GeoVax Labs, Inc. (NASDAQ:GOVX) Q4 2022 Earnings Call Transcript

GeoVax Labs, Inc. (NASDAQ:GOVX) Q4 2022 Earnings Call Transcript March 23, 2023

Operator: Good afternoon and welcome everyone to the GeoVax Fourth Quarter and Full Year 2022 Corporate Update Call. My name is Diego and I will facilitate today’s call. With me today are David Dodd, Chairman and CEO; Mark Reynolds, Chief Financial Officer; Mark Newman, Chief Scientific Officer; Dr. Kelly McKee, Chief Medical Officer; and Dr. John Sharkey, Vice President, Business Development. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note, this event is being recorded. I’ll now turn the conference over to our host, Gabbie DeGravina of CG Capital. Thank you. You may begin.

Gabrielle DeGravina: 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 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 regulatory approvals necessary to be licensed and marketed.

GeoVax raises required capital to complete vaccine development. There is development of competitive products that maybe more effective or easier to use in 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 at 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. Fourth quarter 2022 represented continued progress for GeoVax as we advanced the Phase 2 clinical programs in support of Gedeptin and our promising cancer therapy for patients with advanced head and neck cancers and GEO CMO4S1 and next generation COVID-19 vaccine focused on the unmet needs of immunocompromised patients. We also continue to progress our overall development stage programs. This includes our GeoVax MUC1 immunotherapy currently in IND supportive studies. Also the preclinical studies evaluating the Gedeptin in conjunction with immune checkpoint inhibitors continue to be encouraging with relevant data expected this year.

Throughout 2022, we strengthened our balance sheet during a very difficult investment environment, especially for the biotech industry. As a result of our successful financings last year, we’ve expanded our current clinical programs to include additional sites, while also adding near term opportunities related to our manufacturing processes and the additional oncology programs. Recently, we announced the expansion of our Gedeptin Phase 2 clinical program with the activation of patient enrollment in the two additional sites at Emory University and Thomas Jefferson University. For our COVID-19 vaccine program, we implemented a novel, mobile clinical research facility in Claremont, California to support our Phase 2 COVID-19 vaccine booster trial.

Additionally, multiple sites are in the process of joining our Phase 2 COVID-19 trial among immunocompromised patients, including some potential sites outside the U.S. There is significant interest in participating in the evaluation of our novel COVID-19 vaccine targeting the high risk immunocompromised patient populations. During the fourth quarter, we also announced the acquisition of the rights from the NIH allowing GeoVax to develop and commercialize their MVA as a vaccine against monkeypox or MPox and Smallpox. Our intent is to be the first and primary U.S.-based supplier of a GeoVax NDA vaccine against MPox and Smallpox, resulting in expanded supply and access worldwide, especially related to low and middle income countries, which have consistently experienced significant difficulty in supply of many critical vaccines and therapies.

Finally, we recently announced our successful progress towards becoming the first vaccine supplier using an avian cell line based manufacturing process, significantly expanding the yield and capacity of MVA based vaccines. This will allow us to reduce supply chain risk associated with the use of chicken eggs and to provide the means to greatly expand production cost scale to address potential global needs again, especially related to lower cost alternatives for supply to the low and middle income countries. Our mission is to provide immunotherapies and vaccines that improve lives worldwide, preventing or treating some of the world’s most challenging cancers and infectious diseases. Our business strategy of partnering and collaborations is anticipated to allow us to provide worldwide access to our products while providing optimal value to our stakeholders.

We believe that Gedeptin CMO4S1 and our other initiatives provide significant value expansion opportunities for the company, our shareholder and stakeholder, while providing compelling career development opportunities for the members of our team. As a reminder, Gedeptin is a cancer therapy currently an expanded multisite evaluation among patients suffering from advanced head and neck cancers. The product has received orphan drug designation from the FDA and funding for the current clinical trial, is from the FDA orphan drug’s clinical trials program. Our focus is on completing the initial 10 patient study funded by the FDA. We will review those results with the FDA along with our recommendations for an expanded program, while also discussing with the FDA the potential for an expedited biologics license application filing.

We’re excited about the outlook and promise of Gedeptin within advanced head and neck cancers as well as other opportunities and indications relative to the expanded use of Gedeptin. This includes the potential application of the underlying technology in conjunction with other therapies such as immune checkpoint inhibitors and potential synergy with our internally developed GeoVax MUC1 tumor associated antigen approach. Relative to commercialization, we anticipate partnering and collaborations in support of worldwide use for which business development activities have been initiated. The vast array of unmet medical needs within oncology represents significant opportunities for GeoVax to advance novel approaches such as that of Gedeptin therapy against multiple tumors, Gedeptin in conjunction with immune checkpoint inhibitors and the GeoVax MUC1 cancer immunotherapy approved, addressing various cancer patient needs worldwide.

