Earnings Call Transcript - GOVX Q2 2022

Operator, Operator

Good afternoon and welcome everyone to the GeoVax Second Quarter 2022 Corporate Update Call. I’m Andrew with Chorus Call and will facilitate today's call. With me are David Dodd, Chairman and CEO; Mark Reynolds, Chief Financial Officer; Mark Newman, PhD, Chief Scientific Officer; Kelly McKee, M.D., M.P.H., Chief Medical Officer; and John Sharkey, PhD, Vice President, Business Development. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. Certain statements in this presentation may constitute forward-looking statements. 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 various factors, including whether GeoVax can develop and manufacture its vaccines with the desired characteristics in a timely manner. GeoVax's vaccines will be safe for human use. GeoVax's vaccines will effectively prevent targeted infections in humans. GeoVax's vaccines will receive the necessary regulatory approvals to be licensed and marketed. GeoVax requires capital to complete vaccine development. There is the development of competitive products that may be more effective or easier to use than GeoVax's products. GeoVax will be able to enter into favorable manufacturing and distribution agreements, and other factors outside of GeoVax's 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 in the risk factors section of GeoVax's Form 10-K. It is now my pleasure to introduce the Chairman and CEO of GeoVax, David Dodd.

David Dodd, CEO

Thank you for joining us this afternoon for the 2022 second quarter update call. This quarter has been pivotal for GeoVax as we make progress in our clinical development of COVID-19 vaccines and cancer therapies. We are also moving forward with our preclinical programs. We successfully strengthened our financial position in a tough investment climate for biotech. Our mission is to enhance lives globally by addressing some of the most difficult infectious diseases and cancers. We aim to provide safe, affordable products that add value for our shareholders and stakeholders, while also fostering career growth for our team. The in-licensing of GEO CMO4S1 Gedeptin is expected to significantly benefit the company. CMO4S1 is a leading next-generation COVID-19 vaccine currently in Phase II development, targeting both antibodies and cellular immune responses to offer more robust and lasting protection compared to existing authorized vaccines. This vaccine differentiates itself with several crucial advantages over current options. Gedeptin is a cancer therapy that's currently being evaluated among patients with advanced head and neck cancers. It has received orphan drug designation from the FDA, with funding and support for its clinical trial from the FDA orphan drugs clinical trials program. We believe Gedeptin has significant clinical potential, including a possible accelerated pathway for development. Both CMO4S1 and Gedeptin are now sponsored by GeoVax, and our goal is to fast-track their clinical development, including expedited regulatory review. Simultaneously, we are making progress on other internal programs toward IND filing. Earlier this year, we issued a milestone report for 2021 detailing our achievements and laying out our goals for 2022. We are concentrating on this year's targets, especially accelerating the clinical development of Gedeptin and CMO4S1, and transitioning to a more efficient MVA manufacturing process. In January, we bolstered our finances with a $10 million direct investment and followed that with a $20 million investment in May. Recently, we added another $5 million from warrant exercises. We continue to receive strong interest from potential investors, but our focus remains on achieving our 2022 goals and enhancing shareholder value. Mark Reynolds, our CFO, will give a detailed overview of our financials. In terms of Gedeptin, we confirmed two additional clinical sites and assigned a CRO partner to lead the acceleration of its clinical program. We are actively working on increasing patient enrollment with the aim of completing it by early 2023 and finishing evaluations by late 2023 or early 2024. If the results are positive, we may file for a BLA soon after, depending on discussions with the FDA. Concurrently, we are collaborating with the CDMO to ensure sufficient product supply for expanded clinical programs and to prepare for commercial production. We are optimistic about managing the Gedeptin Phase II program and potentially expanding to more clinical sites. We are enthusiastic about Gedeptin's prospects in advanced head and neck cancer and see encouraging opportunities to extend its use in other indications alongside our MVA-VLP tumor-associated antigen approach. We look forward to providing updates on Gedeptin’s progress this year. Our development of CMO4S1 against COVID-19 is also a priority, particularly in light of emerging variants. CMO4S1 uses Modified Vaccinia Ankara technology like our other vaccine initiatives. It stimulates immune responses to SARS-CoV-2 by generating antibodies that block the virus and creating T-cells that eliminate infected cells. Unlike authorized vaccines, CMO4S1 incorporates both SARS-CoV-2 spike and nuclear capsid proteins, a key difference that enhances immunity. The design aims to elicit both neutralizing antibodies and T-cell responses, allowing for better combat against infections. This approach is intended to preemptively address variants, potentially reducing the need for repeated booster shots of existing vaccines. We believe our strategy may yield a more durable immune response, particularly benefiting high-risk populations, such as the immunocompromised. Analysis published in July indicated that CMO4S1 demonstrated strong T-cell cross-reactivity against Delta and Omicron variants, suggesting it may offer long-lasting protection against SARS-CoV-2 variants. CMO4S1 is currently being tested in two Phase II trials. One is comparing CMO4S1 to the FDA-approved Pfizer vaccine for patients undergoing blood cancer therapies that impair their immune response to COVID vaccines. We anticipate CMO4S1's multi-antigenic design will prove more effective for these patients. The second Phase II trial is examining CMO4S1 as a booster for individuals who previously received either the Pfizer or Moderna vaccine. We believe a heterologous booster could elicit a stronger immune response compared to multiple doses of the same vaccine. Research supports the advantages of heterologous prime-boost strategies, as seen in HIV studies. Our efforts to enhance MVA manufacturing based on the growing AVM cell line aim to improve production consistency and capacity to align with the development timeline for CMO4S1 and CMO2 vaccines. We recognize the limitations of existing COVID-19 vaccines in providing lasting immunity and adequate protection for vulnerable populations. We commend the federal government for acknowledging the need for substantial funding towards next-generation vaccines, including CMO4S1 and CMO2. The Senate Appropriations Committee's recent bill supports this initiative for evolved COVID-19 vaccine development. We are eager for ongoing discussions that support the progress of CMO4S1 and CMO2. Recently, the WHO declared monkeypox a public health emergency of international concern, prompting various nations to implement measures to mitigate health risks. In the U.S., two vaccines are authorized for preventing monkeypox, with MVA being the primary one, which also serves as a vector in GeoVax's COVID-19 vaccines. Previous studies have shown GeoVax's MVA-based HIV vaccine effectively prevents monkeypox in non-human primates. As part of our commitment to public health, we are evaluating CMO4S1 for monkeypox prevention, expecting results to confirm its protective capability against both COVID-19 and monkeypox. We aim to establish that our hemorrhagic fever vaccines, utilized in the same manner, can also protect against monkeypox, enabling a vaccine that could potentially guard against both viral categories in certain endemic regions. We look forward to sharing further developments on this subject soon. Now, I will hand it over to Mark Reynolds, GeoVax’s CFO, for a review of our recent financial results. Thank you. Mark?

