Earnings Call Transcript - IMNN Q1 2024

Operator, Operator

Good morning. My name is Nick, and I will be your operator today. At this time, I would like to welcome you to the Imunon First Quarter 2024 Financial Results Conference Call. I would now like to turn the call over to Kim Golodetz. Please go ahead.

Kim Golodetz, Investor Relations

Thank you, and good morning, everyone. This is Kim Golodetz with LHA. Welcome to Imunon's First Quarter 2024 Financial Results and Business Update Conference Call. During today's call, management will be making forward-looking statements regarding Imunon's expectations and projections about future events. In general, forward-looking statements can be identified by words such as, expects, anticipates, believes or other similar expressions. These statements are based on current expectations and are subject to a number of risks and uncertainties, including those set forth in the company's periodic filings with the Securities and Exchange Commission. No forward-looking statements can be guaranteed, and actual results may differ materially from such statements. I also caution that the content of this conference call is accurate only as of the date of the live broadcast, May 13, 2024. Imunon undertakes no obligation to revise or update comments made during this call, except as required by law. With that said, I would like to turn the call over to Michael Tardugno, Imunon's Executive Chairman. Michael?

Michael H. Tardugno, Executive Chairman

Thank you, Kim, and good morning, everyone. Let me also thank you for joining us for this particularly important call. I want to start by welcoming Stacy Lindborg, your new Chief Executive and President, to her first call with the investment community and our supporters. Dr. Lindborg and I are joined by Jeff Church, our Chief Financial Officer, who will provide remarks on our financials. Khursheed Anwer, our Chief Science Officer; and Dr. Sebastien Hazard, our Chief Medical Officer, are also on the line. Both will be available for the question-and-answer period. But first, Dr. Lindborg. For those of you who have read last week's press announcement, you know much of what I'm going to tell you. That Stacy comes to Imunon well equipped for the task, having spent many years in our industry. She has held positions at some of the most storied companies in the pharma and biotech world, including Eli Lilly, Biogen, and most recently, as co-CEO of BrainStorm Cell Therapeutics, where her deep commitment to their clinical stage product led her to present a compelling case to the FDA at an AdCom for continued development following a Phase III study that missed its primary endpoint. If you followed this AdCom as I did, you know that the argument that Stacy made was very impressive. It's clear that as an experienced biostatistician, Dr. Lindborg's academic focus has provided the regulatory world with innovative approaches to clinical stage product evaluation. Her career reflects a history of accomplishment and success that perfectly complements the challenges facing Imunon as we seek solutions to some of the most devastating diseases in modern oncology and medicine. Virtually everyone who has worked with her knows her skills extend beyond just technology and product development. She has a deep commitment to the people of an organization and to people generally. I have witnessed her passion for an organizational culture of dignity, respect, transparency, and an atmosphere where everyone has a voice. Dr. Stacy Lindborg is someone I have come to know and admire. Her work over the past three years as a member of our Board of Directors has helped us to evaluate Imunon's priorities and drive our critically important development strategies. I look forward, with confidence, to Stacy's leadership and the value she will bring to our mission and to you, our shareholders. Stacy, would you like to make a few comments, please?

