and the University of Nebraska are both monitoring multiple patients currently undergoing FOLFIRINOX treatment to determine their eligibility for enrollment. I wanted to discuss the trial design and what that means for patient enrollment. The timeline from patient identification to enrollment depends on where the patient is in their journey when the site opens, which can take several months. Each patient must be treated with FOLFIRINOX for at least four months, and treatment can be extended further depending on clinician observations and the patient's ability to handle FOLFIRINOX therapy, which is helpful but quite toxic. They must receive a minimum of four months. Once they stop treatment, they are given time to recuperate, and then after four to six weeks from treatment stop, they are monitored again to determine whether the FOLFIRINOX treatment stabilized their disease. If they are stable, they would need to be evaluated and consented before they could enroll, which typically takes about one to two weeks, after which they would be randomized and receive treatment. The clinical sites focus on patient enrollment, and our focus is on opening more clinical sites. These large institutional sites have defined controls and processes in place that must be followed. For example, the IRB only meets once a month; cancer committees can meet every one or two months. We send a site invitation letter to a proposed site, but it took several weeks until the hospital finalized its internal review processes to begin screening patients. These timelines reflect the realities of the clinical trial process at large institutional sites. However, we have some control over identifying and opening additional sites, and that must be our primary focus. To that end, we have identified and contacted over 70 sites, with 31 of those sites expressing interest. For nearly half of those 31 sites, we are currently in ongoing contract and/or budget negotiations. We are also collaborating with centers like Allegheny Hospital in Western Pennsylvania and the Sarah Cannon Research Institute, which have multiple clinical trial sites. Logistically speaking, the more sites we open, the faster we can enroll patients and hopefully receive data that resembles that of the EAP. This is our central focus for AMP-270. So, based on what I've explained, it does take time. However, when the AMP-270 data comes in, we believe that this additional data from the EAP will prove to be well worth the efforts and the wait. In addition to AMP-270, we are also working on final European approvals, including QP release to start the DURIPANC study in the Netherlands, which investigates Ampligen combined with durvalumab for metastatic pancreatic cancer patients. That study is still on track to open for patient enrollment in Q4 of this year. We are awaiting interim results for the Phase II trial in advanced recurrent ovarian cancer. The University of Pittsburgh originally expected that data to arrive in June, but that was amended to September. Conversations we've had indicate that the data is as good or better than what was published at AACR. They are also planning to present data at the 2023 SITC conference regarding immune marker changes and Ampligen's ability to modulate cytokine release and immune function, such as differential T Cell changes in cytotoxic T Cell upregulation. That data parallels observations we've seen in other cancers but especially for ovarian cancer, which, in our opinion, further illustrates Ampligen's broad applicability in solid tumors. We are actively studying Ampligen to treat post-COVID conditions, also known as our AMP-518 study. Site initiation and recruitment progressed rapidly for this study, and we recently announced that we hit our target enrollment of 80 patients. The treatment regimen is for 12 weeks with follow-ups for two weeks thereafter. This means the last patient will receive their dose in mid-November, and we expect top line data as early as Q1 2024. We are excited about this trial. As of the latest update I received, which was last Thursday, out of all doses, both placebo and Ampligen, which number in the hundreds, there has only been one adverse event—a Grade 2 headache that was resolved with over-the-counter treatment. We think this attests to Ampligen's overall safety profile. We are advancing our clinical agenda from both scientific and clinical perspectives, and I believe stockholders should be excited about AIM's short- and long-term future. I'll hand it back to Tom to discuss the future of AIM from a financial perspective.

