Conference Transcript - GLSI 2025-12-03

Speaker 2

with us here today is the ceo sneha patel and uh just a little opening about what the company is about what you're doing and then i can ask some questions and anyone from the audience who has a question can ask as well so why don't you go ahead give us give a short description of what the company is doing and then we'll just ask questions and go through the slides uh yeah go through as many slides as you'd like to introduce the company with. Okay. And then we'll just talk about it.

Sneha Patel, CEO

Okay. All right. Thank you for attending. We're running a phase three clinical trial called Flamingo01. Our goal is to prevent metastatic breast cancer, so the cancer recurrence is after all the treatments, including pretreatment, surgery, and antibody treatment. We are using a nine amino acid peptide called GP2. It's a piece of the HER2 protein. And it's naturally antigenic. We see immune responses even before we even treat a patient. So the study is a phase three trial. We have 150 sites. 140 of them are now open and active. Today we announced we have about 1,000 patients who've been screened so far in the study. So those patients will then go on to be enrolled. We haven't talked about enrollment. We haven't talked about events, but it's an event-driven interim analysis. The study is led by Baylor College of Medicine, and it's a phase three trial where we treat HER2 positive patients. This product of ours is a piece of the HER2 protein, and so we give it as a vaccine. We protect the patients by creating T cells that kill the cancer cells when they come back. So if they're very small and not detected, the patient is healthy after all this treatment. There is potentially some cancer, and we're able to kill it with our T cells. So it's truly a vaccine that prevents the recurrence of the cancer. We're doing this phase two trial because we had a very successful phase two trial. It was led by MD Anderson, where we basically, when we published it, showed we had no recurrences. And so it was almost as if people thought we had a cure. It turns out we have a lot of work to do to reproduce that study. So we've now taken all the hard work, put it behind us, We have a bunch of sites in the U.S. and Europe that are enrolling very well, and hopefully we're going to be soon talking about the number of patients and the event rate. We're a public company. GLSI is our ticker. We've raised about $40 to $45 million since our IPO. So back in 2020, we had a day where we announced our data. The share price went up 30 times. That's kind of what we're known for in that day. It then settled at about $500 million market cap for about a year. We raised enough money to fund this phase three trial. And right now we're funding the trial by using an ATM, which allows us to raise capital every day. And our burn rate is very low. Our burn rate is about $7 million to $8 million a year. We keep it low by having only four full-time employees running this study, which you may not believe is possible, but it is. And this year it may go up to maybe $8 million to $10 million. and we use the ATM again to fund it ourselves right now as well. We've been on the Russell 2000 twice. We're very unique in that we own about 80% of the stock, management and directors, so the flow is very low. And we've locked ourselves up since 2020 through April 2026. So after April 2026, we may lock up again or we may free ourselves up. Okay, so let me just show you the phase two data. So here you can see that we had very low recurrences to no recurrences in the treated. And the immunity for the patient's peak at about six months. So that's the second curve. The third curve is the adverse events. So we have side effects that are injection site reactions and systemic reactions like a vaccine. So this is what you would want to see. It's a sign of an immune response. On the bottom, you can see the arrows where we give six vaccines in the first six months. and then boosters every six months i'll skip the safety data i'll tell you where we are today so we have really an all-star steering committee running running and managing the trial we have harvard yale johns hopkins stanford u.s oncology most of the sites in texas in the u.s we have 40 sites and then we have added on and for a small company like ours this is very unique we've added on about 100 sites in Europe, in Germany, France, Italy, Spain, Poland, Romania, et cetera. And we did this because we had the KOL for each country interested in our study, and they brought in 20 to 40 hospitals themselves as a group to work with us. I'm going to skip these slides. Basically, we're treating before the metastatic breast cancer comes back, and we're trying to prevent it. But the mechanism is we're educating dendritic cells in the skin, so we inject the drug intradermally. Those dendritic cells then create T-cells that are distributed through the body that kill the cancer when it comes back. And we're going to try and sequence the TCR receptor of these T-cells, which could lead to a different product. If we're creating a T-cell that's effective, it would be good to know what the ID of that T-cell is, and maybe we can make it. But right now, the goal is to have those T cells circulating, so if the cancer comes back, we're able to kill it before it can get too large and then lead to metastatic breast cancer. We've done three Phase I trials and a Phase II study. So this is the design of the Phase III trial, and I'll stop here. So we have to screen for HLA because HLA and our peptide associate with each other, and they create a T cell that then kills the cancer cell. So HLA may be an important factor. So HLA-2 is in about half the patients. So in this study, we screen for HLA. And in the pink boxes, we either treat them with our drug, GP2, plus an adjuvant that stimulates the immune system called GM-CSF, or saline placebo. And that's 500 patients total in those two arms. And the third arm at the bottom is all the other HLA types.