Stacy Lindborg, CEO

Thank you, Michael, for those kind words, and I really couldn't be more delighted to join this call in my new capacity as President and CEO of Imunon. Perhaps it would help to reflect on my reasons for joining Imunon at this exciting time, which can be summarized by three drivers: science, people, and opportunity. Starting with science, we have the potential to do great things for patients, most immediately women fighting ovarian cancer with our lead investigational immunotherapy. In fact, we may have in our hands the first immunotherapy effective for the treatment of ovarian cancer. This cancer is a terrible disease that in the U.S. leads to about 20,000 new diagnoses every year and about 13,000 deaths during the same time frame. Globally, there are nearly 0.25 million women living with the disease. The second driver is people. At Imunon, we have a focused and dedicated staff who bring great purpose to our work, leveraging phenomenal depth from both scientific and operational perspectives. We have a core group of employees with tenure that rivals companies known for staff stability. The third driver is opportunity. In TheraPlas and PlaCCine, we have two cutting-edge DNA-based technology platforms that provide abundant opportunities in clinical development. Both of these technologies have important readouts this year. First up is the Phase II trial, which we call OVATION 2, with our TheraPlas interleukin-12 immunotherapy, and a first-in-human trial with IMNN-101 to demonstrate proof of concept with PlaCCine. Both technologies hold great potential, and the timing of these events makes my joining the company at this time ideal from my perspective. As Michael just shared, I bring to the table close to three decades of pharmaceutical and biotech industry experience, with a particular focus on R&D, regulatory affairs, executive management, and strategy development. My recent years included senior leadership roles in the biotech sector, with the first 20 years of my career spent in pharma. Across various companies, I have had the opportunity to work on multiple modalities and assume a diverse set of roles, providing a broad view of our business. This included the chance to study R&D productivity as Head of R&D strategy at Lilly, which led to two publications in Nature. We can all appreciate that, as with any R&D endeavor, there are risks and uncertainties. But from my viewpoint, we have an amazing opportunity in front of us at Imunon. What you can expect from me is a complete commitment to advancing our two key technology platforms, aimed at delivering value to patients, and to run our business in a manner that is in the best interest of our shareholders and employees. Our future is bright, and as a company, we are full of hope that we will have a meaningful impact on patients' lives and create shareholder value. I am grateful for the trust Michael and the Board have placed in me as we execute our plans. I'll now turn it back to Michael.

Michael H. Tardugno, Executive Chairman

Thank you, Stacy. On behalf of our shareholders and employees, welcome. We look forward to your leadership in the challenging and exciting world of biotech. To our shareholders and audience, I want to reassure you that during our management transition, we are fully committed to advancing our two key platforms, TheraPlas and PlaCCine. This is a critical time as we anticipate reporting top-line results from our Phase II study of IMNN-001 in advanced ovarian cancer. Enrollment has begun in our Phase I vaccine study of IMNN-101, a proof-of-concept trial to evaluate immunization against COVID-19 using our DNA-based platform, and we believe our mRNA technology is superior. I also want to stress that during the transition, we will maintain focus on our overall strategy for the development of these product candidates and our technologies. We expect to report top-line results from the Phase II OVATION 2 study in mid-2024. IMNN-001 is our DNA-based IL-12 immunotherapy being evaluated in the perioperative treatment of newly diagnosed ovarian cancer patients in combination with standard chemotherapy. In September 2022, we completed enrollment of 113 patients. A year later, we shared interim data indicating promising progression-free survival and overall survival. So, Dr. Anwer Khursheed, could you provide some rationale for our optimism and the supporting data for our study?

Khursheed Anwer, Chief Science Officer

Of course, Michael, this is Khursheed. I mean that's a great question. I think every team should be developing any products with good reasons for optimism. For IMNN-001, there are solid reasons to feel optimistic based on the data we have accumulated over the last several years. First of all, ovarian cancer is a local disease, an effective concentration at the local site is important. In both human and animal studies, we have seen that IMNN-001 distribution primarily occurs at the local site in the cavity of the peritoneum, which is the area affected by the disease. This is an important pharmacological aspect to ensure that the drug is delivered where it's needed. Second, IMNN-101 produces IL-12, and there’s evidence of IL-12 production through the gene therapy approach. Additionally, we see levels of interferon gamma, which is a key mediator of IL-12 action. We have positive pharmacokinetic data showing these cytokines persist for several days after administration, thereby exerting a continuous pressure on the tumor to provoke an immune response against cancer. Importantly, these levels translate into biological activity. The tumor microenvironment in ovarian cancer is very immunosuppressive, contributing to disease progression. We have observed a shift in the balance towards immunostimulatory cells, favoring an immunostimulatory environment conducive to antitumor effects. Given these pharmacokinetic and pharmacodynamic properties of IMNN-001, along with the clinical benefits we’ve observed in PFS, I think there's a solid rationale to remain optimistic about this trial and future results, Michael.