Mark Reynolds, CFO

Thank you, David. I will quickly go through our income statement as we want to get to the Q&A. Our grant revenues were $82,000 in the first half of 2022 compared to $190,000 in 2021, which reflects a decrease in funding from both the NIH for the COVID-19 vaccine and the US Army for our Lassa fever vaccine. By June 30, 2022, we had utilized all available grant funds, and we plan to seek additional non-dilutive funding for our development programs in the future. Our R&D expenses increased to $2.6 million in 2022 from $1.4 million in 2021, mainly due to new clinical trial activities for COVID-19 and cancer, including manufacturing costs for clinical trial materials. The increase also reflects higher personnel and consulting costs as we expanded our team to support increased activity. General and administrative expenses rose to $2.1 million in 2022 from $1.8 million in 2021, linked to higher personnel, consulting, and patent costs. The net loss for the first six months of 2022 was $4.7 million, or $0.47 per share, compared to a loss of $2.9 million, or $0.49 per share in 2021. This increase is largely due to the ramp-up of organizational infrastructure and expenses related to the CMO4S1 and Gedeptin clinical trials. Regarding our balance sheet, our cash balance as of June 30 was approximately $31 million, up from $11.4 million at the end of 2021. The change reflects $8.2 million used in operating activities, offset by proceeds from our stock offerings in January and May, totaling nearly $28 million. Additionally, this figure does not include the extra $5 million received just this week from warrant exercises, bringing our current cash to about $35 million. Funding our three ongoing Phase III clinical programs and preparing for upcoming development stages are our primary uses of cash and top financial priorities. With the recent $5 million from warrants, our outstanding shares currently stand at 24.7 million. In conclusion, we are well-positioned to advance our clinical programs with a cash runway that should cover operations and priority projects through the end of next year. I look forward to answering any questions during the Q&A, but I will now turn the call back over to David.