Speaker 3

And that's sized at 250 patients.

Sneha Patel, CEO

So we have seen in all three of these arms, without unbinding the data, an immune response that's very similar to what we saw in the phase two study. We see the same safety profile, and we see patients even before being treated with GP2 having an immune response. So we're planning to increase the size of the study so that we don't stop enrolling until we get to the interim. We think we'll add another interim. So we can use an interim analysis to resize the study if we need to, but we can't do that if we've stopped enrolling. So we're going to keep on enrolling. So there's 750 patients designed today, maybe 1,000 to 2,000 in the future. And because we have a high screening rate, we think that we can do this, and this will double the enrollment rate, double the event rate as well. So let me stop there.

Speaker 2

Thank you for that description. And just to back up a little, one of the things about breast cancer and recurrent breast cancer that you're trying to eliminate is just to understand breast cancer. In the initiation report, I went through a lot of the immunology and the characteristics of breast cancer. Just for the purposes of discussion, the EGFR receptor is one type of receptor that can be overexpressed or mutated, leading to a signal for growth and proliferation of cancer cells. And one of the drugs to treat that is Herceptin, which blocks the EGFR receptor. And the HLA, you can just think of as a type of immune category that will qualify the patients to respond to the drug. So what the company is doing is selecting for the breast cancer patients who have the right characteristics, which is about 50% or so. About 50% of the total would be eligible for this.

Sneha Patel, CEO

But what I was really saying now is it's possible that all these patients are responding. So HLA may not be a variable that you have to look at.

Speaker 2

HLA, the drug might respond, the patients might respond regardless of HLA type. So while on one hand, it qualifies them and it's been tested in that, the current trial could lead to expansion for all patients. And the standard treatment for breast cancer would be surgery, radiation, and then a year of treatment with Herceptin after surgery. And the current trial gives the injections starting at a year after surgery to allow the immune system to recognize HER2 and allow the immune cells to kill it and prevent recurrence so that's in a nutshell a simple story leaving out a lot of details that's enough to understand what's going on at the company and just the discussion for today the product works well because the immune system is strong after the patients recovered from all the trauma And that's the key to having it work like a vaccine as opposed to trying to treat the cancer at its peak, which is what the antibodies do and the surgery does. Yes. So just in terms of the treatment, could you just discuss what you're doing and what the patients will be, how they're being treated, the intervals, and what's involved?

Sneha Patel, CEO

Okay, so this slide describes it well. So on the left side, you would have the treatment before surgery, then surgery. It could be a mastectomy or partial removal of just the tumor itself. And then you can see you get all of these antibodies, Herceptin, Progetic, Edxila, and maybe another one called NHER2. They all reduce the recurrence rate in half, but there's still half of the patients that don't respond, and they go on to recur. So what we do is when they're finished with the antibody treatment, you can see these arrows pointing down. there's six of them in the beginning that's the primary vaccination series where we give the protection to the patient and we do it when they're healthy so we have a healthy immune system to create a strong t-cell immune response so that's one per month for six months and then you can see five arrows after that which is the booster phase where we try to sustain the immunity by giving a booster every six months so the patient has to come in 11 times over three years in essence if this is commercialized. But now we collect a lot of blood. We do skin tests because we're trying to study the immune response and see if we can find something that's common in all these patients so we can predict who's responding and who's not and give them other treatments if necessary.

Speaker 2

Great. And the Flamingo trial that is going on now is a phase three. So that when the results come out, assuming they're successful, you can apply to the FDA for marketing approval?

Sneha Patel, CEO

Correct.

Speaker 2

And you mentioned the phase two trial that this is based on. Can you discuss a little bit about the results and what you saw there that justified this very large phase three trial?

Sneha Patel, CEO

Sure. I did go through some of that data, but I think I'll just do it again a little bit. So basically, most of the drugs that are given at this time, the antibodies, for example, they reduce the recurrence rate in half. And so if we follow that and treat those patients that don't respond, we don't know who they are, so we have to treat everybody. But if we can bring that recurrence rate, let's say the antibodies reduce the recurrence rate from 20% to 10%, if we can take that 10% and make it a low single digit, that's stopping metastatic breast cancer. And that's stopping the bulk of the deaths in breast cancer, even though I have to go through all of this. And that's the promise of the treatment, and that's why we had such a robust response in 2020. And the product is relatively safe. It's like a vaccine. And so the patients that have heard about this today, they see the potential efficacy, and they know the side effect profile is tolerable. After everything they've been through, this is nothing. So we have a lot of patients today that are asking doctors to participate in the study, which is why we've had the PIs interested, and we've been able to open up 150 sites in the U.S. and Europe. And it's not easy for a small U.S. biotech to open 100 sites in Europe. That's very uncommon.

