GeoVax Labs, Inc. (NASDAQ:GOVX) Q3 2023 Earnings Call Transcript

GeoVax Labs, Inc. (NASDAQ:GOVX) Q3 2023 Earnings Call Transcript November 8, 2023

GeoVax Labs, Inc. misses on earnings expectations. Reported EPS is $-0.32 EPS, expectations were $-0.17.

Operator: Good afternoon, and welcome everyone to the GeoVax Third Quarter 2023 Corporate Update Call. My name is Mandeep and I will facilitate today’s call. With me are David Dodd, Chairman and CEO; Mark Reynolds, Chief Financial Officer; Kelly McKee, MD, MPH, Chief Medical Officer; and John Sharkey, PhD, Vice President, Business Development. [Operator Instructions] As a reminder, this conference is being recorded. At this time, I am turning the call over to Max Gadicke of Stern Investor Relations.

Max Gadicke: Thank you. 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 it’s product candidates with the desired characteristics in a timely manner and such products will be safe for human use; GeoVax’s vaccines will effectively prevent targeted infections in humans; GeoVax’s product candidates will receive regulatory approvals necessary to be licensed and marketed; GeoVax raises required capital to complete development of its products, there is development of competitive products that maybe 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 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 Dodd: Good afternoon, and thank you for participating in the GeoVax corporate update call. This year and more specifically during the third quarter, we have successfully advanced the progress of our developments focused on the two Phase 2 clinical-stage products while also advancing other critically important initiatives. Today, we’ll address the progress, status, and plans related to Gedeptin, currently in development as a therapy against advanced head and neck cancer, and GEO-CM04S1, our next-generation COVID-19 vaccine. But first, I want to address the strategy behind our activities and why we are confident that we’re on a course that will build significant shareholder and stakeholder value while delivering critically important differentiated products to improve lives worldwide.

Following my comments, Mark Reynolds, our CFO will provide an update of our financials, and then your questions will be addressed. Our strategy at GeoVax is to develop innovative cancer therapies and infectious disease vaccines that provide meaningful differentiation, addressing critically important unmet medical needs, pursuing initial indications that support expedited registration pathways. We anticipate worldwide development, commercialization and distribution via business partnerships and collaborations. In other words, our strategy is reflected as innovate, differentiate, accelerate, and collaborate. It is this strategy that dictates our activities now and continuing through 2024. We are focused on our priorities in order to successfully implement our strategy.

It is critically important that we advance through catalysts and milestones that demonstrate the differentiated value of our developments while strengthening the confidence and support from our investors and other key stakeholders. In addition, we’re addressing opportunities that provide us a basis for achieving leadership within those targeted patient areas and commercial markets. That’s why our current clinical-safe products, Gedeptin and GEO-CM04S1, provide us the potential of achieving leadership in those respective populations. These represent areas where much larger competitors either aren’t addressing such patients, perhaps due to their relatively small size of those opportunities, such as the case for advanced head and neck cancer, or their technologies are inadequate to address the respective patient populations, such as immunocompromised patients relative to the current authorized COVID-19 vaccines.

Also, GEO-MVA, our vaccine against Mpox and smallpox, is intended to disrupt the existing monopoly in that important area, providing us leadership as the first U.S.-based supplier of such a vaccine. I’ll reiterate that since we hold worldwide rights for our products, we are highly focused and engaged in discussions to ensure worldwide access and commercialization. Finally, we realize that adaptability to changing market conditions, emerging competitors, and other challenges is required to achieve and maintain sustainability and success. The principles of focus, leadership, and adaptability are the foundation for implementing our strategy and progressing to successful growth and development. This is not only relevant to our portfolio development activities, but also relative to our financing strategy, which includes equity proceeds, non-diluted funding opportunities, and capital resulting from business development activities.

We believe that having this multi-pronged strategy relative to capital development provides us the ability to continue to support our development priorities in the current challenging economic market environment. The vast array of unmet medical needs within oncology represents significant opportunities to advance novel approaches addressing various cancer patient needs worldwide. Increasingly, we are participating in various oncology conferences, some of which we expect to present at Gedeptin clinical data and with others conduct partnering discussions. Gedeptin is based on a novel patented technology for the treatment of solid tumors through a gene therapy strategy known as Gene-Directed Enzyme Prodrug Therapy or GDEPT. In GDEPT, a vector is used to selectively transduce tumor cells with a non-human gene which expresses an enzyme that can convert a non-toxic prodrug into a highly toxic anti-tumor compound in situ.

