Earnings Call Transcript - GOVX Q1 2022

Operator, Operator

Good afternoon and welcome everyone to the GeoVax first-quarter 2022 Corporate Update Call. I am Chuck with the call, and I will facilitate today's call. With me are David Dodd, Chairman and CEO, Mark Reynolds, Chief Financial Officer, Mark Newman, PhD, Chief Scientific Officer, and John Sharkey, PhD, Head of Business Development. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. 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 the information herein, please go ahead, sir.

Jules Abraham, CORE IR

Thank you, Chuck and 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. There is 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 as risk factors in GeoVax's Form 10-K. It is now my pleasure to introduce the Chairman and CEO of GeoVax, David Dodd.

David A. Dodd, Chairman and CEO

Thank you. And good afternoon, everyone. And again, thank you for participating in the 2022 first-quarter update call. First-quarter marked a transformational period for GeoVax. And that we achieved clinical stage development status within the two priority areas of COVID-19 vaccine development and cancer immunotherapy. In addition, we added strong expertise and experience to ensure our ability to expand and accelerate our clinical development programs in the requisite activities through regulatory registration, manufacturing, and distribution. Our mission is to provide products to prevent or treat some of the world's most challenging infectious diseases and cancers by leveraging technology and collaborations that allow us to successfully provide life-enhancing products in a scientifically validated manner. Our pursuit is to deliver safe, affordable products to improve lives worldwide, delivering increased value to our shareholders and providing motivating career development opportunities to members of our team. We firmly believe that GeoVax can provide differentiated, advanced vaccines and immunotherapies, competing with and collaborating with other companies worldwide. We intend to successfully execute in this regard. We're pleased to have this opportunity to review our successful progress into Phase II clinical development while securing critical resources in support of GeoVax's growth and development while also advancing our IND enabling programs. The in-licensing of both GEO, CM04S1 and Gedeptin represented watershed events of the transformation of GeoVax as a milestone towards potential significant value expansion of the company. CM04S1, which we in-licensed exclusive global rights from the 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-licensed exclusive global rights from PNP Therapeutics and the University of Alabama, Birmingham. Currently being evaluated among patients suffering from advanced head and neck cancers, it has already received orphan drug designation from the FDA. In addition, we're advancing encouraging internal programs on the path to IND final. In January, we issued a 2021 milestone report addressing the goals we established and communicated early last year. That update outlined our successful 2021 performance in executing upon those goals, bringing us to Phase 2 clinical status, enabling our progress related to our internal programs while strengthening the organization with the expertise to accelerate our growth and development. At the 2021 World Vaccine and Immunotherapy Congress last December, we reported results validating our COVID-19 vaccine approach of a multi-antigenic vaccine inducing strong antibody and cellular immune responses, potentially providing more robust and durable protection beyond the current authorized vaccines. In fact, in a well-validated lethal challenge transgenic mouse model, our CMO2 vaccine 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 II COVID-19 vaccine CM04S1 and our universal Coronavirus vaccine candidate CMO2 are each multi-antigenic COVID-19 vaccines designed to strongly induce 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. Last week at the World Vaccine Congress, Dr. Newman further discussed the status of CM04S1 and the basis in support of our multi-antigen universal Coronavirus vaccine. In January, we further strengthened our balance sheet and are currently well-capitalized for at least a year. We anticipate further strengthening of our balance sheet during 2022, which will be addressed later by Mark Reynolds, our CFO. Our primary focus this year is to accelerate the recruitment and enrollment of our three Phase II programs. This includes our multi-site clinical trial in support of Gedeptin and our two clinical trials in support of CM04S1. Since acquiring the rights to Gedeptin, we've confirmed two additional clinical sites in the assignment of CATO SMS as our CRO partner responsible for leading the expansion and acceleration of the Gedeptin clinical program. Our focus on accelerated and expanded patient enrollment is actively underway with the goal to complete patient enrollment towards the end of 2022 or early 2023, followed by completion of patient evaluations, perhaps by the end of 2023. Should the results be supportive, a BLA filing will likely follow shortly 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 possible expansion of further additional clinical sites. We are highly excited about the outlook and promise of Gedeptin within advanced head and neck cancer, where it has received orphan drug designation and has previously provided encouraging potential for such patients. In addition, there are promising opportunities relative to expanded use of Gedeptin in 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. Also during the first quarter, we focused on the two Phase II clinical trials in support of CMO4S1. This vaccine utilizes synthetic modified vaccine technology similar to other vaccine programs under development at GeoVax. CM04S1 induces 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 nucleocapsid 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 N protein elicits or reduces 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 N 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. This vaccine is the first step in the worldwide goal to provide a vaccine that gets ahead of the variants instead of having to chase the variants. If successful, this vaccine will reduce reliance on the repeated administration of booster doses of existing vaccines. We believe that a multi-punch approach has the potential for providing a more robust and durable immune response and protection than the current authorized vaccines. We also believe that very high-risk populations such as immunocompromised individuals will benefit from such a two-pronged approach. CMO4S1 is currently being evaluated in two Phase II clinical trials. One trial is the first comparative study of an investigational COVID-19 vaccine as the primary vaccine versus the current FDA-approved Pfizer vaccine in individuals 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 evidence has demonstrated and validated that such patients failed to respond optimally to the current generation vaccines. And we believe that CMO4S1 will prove to be the more potent vaccine because it is multi-antigenic and delivered using the MVA vector. We believe this will differentiate CMO4S1 from the other vaccines by providing both a strong antibody response and a sustained T-cell response to these patients who are still at high risk of severe COVID-19 due to their immunocompromised status. The other trial currently underway is evaluating CMO4S1 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 or fifth shot of the same vaccine may provide a 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 them now combined CATO SMS and Pharmalan to oversee the acceleration and management of these two exciting clinical programs working under the direction of our internal clinical operations team. Finally, the ongoing GeoVax effort to develop a manufacturing process based on a continuously growing MVA cell line to increase production, consistency and capacity will mesh with the clinical development activities and full development schedule associated with CM04S1 and CMO2 vaccines. Now, I'd like to turn the presentation over to Mark Reynolds, GeoVax Chief Financial Officer for a review of our recent results and financial.