Michael H. Tardugno, Executive Chairman

Thank you, Khursheed. If the interim data are confirmed, the observed PFS benefit would represent a clinically meaningful outcome. In September, we reported PFS and OS data indicating an approximate 30% delay in disease progression and death among patients in the treatment arm compared with those in the control arm. The hazard ratio, in fact, nears the study objective. Preliminary OS data followed a similar trend, suggesting an approximate 9-month improvement in the treatment arm over the control arm. Subgroup analysis indicated that patients treated with a PARP inhibitor as maintenance therapy exhibited longer PFS and OS when treated with IMNN-001 compared to those treated with neoadjuvant chemotherapy only. We note that when the OVATION 2 study began, PARP inhibitors had not yet been approved for first-line maintenance treatment for this population. Since then, for patients with certain genetic characteristics, PARP inhibitors have become an important part of the treatment plan. In a non-prespecified subgroup analysis for patients receiving PARP inhibitor maintenance therapy, trends suggest a larger clinical benefit may exist. In this subgroup, the median PFS in the control arm was 15.7 months versus 23.7 months in the treatment arm, an increase of 8 months. The median OS in the control arm was 45.6 months, while it had not been reached in the treatment arm. Although this data is non-prespecified and represents a small patient population, it is nonetheless intriguing and encouraging. We also have a second study that is starting to attract significant interest from the medical community. It is a second study of IMNN-001 in advanced ovarian cancer, led by the Breakthrough Cancer Foundation, which will enroll 50 patients with Stage III/IV ovarian cancer. Patients treated with frontline neoadjuvant therapy will be randomized to receive standard chemotherapy plus Avastin as the control arm, and standard chemotherapy plus Avastin plus IMNN-001 as the treatment arm. Our abstract describing the study design has been accepted for presentation at the ASCO conference during the week of May 31 through June 4. This reflects the medical community's interest in our study and potential for a new therapeutic option for women with advanced ovarian cancer. The primary endpoint of the trial is the detection of minimal residual disease (MRD) using second look laparoscopy, assessed approximately 3 months after adjuvant treatment. The secondary endpoint is PFS, but the trial will also provide various translational endpoints aimed at understanding the clonal evolution and immunogenomic features of the MRD phase of ovarian cancer, which is currently undetectable by imaging or tumor markers. In February 2024, Memorial Sloan Kettering Cancer Center joined MD Anderson in enrolling patients in this trial. We expect additional sites to be added soon. We will keep you informed about the trial's progress. Assuming success in either or both of these studies, we believe that IMNN-001 will be the first immunotherapy that has proven effective for patients with advanced ovarian cancer and will validate the TheraPlas platform, showing it may have a place in medicine for treating various intraperitoneal cancers. Now, I want to turn my focus to the infectious disease program. Last month, we announced that the FDA had accepted our Phase I protocol for a seasonal COVID-19 booster. As we reported this morning, enrollment has already begun at our clinical trial center in Philadelphia, with a second center at Beth Israel in Boston expected to commence soon. This first phase of the study is a 24-subject proof-of-concept trial. The primary objective is to evaluate the vaccine candidate's safety and tolerability in healthy adults. Secondary objectives include assessing the neutralizing antibody response, cellular response, and their durability, which we expect to be among the key advantages of our DNA-based formula. Based on preclinical data, we expect durability to be substantially superior to published mRNA vaccine data. This trial is a complex process, and I'm not sure if I covered everything adequately. Sebastien, could you provide more details about the study?

Dr. Sebastien Hazard, Chief Medical Officer

Absolutely, Michael. Good morning, everyone. The primary objective of the Phase I study is to determine the appropriate dosing for Phase II. There will be three cohorts with escalating doses, each consisting of 8 participants. An independent data monitoring committee will assess the data to decide on the optimal dose for Phase II. Additionally, there will be a strong emphasis on evaluating safety and tolerability, which is a critical aspect of the study. We will also focus on efficacy, particularly in terms of the neutralizing antibody response, which we hope to measure early after participants have enrolled, as well as the cellular response and the durability of that response.

Michael H. Tardugno, Executive Chairman

Thank you, Sebastien. So if we achieve success in the first 24 patients, what happens next?

Dr. Sebastien Hazard, Chief Medical Officer

The protocol states that we will then be ready to enroll into Phase II with approximately 50 patients using the recommended Phase II dose. This will further establish the tolerability and safety of the vaccine candidate but most importantly, provide a robust proof of concept regarding its efficacy.

