GeoVax Labs Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 6, 2024

There are 8 speakers on the call.

Operator

Good afternoon, and welcome everyone to the GeoVac Second Quarter 2024 Corporate Update Call. My name is Alex, and I will facilitate today's call. With me are David Dodd, Chairman and CEO Mark Reynolds, Chief Financial Officer Mark Newman, PhD's Chief Scientific Officer Kelly McKee, and the Miles per hour Chief Medical Officer and John Sharkey, Ph. D. Vice President, Business Development.

Operator

At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. At this time, I am turning the call over to Max Gatica of Precision HQ.

Speaker 1

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 product candidates with the desired characteristics in a timely manner and such products will be safe for human use.

Speaker 1

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 may be more effective or easier to use than GeoVax products. GeoVax will be able to enter into favorable manufacturing distribution agreements and other factors over which GeoVex has no control.

Speaker 1

GeoVex assumes no obligation to update these forward looking statements and is not intended 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 ks. It is now my pleasure to introduce the Chairman and CEO of GeoVax, David Dodd.

Speaker 2

Thank you, Max. Good afternoon and thank you for participating in the Q2 2024 GFX corporate update call. Following my comments, Mark Reynolds, our CFO, will provide an update of our financials and then your questions will be addressed. The Q2 included several major events in the development of GeoVax led by the BARDA Project Next Gen Award valued at almost $400,000,000 supporting GEO CMOS4S1, our next generation COVID-nineteen vaccine in a Phase 2b10,000 patient trial comparing our vaccine to an FDA authorized mRNA vaccine. This program is already underway with our having already initiated billings to BARDA as Mark will further discuss during the financial review.

Speaker 2

We are delighted to be partnered with Elucent as our CRO for the Project NEXTGEN trial as Elucent is our existing CRO supporting both our CMO4S1 and Godefan clinical trials. In addition, during Q2, we conducted a comprehensive review of the gedepptin Phase IbIIa trial in conjunction with the Godaptan Clinical Advisory Committee, deciding to proceed with the implementation of a Phase 2 trial evaluating gedepine in combination with an immune checkpoint inhibitor as therapy for patients with squamous cell head and neck cancer. Thus far, clinical evaluation of Godefan therapy has demonstrated sufficient tumor stabilization or reduction activity to support plans to advance clinical development of gadeptan in such an expanded Phase 2 clinical trial. These two events and decisions represent significant milestones for GEOVAC. Today, we'll discuss the progress status and plans related to CMO4S1 and cadetin as well as provide updates on our other programs, including our progress in the advanced MVA manufacturing process.

Speaker 2

Our goal is to successfully develop innovative cancer therapies and infectious disease vaccine addressing critically important unmet medical needs pursuing initial indications that support expedited registration pathways. We anticipate establishing business partnerships and collaborations in support of worldwide development, commercialization and distribution. Last December, we announced the closure of enrollment for the Phase Phase A2B trial gedepthan among advanced head and neck cancer patients. This initial targeted patient population represents those who are in end stage care, who unfortunately die each year as a result of head and neck cancer. This represents 17,000 in the U.

Speaker 2

S. And over 400,000 individuals worldwide. Our goal is to obtain clinical evidence supporting advancement of this therapy, including in patients with earlier stage disease. You recall this trial was funded by the FDA under the Orphan Drugs Clinical Trials Program. The April comprehensive review of the results from the Phase 1 and the most recent Phase 1a2b trial of Godefan concluded that Godefan has demonstrated acceptable safety and to support continued development of a Phase II trial in first recurrence head and neck cancer.

Speaker 2

The primary goal of this trial will be to establish efficacy of neoadjuvant gedepine therapy combined with an immune checkpoint inhibitor in squamous cell head and neck cancer. The company has initiated the necessary planning activities, including protocol development, manufacturing and CRO selection with the trial activation anticipated during the first half of twenty twenty five. We believe that the Goddeptan mechanism of action will enable us to address a variety of solid tumors, both cancerous and benign. We hold worldwide rights for all indications of this technology and we are participating in various oncology and partnering conferences. We anticipate funding the EXPANDED Phase 2 trial through a combination of internal funding, potential partnering and potential non dilutive funding resources.

