Imunon Q2 2023 Earnings Call Transcript

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August 10, 2023

There are 9 speakers on the call.

Operator

Good morning. My name is Alan, and I will be your operator today. At this time, I would like to welcome you to Immunon's ground noise. Following the speakers' prepared remarks, there will be a question and answer session. I would like now to turn the call over to Kim Golodetz.

Operator

Please go ahead.

Speaker 1

Thank you, and good morning, everyone. This is Kim Golodetz with LHA. Welcome to Immunon's 2023 Second Quarter Financial Results and Business Update Conference Call. During today's call, management will be making forward looking statements regarding Immunon'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.

Speaker 1

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 Securities and Exchange Commission. No forward looking statements can be guaranteed and actual results may differ materially from such statement. I also caution that the content of this conference call is accurate only as of the date of the live broadcast, August 10, 2023. Immunon 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 Doctor.

Speaker 1

Corinne Magoff, Immunon's President and Chief Executive Officer. Corinne?

Speaker 2

Thank you, Kim, and good morning, everyone. Today, joining me is Jeffrey Church, our Chief Financial Officer In addition, Doctor. Kirshid Anver, our Chief Science Officer, will be available during the Q and A session at the end of our prepared remarks. As I have discussed during previous calls, Immunon's growth and development is dependent on 4 pillars. The one I'd like to spend most of our time on today is the development of our plasine prophylactic vaccines modality Asana licensing and partnership opportunity.

Speaker 2

Kacine is our proprietary mono- or multi cystronic, nonviral and synthetic DNA technology for the expression of pathogen antigen. It is currently being evaluated In preclinical studies for the development of next generation vaccines. We have made exceptional progress advancing this technology as a prophylactic vaccine modality with important features both as a commercial pilot platform and as a potential solution to addressing the next pathogens of interest. I will review some of our most recent preclinical data with Plastin, Which suggests this asset has been derisked and is performing as we anticipated. During the quarter, Doctor.

Speaker 2

Enver presented results from preclinical studies in a vaccine COVID-nineteen vaccine at the Vaccine Technology and the 2023 Virus and Cells Golden Research Conference in Barcelona demonstrated characteristics that address the limitations of current commercial vaccines by offering enhanced breadth of protection to emerging variants, persistence and robust cellular immunity as well as stability at workable temperatures. Importantly, humoral immune responses specific to SARS CoV-two spike antigen. We are persistent over a 14 month post vaccination period, While the T cell responses from classic COVID-nineteen vaccines after 14 months were higher than a commercial mRNA vaccine. In another mouse study, the human response to a single dose of the commercial mRNA vaccine plateaued within 14 days after vaccination, Well, the response continued to increase over time with the vaccine vaccine, demonstrating improved durability. We believe that our DNA plasmid vaccine may provide greater protection against reinfection, hospitalization or death.

Speaker 2

More recently, we have shown that vaccine is stable for at least 12 months at respiratory temperatures And for at least 1 month at room temperature. I can't emphasize enough how important these attributes are commercial vaccine product, especially as many new pathogens may arise in geographies where there are challenges with refrigeration storage distribution networks. In addition, our ability to rapidly switch out antigens and load multiple etigens into the same vaccine should be instrumental in addressing the spread of disease. Beyond the development of a next generation COVID-nineteen booster vaccine, which I will come back to in a minute, We at Immunon are interested in developing the plasmodality across many pathogens of interest, like Filoviruses or RNAViruses, where a DNA based approach may be beneficial. To date, the U.

Speaker 2

S. And Global Public Health Policy and Commercial Vaccine Manufacturers continue to play catch up with the reoccurrence of existing infectious disease threats and new emerging pathogens. Emerging fevers, which are caused by viruses like Lassa or Marburg or Ebola are prime examples and our most serious threats to public health, both in the endemic regions of West Africa And worldwide due to high mobility and mortality rates. And these viruses cause lethal hemorrhagic fevers In several cases and are classified as risk of purchase would need to be handled in biosafety level 4 facilities. And there are also potential biodefense threats if used as biological weapons against civilians.

Speaker 2

So let's now turn to IMN101, our first clinical vaccine designed as the next generation COVID-nineteen booster. All the preclinical studies in mice and NHP have supported the development of pre IND package that we submitted earlier this year to the FDA. We have just received the written response from the FDA. And I am pleased to tell you that the FDA provided encouraging feedback on our data and clinical development plan, which gives us comfort that we are well on track to submit an IND in the Q1 of 2024 and enter the clinic soon thereafter. The IND will be for a proposed Phase III program, Which is designed to provide proof of principle in humans.