David Dodd, CEO

Thank you, Mark. My colleagues and I will now answer your questions. Again, joining us for the Q&A session are doctors Mark Newman, Kelly McKee, and John Sharkey, our Chief Scientific Officer, Chief Medical Officer, and Vice President of Business Development, respectively. I'm therefore turning the call back to Andrew for instructions on the question-and-answer period.

Operator, Operator

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

Jason McCarthy, Analyst

Thank you for taking my question. Can you discuss the factors influencing the demand for a monkeypox vaccine? We know that MVA is effective, and I believe it is the leading US-based MVA option. I've noticed that some mRNA companies are announcing significant stock increases today. Can you provide some insight into these dynamics? How might this market develop, or is it primarily about MVA, where you could play a substantial role?

David Dodd, CEO

I'll start and then we'll see if any of my colleagues would like to add. So first of all, Jason, thank you for your question. Appreciate your interest in the company. We do recognize that we are likely the leading MVA company, certainly in the United States. We all know that there is a single source supplier for monkeypox currently and it's out of Denmark. We think it's very important for there to be a supplier out of the United States that addresses this for numerous reasons, not only to reduce the total dependence on a single supplier. I have no idea the degree to which Moderna with their mRNA may or may not be successful in producing a monkeypox vaccine. Time will tell on that, but we certainly recognize that MVA, which as we know is the basis for so many of our products, is approved for preventing monkeypox. So that provides us an opportunity, and we validated that in previous peer-reviewed publications that I mentioned in my comments. I don't know if Kelly McKee would like to add anything else to that, but I'll ask if he would.

Kelly McKee, Chief Medical Officer

Hello. David, you’ve captured the main considerations well. Currently, MVA, or vaccinia-based vaccines in general, are the only established preventive options for monkeypox. The regulatory pathways for new entrants remain uncertain. Therefore, it's unclear how much Moderna or others will be able to contribute in this area. As we strategize for monkeypox, we also need to navigate some regulatory questions. Thus, the field is quite open at the moment.

Jason McCarthy, Analyst

Do you take a multi-faceted approach? It seems you have a promising COVID vaccine that might also be effective against monkeypox. Additionally, you are considering Sudan, Marburg, and Ebola, as monkeypox could be a bigger concern in other regions. Are you thinking about taking action in the U.S. as well as in West Africa? Another organization recently announced their plans to operate in Kenya.

David Dodd, CEO

The answer is yes. And I'll ask Kelly to elaborate a little bit about our outreach to Africa and the concepts there and also the difference in monkeypox and the strain of monkeypox that we see in Africa. Kelly, would you like to address that?

Kelly McKee, Chief Medical Officer

Sure. Jason, your thoughts align closely with ours. We see the potential to provide a dual solution, and we have started preliminary discussions with individuals in some sub-Saharan African countries to gauge interest in a co-development program. While I can't share specific details about those conversations, the opportunity is definitely there. There are two main strains of monkeypox recognized. The strain causing the current global outbreak is the West African strain, whereas the Central African strain, which is prevalent in the Central African Republic and neighboring areas, appears to be much more virulent. Consequently, there is significant concern in these potentially endemic countries regarding access to an effective vaccine. The chance to offer protection against both monkeypox and another endemic virus, whether it’s COVID or one of the hemorrhagic fever viruses, is certainly an attractive possibility.

Jason McCarthy, Analyst

Just one last question, is there interest from a pharmaceutical group like BARDA, considering the stockpiling related to the monkeypox virus and its implications? Since the vaccine is intended for smallpox in immune-compromised individuals, does this make your COVID vaccine, which offers cross-protection against monkeypox, particularly appealing to a government agency like that?