Speaker 2

During the Q and A session, we welcome the opportunity to further discuss our plan for the EXPANDED Phase 2 trial. Our big news during Q2, however, was the announcement of the BARDA project next gen award of almost $400,000,000 supporting CM04S1 and a 10,000 patient comparative trial against an FDA authorized mRNA vaccine. This announcement and award represents a highly significant event in the evolution of our company, which we believe represents a strong validation of our MVA technology and expertise. The vetting process was lengthy and rigorous, but we remain confident throughout and we're delighted to be part of the Project Next Gen vaccine program. Our aim with CMO-four F1 is to provide a more practical public health friendly COVID-nineteen vaccine than that offered from the 1st generation vaccines.

Speaker 2

We believe that this is achieved by stimulating a robust and durable immune response across multiple virus variants as a result of the induction of both the antibody and cellular arms of the immune system against multiple virus antigens. This distinction is critically important in addressing the high risk populations immune compromised individuals for whom the current vaccines and monoclonal antibody therapies are typically inadequate. This represents the key differentiation between our vaccine and the 1st generation approved vaccines. Our vaccine utilizes a proven safe and efficient delivery platform, modified vaccinia anchor or MVA, which does not replicate in mammalian cells. The safety of MVA has been well established and accepted by regulatory authorities worldwide, especially among patients with weakened immune systems as well as among pregnant women.

Speaker 2

That our vaccine platform, MVA, is also a standalone vaccine authorized for protection against mpox and smallpox is a unique feature with critically important clinical benefits, providing a significant differentiator for CMO4S1, especially as a preferred COVID-nineteen vaccine in regions endemic to MPOX. A current example is within the Democratic Republic of the Congo or DRC, where there is a threatening outbreak underway. Also, the CDC recently issued a warning of continued MPOX threats and risks within the U. S. We believe that CM04 S1 offers an immune profile optimal for more general use as a heterologous booster to current mRNA vaccines, providing a more robust, durable and broadly functional immune response against emerging variants, potentially without the need for the continuous vaccine reconfiguration that appears necessary with the mRNA vaccine.

Speaker 2

In fact, the HHS press release announcing our Project NextGen award specifically highlighted our award as providing the potential for COVID-nineteen vaccine that provides broader protection, meaning encompassing a wider array of variants and the potential for increased durability than that evidenced by the current authorized vaccines. The clinical data thus far from our current Phase 2 studies is supportive of this potential. Relative to CMO-four S1, we anticipate partnering and collaborations in additional clinical and research efforts and in support of worldwide commercialization and distribution. Active initiatives are underway in these areas. As mentioned earlier, we are delighted to be partnered with Allucent for this Phase 2b trial and we recognize the BARDA funding provided to both GeoVx and Ilucym to ensure successful operational execution of this critically important study.

Speaker 2

As you recall, 3 Phase 2 clinical trials are underway with CMO-fourS1, 2 of which address the high risk populations of immunocompromised patients. The other Phase 2 trial evaluates our vaccine as a heterologous booster among healthy adults following prior receipt of an mRNA vaccine. Overall, we hope to demonstrate that our COVID-nineteen vaccine successfully addresses the current unmet needs among the tens of millions of immunocompromised patients, while also demonstrating the vaccine as a more robust durable booster vaccine used in conjunction with mRNA vaccines. I won't delve further into these specific trials at this time, but we welcome any questions you may have during our Q and A session. With the announcement of our Project NextGen award last month and the progress in our other Phase 2 clinical studies, our activity related to partnering and collaborations has increased.