Mark Reynolds, Chief Financial Officer

Thank you, David. Starting with our income statement, grant revenues were $82,000 for the first quarter of 2022 compared to $110,000 in 2021. This decline reflects the completion of our grant from the NIH supporting our COVID-19 vaccine and the grant from the U.S. Army related to our loss of the Pfizer vaccine program. As of March 31, 2022, all available funds from these grants have been used, and we plan to seek additional non-dilutive funding for our development initiatives in the future. We have already submitted an application to the NIH for our MUC1 tumor-associated antigen cancer immunotherapy program. Research and development expenses amounted to $1.3 million in the first quarter of 2022, up from $603,021 in the previous year, primarily due to increased personnel costs, consulting expenses, manufacturing costs for clinical trial materials, and a higher level of activity related to ongoing trials for CM04S1 and GDEPT. DNA expenses were relatively stable, totaling $1.2 million in this quarter compared to $1.1 million last year. Overall, the net loss for the first quarter of 2022 was $2.4 million or $0.34 per share, compared to $1.6 million or $0.29 per share in 2021. The increase is mainly tied to the expansion of our organizational infrastructure and costs associated with clinical trial activities. Looking at the balance sheet, our cash balances at the end of this quarter were $16.3 million, an increase from $11.4 million at the end of the previous year. This change reflects $4.3 million used in operating activities, offset by net proceeds of $9.2 million from a stock offering in January. Funding our three ongoing Phase II clinical programs is our most significant use of cash and is our top financial priority. It's worth noting that the first stage of the Gedeptin trial, involving 10 patients, is being funded by the FDA through a grant under the orphan products clinical trial program, which helps reduce some of our immediate cash needs. While we do not provide specific forward-looking cost estimates for completing our research programs, we believe our existing cash reserves are adequate to support our operations and priority programs through the second quarter of 2023. We anticipate that progress on these programs and the data we generate will present an attractive investment opportunity for new fundraising efforts later this year. I am happy to address any further questions during the Q&A session. I'll now turn the call back to David.

David A. Dodd, Chairman and CEO

All right. Thank you Mark. And my colleagues and I will now answer your questions, and joining us as we've mentioned earlier, for the Q&A session, are doctors 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 session.

Operator, Operator

Thank you. We will now begin the question and answer session. We will pause momentarily to assemble our roster. The first question will come from Jason McCarthy with Maxim Group. Please go ahead.

Joanne Lee, Analyst

Hi, this is Joanne Lee on the call for Jason. Thanks for taking the questions. I wanted to congratulate you on the recent publication of the Phase 1 data of CM04S1 last month. As a reminder, could you just walk us through how the results from that trial have highlighted the vaccine's mechanism of action and its differentiation from the current vaccine?