Gedeptin is tumor agnostic, meaning that it provides the opportunity to address a variety of solid tumors, either cancerous or benign. We hold worldwide rights for all indications of this technology, or as we call it, this pipeline technology. Annually in the U.S., there are 67,000 new cases of head and neck cancers with approximately 15,000 deaths. Worldwide, there are approximately 900,000 new cases of head and neck cancers annually, and approximately 400,000 deaths. Our initial targeted patient population for the application of GDEPTN represents those who are in stage care, the 15,000 in the U.S., and the 400,000 worldwide. These patients represent a critical unmet medical need. Many are unable to swallow food and have difficulty speaking.

Most have exhausted existing therapies and standard of care. Typically, they are receiving palliative care. Our goal is to provide an improved end-stage quality of life by reducing and or eliminating various targeted tumors. The current protocol entails up to five treatment cycles, each consisting of three intratumoral injections of Gedeptin over two days, followed by infusion of a prodrug, fludarabine phosphate, once daily for three days. The Phase 1 dose ranging study demonstrated that treating a tumor with a single cycle of Gedeptin followed by fludarabine infusions was well-tolerated with evidence of a reduction in tumor size in patients with solid tumors. As a result of that study, the FDA is funding the current trial under the Orphan Drug Clinical Trials Program.

In July, initial data from the current multi-site trial was presented at the AACR-AHNS International Conference in Montreal. That presentation included results from the initial eight of the targeted 10 patients enrolled. As noted in the press release issued at that time, administration of Gedeptin was shown to be safe and feasible. We expect to complete this initial trial by the end of Q1 2024, then to review our recommendations for an expanded Phase 2 trial with the FDA focused on an expedited path to registration in the interim, we are discussing partnerships and collaborations in support of worldwide development and commercialization of Gedeptin against various solid tumors, both as monotherapy and as combination therapy in conjunction with immune checkpoint inhibitors.

Turning now to COVID-19. CMO4S1, our next generation COVID-19 vaccine, differentiates from the current authorized COVID-19 vaccines in targeting both the antibody and cellular arms of the immune system, focusing on providing a more robust and more durable protection than the current vaccines. This is critically important in addressing the high-risk populations of immune-compromised individuals, those for whom the current vaccines and monoclonal antibody therapies are inadequate. Such populations include those with various blood cancers, renal disease, sickle cell anemia, HIV positive, autoimmune diseases such as lupus, and those on immune-depressive therapy. In general, patient groups with ablated immune systems unable to respond adequately to the approved mRNA vaccines are at such a high risk.

In the U.S., there are approximately 15 million immune-compromised individuals. Worldwide, there are an estimated 240 plus million. There’s a major critical need for next generation COVID-19 vaccines to support such individuals, and we believe that CMO4S1 is the leading next generation vaccine currently in clinical development. During second quarter of this year, the White House announced Project NextGen, a $5 billion initiative to follow on from Operation Warp Speed, seeking COVID-19 vaccines with enhanced breadth of protection against variants and improved durability, being particularly interested in novel vaccine candidates already in clinical trials. We believe that CMO4S1 is a prime example of the desired next generation COVID-19 vaccine.

We have considerable interest, both domestically and internationally, in participating in our clinical development program. We believe that an opportunity for an expedited regulatory path likely exists due to our focus on high-risk populations unserved by the current COVID-19 vaccines and monoclonal antibody therapies. Also, we anticipate partnering and collaborations in support of worldwide commercialization distribution. Regarding Project NextGen, we are currently in active discussions related to formal participation in this initiative. Of the $5 billion funding, so far $1.9 billion has been awarded, resulting in $3.1 billion remaining to be awarded. Project NextGen leadership has indicated their expectation to award the full $5 billion, with additional awards to be announced by year end.