David Dodd, CEO

We believe there is potential for this. Various federal government agencies are seriously considering the multi-antigen approach for COVID-19. From our discussions, we see increased interest, especially given the ongoing limitations of the currently authorized vaccine for COVID-19. Additionally, the ability to address monkeypox could significantly benefit the stockpile program and NGOs focused on other endemic areas.

Operator, Operator

The next question comes from Jeff Kraws with Crystal Research. Please go ahead.

Jeff Kraws, Analyst

Thank you. Jason covered several of my questions, but I'd like to follow up on the topic. There have been discussions this week about military involvement in Africa, as well as our military. You've received grants already. Is supplying that something you would pursue? Additionally, have you engaged with companies like Pfizer and Moderna regarding their struggles to provide enough COVID vaccines? Are you comfortable that you can navigate similar challenges with these products or even with monkeypox? Lastly, regarding the combination vaccine, if you have one, that's great. Are you considering offering it both separately and in combination, as regulatory bodies might require different approaches?

David Dodd, CEO

To address the second question, we acknowledge the complexity of the regulatory pathway for MVA as an alternative to the existing MVA. Moving forward, we understand that our MVA-based vaccines also offer the benefit of preventing monkeypox. If we were to further develop an MVA-VLP or MVA-based Zika virus vaccine, particularly in collaboration with South America, we recognize that monkeypox is prevalent in Brazil and poses a threat. Therefore, we can address needs not only through dual indications but also by leveraging the MVA-based vector's advantage of preventing monkeypox. That's the strategy we are considering. Regarding manufacturing, I would like to invite Dr. Mark Newman to provide comments, as we continue to advance toward a system that will allow us to meet demands at a faster rate than traditional chicken eggs or chicken embryonic fibroblasts.

Mark Newman, Chief Scientific Officer

Yes, sure. So right now we manufacture using a process based on chicken embryonic fibroblast, which is the same thing that Bavarian Nordic user. It's a primary cell line, and that has limitations that you start with eggs. We are in an active program looking at getting into continuous cell manufacturing, cell-based manufacturing, which will be more comparable to what the adeno vectors. So if you think of the J&J or the AZ COVID vaccines, those are produced with these continuous cell lines. So that's ongoing. Now our focus has been on our vectored vaccines, particularly CMO4S1 and then some of the other products at the research level. We actually haven't looked at just producing MVA without one of these inserts in it. So let's go to your other point: would you make something that is MVA specific? That would be the easiest path. I have no doubt, there is a lot of data out there that suggests there are multiple cell lines that can produce or support the production of MVA. We will run into a little bit of difficult situations when we have these combo vaccines because you're incorporating an insert, and you got to make sure that the insert stays in there while you're producing it. Just to make an MVA vaccine with the cell line would probably be the easiest path. We have –

Jeff Kraws, Analyst

Yeah, that's why I asked, because from a regulatory perspective, the FDA has faced challenges when attempting to combine things. Your data is very clear and convincing, and I believe it might be easier for you to clarify and present it simply for everyone to understand.

Mark Newman, Chief Scientific Officer

I think you're right. If it's an HIV vaccine, you'd have to get it approved for HIV and then you need to expand your claims, showing that it all works against monkeypox. I think that’s what we would face. So yeah, those are all things that are being discussed.

David Dodd, CEO

Thank you very much for the answers.

Operator, Operator

The next question comes from Kumarguru Raja from Brookline Capital Markets. Please go ahead.

Kumarguru Raja, Analyst

Thanks for taking my questions and shifting gears to oncology. What are you seeing in terms of enrollment? And also in terms of the animal studies that are being considered in North Carolina, when can we get an update and what kind of information can we expect from that studies?

David Dodd, CEO

Kumar, thank you for your interest. Could you repeat your first question and then we'll address the North Carolina one?

Kumarguru Raja, Analyst

Yeah. The first question is just the details about how the enrollment is going. What are you seeing there and what can we expect in terms updates?

David Dodd, CEO

Okay. So I'll ask Kelly to discuss the Gedeptin and then I'll ask Mark Newman to pick up on the development programs, including the UNC Charlotte. Kelly?