Thomas Equels, CEO

Thank you very much, Chris. As Chris was mentioning, we have a well-developed safety profile. We have more than 10,000 intravenous doses in humans. We've found that Ampligen is generally well tolerated, not only intravenously but also intraperitoneally and intranasally in Phase I, Phase II, and Phase III testing. So we have a drug that is generally well tolerated, which allows us to springboard into multiple clinical programs because safety is not a major issue to consider. Now, I'd like to address our milestones, how we've achieved them, and what milestones are coming up. We're currently in the third quarter. In this quarter, we have projected that we would open numerous additional sites in our locally advanced pancreatic cancer program. We projected that interim results would be published for our advanced recurrent ovarian cancer program. Regarding post-COVID conditions, we projected that we would enroll and treat patients. In fact, we have enrolled our last patient in this Phase II trial and have begun dosing all subjects. Thus, many third-quarter milestones have already been accomplished. For the fourth quarter, we hope to begin dosing in metastatic pancreatic cancer and to begin enrollment by that timeframe. Regarding post-COVID conditions, we anticipate having enrolled and treated our last subject in that Phase II study. With the last patient complete, we move into the first quarter of 2024. A significant milestone we expect is the publication of our top line data from the Phase II long COVID study. Now, I want to talk a bit about who we do business with. We all know the old wisdom: you can sometimes be measured by the company you keep. We are fortunate to be working alongside leaders like AstraZeneca in metastatic pancreatic cancer in combination with their drug durvalumab. We've conducted a number of studies in collaboration with Merck using Ampligen and their drug pembrolizumab, KEYTRUDA. Our investigator-sponsored studies, and the locations where we're conducting these trials, are top-tier cancer centers: Erasmus in the Netherlands, Roswell Park in New York, the University of Pittsburgh, and the Buffett Cancer Center in Nebraska, are among the premier resources in cancer research for the areas we are targeting. Now, let's discuss our financial snapshot. As you can see, we remain in an extremely strong financial position. Throughout the second quarter, our team made significant progress advancing Ampligen through our clinical trials in multiple indications. We continue to be encouraged by the growing body of positive and consistent data and believe Ampligen will be a meaningful treatment option in the future. Our operational execution remains fully supported by a strong cash position, and we are steadfast in our mission to advance the clinical development of our oncology pipeline. I think the numbers speak for themselves in that respect. So we arrive at maybe what's the important question for some: Why AIM? Why now? When we consider what's happened in the biotech sector, particularly with small-cap biotech companies, many have been significantly adversely affected over the last two years. However, we've achieved clinical progress, stayed true to our goals and milestones, and have done so while being prudent stewards of our cash position. We find ourselves in a strong cash position with lots of positive activity underway. This kind of activity can translate into superior development of stockholder value. On behalf of the team at AIM, I want to thank you for your interest in Ampligen and AIM ImmunoTech. Now, I'd like to turn the presentation over to the operator for Q&A.

Operator, Operator

Thank you. The floor is now open for questions. The first question is coming from Jim Molloy of Alliance Global Partners. Please go ahead.

James Molloy, Analyst

Hi. Good morning. Thank you very much for taking my questions. I want to follow up on the AMP-518. Could you walk through, please, what data we should anticipate to see here in the first quarter, what's the sort of the primary, secondary? And what's sort of the dosing schedule? Please also walk through the rationale of the trial.

Thomas Equels, CEO

Thank you, Jim. It's good to talk to you again. We had a pilot program in AMP-511 that gave us preliminary data not in a controlled setting, but we achieved a positive response in four out of four subjects, three with fairly significant positive results. We used that to de-risk, in a sense, the activities we were planning for AMP-518. I'm going to hand this over to our Scientific Officer Dr. McAleer to discuss the actual elements of the protocol and the stages that you'll encounter. This differs from a cancer study because the protocols are long and drawn out; everything moves pretty quickly here. He'll go through that, and we hope that in the first quarter of next year, we not only will have the top line data but that it will be consistent with the pilot study we conducted, which would be extremely favorable.

Christopher McAleer, Scientific Officer

Thank you for the question, Jim. Your inquiry was multifaceted, so I hope I answer all aspects of it. The trial design is a double-blind, placebo-controlled setup. There are 40 controlled patients and 40 Ampligen-treated patients. The primary endpoint is a PROMIS fatigue score, short form 8a. The secondary outcomes will include brain fog assessed through a PROMIS score as well. We also have a six-minute walk test and a MoCA exam for cognitive function. Additionally, some exploratory biomarker analysis is taking place, and we expect that data to reflect on the top line outcome. I'm sorry, the other part of your question was...?

James Molloy, Analyst

Well, you just answered most of it. I just want to inquire about the dosing and what you anticipate to get out of this in regards to potentially going into a Phase III confirmatory trial?

Christopher McAleer, Scientific Officer

Yes. The trial involves 12 weeks of dosing with two weeks of follow-up. Whether we proceed next depends on the quality of the data. We anticipate that could lead to a Type B meeting with the FDA to discuss a Phase III confirmatory trial, but this hinges on how well the treatment performs.

Thomas Equels, CEO

Yes, and remember, in order to advance with the FDA, we need this placebo-controlled Phase II data not only to proceed to Phase III but also, to explore potential fast track and breakthrough opportunities, similar to those found in cancer therapeutics into long COVID, which is currently affecting a significant number of Americans. This presents not just a significant market opportunity, but also a major public health impact. We must have this type of placebo-controlled trial to present to the FDA and pursue opportunities for next steps.

Christopher McAleer, Scientific Officer

Jim, the 80 patients may seem small for a Phase II trial lacking current therapies. However, if the data aligns with our preliminary expectations based on Ampligen's mechanism in relation to fatigue and brain fog, I hope that will suffice for the Phase III study.

James Molloy, Analyst

What's the entry criteria for the trial? Is it based on changes in PROMIS scores for fatigue and brain fog, and could you clarify the entry criteria?

