GeoVax Labs, Inc. Q4 FY2021 Earnings Call

Good afternoon. And welcome everyone to the GeoVax Fourth Quarter Year End 2021 Corporate Update Call. I am Chuck with Chorus Call and will facilitate today's call. With me are David Dodd, Chairman and CEO; Mr. Mark Reynolds, Chief Financial Officer; Mark Newman, Ph.D., Chief Scientific Officer; John Sharkey, Ph.D., and Head, Business Development. All participants will be in listen-only mode. Please note this event is being recorded. I would now like to turn the conference over to Jules Abraham of CORE IR, who will provide a forward-looking statement regarding this call and information herein. Please go ahead, sir.

Thank you, Chuck. Good afternoon, everyone. Please note the following certain statements in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors, including whether GeoVax can develop and manufacture its vaccines with the desired characteristics in a timely manner, whether GeoVax's vaccines will be safe for human use, whether GeoVax's vaccines will effectively prevent targeted infections in humans, whether GeoVax's vaccines will receive regulatory approvals necessary to be licensed and marketed, whether GeoVax raises required capital to complete vaccine development, and the development of competitive products that may be more effective or easier to use than GeoVax's products, whether GeoVax will be able to enter into favorable manufacturing and distribution agreements and other factors, over which GeoVax has no control. GeoVax assumes no obligation to update these forward-looking statements and does not intend to do so. More information about these factors is contained in GeoVax's filings with the Securities and Exchange Commission, including those set forth at risk factors in GeoVax's Form 10-K. With that, it's now my pleasure to introduce the Chairman and CEO of GeoVax, David Dodd. David?