Speaker 2

We believe that CMO4S1 represents significant promise as a critically needed and important part of the COVID-nineteen vaccine armamentarium public health worldwide. During the remainder of 2024, we anticipate continued expanded discussions and advancing business development negotiations. In summary, we are focused on addressing opportunities that provide a basis for achieving leadership within differentiated patient areas and commercial markets. Our current clinical stage products gedepptin and CMO4S1 are focused on patient populations currently underserved or unserved by existing therapies and or vaccines. GEO MVA, our vaccine candidate against Mpox and smallpox is intended to disrupt the current monopoly in that important area, providing us a leadership as the 1st U.

Speaker 2

S.-based supplier of such a vaccine. This may also provide GeoVax our initial step into revenue generation due to the significant governmental interest in U. S.-based supply chains versus overdependence on non U. S. Suppliers.

Speaker 2

The strong sentiment in favor of such on sourcing initiative remains a major national legislative focus and interest. We're 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. Finally, we anticipate providing continued 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. Overall, our various lead stage products, gadeptan, CM4OS1 and MVA represent critically important areas of medical needs, largely unserved or underserved by current products and standard of care. We are pleased with the consistent encouraging results we're seeing from our clinical studies.

Speaker 2

Moreover, we believe that expedited paths to registration are feasible for these products. From a commercial perspective, these product opportunities represent an estimated annual U. S. Revenue potential of over $40,000,000,000 I'll underscore that this isn't a sales forecast, but rather a reflection of significance of the need to address these critically important areas of healthcare, both clinically and commercially. Expanding this to a worldwide basis in conjunction with partners and collaborators adds to the confidence we have relative to the outlook for GeoVax, our shareholders and stakeholders.

Speaker 2

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?

Speaker 3

Thank you, David. Starting with our income statement, I'll focus most of my comments on the comparative figures for the 6 month period of 2024 versus 2023. During the quarter ended June 30, we reported $301,000 of revenues associated with the BARDA Project NextGen award. There were no comparable revenues reported during 2023. This represents our first billing to BARDA under the contract, which began on June 12.

Speaker 3

So there's a little more than half a month worth of billing there. This is a cost reimbursement contract, so future revenues will directly correlate with our billable personnel time and the incremental expenses we incur. Research and development expenses were $8,700,000 during the 1st 6 months of 2024 versus $7,500,000 in 2023, representing an increase of roughly $1,200,000 or 15%. This year over year increase is primarily associated with the cost of conducting our clinical trials, including manufacturing costs for clinical trial materials as well as some supportive studies. General and administrative expenses were $2,500,000 in 2024 versus $2,900,000 in 2023, representing a decrease of $400,000 or 13 percent, mostly associated with lower stock based compensation expense and a mix of other costs as well.

Speaker 3

Other income net was $31,000 in 20.24 as compared to $484,000 in 2023, primarily reflecting lower interest income due to lower cash balances invested through money market accounts. So overall, net loss for the 1st 6 months of 2024 was approximately $11,000,000 or $4.68 per share versus $10,000,000 in 2023 or 5 point $6.6 per share, again with the increase in the net loss being driven by the CMO-4S1 and the Godaptan clinical trial activity. Turning now to the balance sheet. Our cash balances at June 30 were $1,600,000 as compared to $6,500,000 at December 31, reflective of $7,600,000 used in operating activities, partially offset by $2,700,000 in financing transactions together with some buildup in our payables and accrual balances. We also completed an additional raise in July with net proceeds of $2,800,000 which is not reflected in the current balance sheet that you see.

Speaker 3

Our outstanding common shares currently stand at $5,300,000 following the recent financials. As David mentioned, the BARDA Project Next Gen award was the most significant event during the Q2 and it's our top priority going forward in terms of operational focus. But that entire clinical program is fully funded by BARDA through the awards to GeoVax and to Elucent, our CRO partner. The total federal support for this program will total, we expect between 367,000,000 dollars 388,000,000 over the next several years. In terms of our funding needs, the ongoing non BARDA Phase 2 clinical programs for gedepatin and CMO-four S1 will continue to be the most significant use of our cash in the foreseeable future.