As previously mentioned, we hold worldwide rights for the use of GeoVax and the GeoVax tumor associated antigen technologies in all indications. Our plans include the successful development of commercialization globally in conjunction with collaborators and partners. GEO, CMO4S1, which we refer to as CMO4S1, is in Phase 2 clinical development as COVID-19 vaccine, targeting both the antibody and cellular arms of the immune system. The goal is to provide a more robust and durable protection than the currently authorized vaccines, especially for immunocompromised individuals. This vaccine holds promise over the current authorized vaccines from several critical areas of differentiation and value to various patients. CMO4S1 is being developed to address those patient populations of immunocompromised individuals currently and adequately served by the authorized vaccines and the various monoclonal antibody therapies.

A recent article in The New England Journal of Medicine addressed the critical need to address both antibody and T-cells relative to protection against SARS-CoV-2infection and COVID-19. CMO4S1 is specifically constructed to conclude a broader focus on the SARS-CoV-2 virus, including both the spike protein and the nucleocapsid protein, resulting in strong humeral and cellular immune responses. As a result, it induces strong antibody and T-cell responses. Such immune responses were validated and reported last year in the Lancet Microbe publication of the Phase 1 data. Addressing the cellular immune responses via inclusion of the nucleocapsid protein is especially critical among those patient populations, who have immune systems with a blade of ability to mount a response to antibody stimulation.

This includes patient populations with various blood cancers, HIV, sickle cell anemia, kidney disease, autoimmune disease and others with various comorbidities. We estimate at least 15 million such individuals in the U.S. alone and over 200 million patients worldwide. We believe that CMO4S1 has the potential to address a critical worldwide medical need and commercial opportunity. We also believe that an opportunity for an expedited regulatory path may exist for such a development program. With CMO4S1, we also anticipate partnering and collaborations to occur for worldwide distribution, providing a novel vaccine as support of patients with such compromised immune systems. Regarding 2023 milestones, our focus this year includes accelerating efforts in support of the Gedeptin and CMO4S1 Phase 2 clinical programs, moving the GeoVax MVA vaccine related to MPox and Smallpox development and advancing our MVA manufacturing process into operational validation.

During the first half, we anticipate reporting initial clinical results of the safety lead in for the CMO4S1 immunocompromised trial. Presentations are scheduled for the World Vaccine Congress in early April, the Vaccine Summit 2023 in late May, as well as the ISAC Flow Cytometry (ph) International meeting in late May. In addition to the recently reported side expansion of the Gedeptin study, we anticipate reviewing initial data later this year. Also this year, we anticipate reporting further preclinical information related to the use of the Gedeptin technology used in conjunction with immune checkpoint inhibitors. Furthermore, we intend to provide updates relative to IND supportive studies of our advancing GeoVax MUC1 tumor associated antigen therapy.

In early June, our team will be actively participating in ASCO 2023. During 2022, we strengthened our balance sheet, adding $37 million during a time when many biotech firms were furloughing programs and/or people. We feel that our capital development success reflects investor support and belief in the value and growth opportunities underway at GeoVax. We continue to receive strong interest related to capital investment development, which we’ll evaluate, but we’re focused on execution towards our 2023 goals, strengthening shareholder value and achieving critical reporting milestone for our current development programs. Now, I’d like to turn the presentation over to Mark Reynolds, GeoVax’s Chief Financial Officer for a review of our recent results and financial status.

Mark?

Mark Reynolds: Thank you, David. Starting with our income statement, the first thing to note is the lower grant revenues reported during 2022 as compared to 2021, which is reflective of the wind down of our grants from U.S. Army and NIH (ph) for our loss of fever and COVID-19 preclinical programs, as we focused attention on our clinical programs. We do however intend to seek additional non-dilutive government funding for our preclinical development programs in the future. Research and development expenses were $9.1 million for 2022 versus $15.6 million for 2021, representing a decrease of $6.4 million. It should be noted, however, that the €˜21 expense included $12.3 million of license fees and other upfront costs related to our licenses of CMO4S1 and Gedeptin.

Excluding these costs, our R&D expense actually increased by $5.9 million. These increases were planned and expected as they were associated with new clinical trial activity for CMO4S1 and Gedeptin, including manufacturing costs for clinical trial materials. The increase is also reflective of higher personnel and consulting costs as we stacked up earlier in the year. General administrative expenses were $5 million for 2022, as compared to $3.6 million in 2021 with the increases associated with higher personnel, consulting and patent costs. So overall net loss for 2022 was $14 million or $0.83 per share versus $18.6 million in 2021 or $3.04 per share. Again, the increases during 2022 are primarily associated with the ramp up of organizational infrastructure and other costs associated with CMO4S1 and Gedeptin clinical trials.