We hope to provide further updates soon. For the remainder of 2023 and 2024, we are focused on accelerating efforts in support of the Gedeptin and CMO4S1 Phase 2 clinical programs, as well as advancing our MVA vaccine specific to Mpox and smallpox in the development and further progress of our program focused on the advanced MVA manufacturing system. In 2024, this will include the further reporting of results from our CMO4S1 Phase 2 programs, including results from the Healthy Volunteer Booster trial, completion of enrollment and results from the Immunocompromised DLL trial, and additional side initiations of further results from our Immunocompromised Stem Cell Transplant trial. For Gedeptin in 2024, we expect to report the final results from the current trial and our plans for the expanded Phase 2 trial.

We also expect to report plans regarding the next steps related to evaluating Gedeptin as combination therapy used in conjunction with immune checkpoint inhibitors. Relative to GEO-MVA against Mpox and smallpox, we anticipate reporting in 2024 our regulatory path and plans related to advancing that product towards registration. Finally, next year, we’ll continue to provide updates related to our advanced MVA manufacturing process targeted to enable GeoVax to effectively produce and distribute MVA-based vaccines in response to real-time market needs. 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 status. Mark?

Mark Reynolds: Thank you, David. I’ll start the financial review with our income statements. We had no active grants during 2023, so we reported no grant revenues as compared to a small amount in 2022. However, as David has noted, we are having ongoing discussions with regard to Project NextGen. If an award were to be made by BARDA to GeoVax, this could become a very important component of our financing mix in the future. In this regard, though, I’ll state that there is no award to date, and there are no guarantees that it will be won. So I’ll refer everyone back to the forward-looking statements disclaimer at the beginning of this call, as all of our comments regarding Project NextGen are forward-looking statements. Research and development expenses were $6.9 million and $14.5 million for the three-month and nine-month periods in 2023 versus $2.7 million and $5.4 million, respectively, in 2022.

These increases are primarily associated with the clinical trial activity for the CMO4S1 and Gedeptin programs, which includes manufacturing costs for clinical trial materials. The increase is also reflective of higher personnel costs, as we brought on two additional executive-level employees in early 2023, adding depth to our regulatory and quality control functions. General and administrative expenses were $1.7 million and $4.6 million for the three-month and nine-month periods in 2023 versus $1.2 million and $3.4 million in 2022, with the increases mostly associated with higher personnel and consulting costs, patent costs, and Investor Relations expenses. Interest income was $675,000 in 2023 versus just $4,000 in 2022, reflecting increasing interest rates available through our Money Market accounts.

So overall net loss for the nine-month period of 2023 was approximately $18 million, or $0.69 per share, versus $8.6 million in 2022, or $0.63 per share, again with the increase being driven by the CMO4S1 and Gedeptin clinical trial activity. Turning now to the balance sheet, our cash balances at September 30, were approximately $12.7 million, as compared to $27.6 million at the end of 2022. The change in our cash balances is reflective of $14.9 million used in operating activities. There were no significant financing or investing activities so far during 2023. Our outstanding common shares currently stand at $26.7 million. So going forward, funding our ongoing Phase 2 clinical programs for CMO4S1 and Gedeptin will continue to be the most significant use of our cash going into 2024.

We don’t expect this prioritization of our spending to change if we receive a Project NextGen award from BARDA, as any incremental spending for that program will be funded by the award. We do expect to raise additional capital to fund our programs in 2024, and we intend to do that in conjunction with positive news flow. I’ll be happy to answer any questions for the Q&A. And I’ll now turn the call back to David.

David Dodd: Thank you, Mark. My colleagues and I will now answer your questions. Joining us for the Q&A session are Drs. Mark Newman, Kelly McKee, and John Sharkey, our Chief Scientific Officer, Chief Medical Officer, and Vice President of Business Development, respectively. I’ll now turn the call over to the operator for instructions on the question and answer period.

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Q&A Session

Operator: [Operator Instructions] Our first question comes from Jason Kolbert with Dawson James. Please go ahead.

Jason Kolbert: Hi, guys. Congratulations on all the progress. I have kind of a tangential question, but I think it’s important. There have been a tremendous number of COVID reinfections. People who had COVID recovered from it, and now they are getting it again. I noticed that the emergency use authorization is now approved for Pfizer’s Paxlovid. And Paxlovid is getting prescribed quite a lot. I’m just wondering how this impacts the marketplace and does it impact immune compromised patients at all?