Speaker 3

We are currently developing our capital formation plans to fund these programs through the next several valuation inflection points. I'll be happy to answer any questions during the Q and A period. And I'll now turn the call back over to David.

Speaker 2

Thank you, Mark. My colleagues and I will now answer your questions. Joining us for the Q and A session are doctors 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. Thank

Operator

For our first question, we have Robert Lee Moyer with Noble Capital Markets. Please go ahead.

Speaker 4

Good afternoon and thank you and congratulations on all the great progress in the first half of the year. One of the things that was mentioned was that the cadetin trial is squamous cell carcinoma in the head and neck and there was a mention of a variety of solid tumors. So I was wondering if there was anything else that you could tell us on any additional indications in preclinical or planned IND filings there?

Speaker 2

Thank you, Robert. I hope people can hear me. I've been out of the conference call for quite a while. But anyway, I'm going to ask Kelly McKee, our Chief Medical Officer to address that. Kelly, with us.

Speaker 2

Robert, can you hear me okay?

Speaker 4

Yes. I was having some technical difficulties a little earlier, but you're loud and clear right now.

Speaker 2

Okay. Because I missed over 2 thirds of this. So I guess Kelly is on there, still some technical difficulties. But we initially were studying the advanced head and neck cancer, we did that with the Phase 1 and then the Phase 1a and 2b. And then we had this our review with our clinical advisory committee in late at the end of April.

Speaker 2

And we've determined that the next target for the Phase 2 study will be the study approximately it will be decided as we go through and finalize the protocol, but approximately 36 patients. It will be gedepatin in combination with the have been receiving proposals or interest that we also look at triple negative breast cancer and we also look in earlier stage cancers. So right now, our focus is not on any of those others. It really is towards advancing with the Phase 2 trial as we announced. I think it was last week we announced what the plans are for that.

Speaker 2

But we do anticipate that the Godaptan technology, the therapy will be applicable to a variety of solid tumors as long as again, as long as they're needle accessible, which is virtually all of them with today's technology. So we have quite a bit of interest both internally as well as among our oncology advisors. But right now, we're focused on moving forward with all the planning activities that we've already initiated, the manufacturing, the development of the protocol, so that we'll be prepared as we get towards into that sort of late second, maybe but then in the Q3 next year to activate this Phase II trial. Does that answer your questions, Whelan?

Speaker 4

Yes. That was a great answer. But you gave me some of the details I was hoping for. And if I could just ask a second question. Is it too early to ask if the accounting or the funding from NextGen, the $24,000,000 has been determined yet.

Speaker 4

And any hint as to what the accounting treatment is going to be on those? Yes,

Speaker 2

I'll Mark, can you open it?

Speaker 4

Okay, go ahead.

Speaker 3

Yes, I'll answer that. We're treating this as revenue. It's a cost reimbursement program. So as we expand the external cost for the study and as we incur the personnel time, we bill BARDA for that with a slight markup for fringe benefits and for some overhead rates. So as the costs are incurred is when the revenue is recognized.

Speaker 3

So for the 10 Q that we just filed, the project didn't start until June 12. And so we build a small amount for the month of June. I think we reported $301,000 in the income statement, but that will build over time. But the big value here is in the money that's going to the CRO and that does not flow through our financial statements at all. The money goes directly to the CRO.

Speaker 3

So you won't see that reflected in our revenues.

Speaker 4

Yes, of course. Okay, thank you very much. Thank you.

Operator

Your next question comes from the line of Jason Kolbert with EF Hutton. Please go ahead.

Speaker 5

Hey, David. You're right. You cut out about I would estimate about a third of the way through. So we kind of missed everything you were saying. And I did want to hear you discuss kind of the financials in terms of what the pro form a cash is today and understand how you're going to manage the cash burn going forward.