David A. Dodd, Chairman and CEO

Sure, I'll ask Mark Newman to step in on that.

Mark Newman, Chief Scientific Officer

Sure. I mean, I think that it's fairly straightforward. As David said, that vaccine was designed to induce antibody responses and T-cell responses with the primary antibody target being the S protein and then T-cell responses would be generated to both the S and the N. And we measure the antibody responses by enzyme-linked immunoassay (ELISA), which is just total titers and neutralizing function. And both of those were readily detectable and at levels comparable to what you're seeing with the approved vaccines. It's a fairly small study. And then we're also seeing the T-cell responses, which we typically measure as cytokine production. They're what's called the type 1 response, which is the predominant effective antiviral response. Whereas the type two response would be considered more for allergies and things like that. So it's the correct type of response. The nice thing is we saw good responses at all dose levels tested, that was the dose escalation trial as most Phase 1 trials are, safe at all doses and the lower dose was essentially as immunogenic as the middle and higher doses. We've got some range to work with. Does that help?

Joanne Lee, Analyst

Yes. Great. That was helpful. So for your two ongoing programs, CM04S1 and CMO2, could you just give us any update on timelines in terms of the enrollment status? And lastly, as a follow-up, if you could briefly touch on, given the way new variants have been emerging and driving a constant ongoing string of boosters with the same vaccine. Could you just touch on the importance of getting new vaccines to market that have differentiated mechanisms and targets? Thanks.

David A. Dodd, Chairman and CEO

Okay. Mark, feel free to share your thoughts, but I believe Kelly McKee, our Chief Medical Officer, might also have some insights to offer. So I'll let you both decide who goes first.

Mark Reynolds, Chief Financial Officer

Okay, well, let me start. So you've heard us talk for a year that you were not really chasing variants. The Omicron was just a perfect predictable next-generation variant, right? We're seeing immune pressure against the circulating virus, and now the new variants are coming up and there's less and less protection from the neutralizing antibodies. And of course, the mutations are happening in the S protein primarily because that's where the antibodies are targeted. So I think that we're in the right position. If you follow the field, you will have noticed that there was an open letter recently sent to the FDA Commissioner highlighting the importance of T-cells and imploring the FDA to ask vaccine manufacturers to start looking at T-cell responses. And I think that that made the Wall Street Journal and we're there already. So I think we're in the right position. The world is starting to recognize the importance of a broader immune response. World Health Organization, everyone is stepping up and saying, well, we'd like something that is very improved. The terms universal Coronavirus, cross-variant, or mixed virus are all being bantered around quite a bit.

Mark Newman, Chief Scientific Officer

This has been a core part of our program since the start. With the first two generations, we have a first-generation with two candidates: one in Phase II and one in animal testing, both showing high immunogenicity and effectiveness in reducing various responses. We are making significant progress on this initial step towards creating a much improved and more potent next-generation vaccine.

Kelly McKee, Chief Medical Officer

Yes. Hello everyone. While I'm not an expert in the scientific aspects, I can provide an update on the clinical trials. As you know, our study focused on immunocompromised populations, specifically the transplant trial. The study design is a bit complex, but we've successfully enrolled patients across all our different cell therapy cohorts, and we're in the midst of finishing the safety lead-in phase for those cohorts. For one of the cohorts, we're about to move into the blinded phase of the trial to compare our results against the Pfizer vaccine. A challenge we've encountered with this trial is the changing therapeutic environment for immunocompromised patients, which has required us to progressively modify the protocol to align with the current vaccination standards for these patients. Coupled with the regulatory timeline for protocol amendments, the enrollment hasn't been as quick as we hoped, but it is still making good progress. The healthy volunteer study is somewhat similar; although it's a more straightforward trial, we are also adjusting that protocol to facilitate quicker enrollment to match the current practices for boosting healthy individuals, and we are optimistic that we'll see an increase in enrollment soon.

Jeffrey Kraws, Analyst

Thank you very much. David, it looks like, and this might be either for Sharkey or Newman possibly. But looking at Gedeptin, I realize that there's a large focus in the marketplace on the COVID vaccines. But Gedeptin seems to have incredible potential. When I was looking at some of the scientific research on this. In conjunction with checkpoint inhibitors, it seems to have interesting enhanced performance of the checkpoint inhibitors. One, can someone expound a little bit about that? And secondly, can you provide an update on the status of the trial, as well as some of the opportunities that I think lay ahead of us? Those are the first couple of questions.