Thank you, Jules. Good afternoon. And thank you for participating in the 2021 fourth quarter year-end update call. We're pleased to have this opportunity to review our successful acceleration in the Phase 2 clinical development within COVID-19 and immuno-oncology while we continue to secure critical resources in support of GeoVax growth and development, while advancing our IND enabling programs. Over the past year, we utilized our balance sheet to catapult in the Phase 2 clinical development through the strategic licensing of both GEO-CM04S1 and Gedeptin. CM04S1, which we in-licensed exclusive global rights from City of Hope National Medical Center, is a next-generation COVID-19 vaccine, targeting both antibody and cellular immunity with the goal of providing more robust and durable protection than the current authorized vaccines. Gedeptin is a cancer immunotherapy which we in-license exclusive global rights from PNP Therapeutics at the University of Alabama, Birmingham. Currently, it is being evaluated among patients suffering from advanced head and neck cancers and has received orphan drug status from the FDA. In addition, we're advancing encouraging internal programs on the path to IND filing. In January, we issued a 2021 milestone report addressing the goals we established and communicated early last year. Entering 2021, we built a strong balance sheet supporting both strategic transactions and an organization with the expertise to accelerate our growth and development. We successfully executed our plans propelling our status in the Phase 2 clinical developments within both COVID-19 and immuno-oncology. Also, we advanced our internal programs within COVID-19 and immune-oncology, as well as reported encouraging results in support of our Hemorrhagic Fever Virus Vaccine program. This included a scientific presentation at the 2021 World Vaccine & Immunotherapy Congress in early December, validating our COVID-19 vaccine approach of a multi-antigenic vaccine eliciting strong antibody and cellular immune responses, potentially providing more robust and durable protection beyond the current authorized vaccines, which are primarily designed to induce neutralizing antibodies. In fact, in a well-validated lethal challenge transgenic mouse model, our CMO2 candidate, which is the first step towards a universal Coronavirus vaccine, provided complete protection following a single dose, even in the absence of measurable neutralizing antibodies. To our knowledge, these results are unprecedented. I'll note that both our Phase 2 COVID-19 vaccines CM04S1 and our CMO2 are multi-antigenic COVID-19 vaccines designed to strongly elicit both antibody and cellular immune responses. At that same Scientific Congress, we also reported further encouraging results in support of our Marburg and Sudan vaccines. During this year, we anticipate reporting milestones and progress related to both our clinical and IND enabling programs. So let's move into further discussion related to our exciting programs and activities underway at GeoVax. As we entered this year, we further strengthened our balance sheet while focusing on the acceleration of our CM04S1 and Gedeptin Phase 2 programs and completing the IND enabling activities in support of our CMO2 vaccine for COVID 19, our MUC1 vaccine in immune-oncology, and our hemorrhagic fever virus vaccines, the latter of which are supported via non-dilutive funding and activities. In addition, we have further enhanced our resources and expertise in support of successfully executing our plans for the growth and development of the company in 2022 and beyond. Our priority focus this year is to accelerate the recruitment and enrollment of our three Phase 2 programs. This includes a multi-site clinical trial in support of Gedeptin and our two clinical trials in support of CM04S1. Since our recent Gedeptin announcement, we have confirmed two additional clinical sites with Cato SMS as our CRO partner responsible for leading the expansion and acceleration of the Gedeptin clinical program. Our goal is to complete patient enrollment towards the end of 2022 or early 2023, followed by completion of patient evaluations by the end of 2023. Should the results be supportive, a BLA filing will likely shortly happen thereafter. In parallel with the ongoing clinical program, we are also engaged with a CDMO to prepare for commercial manufacture. We are confident that the Gedeptin Phase 2 program will be successfully managed by Cato SMS and our clinical operations team, with the possible expansion of further additional clinical sites soon. We're highly excited about the outlook and promise of Gedeptin within advanced head and neck cancer. We have just received orphan drug designation from the FDA and have previously provided encouraging potential for such patients. In addition, there are promising opportunities relative to expanded use of Gedeptin and other indications, as well as the GDEPT technology in conjunction with other therapies and potential synergy with our MVA-VLP tumor associated antigen approach. We're looking forward to providing milestone updates throughout this year about the progress of our Gedeptin program. In November of last year, we announced an exclusive worldwide license of a Phase 2 COVID-19 vaccine from City of Hope National Medical Center. This exciting vaccine is now referred to as GEO-CM04S1, which I typically refer to as CM04S1. CM04S1 utilizes synthetic Modified Vaccinia Ankara (MVA) technology similar to our other vaccine programs under development at GeoVax. This transaction literally propelled us into a critical stage of clinical development. CM04S1 works by inducing immunity to SARS-CoV-2 by stimulating the immune system to produce antibodies against SARS-CoV-2 that can block the virus from entering healthy cells while the immune system can also grow new disease fighting T-cells that can recognize and destroy infected cells. The vaccine includes both SARS-CoV-2 spike and nuclear capsid proteins. By inserting these proteins, the MVA delivery vehicle is able to drive the expression of both proteins within the body of the vaccine recipient, inducing immune responses. The role of the S protein is to elicit a neutralizing antibody response against the initial infection while the M protein elicits a T-cell response to directly attack virus-infected cells, reduce viral replication and reduce severity and clearance. Thus, the vaccine is designed to induce both neutralizing antibodies and T-cell responses specific for the S protein and the M protein. This vaccine design was implemented specifically to induce an expanded immune response to better combat and clear infections regardless of the circulating SARS-CoV-2 variants. Our goal is to provide a vaccine that gets ahead of the variants versus having to chase the variants, which have successfully reduced reliance on the repeated administration of booster doses of existing vaccines. We also believe that various high-risk populations such as immune-compromised individuals will greatly benefit from such a two-pronged approach. CM04S1 is currently being evaluated in two Phase 2 clinical trials. One trial is the first comparative trial of an investigative COVID-19 vaccine with the current FDA approved Pfizer vaccine in people that have received or are undergoing specific blood cancer therapies associated with transplantation or CAR-T therapy to suppress or severely reduce pre-existing immunity to COVID-19 vaccines. Multiple clinical trials have demonstrated that such patients failed to respond optimally to the current generation vaccines. We believe the CM04S1 will prove to be more potent because it is multiple antigenic and delivered using the MVA factor. We believe this will differentiate CM04S1 from other vaccines by providing both a strong antibody response and a sustained T-cell response to these patients who are still at high risk due to their immunocompromised status concerning severe COVID-19. The other trial currently underway is evaluating CM04S1 as a booster for healthy patients who have previously received either the Pfizer or Moderna mRNA vaccines. We believe that providing a heterologous booster rather than a third or fourth shot of the same vaccine may provide more robust and durable immune response and protection. Heterologous prime boost immunizations are well studied in other fields such as HIV and are being evaluated in multiple countries using different COVID vaccines. We are working with Cato SMS and Pharm-Olam, following the recent merger to oversee the acceleration and management of these two exciting clinical programs, working in conjunction with our internal clinical operations team. Finally, the ongoing GeoVax effort to develop a manufacturing process based on a continuously growing AVM cell line to increase production consistency and capacity will mesh with the clinical development activities and full development schedule associated with the CM04S1 and the CMO2 vaccines. The potential benefits of this transaction to the GeoVax program are highly significant at this time.