Michael H. Tardugno, Executive Chairman

Thank you very much, Sebastien. Based on the compelling preclinical data for this vaccine candidate, we expect immunogenicity and protection to exceed 95%. We anticipate a shelf life of at least 12 months at refrigerator temperatures, while mRNA vaccines must be stored at minus 70 degrees Celsius. We also expect stability for at least one month at 90 degrees Fahrenheit, indicating superior commercial handling and distribution characteristics compared to mRNA vaccines, as well as greater manufacturing flexibility. Assuming a successful Phase I trial and that IMNN-001 performs as expected, we intend to collaborate with others for further development to expand the platform. To make it clear, this is a Phase I study. It is a proof-of-concept study to demonstrate the superior characteristics of our vaccine candidate. SARS-CoV-2 is a relevant virus for illustrating the comparative benefits of our product and its potential application for other infectious diseases. Now, I'll turn the call over to Jeffrey Church for his always lively discussion of our financial results. Jeff?

Jeffrey W. Church, CFO

Thank you, Michael. Details of Imunon's first quarter 2024 financial results were included in the press release we issued this morning and in our Form 10-Q, which we filed today before the market opened. As of March 31, 2024, Imunon had $9.8 million in cash and investments. Our cash usage was $5.9 million in the first quarter of 2024, compared to $4 million in the same period last year. This increase was primarily due to the final payment of CRO costs related to the Phase III OPTIMA study. In March 2024, we received $1.3 million in net proceeds from the sale of approximately $1.4 million of our unused New Jersey net operating losses. These NOL sales cover the tax year 2022 and provide nondilutive funding that strengthens the company's balance sheet. As we have in the past, we will continue to focus on strong cash management. We have proactively evaluated and prioritized our spending with a focus on our two clinical stage product candidates. With minimal financing through the continued sale of our New Jersey NOLs and the opportunistic use of our aftermarket facility, we expect our cash runway to extend into the first quarter of 2025. Let me now review our financial results. Imunon reported a net loss for the first quarter of 2024 of $4.9 million or $0.52 per share. This compares to a net loss of $5.6 million or $0.68 per share for the same quarter last year. Our operating expenses were $5 million in the current quarter, a decrease of $700,000 or 12% from the first quarter of 2023. Let me break down the operating expenses by line item. Research and development expenses were $3.3 million in the first quarter of 2024, an increase of $700,000 from the $2.6 million we reported last year. Specifically, R&D costs associated with the development of IMNN-001 to support the OVATION 2 study and the PlaCCine DNA vaccine technology platform totaled $1.6 million for Q1 2024, compared to $1.4 million in the prior year. Costs related to the OVATION 2 study were $300,000 for both the first quarters of 2024 and 2023, as Michael noted, enrollment was completed in September 2022. CMC manufacturing costs were $300,000 in Q1 2024, down from $600,000 in Q1 2023, due to the establishment of in-house pilot manufacturing capabilities for DNA plasmids and nanoparticle delivery systems. General and administrative expenses totaled $1.7 million in Q1 2024, compared to $3.1 million in the same year-ago quarter. This $1.4 million decrease in G&A expenses was primarily due to lower non-cash compensation expense, reduced employee-related costs, lower consulting and legal fees, as well as decreased premiums on our Directors and Officers insurance. Other non-operating income was $100,000 for Q1 2024, which was largely unchanged from the previous year's first quarter. With that financial review, I'll turn the call back to Michael.

Michael H. Tardugno, Executive Chairman

Thank you, Jeff. As always, a great overview of our financials. Jeff highlighted our investment in pilot manufacturing. We should point out that the company can produce its plasmids, the foundation for our DNA therapeutics and vaccines, at a significantly lower cost than outsourcing, enhancing our future cost control. This capability is crucial as we advance our programs. I also want to emphasize that we have some exciting upcoming developments that will inform the company's future. In the meantime, we have taken steps to conserve capital. Like we noted in our last conference call, our goal is to ensure we have sufficient cash to complete our two clinical trials. We are closely monitoring funding conditions for micro-cap companies in this challenging capital market. Lastly, I want to reiterate the appointment of Stacy Lindborg. We look forward to her guidance from a deep and capable management team. Together, we believe we have the potential to create significant value for both patients and shareholders under Dr. Lindborg's leadership. So now, operator, I'd like to open the call to questions. Operator?