Speaker 2

Okay, and just putting some numbers behind these percentages, is how many patients are treated with surgery and then the recurrence rates that are seen now compared with what the drug can do and how many lives would actually be saved?

Sneha Patel, CEO

Okay, so at the bottom of this slide is a little bit of that. So in the U.S. and Europe, there are 44,000 new patients that could be treated per year. And so if we can prevent 10% of those deaths, that would occur because of metastatic breast cancer, we'd save 4,000 to 5,000 lives per year. And you can see at the bottom of the calculation, there's 700,000 new patients per year. And we would probably get about 6% of those initially, which could go to 12% if we have all HLA types. So it could be 44,000 to 88,000 patients that we would treat per year in the U.S. and Europe. And that's a very large number of patients.

Speaker 2

Yeah, yeah, certainly. And in terms of the course of disease that you're preventing, and not only are you saving lives, but once these recurrences happen, what happens to the patient in terms of hospitalizations, additional treatment, and the cost of care after occurrence?

Sneha Patel, CEO

Yeah, I don't know what the cost is, but what I can say is some of these patients are treated forever, you know, because they are long-term survivors, but they're HER2-positive, so they have to take the antibodies. They can tolerate them, so they keep on taking them. But 70% to 80% won't survive long-term. So this is why patients who understand what we have realize that this is a real chance for them not to have to worry about this recurrence, which is on their minds for probably five years after they get their antibody treatment when their risk is the highest. But it persists for a long time. There's about nine million breast cancer survivors in the world today that are way outside of their antibody treatment. We're not treating them today. They're a group that could be eligible. And then there's also half the patients that are not high-risk. So there's 88,000 patients. Another 88,000 are not high-risk. They're low-risk, 5% to 10% chance of recurrence. And today doctors don't feel that those patients should be put into a study or their events are so low it would be a big study, but that's the other group that we could also treat as well.

Speaker 2

And not only are you saving lives and keeping the patients out of the hospital, But in terms of the cost of caring for these patients, keeping them out of oncology wards and hospitals and all of the drugs that they get, this would look like it's going to save costs by preventing it. And this is a more efficient way of treating these patients and would save money for the system as well as saving lives.

Sneha Patel, CEO

If you look at the economics of it, prevention is better than treating in any situation. So I think, you know, if you were to ask what price we could receive for this, it would be a high price because we're saving not just lives, but also money in the health care system. Yes. Absolutely. Yeah. You know, conceptually, you could bring it to the front of treatment, too. You could say, why not vaccinate these patients before you know they have cancer? We would just have to be able to predict who's going to be HER2 positive and who's at high risk for breast cancer. and there's a lot of people working on genomics and predictions and maybe someday this would prevent the surgery because that's in the chemo and the Receptin treatment because that's really what we'd like to do is to actually bring it to the front of the line and not have it in the middle period while people are waiting.

Speaker 2

Well, yeah. The other point that you're doing this after a year of Receptin, couldn't you move this up until at diagnosis or with surgery in addition to Herceptin or as a first-line post-surgery? And, you know, the answer, I think, would be first you have to start where you are and prove that it works there. Then people would say, well, if it does that, why wait? Move it up.

Sneha Patel, CEO

And understand when the effectiveness occurs because we're going to see these recurrences in the placebo arm, and when are we seeing them? So, if it takes six months for this vaccine to be effective, you have to have a six-month window to treat someone earlier when the immune system is healthy, which is usually not the case. But you would figure out how to do that.

Speaker 2

First, if it works there, you've got a drug in an enormous opportunity. Subsequent studies and comparisons on using the drug more effectively would be down the road. but the first things you're going to do is show that it's effective for preventing recurrence and metastases.

Sneha Patel, CEO

We're really going to provide a tool to these doctors. These breast cancer specialists are so good at what they do, and they'll figure out how to use the tool. Yeah, we'll help them, but they'll figure it out themselves. Sure. Question?

Speaker 1

How much longer will you be in the phase three? Is that under three years or four years?