Speaker 2

The FDA also confirmed The plug and play strategy for our platform was acceptable. So this confirms the flexibility and the versatility of our modularity, which Allows for the rapid production and development of any vaccine by simply changing the antigen coding cassette. IMN101 is a monovalent COVID-nineteen vaccine candidate of the Omicron XBP15 variant as per the FDA's recommendation. You remember that the FDA's VirPack, the Vaccines and Related Biology Products Advisory Committee, met on June 15 this year To discuss and make recommendations for first half to strength for updated COVID-nineteen vaccines for use in the Beginning in the fall of 2023. So the plug and play model using the PressMeade DNA backbone has shown excellent results, not only in COVID-nineteen strength, but our early work Also suggest a plasine vaccine could be useful in multiplex, none also as mparks.

Speaker 2

Initial data appear to confirm the validity of plasine as a platform with broad applicability. Mice immunized at day 14 with an endpox And this is 3 separate immunological responses associated with the virus. And we also have generated immunological responses against Flu Antilloviruses in preclinical work. Last quarter, I mentioned that we are developing 2 more modalities as a logical extension of our prophylactic vaccine modality. 6 class concerns the application of our DNA technology to produce universal cancer vaccines, also called tumor associated antigen cancer vaccines.

Speaker 2

We have initiated preclinical work to develop a TRP-two and NYS-one tumor associated antigen cancer vaccine in melanoma, which we call IMN201. This new modality is based on antigen selection and optimization along with the option to include important immune modifier on a single nucleic acid vector. This represents a promising strategy to induce a specific and long We have completed our initial proof of concept study looking in a mouse melanoma model potential prophylactic benefits of monovalent TRP-two and bivalent TRP-two NYS-one vaccines. We are very happy with the results as the 6 class vaccination followed by a tumor challenge delayed the tumor growth and improved survival. Now the therapeutic studies evaluating the therapeutic benefits of our vaccines And consisting of a tumor challenge followed by vaccination are ongoing and will be completed in the second half of the year.

Speaker 2

And we are also in early discovery of our 4th modality in the past For personalized neoantigen cancer vaccines. I'd like now to touch on IMN001, our DNA based immunotherapy for the localized treatment of advanced ovarian cancer currently in Phase 2 development. Recall that last September, we reached full enrollment of 110 patients, and we expect to report an additional set interim, more mature data in the second half of twenty twenty three. Enrollment with our study with breakthrough cancer is now open at MD Anderson. And the Breakthrough Cancer Foundation is working to add more sites.

Speaker 2

This study, as you remember, is looking at IMN001 in combination with Avastin. As part of our strategy to reduce reliance on outsourced manufacturers, In June, we unveiled our new cGMP clinical materials production facility on the Huntsville, Alabama campus of the HudsonAlpha Institute of Biotechnology. The facility will support R and D efficiencies and lower development costs for infectious disease and cancer vaccines and non viral DNA based immuno oncology therapies. This new capability complement our existing cGMP quality control facility for testing clinical products at the Huntsville site. We have designed and built our own manufacturing capabilities to produce GMP grade plasmid DNA and DNA facilitating agents to support Phase 1 people studies with our placebo infectious disease modality and our in the class and 6 class cancer vaccine modalities.

Speaker 2

The plasmid DNA and DNA fat generating agents are key components of the final vaccine formulation with GMP fill and finish carried out at the CDMO partner site. Our scientists can now select any protein from the human or pathogen proteins to be engineered. Our existing labs also have The ability to conduct testing and run experiments in a variety of animal disease models. These internal capabilities will allow us call to control both the costs and the process. I will turn the call over to Jeff Church now, who will discuss our financial results.

Speaker 2

Then I'll come back and provide a review of upcoming milestones and activities. Jeff?

Speaker 3

Thank you, Corinne. Details of Immunon's Q2 2023 financial results are included in the press release we issued this morning and in our Form 10 Q, Which we filed today before the market opened. Immunon ended the 2nd quarter with $24,100,000 in cash, investments and accrued interest receivable. Our cash or net cash usage for operating activities was $6,800,000 in the Q2 of 2023, up $200,000 during the Q2 of 2023 resulted from the early repayment of the company's loan facility with Silicon Valley Bank. This was offset by equity sales under at the market equity facility.

Speaker 3

Combined with the $1,800,000 in planned future sales State of New Jersey net operating losses. We believe we have sufficient capital resources to fund the company's operation through 2024. Let me now turn to a review of our financial results. Immunon reported a net loss for the Q2 of 2023 of 5.6 $1,000,000 or $0.61 per share. This compares with a net loss of $6,000,000 or $0.87 per share in the Q2 of 2022.