Turning now to the balance sheet. Our cash balances at December 31 were approximately $27.6 million, as compared to $11.4 million at the end of €˜21. The change in our cash balances for ’22 is reflective of $19 million used in operating activities, offset by proceeds from stock offerings in January and May with combined net proceeds to us of nearly $28 million and an additional $7.6 million proceeds from exercised warrants during the third quarter of last year. Our outstanding common shares now stand at $26.3 million. In summary, we are well positioned to accelerate and advance our clinical programs with a cash runway, sufficient to fund our operations and priority programs to the end of 2023. Funding our three ongoing Phase 2 clinical programs and preparing for the next stages of development are the most significant use of our cash and our top financial priority.

I’ll be happy to answer any questions during the Q&A. And I’ll now turn the call back over to David.

David Dodd: Thank you, Mark. My colleagues and I will now answer your questions. Joining us for the Q&A session are Dr. Mark Newman; Kelly McKee; and John Sharky, 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.

Operator: Thank you. And before we take questions, I’m going to hand the floor to Mark Reynolds for some comments. Thank you.

Mark Reynolds: To take a minute to tell all the listeners that what you just heard was prerecorded by David and me. Unfortunately, David had an unexpected family emergency today and he is going to be unavailable to participate in the last Q&A session. But I still have with me today, Mark Newman, John Sharkey and Kelly McKee, and we’ll all do our best to answer any questions that may arise. So I’ll turn it back to the operator now.

See also 15 Companies That Test on Animals in 2022 and 10 Cheap Hot Stocks To Buy.

Q&A Session

Operator: Thank you. And at this time, we will begin our question-and-answer session. Our first question comes from Jason Kolbert with Dawson James. Please state your question.

Jason Kolbert: Hi, guys. Congratulations on all the progress. Couple of questions across a couple of areas. First on Gedeptin, at what point do you think you hit it proof-of-concept. That’s what I’m trying to understand. Phase 1/2 trial at what point do you walk away and say, yeah, this thing works?

Gabrielle DeGravina: Mark or Kelly, which one of you take that question, please.

Kelly McKee: Well, this is Kelly. Let me sort of start off. That’s really kind of a hard question to answer. We have proof-of-concept in a general sense from the Phase 1 study that’s already completed in that we demonstrated that ejection of tumors with Gedeptin and followed by fludarabine infusions shrink the tumors. Now, this is palliative therapy, so we have no expectation that we’re going to — that we’re going to improve overall survival or even necessarily length in survival, but we do have proof-of-concept already that this technology will shrink tumors. The current study is designed to follow-up that initial trial by giving repeat administrations of Gedeptin and repeat with fludarabine (ph) patients is following to activate the protein inside the tumor.

And sort of assess not only sort of what the safety profile is, with repeat administration. But to see whether we’re seeing an accelerated benefit or an expanded benefit in shrinking tumors. And we’ve — it’s a small number of patients. We’ve now enrolled eight of our target 10 and once that — once the study is completed and we start looking at all the data sort of qualitatively as well as quantitatively, I think have a better sense for that and that information should start to become available towards the end of the summer, given sort of the timelines of the trial itself. Does that help answer your question?

Jason Kolbert: Yeah. No, that does. I mean, it establishes the timeline we get it. We’re going to get equals 10 and see what the data looks like. What’s the best case scenario that you’d like to see?

Kelly McKee: Best case is, we take our data package to the FDA and they look at it and tell us, well, if you can give us similar data in additional reasonable number of patients. We don’t know what that reasonable number would be. We were initially hoping it would be somewhere in the neighborhood of 20 to 40, but it’s probably going to be more than that. But then we could achieve an accelerated approval for this as an unmet medical need. But, again, it sort of depends on what the data looks like when we finish the trial and what the environment at the FDA is in terms of accelerated approvals for these kinds of therapies at the time that we presented to them.

Jason Kolbert: Okay. Fair enough. Understood. Similar question on the Cov-2 vaccine program. Two Phase 2 trials, what’s the next focal point that we should be looking at in terms of that data set?

Kelly McKee: Well, so the two trials that we have ongoing, one of them is in healthy volunteers as healthy individuals, as a heterologous booster and we’re about between a third and a halfway through enrollment. With the addition of our new clinical site, we anticipate accelerating enrollment dramatically and hope to have that study fully enrolled within the next couple of three months at worst. And given the follow-up that can — the primary endpoint — primary immune marker endpoint is a month or so after the booster. So we should start seeing some of that data hopefully by quarter three quarter — well, say early quarter four of this year. The study that we’ve got ongoing in patients with hematologic malignancies is a much slower pace study.