Kelly McKee, Chief Medical Officer

Yeah. Hi. We probably shouldn't really talk about the enrollment dynamics at this time. We transitioned this trial and to take control; I mean, we in-licensed the Gedeptin product a number of months back. We've been in the process of transitioning the IND and expanding the trial from a single site to a multi-site study. That has resulted in sort of a pause in the initial enrollment, and we anticipate accelerating it in short order as David indicated in his introductory remarks. We hope to have the current trial completed sometime next year. Beyond that, we need to be talking to the regulators to see sort of what they want us to present to them for further studies or the regulatory pathway for an accelerated approval.

David Dodd, CEO

Thank you. I would just underscore that once we took over full sponsorship we then were in the driver's seat to initiate those types of discussions and to focus on accelerating across the multi-sites. That’s where we are right now. So as Kelly said. Mark, do you want to pick up on the University of North Carolina, Charlotte work that's going on.

Mark Newman, Chief Scientific Officer

Yes, sure. We are collaborating with a world expert in pancreatic cancer who has a unique animal model resource. Currently, we are validating this model for our use in her lab. Our approach is somewhat different from what you typically see. This process is progressing at a reasonable pace, though it often takes longer than anticipated. We expect that once the model is fully validated and we are confident in its repeatability, we will begin to see results. The in-life portion of the study has two components; initial data should be available by the end of the year, and follow-up data will depend on those results, likely coming in Q1 and Q2 of next year. We plan to provide updates on our progress later this year and into Q1 of next year.

Kumarguru Raja, Analyst

So the expectation is that data would be presented at medical meetings. And also with regard to Gedeptin, where do you stand in terms of drug supply for the clinical trials? Thank you.

Mark Newman, Chief Scientific Officer

The drug substance for the cancer trial?

Kumarguru Raja, Analyst

That’s right. Yes.

Mark Newman, Chief Scientific Officer

We are planning for the Mark 1 program to be a combination vaccine using our MVA vectored vaccine, which we will enhance with a peptide and adjuvant. The current questions about the mouse model involve whether we should start with the peptide and then boost with the MVA or begin with the MVA and boost with the peptide. It's too detailed to cover fully on this call, but we believe we can optimize the immune response to either focus more on CD8 responses or antibody production through various immunization strategies. In terms of moving this into clinical trials, the peptide is currently available as we are utilizing a GMP product made at the University of Pittsburgh's BIO facility, which will collaborate with us through the National Cancer Institute. We also have a GMP-produced liposome encapsulated toll receptor agonist as the adjuvant, supported by a supply agreement with a partnering company. The MVA will need to be produced, and we have several potential partners for this manufacturing process, opting to use CES cells to expedite production without any experimental approaches. Based on our previous experience, for instance with 04S1, we estimate that it will take about five to six months to produce enough material to support Phase I and Phase II testing. It's important to note that this is early-stage testing, and assuming we receive promising results, we will scale up production and enhance quality control before proceeding with a full CDMO for final production. However, we do not need that finalized for initial Phase III discussions.

Kumarguru Raja, Analyst

This is very helpful. Thanks so much.

David Dodd, CEO

And Kumar, the data results will be presented as they've been validated, etc. at scientific meetings and we will issue press releases notifications of all of that.

Kumarguru Raja, Analyst

Thank you.

David Dodd, CEO

Are there any other questions?

Operator, Operator

Not at all. Seeing no further questions, this concludes our question-and-answer session. I would like to turn the conference back over to David Dodd for any closing remarks.

David Dodd, CEO

Thank you, Andrew, and thank you everyone for participating in this corporate update call, sharing our achievements, progress, and outlook. Your interest is greatly appreciated. Our focus is on execution and reporting updates on progress with Gedeptin, CMO4S1, CMO2, and our other development programs, such as the one we're just talking about with the Mark 1, as well as the expansion of our capabilities and resources. Our goal is to build shareholder and stakeholder value. I want to acknowledge and thank the GeoVax Board of Directors, our GeoVax staff, and the many other parties that continue to support, assist, and advise us towards achieving success. For all of us, it is a great pleasure serving our shareholders and stakeholders and being a part of this team. We wish you a safe and enjoyable day and thank you. We look forward to speaking with you at the next conference call.

Operator, Operator

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