Thank you, Dave. So starting with our income statement, Grant and Collaboration revenues were down to 385,000 in '21 versus $1.8 million in 2020. As the '21 period revenues relate entirely to our Grant from NIH for the COVID-19 vaccine for the pan-Coronavirus program. While the 2020 amount includes revenues from our Grant from the U.S. Army supporting a loss of fever vaccine program, which had begun to wind down during that period. That's the reason for the reduction. Research and development expenses were $15.6 million in '21 versus $2.4 million in 2020, with the increase primarily associated with our license fees, both paid and accrued, and clinical trial expenses related to our license agreement with City of Hope for the COVID-19 vaccine program, as well as for our license GDEPT. Also contributing to the increase were expenses related to our universal Coronavirus vaccine program, manufacturing process development and generally a higher level of activity. G&A expenses were $3.6 million in '21 versus $2.2 million in 2020. A large portion of the increase here is related to our annual Delaware franchise tax, which is based on our capitalization and was minimal during 2020. Other increases in insurance premiums, patent costs, legal fees, consulting fees, and personnel costs are generally associated with preparing our organization for a higher level of activity following capital raise. Other income and expense for '21 included a $172,000 gain on extinguishment of debt associated with the forgiveness of a PPP loan we received in early 2020; a comparable figure for 2020 includes interest expense of $144,000 related to convertible debentures that were retired during that year. The overall net loss for '21 was $18.6 million or $3.04 per share, versus $3 million in 2020, or $2.14 per share, again, with the increase primarily associated with our licensing and R&D activity. Turning now to the balance sheet. Our cash balances at the end of this past year were $11.4 million as compared to $9.9 million at the end of 2020. The change in cash balances is reflective of approximately $11 million used in operations, offset by proceeds from our stock offering in early '21 which generated net proceeds to us of $9.4 million. During the year of 2021, we also received $3.4 million from the exercise of our publicly traded warrants. Subsequent to year-end in January of this year 2022, we raised an additional $9.2 million through a private placement priced at $3.26 per share. So as of today, GeoVax has cash balances of approximately $17 million. Now that we've got three ongoing Phase 2 clinical programs in COVID-19 and cancer immunotherapy, our cash needs have obviously increased not only for license fees and direct costs associated with plentiful programs, but also for the facilities, personnel, and other costs to support those programs. While we don't provide specific forward-looking estimates of costs to complete these programs, what we can say at this time is that our existing cash resources are sufficient to fund our operations and our current business plan priority programs into the second quarter of 2023. We believe the advancement of these programs will create an attractive investment opportunity for new fundraising as they present themselves. I'll be happy to answer any questions during the Q&A. And I'll now turn the call back over to Dave.

Thank you, Mark. My colleagues and I will now answer your questions. Joining us for the Q&A session are Drs. Mark Newman and John Sharkey, our Chief Scientific Officer and Head of Business Development respectively. I'm therefore turning the call over to the operator for instructions on the Q&A period.

We will now begin the question-and-answer session. Our first question will come from Jason McCarthy with Maxim Group. Please go ahead.