Speaker 3

Operating expenses were $5,500,000 in the Q2 of 2023. It was down about 10% from the 6 $1,000,000 that we reported in the Q2 of 2022. Let me break down each one of these line items. Research and development typically research and development costs associated with our plasimedina vaccine mortality increased to $1,300,000 from increase from $1,300,000 from $600,000 a year ago. R and D costs to support the OVATION study as well as the Phase 3 OPTIMA program decrease to $300,000 from $800,000 in the Q2 2022.

Speaker 3

R and D costs associated with the preclinical development of Immunon001 decreased to 400,000 Q2 compared to $800,000 in the same period of 2022. Other clinical and regulatory costs were $400,000 this year compared to $700,000 in the prior year. CMC or manufacturing costs increased $700,000 this year from $300,000 reflecting the development of the in house pilot manufacturing capability, which Karim referred to earlier, for DNA Plasmids and Nanoparticle Delivery Systems. General and administrative expenses were $2,300,000 in the Q2 of 2023 compared to $2,900,000 for the comparable prior year period. This decrease was primarily attributable to lower non cash stock compensation and lower

Operator

professional fees, including legal fees,

Speaker 3

offset by higher fees, including legal fees, offset by higher compensation expenses related to the CEO succession plan, which we announced in mid 2022. Other non operating expenses were $85,000 in the Q2 of 2023 that compared to $65,000 in the prior year period. The company incurred an early debt extinguishment expense of $300,000 on its loan facility with Silicon Valley Bank, which was offset by higher investment income from short term investments due to the higher returns we're seeing on these investments. Results. Recall that in April 2023, we repaid the loan to First Citizens Bank, which is previously Silicon Valley Bank for a total of $6,400,000 which included principal interest, prepayment fees and end of term fees.

Speaker 3

$6,000,000 collateral account, which we classified as restricted cash was released quarter compared to the prior year due to higher returns on these investments. I'll take just a brief look at the first half of the year, both first Q2. For the 6 months ended, we reported a net loss of $11,200,000 that compares to $16,500,000 Q1 of 2020. Operating expenses were $11,200,000 in the first quarter of 2020 I'm 1st half of twenty twenty three, which was an 8% decrease from the $12,100,000 that we reported in the same period last year. Net cash used for operating activities was $10,800,000 for the 1st 6 months of 2023 compared to 13 point $4,000,000 for the same period in 2022.

Speaker 3

This decrease was primarily related to a one time payment of $4,500,000 interest expense and related costs resulting from the sale and subsequent redemption of $30,000,000 of Series AB Convertible Redeemable Preferred Stocks in the year ago period. Cash used by the financing activities of 3 point $7,000,000 during the 1st 6 months of 2023 resulted from, as I mentioned earlier, the early repayment of our loan facility with Silicon Valley Bank, offset by $2,700,000 of sales of equity under our at the market facility. We also received net proceeds of $1,400,000 from the sale of unused New Jersey net operating losses in the Q1 of 2023. Our projected cash utilization for the balance of 2023 is approximately $4,500,000 per quarter. The majority of expenses are related to the development of our plastine modality.

Speaker 3

We will now turn the call back over to Corinne.

Speaker 2

Thank you, Jeff. Immunon is tightly focused on harnessing the power of the immune system By developing novel DNA based approaches in immuno oncology and infectious diseases. We believe that the non viral DNA Will be a key driver of the future of global medicines. We are very excited about the potential at Immunon to improve The health of millions, if not billions of people, while creating significant value for our shareholders. Along our achievements, We have derisked our plasmodality across several pathogens of interest by demonstrating the immunogenicity and safety of our vaccines.

Speaker 2

We have generated compelling data in SARS CoV-two and IMN-one hundred and one, the next generation COVID-nineteen signal booster will be in the clinic in Q1 next year. We also have generated excellent immunological response for vaccines against pathogen of concern, especially monkeypox through lachyvirus, monkey virus. We unveiled state of the art manufacturing site in Hanseld to reduce our reliance on others. We entered into collaborations Designed to advance our technology, and we are actively building capabilities for the development of cancer vaccines. Looking forward, we expect to reach several value creating milestones over the next 6 to 18 months.

Speaker 2

Among them Reporting additional interim data on IMN001 for our VASISHNAV study and the combination study with nevacizumab In advanced ovarian cancer and reporting top line data from the OVATION II study, studying also the IND for SARS COVID-nineteen vaccine and announcing proof of concept vaccine data as well for another virus program. We are very excited to tell you about our programs in more detail in an R and D day That we plan to hold this fall. We will have several European leaders discussing our work during this virtual program. So please keep an eye out for more details in the coming weeks. With that, I open up the call to your questions.