David A. Dodd, Chairman and CEO

Okay. Thank you. Jeff. John, why don't you take the first part and then Kelly can give an update on the progress on the clinical. Or Mark Newman, would you, I don't know if John is still on?

Mark Newman, Chief Scientific Officer

Well, yeah. I can start. I think John's muted probably. So yeah, we're obviously familiar with the checkpoint inhibitor story, and I think that any product that can make the checkpoint inhibitors work better against solid tumors, particularly adenocarcinomas, has great potential. So that's not part of the initial focus, but it is something being evaluated by a collaborator at Emory University. There is a lot of interest in the field with combining all of these different products with checkpoint inhibitors, preparing a standard of care essentially. That's when we look at the cancer market, and the approach, everything is in addition to standard of care. So I don't think that the vaccines would be anywhere near as exciting, nor would these other types of products be anywhere near as exciting if you couldn't plug them in with the checkpoint inhibitor. So ideally, the goal here is the Gedeptin will kill tumors. And we presented this before, and as the tumors are dying, you release neoantigens, and the neoantigens are the basis of a vaccine. So it's an autologous vaccine concept. We're not the only one that has looked at this and there's a lot of literature out there on that, but it's not the lead on the program right now, but it is something that's being investigated.

Kelly McKee, Chief Medical Officer

The clinical program has transitioned the IND over to GeoVax, allowing us to expand the trial from the original single site at Stanford to two additional sites at AMRI and Thomas Jefferson University in order to accelerate enrollment. Currently, we are about halfway through reaching our total target number. Once we have all regulatory aspects sorted out, which should be soon, we will begin re-enrolling and completing the trial quickly. We have already identified a couple of patients as potential candidates.

Jeffrey Kraws, Analyst

That's very impressive. Thank you. My last comment is about COVID. It's more of a comment than a question, but any elaboration would be appreciated. I know two family members going through chemotherapy, and one is currently battling a severe case of COVID due to a compromised immune system. I believe that instead of only focusing on the COVID vaccine, we should consider that people with compromised immune systems could benefit greatly from a multiple antigen approach. While this may not be the primary focus in the market, there are many individuals suffering from cancer who face COVID or are undergoing chemotherapy and unfortunately, a significant number are dying.

David A. Dodd, Chairman and CEO

Kelly, would you like to comment on that?

Kelly McKee, Chief Medical Officer

You're absolutely correct. The existing literature provides ample evidence that individuals who are severely immunocompromised are significantly more prone to experiencing severe illness and mortality from COVID infections. This is precisely why we believe that the CMO4S1 vaccine currently presents a unique opportunity to protect these individuals from COVID infection. While it remains to be seen if our hypothesis is accurate, we believe that if we can effectively stimulate T-cells to offer functional protection against the disease after these patients are infected, we have something very valuable to contribute.

Mark Newman, Chief Scientific Officer

I've got a paper on my desk titled 'CD8 cells contribute to the survival of COVID-19 patients with hematologic cancers.' And there's a sentence in here that points out cancer patients have an increased risk of severe COVID, with an estimated case fatality rate of 25%. That's ten times the general population. This is a big meta-analysis. So it's clearly a focus that needs to be addressed. And one of the things that people keep forgetting is that this MVA vector we're working with was developed as a super safe smallpox vaccine that is highly effective in populations like immunocompromised. So it's really a T-cell and an antibody driving type of vector with probably more T-cell power than the other vectors. And so we really do think it's a good fit for these immune compromised patients, and not just cancer patients, but people that are older, all sorts of immune compromised situations.

Michael Okunewitch, Analyst

Hey, guys. Thank you for taking my question. So I'd like to ask on some of the differences in the approach between CMO4S1 and CMO2 that makes one a variant vaccine and the other potentially a universal Coronavirus vaccine. Could you talk a bit about the targeting strategy for those two different vaccines?

David A. Dodd, Chairman and CEO

Sure. Mark Newman, do you want to discuss that?