Hi, guys. Thanks for taking the questions. Let's start with the 04S1 program. And maybe any of you could speak a little bit more broadly about the state of COVID vaccines and the pandemic now, because the data that we were seeing on the mRNA side with Omicron was less than fantastic or desirable, like we saw with Delta and some of the other variants. And then you and I both know that there's - it's not the last letter in the Greek alphabet, there probably will be more variants or probably be looking at something again, surging next year. So the Omicron data, does that change the importance now of 04S1 and the need for doing something different than just mRNA?

Thank you, Jason. This is David Dodd. I'll start and then I'll ask Mark Newman to pick up and I'd say that we share your outlook for how there will continue to be emerging variants. We can't predict what letters of the alphabet will occur based on what their constructs will be. But clearly there is a need, especially among high-risk populations. Those who have compromised immune systems know that they are being highly insufficiently served by the existing vaccines. But in general, we need additional ones so that we can, as we refer to, get ahead of the variants and be able to strongly elicit both antibodies as well as T-cells to provide better protection, more robust and durable protection. But I'll ask Mark Newman to pick up from here. Mark?

Sure, thanks. So, I think what you're seeing is that the world is starting to recognize that targeting the S protein alone and focusing on neutralizing antibodies has some limitations. So this is impacting primarily the vaccines that are based solely on the receptor binding domain, right, that part that interacts and mediates the infection to a cell. Now, that is not the current generation mRNA vaccines, as they include the total S protein. But still, it's the mutations that are mutating around the receptor binding domain primarily. We just had a World Health Organization conference a couple of weeks ago, which I participated in, and, you know, it's interesting because while the new variants are not being protected as well with the current generation vaccines, the immune responses that they're generating don't protect against previous infections as well. So, it's almost like the virus can go in full circles, and that was actually how it was described; in fact, they can come back into where it started. And of course, you don't have long-lived immunity, one of the issues that's being pointed out with the mRNA vaccine. So I've been saying for a year now that we need to have a broader response; we need to focus on T-cell responses to conserved structural proteins. These are the things that make a Coronavirus a Coronavirus. There are conserved regions in the S protein, but also the M and the nucleocapsid, which are in the CMO2 and the 04S1 respectively. The world is starting to come to realize that. You know, the difficulty is, while everyone accepts it, how would you measure and how do you design a vaccine? Heterologous prime boosts are back in vogue. Those of you who have followed HIV vaccine work for decades will remember that there were multiple attempts to boost immune responses by using different product formats. Now you're hearing about what they call mix and match; you know, if you got the J&J vaccine, go get a different one, go get one of the mRNA, if you got an mRNA, you can boost it with the J&J or an AstraZeneca vaccine, if you're living in Europe. You know, these are the approaches that are being taken. Obviously, the evolution of variants drives the need for next-generation products. But if you're holding one of the current generation products, you're going to try and find a way of using it. You're seeing both of these aspects kind of flow into the medical world. So, heterologous prime boost using existing vaccines and then next-generation vaccines that are designed to induce a broader response. There is some interest in the mRNA field in particular and making Omicron-specific vaccines. But, you know, by the time maybe the Omicron vaccine got into Phase 1, the Omicron cousin was already out there, was B1, now B2. Chasing variants, as David said, is just not something that we feel is a logical approach. So, does that answer your question?

Thanks.

Okay, to move on?

Yes, please.

Our next question will come from Shivendu Seneroy with Brookline Capital. Please go ahead.

Hi, I'm Shivendu for Kumar from Brookline. Appreciate the update. Thank you. So, with regards to the Sudan and Marburg programs, first of all, congratulations on encouraging preclinical data. My understanding is that the clinical trials would move with federal funding. So I was wondering if you have any inputs from the Department of Defense or BARDA regarding the clinical studies and how you think about taking these programs further?

And you're specifically addressing the hemorrhagic fevers, right?

Yeah, yes.