Thomas Equels, CEO

We are measuring both changes from control for the PROMIS fatigue score and secondary measures of change from baseline in individual patients.

James Molloy, Analyst

Okay. Great. You have always been excellent stewards of shareholder capital, especially with many trials being run in partnerships and ISTs. As for AMP-518 and AMP-270, are these the only two trials under your direct control that AIM is currently funding?

Thomas Equels, CEO

That's correct. While we provide financial support for some investigator-sponsored trials, including the primary component of supplying drug, it was vital for AMP-518 and AMP-270 to be AIM-sponsored trials. This ensures we control the data and can quickly fund the necessary items to move forward. Advanced pancreatic cancer is a dreadful malignancy with no current therapy that provides extended survival or progression-free survival. What we aim to do is crucial, not just financially, but in delivering an immunological solution that may save lives. Likewise, with long COVID, people are severely affected, often bedridden and unable to function. Our ability to provide a therapeutic solution is vital because they currently have no options. Should we demonstrate that we have a significant therapeutic impact in this Phase II study, we plan to rapidly move forward with a Phase III, if permitted by the FDA. We are focused on delivering solutions for these patients, so it is vital that AIM controls these trials to maintain pace.

James Molloy, Analyst

Thank you. Maybe last question. You mentioned the interim data for advanced recurrent ovarian cancer will be coming out in the third quarter. What should we expect to see there? What would constitute good data versus bad data?

Thomas Equels, CEO

While we don't know the exact content of that data right now, every indication suggests it will be consistent with the preliminary data presented at AACR in April 2020, which was extremely positive. If you recall, that abstract was a late-breaking one because it was unusual to publish preliminary data. However, it was necessary due to the powerful nature of the findings in a cancer type with limited alternatives. In advanced recurrent ovarian cancer, similar to late-stage pancreatic cancer, the prognosis is unfortunately dire. The AACR abstract showed impressive results in combining Ampligen with pembrolizumab. It proved beneficial in clinical terms, with a clinical benefit rate exceeding 60%. It showcased a 35% overall response rate, with 15% having complete response and over 20% showing partial responses. Based on our operating assumption, we believe that the interim data will be similarly impactful.

James Molloy, Analyst

Excellent. Thank you. I'm currently referencing the AACR from 2022. Will there be any data presented at AACR this year or do you anticipate this will also be presented next year?

Thomas Equels, CEO

I believe they're aiming to present this interim program data at SITC this year, assuming they can finalize everything in time.

James Molloy, Analyst

Understood; of course, it depends on the timeline. Thank you very much for taking my questions.

Thomas Equels, CEO

Well, thank you, Jim.

Operator, Operator

Thank you. The next question is coming from Ed Woo of Ascendiant Capital. Please go ahead.

Edward Woo, Analyst

Congratulations on the progress you've made. My question is about the long COVID study. Was that only a US study? Are there any plans to conduct studies internationally, especially in the EU?

Thomas Equels, CEO

Yes. I'll address that, Ed, if I may. Right now, it's only occurring in the US. The AMP-518 is an FDA-authorized study. However, we are working towards conducting a similar, though not identical, study in Europe, likely in the Netherlands. However, that is still in planning stages due to the extensive bureaucratic processes involved in getting these studies started.

Edward Woo, Analyst

Great. No problem. You seem to have a robust cash balance. Are there any considerations for potential acquisitions, or will you focus on your current projects?

Thomas Equels, CEO

Well, my father taught me when I was learning baseball as a boy to keep your eye on the ball if you want to hit it correctly. We've got a lot of crucial work ahead of us and I want to avoid losing focus by engaging in merger or acquisition activities that would distract us from our goals. However, if a compelling opportunity arises, there may be acquisitions available, considering the biotech sector has faced significant challenges over the past two years. But we aim to leverage our existing cash and our team's efforts to ensure we deliver on our clinical progress and meet our milestones, which I believe are imperative for our shareholders, without straying from that focus. This may sound like a politician's answer, but our primary priority remains on the clinic. Only if an exceptionally attractive opportunity arises would we consider an acquisition.

Edward Woo, Analyst

Thanks for addressing my question. Wishing you the best of luck.

Thomas Equels, CEO

Thank you, Ed. We appreciate your interest.

Operator, Operator

At this time, I'd like to turn the floor back over to Mr. Equels for closing comments.

Thomas Equels, CEO

I want to thank everyone very much and thank you, Donna. In closing, I'm extremely pleased with our progress this year and believe we are very well positioned to achieve important operational and clinical milestones throughout the remainder of this year and beyond. This is a very exciting time for AIM. On behalf of Team AIM and myself, I want to thank you for your continued support.

Operator, Operator

Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines at this time or log off the webcast and enjoy the rest of your day.