Mark Newman, Chief Scientific Officer

Certainly. The key similarity lies in the multi-antigen approach. We are combining the antibody target, the S protein, with another structural protein. These elements were initially developed separately; one originated from City of Hope, known as CM04S1, which combines S and N proteins, while our internal program integrates S with M, referring to the membrane and envelope proteins. These components are essential for assembling a live virus-like particle, fundamental to the GeoVax platform. The in-licensing occurred because of the similarity, as it was already in clinical trials, marking a first step in Phase II development, while the other is still in the research phase. Personally, I think we should not modify the Phase II product at this stage; we want to understand its potential fully. Consequently, we will focus on the basic research with CMO2, which is currently being tested in animals. This program allows us to introduce additional proteins, and we aim to explore how many different viral gene products we can integrate into this vector to enhance the immune response further. Recent research shows that exposure to other coronaviruses, which typically cause mild colds, can provoke T-cell responses that may provide some protection against COVID. There is growing evidence of cross-reactive T-cell responses contributing to this protection. While we are advancing with the CMO2 program, it's important to note that it's still in the mouse model phase.

Michael Okunewitch, Analyst

Thank you. And then I'd also like to follow up. If you could discuss some of the difficulties of conducting a COVID trial at the moment, just given where we are in terms of cases and how the fluctuations seem to be largely driven by the emergence of new variants?

David A. Dodd, Chairman and CEO

Sure, I'll make a comment and then I don't know, Kelly maybe you'll pick up from there. I would just say that my observation is that conducting clinical trials now versus say, a year-and-a-half ago is challenged by the fact that we do have other vaccines out. We've got therapeutics out, standard of care is evolving, and yes, you also are seeing continued evolution of this virus and the emergence of new variants of concern. Kelly, do you want to pick it up from there?

Kelly McKee, Chief Medical Officer

Sure. I believe this relates to some of the remarks Mark Newman made earlier about the need for us to rethink what defines a surrogate marker for vaccine efficacy. In the past, we could assess protection through clinical responses, but that's become increasingly challenging and, in some cases, nearly impossible. We're now confronted with the question of which markers we should use to demonstrate that the next-generation vaccine, whether for primary vaccination or as a booster, truly offers an improvement. The study designs will likely include non-inferiority comparisons against existing authorized or licensed vaccines, but the specific measures we will use for these comparisons are still unresolved. We anticipate, as Mark mentioned earlier, an increase in discussions with regulators to address this issue. You may know that the NHRA, the regulatory agency in the UK, recently approved the Novavax COVID-19 vaccine based on serologic markers demonstrating non-inferiority compared to the existing AstraZeneca vaccine. This may be just the beginning of how regulators will approach this problem moving forward.

John W. Sharkey, Head of Business Development

And I would add Michael that you could think about what GeoVax has focused on as a strategy. We're looking to differentiate ourselves, and we believe that CM04S1 may demonstrate this. The populations we're discussing, specifically immunocompromised individuals, represent a significant group. If you consider people being treated for various cancers or those with genetic conditions like multiple sclerosis, individuals with weakened immune systems, organ transplant recipients, those on immunosuppressive drugs, the elderly, and people with substantial pre-existing vulnerabilities, we're talking about roughly 10 million to 15 million patients who are clearly not being adequately served by the current vaccines. If you analyze the opportunities, while they may be niche markets, they are very valuable and crucial from the perspective of patients and the size of those opportunities. Moreover, there is a pressing need for a booster that offers greater durability, as we continue to observe a concerning decline in the immune response protection from merely administering another shot of the same vaccines. Therefore, we believe there are numerous areas that need to evolve. Clearly, discussions on how to evaluate and measure these aspects, as Kelly mentioned, are absolutely critical, and this will also evolve significantly.

David A. Dodd, Chairman and CEO

And thank you all for participating in this conference call, and for providing insightful questions and giving us an opportunity to discuss why we're doing what we're doing and what we anticipate seeing coming out of the clinical end. But our focus is clearly as we've said, it's now in execution and reporting updates and progress for Gedeptin, CM04S1, CMO2, and our other development programs, as well as updates on the expansion of our capabilities and resources. As I noted at the beginning of today's presentation, our pursuit is to deliver safe, affordable products to improve lives worldwide. The products like the vaccines and immunotherapies that can be not only delivered but administered and utilized wherever they need to be; increasing value to our shareholders and again, providing motivating career development opportunities for the members of our team. We also want to acknowledge and thank our Board of Directors, our staff, and the many other parties that continue to support, assist, and advise us towards achieving success. For us, it's a great pleasure to be able to give you these updates and hopefully excite you about our company and for being a part of this team. Have a safe, enjoyable day. This concludes our conference call.

Operator, Operator

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