Okay. Thank you. Thanks. I just wanted to make sure. Well, we are currently those programs have been supported through NIH preclinical services, through non-human primate testing and all. During the course of our progress with these products, you may be aware that we initially demonstrated for the Ebola Zaire vaccine showed 100% protection in a single dose without the use of any adjuvant. I think that's unprecedented in non-human primate models to achieve that result in a single dose. We have moved forward with our current products also. We have been in continued dialogue with BARDA about the Strategic National Stockpile program and the progress of our products. In the potential, you know, time will tell. We believe that with the progress we've seen and support through the non-human primates from NIH preclinical services, that depending on the outcome, we would anticipate that if there is the opportunity to move it forward in the clinical development, we would likely be supported through non-dilutive funding. That's consistent with discussions that we've had on an ongoing basis. Mark, do you want to add anything?

Well, yeah, I can just add that, you know, the real world is that when COVID hit, we couldn't get non-human primates to do the testing. And so that slowed us down. But that has picked back up and everything is back on schedule. We are fully anticipating we were analyzing data yesterday. So we are seeing all sorts of different results come in through these contracts. We fully anticipate having a BARDA tech watch meeting this year. We will have to see what the data looks like. But everything is back on track; we are just dealing with the shortage of test animals.

Great, thanks. This was helpful. In now with regards to the pan-Coronavirus CMO2 program that elicits both VNT cell responses and preclinical models. Can I get some more color on your future plans? And are you planning to develop this for other Coronaviruses, like MERS?

Yeah, so the - again, remember that in MERS, it's a significantly different S protein, right. Some of it's the same as with COVID, but it's different; it uses a different receptor. The matrix, the nucleocapsid, the envelope, a lot of the non-structural proteins like the enzymes and things that the virus uses to process proteins and DNA, those are all very highly shared amongst beta coronaviruses. What we're doing is, when you are - it's an ongoing program, looking at other targets, we can roll into the existing CMO2. So CMO2 is now basically the backbone, because the 04S1 is fairly similar. And that's in the Phase 2 trial. We don't want to necessarily play a lot of games with that one, but the CMO2 is where we can start rolling these open reading frame proteins in that are highly conserved and have enzymatic activity. We are making those and have our next-gen – our next product is being sequenced right now to see if it's holding up and looks like we want. This is a program that we pitched and discussed with groups like Sappi and NIH. It involves, again, shifting away from the S protein and reliance on neutralizing antibodies—not that we wouldn't have S protein, but expanding it. All this is rolling along. It's all in either the construction phase or goes into small animal models at first. So, it's on track; it was always an extended two to four-year program. Depending on where we are successful and how the world has evolved, we can rely on what people are seeing in CMO2 and determine what else we add. This is still going, but it's separate and more research-focused from the 04S1, which targets the existing pandemic and the immune-compromised patients. So, the CMO2 is really the beta Coronavirus vaccine of the future. That's how we're looking at that.

I would just add that our plan is to drive through the clinical development of 04S1 because we believe that it can more immediately address populations that are highly at risk, who are not being adequately protected with the current vaccines, and then we can follow along with further development that will provide greater protection going forward as we see Coronaviruses continuing to evolve.

Perfect. That makes sense. Just one final question regarding the cancer vaccine program. Do you plan to conduct non-human primate studies for the MVA-VLP MUC1 program? What kind of data do you think will be sufficient to get it into the clinic?

For the cancer programs, no, we don't envision going into non-human primates. Those are typically handled through transplantable tumor models. We have just initiated another trial, another animal experiment using human transgenic mice that are well-established models. There, what you do is you vaccinate and challenge with the tumor by transplanting the tumor in or you transplant the tumor first and then you start vaccinating, and see if you can retard tumor growth. So that's the type of study that's done for those. There are no transplantable tumors you could use for the non-human primates. You can't just sit around and wait and see if they get cancer. So those are under control that way. The path forward that we're taking is we're piggybacking on other programs, what others have done involving the MUC1 gene. There is a significant history about targeting immune responses against aberrantly glycosylated MUC1. It’s a situation where your body raises immune responses on its own, sometimes they add to the carcinomas. There are products that have been tested in clinical trials through one of our collaborators, the University of Pittsburgh. This is how we'll move this; the goal is to take something that's already been in Phase 1 and Phase 2 trials and then add the MVA to that. You are looking at two experimental products, but two experimental products that have a great deal of safety and initial evaluation behind them—this will allow us to put them together through an FDA approved study. But no non-human primates—that's just not something we do for cancer.