Speaker 2

Operator? Call.

Operator

Our first question comes from Amelie Burton of H. C. Wainwright. Go ahead.

Speaker 4

Hi. Thanks for taking the questions. I guess 2 on the COVID program. First, can you touch on the remaining steps and studies that you might need before you could submit the IND in the Q1? And then do you plan to have the Phase III study just be in general healthy volunteers?

Speaker 4

Or Do you think you might focus development on either like elderly or immunocompromised patients? And then just clarifying timelines for Ovation II. I think you previously talked about interim data in the 3rd quarter. Is that still happening? And then is top line data supposed to still on track for the first half of next year?

Speaker 4

Thank you.

Speaker 2

Thank you, Emily. I'll start with the timelines on Ovation. Yes, so I confirm that we should additional interim data in the Q3. And for the top lines, we're still planning on having the top lines at the end of the Q2 2024. To your question on COVID, so and I'll ask Doctor.

Speaker 2

Khursheed, Anwerth to complete my answers. Yes, so we'll be ready to submit IND in the Q1. What we are working on at the moment is the production of the clinical vector. So we are pretty much set and very much on track for this submission of IND. And when it comes to the Phase III trial design, we'll be looking at generally healthy volunteers.

Speaker 2

I think your question on looking at immunocompromised patients actually is an interesting one or That's something that we actually will address with our advisors that could be a subsequent study. Krishi, do you want To add to what I just said.

Speaker 5

Yes. Sure. I think you've covered it well. Emily, at least 2 sets of studies So that's a safety tox study that's due to start soon and a biodistribution study, where the plan is made and the delivery system goes and how long it takes to clear. So those are the 2 fundamental IND enabling studies that We'll complete the submission of the IND.

Speaker 5

And as Karim said, early Phase 1 study will be healthy volunteers, but Clearly for Phase 2 part, we could look into some stratification. As Corinne said, maybe some elderly with morbidity, but discussion with our advisory on card.

Speaker 4

Okay, great. That's very helpful. Thank you.

Speaker 2

Thank you.

Operator

Our next question comes from David Bautz from Zacks. Go ahead.

Speaker 6

Hey, good morning, everyone. Thanks for taking the questions. First one is on the Plastine Technology. Do we have any idea right now about how long the antigen is going to be expressed in someone who gets immunized with Placine? Are we talking days or weeks or months?

Speaker 6

Do you have any clue right now?

Speaker 2

Hi, David. Yes, we certainly do. Priscilla, Krishi, can you please answer the question?

Speaker 5

Yes, of course. So David, compared to mRNA Our protein DNA phase for longer period of time, especially in So with other genes such as the recorder gene, we have seen expression for several weeks. So, I anticipate the expression of the antigen would last several weeks after a single injection or even months.

Speaker 6

Is there any concern about tolerance development or even an allergic reaction with such long expression of the antigen.

Speaker 5

The levels of the antigen are not high or super Max to be able to cause any intolerance issue that generally happens if you have an antigen protein bolus given over time, super physiological levels, then you see intolerance. So these are levels that are enough to initiate immune responses. I don't anticipate intolerance, but again, we haven't specifically looked for that.

Speaker 6

Okay.

Speaker 2

What I'd like to add as well, David, is we believe that the increased No longer expression of the antigen is in fact a benefit because it gives time to immune system to build memory cells, right? And that's a bit maybe the concern a little bit with mRNA is that memory cells are not too much present.

Speaker 6

Okay. That sounds good. And then, as Far as the Phase 1 study goes, I guess, how do you determine which variant you're going to target for that? And then Can you change which variant you target between going from, say, the Phase 1 to the Phase 2?

Speaker 2

That's a great question. So I mentioned that the FDA every year will tell Manufacturers which variant to go after. So they're going to use the same principle as they do for the flu vaccines, right? So they met the VIA PAC, Mac, in 2015 and they said what the manufacturers need to put into production is Omicron HBV15, Which is what we did. The FDA agreed that, that was the right thing for us.

Speaker 2

And then we'll do a Phase III, which means that And as soon as we start the Phase 1, when we get the safe dose from the Phase 1, we'll go immediately into Phase 2 program With the same volumes.

Speaker 6

Okay. So, is this system being set up kind of like The flu vaccine is where you're not going to have to basically do animal studies again every year with a different variant. You're just going to be able to plug it in and use that whichever okay.

Speaker 2

And that's what I mentioned. That's why we're so pleased that the FDA confirmed what we call our plug and play strategy. So then you don't have to redo your tox

Operator

next question comes from Kempe D'Alevare from Brooklyn Capital Markets. Go ahead.