Operator, Operator

The first question comes from Emily Bodnar with H.C. Wainwright.

Emily Bodnar, Analyst

Congrats on the new role, Stacy, and welcome to the team. I have a few questions. First, regarding the COVID study, I noted you intend to evaluate three different doses. Could you comment on whether you're looking to start with a dose that you think will be effective in producing neutralizing antibodies based on your preclinical work? Additionally, could you discuss your internal goals for the study regarding durability and neutralizing antibody response, considering you're examining a different variant than those studied with other vaccines? Lastly, for the OVATION 2 study, will you have a corporate event to announce the top line results? How do you believe you could initiate a Phase III study if OVATION 2 yields positive results?

Michael H. Tardugno, Executive Chairman

Let me start with your first question, which relates to the starting dose for the Phase I study of the vaccine trial and whether we believe it will have effective immunogenic properties. I will pass this over to Khursheed Anwer to address. Khursheed, do you believe the first dose will have sufficient efficacy related to protection?

Khursheed Anwer, Chief Science Officer

Yes, Emily. It's good to have you on the call. We performed a study in non-human primates, assessing several doses, and we noticed significant binding antibodies, neutralizing antibodies, and nearly complete protection against the viral challenge comparable to mRNA. The doses we have chosen for human trials are aligned with those shown effective in non-human primates, giving us confidence that we should be able to achieve similar outcomes.

Michael H. Tardugno, Executive Chairman

Before we wrap up the answer to that question, Sebastien, do you have anything else to add?

Dr. Sebastien Hazard, Chief Medical Officer

No, I believe that covers it perfectly, Michael. I have nothing in particular to add.

Michael H. Tardugno, Executive Chairman

Emily, does that address your questions?

Emily Bodnar, Analyst

Yes, it does.

Michael H. Tardugno, Executive Chairman

Your second question pertains to OVATION 2 and our plans for announcing results at a corporate event. Yes, we are considering that. This is a novel approach to recruiting the immune system using IL-12, and we take pride in the technology developed under Dr. Anwer's leadership. Given IL-12's history as a therapeutic target since the late 1980s, it is fair to say that it has been largely overlooked due to safety concerns surrounding direct recombinant IL-12 administration. We aspire to not only announce the results but highlight the potential of the platform, assuming successful outcomes, alongside insights from key opinion leaders involved in the study during our communication with the investment community. Your third question was regarding when we might commence a Phase III study. We have some ideas at this juncture regarding the design of the Phase III trial. Dr. Hazard is actively evaluating several strategies. Given the last interim data and the top-line data anticipated in the next few months, I believe we'll be able to assemble the right group of significant opinion leaders and investigators to finalize the study protocol. However, interaction with the agency is always the most challenging aspect of forecasting timelines. Our internal goal would be to have a Phase III study up and running by Q1 next year.

Emily Bodnar, Analyst

Just a follow-up on that. Are you planning to have an end-of-Phase II meeting with the FDA post-study?

Michael H. Tardugno, Executive Chairman

Yes, we think that would be essential.

Operator, Operator

The next question comes from Kemp Dolliver with Brookline Capital Markets.

Kemp Dolliver, Analyst

Welcome to the team, Dr. Lindborg. As we have a biostatistician on the call, I’d like to hear your thoughts on how we should consider the parameters in the Phase III study, assuming success. I realize these are broad strokes at this point, but your insights would be appreciated.

Stacy Lindborg, CEO

Regarding the trial, as we've previously indicated, I had the advantage of following its design while serving on the Board. The trial was planned in a way that it doesn’t intend to showcase a significant p-value but to instill confidence for the next trial. Therefore, we expect that we'll learn from this trial in order to inform the design of the next one. The key factor will be to analyze the final results. While interim reports can provide insights, true understanding will only come when all events are recorded. We aimed to have 80 events; we need to assess the changing treatment landscape. Michael mentioned the emergence of PARP inhibitors and their impact on treatment effects compared to standard care. Additionally, we'll closely collaborate with the medical community to ensure we leverage the complexities of our trial data along with evolving treatment strategies beyond our individual study. A substantial amount of thought has already gone into potential trial designs, but further specifics necessitate final data analysis.

Operator, Operator

The next question comes from James Molloy of Alliance Global Partners.