Okay, great. Thank you for taking my question.

The next question will come from Jason McCarthy with Maxim Group. Please go ahead.

Hey, guys, sorry, I got cut off. A lot of my COVID-related questions are subsequently answered. But I wanted to touch on the Gedeptin program. We think it's really important. Can you give us even an update on where those first 10 patients are in terms of enrollment or their progress? And then what are the expectations in terms of how many patients you think you might have to add for this program to make it registrational? And the third part of that question is, what would be considered a good objective response rate? And a second line head and neck cancer would be 10%, 20%, 30%, and what do you think would be clinically meaningful for this program?

Thank you. Let me ask John Sharkey, would you like to answer that?

Sure, sure. At last, I recall, there have been five patients enrolled, and two patients are waiting for the additional trial on top of the 10, looking at a higher dose of the drug to maximize the effect. As far as the sort of increase we would see, this is going to be personal opinion at this point. We are putting everything together to initiate a discussion with the agency on it. I would imagine it would be in the range of 20% to 30% against the current standard-of-care, because this is for an end stage. But that's purely I have to say, speculate at this point based on what we have discussed with the agency. Hopefully, that answers your question, Jason.

Yeah, it does. Thank you. If you're successful with a 20% to 30%, whatever the response rate that you're going to need, the FDA has not said this yet, but would it be optional to then move to first line for a trial? We've seen that with a few other programs out there, and this is something that Gedeptin could follow—a similar path to that?

For head and neck, it's given its mechanism of action as a single agent, I personally don't think it would likely move into first line. However, as we've also said, we're looking at it early on with combination with checkpoint inhibitors. The data suggests that you would improve the response of metastatic disease and checkpoint inhibitors in an animal model, when combined with Gedeptin. That potentially could move up into an earlier stage treatment paradigm for certain patient populations in combination with checkpoint inhibitors. I could see that happening. I just don't—I just don't think, my personal opinion, given this mechanism of action, and stage disease, I think people would try other treatment paradigms versus a standalone.

And lastly, is the expectation, that you haven't met with regulators yet, that it would only be about 30 people that you'd have to add? In some of the one-sided trials that we've seen for approvals, they've ranged anywhere from as low as 30 to as high as 150 people to gain or to be sufficient for filing. Is it possible that they could want more than 30, even less than 30? We've seen some sarcoma studies where they take 15, 20 people, and that’s more than enough given the unmet need?

In dealing with the agency, anything is possible. But that's the reality. Given that it's an end-stage disease and they have no other treatment options, the way the file was designed, I personally expect it would be on the lower end of the range of what you would see for these types of trials.

Yeah, I would add, Jason, that based upon the discussion held with the agency following the Phase 1 program, the indication was given that a number of patients in the current Phase 2 trials lower than what we have; we are exceeding that by more than 10—the number we're looking for is something more like 20 in total. We are looking at potentially adding 30 on top of the 10. So that would be almost double the number, and they were looking for a minimal number. What we have invested in and what we're investing in is to increase the number significantly beyond the number that had previously been indicated. But we engage in discussions. As we add these additional sites and expand beyond that and accelerate the enrollment, which is what we’re focused on for this year. We do believe we will complete more than the previously indicated number of patients.

Great, thank you for taking the questions.

Thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. David Dodd for any closing remarks. Please go ahead.

Thank you. And thank you, everyone, for participating in this conference call, sharing in our milestone achievements, resulting in clinical stage developments within both immuno-oncology.

I'll finish it off by just saying thanks to everybody for participating and hope everybody has a pleasant evening.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.