Speaker 7

Great. Thank you. Just to continue on with the vaccine discussion. So Do you expect you would have Phase 1 data in the second half of twenty twenty four given the timing of the IND filing?

Speaker 2

Yes, I believe so. Yes, that's what we are planning to do. Hi, Ken. Okay.

Speaker 7

All right. Thank you. And then you had originally hoped to file the IND by the end of the year. We're not talking about a significant change in the timeline, but I'm curious, does the change in the timeline reflect the timing of FDA feedback Reflect the pre IND functions that or the IND enabling functions that you're doing now.

Speaker 2

Right. Thank you. Yes, we thought we could be a bit faster with our A and D filing. You're correct. I think the shift in the time lines reflects the fact that we wanted to hear To make sure that we would pursue a variant that is the one recommended by the FDA.

Speaker 2

So we wanted to wait for the June 16 SEOPEC meeting. And then of course, the FDA feedback on our pre IND package was a bit delayed compared To what we had thought as well. So that's the reason.

Speaker 7

Great. Thank you very much.

Operator

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

Speaker 6

Go ahead.

Speaker 8

Hi, good morning. Thank you for taking my questions. Most of them answered, but I had a question on the combo with Avastin Phase onetwo underway. What's the expectation for the potential interim look for that and Moving into a Phase II portion of that trial.

Speaker 2

Good morning, James. So as I mentioned, This trial is under the sponsorship of the Breakthrough Cancer Foundation. We're supposed to have 4 centers enrolling patients in this clinical trial. The first center in Deane Dersun is up and running. They have not enrolled patients yet, but they are definitely up and running.

Speaker 2

And we are expecting the other centers to join the study in Q3 or yes, I mean, maybe September, October time frame this year. So it's a Phase onetwo, which means that the first phase of this trial is really to evaluate The dose that we need to administer to patients in combination with Avastin, and then the Phase So it's a bit difficult at the moment to give you exactly when we can get some first data. But certainly, in the course of 2024, we'll have more certainty as the new centers evolve. Krish, do you want to add anything to what I said? I know you've been talking with the investigator as well.

Speaker 5

Sean, no, you're right. I mean the initial part as Kareem, that is to demonstrate safety in combination with the Avastin and chemo. And once the 4 sites That we have targeted, come on board. The Phase 1 portion should not take much. I don't want to put a date or time, but I think it's just starting now.

Speaker 5

So Phase 1 All rights to be on board. It's another matter of perhaps I would say 3 to 4 months after that.

Speaker 8

Okay, great. Thank you. And is there I have on sort of my model expectations for maybe another combo at some point With Opdivo, is that something that you guys are still looking at for epithelial ovarian cancer?

Speaker 2

Hi, Jess. Yes. So I think I would say in theory, I believe that There is a lot of value in testing IL-twelve in combination because mechanistically, that makes a lot of sense to Add an IL-twelve with checkpoint inhibitor, for instance, right, because it's all about moderating the tumor microenvironment. So we might think about this. I mean, we do one thing at a time, right?

Speaker 2

The reason why we engaged in a combination trial with Avastin now is because we had very compelling synergistic data in a preclinical model In mice. But it's not a lot of question to think that a combination with a checkpoint inhibitor could be an interesting trial as well.

Speaker 8

Absolutely. So I know you have limited resources as everyone does. Actually at that point, Has there been any discussion to the effect of any larger pharma partners coming in to partner to help With the R and D?

Speaker 2

On the IL-twelve program you're asking specifically?

Speaker 8

Really IL-twelve, really across the board.

Speaker 2

This will be key to our operating model. So we'll certainly, we'll seek partnerships. That's why we are so eager to get into a Phase I program with our vaccine, vaccine modality, so that we can Get to this proof of principle in humans. And then I'm sure that that will open doors for collaborations after that.

Speaker 8

Outstanding. Thank you for taking the questions.

Speaker 2

Thank you.

Operator

This concludes our question and answer session. I would like now to turn the conference back over to Doctor. Corinne Legoff for any closing remarks.

Speaker 2

Thank you very much. So, as you know, we've been using the phrase vaccine of the future to describe work. And this is exactly what our vision is, is to be the provider of safe and effective vaccines that are superior to current vaccines in terms of durability and buffer protection that are stable at workable temperatures that can be We also believe our technology holds excellent promise in immuno oncology. So We look forward to keeping you informed of our progress for joining us, and we look forward to speaking with you again at our upcoming R and D Day event. Have a very nice day.

Operator

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

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