David Dodd: Thank you, Jason. What I will do is make a couple of comments on my thoughts on this. And then Kelly, I will ask if you would like to add to it. But first of all, I will say that I don’t think it impacts the immunocompromised at all, because it’s been shown that they are not responding well to the monoclonal antibodies, either [indiscernible] or Paxlovid. I think that’s unchanged. There is still a tremendous need for a vaccine such as ours that will address their needs because they have been unmet since the beginning of the introduction of the vaccine. So, I think from that standpoint, there is just really no impact. If anything, it further underscores the importance of what we have in development. Kelly, do you want to add anything?

Kelly McKee: Yes. Just a couple of thoughts. First of all, as far as the impact on the vaccine market overall, I think everybody sort of recognizes that the mRNA vaccine sales have been considerably lower than they were in the first stages of the pandemic, for sure. There are so many factors that impact that. The sort of issue of recurrent infections or breakthrough infections is only a component of that. So, I’m not sure you can sort of parse those issues efficiently. As far as the impact on the immunocompromised population, we’re sort of talking apples and oranges. Paxlovid is a therapeutic, of course. We’ve got a vaccine to offer. I think by anybody’s measure, if we can prevent people from getting sick, particularly for those who are getting severely ill, we’re better off than having to rely on a therapeutic, an antiviral therapeutic that, number one, isn’t 100% effective.

And number two, has some substantial sort of side effects that you prefer not to deal with, not the least of which is this sort of long COVID syndrome that seems to sort of appear in people after they stop taking Paxlovid. So, you know, it shouldn’t impact us at all, and, whether it has, what the influence is on the wider vaccine landscape, I can’t really, I don’t know.

David Dodd: Well, I was just, you know, what I see in the real world all this a very large segment of the population does not want to get a fourth, fifth, and sixth mRNA booster. They’re hearing that, you know, Paxlovid does have some side effects, metallic taste in the mouth principally, but it’s pretty effective at knocking virus down. But you’re right, there is a lag, and I think a segment of the population would really like an mRNA alternative. And I’m really wondering if that, might that not be a market segment that, in addition to immune-compromised patients, kind of becomes very attractive to you? Well, I think it could be. Go ahead, Kelly, I’m sorry.

Kelly McKee: Well, I was just going to say, I mean, when you say that they prefer an mRNA option, I think the mRNAs are kind of what they have, currently available to them. One of the, one of the, the big advantage that I think our vaccine offers is, sort of an alternative approach to immunization where we, can provide sort of broad, durable immune protection that is, that won’t require, that shouldn’t, I should say, require, frequent, once, twice a year boosting in order to maintain immune, an immune-protective status.

David Dodd: Well, I was going to add, Jason, I was going to add that as the data comes out from the recently fully enrolled trial, where it’s the healthy volunteers receiving our vaccine as a booster, I think that data may be demonstrative of sort of what Kelly was just touching on. Maybe that, that our breadth of protection and the durability that’s delivered from this dual-antigen approach is going to give something that will be a value that they’re not receiving from the mRNAs.

Jason Kolbert: You know, in a prior life, I was involved in pharmaceutical sales. So, a year from now, before you hire a pharmaceutical sales manager, you should give me a call.

David Dodd: Okay, we’ll do that.

Jason Kolbert: All right, guys. Thank you so much.

David Dodd: Thank you. Thank you.

Operator: [Operator Instructions] This concludes our question-and-answer session. I would now turn the conference back over to David Dodd for any closing remarks.

David Dodd: Well, thank you for everyone. There weren’t that many questions. We have a new sales manager coming in a year from now, I guess. But anyway, I want to thank everyone for participating in the call. We appreciate your interest. And I just say that, again, to reiterate, our strategy that we’re focused on is to innovate, to differentiate, to accelerate to the market, and to do this while collaborating. That reflects our focus towards building significant shareholder value. I want to acknowledge and thank our Board of Directors, our staff, and the many other parties that continue to support and advise us towards achieving success. We’re committed to providing meaningful career development opportunities for highly competitive, quality-oriented members of our team.

We’re seeking to disrupt the current paradigm of both cancer therapies, infectious disease, vaccines, and redefining how this success is, in fact, defined in addressing various patient populations. So, I want to wish everyone a wonderful day. Thank you, and we look forward to keeping you updated as we go forward. Thank you.

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