James Molloy, Analyst

Congratulations to Dr. Lindborg on your appointment as CEO. As you transitioned to Imunon, what aspects of the two ongoing trials interested you the most, specifically regarding the vaccine and immunotherapy? Additionally, regarding the OVATION 2 data, could you clarify what would qualify as good, bad, or inconclusive data in mid-2024? It seems as though the PARP inhibitors could potentially leave OVATION 2 behind. Is there still room for IMNN-001?

Stacy Lindborg, CEO

Both of your questions are very interesting. In response to the first, I would say that trials provide insights not only into the specific technology but also indicate a range of broader testing opportunities that could lead to approvals. What excited me the most was the tangible potential both trials present for technology testing and the pathways to initial regulatory approval, along with numerous expansion opportunities. Regarding your second question, we always want to see standard-of-care improvements and other effective treatments emerging for women battling this cancer. From our interim study data, we noticed strong results in women receiving PARP inhibitor treatments alongside IMNN-001. Therefore, this suggests that it does not diminish the treatment's validity; rather, it seems to provide a synergistic effect, which is encouraging.

Michael H. Tardugno, Executive Chairman

I'd like to add that PARP inhibitors are currently indicated for patients with specific genomic signatures, such as HRD-positive or BRCA-positive, which include about 45% or less of the patients eligible for neoadjuvant treatment. The synergy appears promising for those who receive both IMNN-001 and PARP inhibitors. We anticipate that IMNN-001 will also offer advantages for patients who aren't eligible for PARP inhibitors, providing a broader therapeutic option.

James Molloy, Analyst

While it's premature to predict, do you foresee that a PARP inhibitor will be incorporated in the Phase III if the results are favorable? What might the design of that trial resemble, assuming good mid-2024 data?

Michael H. Tardugno, Executive Chairman

That's certainly a topic of discussion. It will naturally depend on the data we receive. However, we would prefer not to exclude either demographic from our ongoing study. Very likely, our Phase III will include both populations sorted accordingly. If I were to wager, I think that would be our probable direction. But, again, it's contingent on the strength of the data presented.

James Molloy, Analyst

I have a couple of follow-up questions before I conclude. Firstly, regarding the Phase I/II trial of IMNN-001 combined with Obdivo and Yervoy, what’s the expected timeline for this trial to start? Secondly, regarding the vaccine, when do you anticipate top-line data from the 101 SARS-CoV-2 trial? Finally, what's the update on the 102 IND filing?

Michael H. Tardugno, Executive Chairman

I apologize if I misspoke earlier, but we are currently combining IMNN-001 with Avastin in the MRD study. We are considering potential synergies with checkpoint inhibitors too, such as Obdivo and Yervoy; however, given our focus on managing resources effectively, this will require prioritization. The exploration into these combinations is promising, assuming we can secure the necessary resources to initiate such projects successfully.

Dr. Sebastien Hazard, Chief Medical Officer

Yes, I fully agree. We're analyzing the potential synergies involved in this opportunity. If we secure the necessary resources, this could offer a very compelling project.

Michael H. Tardugno, Executive Chairman

Now, regarding your second question about the 101 data expectations, while we await the Phase I data, we anticipate having top-line results by the end of this year. Although we won't have definitive durability information, we should be able to provide updates on immunogenicity and early durability results from the vaccine’s response before the year closes.

Operator, Operator

This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Michael H. Tardugno, Executive Chairman

First, thank you all for your time today, especially for the insightful questions that allowed us to elaborate further on the work we’re undertaking, which we are very proud of. We are focusing on a technology area that has been pursued by many companies. I believe that under Dr. Anwer's guidance and the support of this management team, we can unlock the potential of DNA as a therapeutic option and vaccine technology. Thus, the future under Dr. Lindborg's leadership is truly promising. I appreciate everyone’s participation in this call. It’s critical to underscore the potential of our proprietary technologies, as I’ve noted consistently. We’re advancing our work to aid women facing ovarian cancer and adapting strategies to address the increasing threat of pandemics. We remain committed, enthusiastic, and prepared to report on our ongoing progress in the coming months. I look forward to keeping you all informed, and on behalf of everyone at Imunon, we wish you all a safe and pleasant afternoon. Thank you very much.

Operator, Operator

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