Sneha Patel, CEO

We don't know how long it's going to be. it's event-driven to get to the interim. We're also going to change it now, so we'll have maybe two interims. So we haven't, as a company, we've only spoken today really for the first time about the screening total so far, so it's a thousand patients that we screen. We haven't even talked about that number either because we use the ATM to fund the company. So they've done a great job in keeping up with our burn rate and the key is the volume of trading has we probably used it in full for the past year and we've burned about eight million and maybe in the car year call it another three or four million so well the unique thing is what you know what i showed you was this uh this treatment timeline the first six are in the first six months so that's the intensity of the cost but then the other vaccinations are six months apart so it's going to be an interesting curve, depending upon when patients are enrolled, we'll see the cost come down as we get into the latter phase of the study. Yeah, this, I mean, well, this is in the sweet spot of big fauna, so this is where Roche has played forever. We'll let them tell us what they want to do. We're not going to tell them what we want to do, though. We're playing poker, right? So we're going to take this as far as we can to get the highest value for our shareholders. The more pain we go through, the more capital we put in, the more we expect. We're not going to sell out at a modest price if we can manage to go as long as we can. And quite frankly, this would be a $5 to $10 billion revenue product with those numbers I gave you. So this would be similar to Herceptin, Herceptin sales when it was at its peak, which is now biosimilar. You also have other companies that have gotten to the space like Pfizer bought Segen for $20 or $30 billion. AstraZeneca and Dietschenko are very big in the space, Novartis, Merck. So all of these companies will look at this at some point and may have in the past, I can't say. And we'll, you know, if it's, they're all financial plays, in my opinion. If it's going to be a big revenue producer, they'll step in and make a financial offer.

Speaker 2

And just two things to add to that is that in terms of the burn rate, starting a clinical site and getting a site up and running is a very front loaded expense and then with the way the drug is treated these are also front loaded treatments with an induction phase and then maintenance so the bulk of the cost for a site and treating a patient is up front and then it tails off so I don't expect to see a huge ramp up in clinical expenses because the sites are already up and running and there's a large number of patients yeah

Sneha Patel, CEO

yeah I mean right now we you know we have a lot of options but I think of it is this way the fixed costs already been spent and now it's just a variable cost the cost per patient we have four full-time and we brought our us cro in-house as consultants so we'll have about seven or eight uh very experienced cra's and clinical trial experts who help us run the trial globally in the u.s we had one but we've we found that it's better to have high quality people that you control than to have a cro claiming that you have high quality people with Bay Control. So we think we're better off. My colleague, she started a CRO. She sold it. She started a second CRO. Then she wanted to join us full-time.

Speaker 1

Where are you located?

Sneha Patel, CEO

Houston, Texas.

Speaker 1

I see you have like five.

Sneha Patel, CEO

Yes, for some reason, the LA area really likes our product. That's a site that's interested, but we're at UCLA, USC, Trio US, and there's another City of Hope also that we're about to start up as well. Yeah, well, that's for celebrities.

Speaker 2

Yeah, City of Hope is, they have a hand in everything to do with chemotherapy.

Speaker 3

Carrie, you mentioned you're in Houston. Have you pursued or received Seaprit funding?

Sneha Patel, CEO

No, because we're a real simple technology. CEPRIC goes after the cutting-edge technology. They're really managed by outside venture capitalists and scientists. But we're basic companies. So at one point, we almost had it, but we funded this phase two trial ourselves. We're a group of wealthy enough individuals to do that. We're not a VC or anything, but wealthy enough to fund the phase two study to take it this far. And then we needed to go public to fund the phase three study. But that's why we own so much also and continue to invest. any other questions well the the we could always bring in another drug I mean I have another company I could bring a drug in it's an obesity drug but I don't want to do it because this phase two data is so good anything else would could potentially be negative so why do that when you have something with such good data focus on it and focus on reproducing the first study don't try to

Speaker 3

get bigger than you really need to be and put all the capital behind this study get more patients instead of diverting the capital to a different drug with more than 6 000 small and micro cap companies listed if you're looking for the next apple then channel check truly is the orchard it's an investor community where you can access independent wall street research advanced market data balanced news corporate videos and podcasts you can even register to attend in-person Meet the Management Series lunches and to be part of the preeminent annual small and micro-cap investor conference, Noblecom. And here's the best news. Since Channel Check is sponsored by the featured companies, premium membership requires no investment. It's absolutely free. So check it out. Log in today. Find out why Channel Check is North America's leading source of research on the companies that just may change the world.