Speaker 5

And I understand BARDA really has something to do with this, right? BARDA is just kind of a pass through on the income statement.

Speaker 2

Mark, do you want to?

Speaker 3

Yes. Jason, I'll address that. In fact, I don't know if the web live stream is still available or not, but I flipped back in the slides to kind of cover some of this. I mean, we did have some across the board technical difficulties here where the stream just went down for some reason. Exactly.

Speaker 3

So anyway, as I just answered with Robert, for the quarter, we reported $300,000 in revenues from the BARDA contract. And as I said, the money will start flowing, in fact, for the month

Speaker 6

of next month. Well, the month

Speaker 4

of next month. So I really wasn't asking about

Speaker 5

the BARDA award. I was really asking about the cash balance on the balance sheet and kind of how you perceive the spending outside of BARDA, right, independent of BARDA. So whatever you receive from BARDA, you're going to spend. But outside of that, Howard, just tell me a little bit about what you're thinking in terms of your current pro form a cash, what you have ballpark on the balance sheet today and what the plan is going to be to run the company over the coming year? Thanks.

Speaker 3

Okay. The bottom line is that even with the BARDA funding, we're going to need to raise money. Okay. That's a given because the BARDA contract obviously does cover the other programs we've got ongoing. The other clinical trials for CMO-four S1 and the planned gedaptan trial and plus our ongoing corporate overhead and burn.

Speaker 3

So we will be raising funds. We're not at liberty yet to say how or how much and the timing of all that, that's in development. We are in discussions with several different bankers in that regard. But what I can say is that by BARDA funding a complete clinical pathway for at least one significant program for CMOS-four S1, That gives us some flexibility to turn the spigot on and off, so to speak, on some of the other programs. Now we want to accelerate as fast as we can, obviously, but that's going to be dependent on the availability of capital resources and the fundraising efforts.

Speaker 3

And that's still to be determined.

Speaker 5

But Mark, where I was really going was what is the impact of the BARDA award in terms of your flexibility of fundraising instruments? I know we all know you can raise equity, right? But I'm just wondering if there might be a more or a less dilutive approach have you considered debt. I noticed one of my other companies who was dealing with a depressed stock price actually did something really smart. They did a debt offering and I'm not a big fan of that except that you have such a securitized asset with BARDA that I would think you would open up some new financial levers for you.

Speaker 5

That's Well,

Speaker 3

yes, okay, I understand now. The issue I have with debt is and I'm not opposed to debt in the right circumstances. The issue we have with taking on debt for where we are now is that you mentioned the word securitized. Okay, that's one form, one way to get some debt done is securitizing assets. But then that hamstrings you on sometimes with strategic opportunities for corporate licensing and whatever, if you have some lean on your assets or your patents.

Speaker 3

And outside of that, if you're looking at unsecured debt, then you're where we are, you're looking at usually a convertible feature that's built in there and I'm really not a fan of those.

Speaker 5

Got you. Okay. That's helpful. And but you don't feel do you feel comfortable with the kind of offers you're getting that you'll be able to continue to develop Adapt and in terms of the timeline you've already represented in the street?

Speaker 3

Yes, absolutely. I mean, I think that there's still a communication challenge we have to really communicate the value of the assets we've got that is not being reflected in the stock price. And the current environment we're under and the crapper that the market is in right now just compounds that. But I think we're going to weather through it. We will find the funds to continue the programs.

Speaker 3

And I think there's a lot of upside here.

Speaker 5

Well, I mean, this is what David does. This is what you're really good at. So I'm glad you're at the helm for that. All right. Thanks guys.

Speaker 5

I really appreciate it.

Speaker 4

Thank you, Jason.

Operator

Your next question comes from the line of Jeff Cross with Crystal Research. Please go ahead.

Speaker 6

Thank you very much. And sorry, you had your technical difficulties on the call. The questions that basically have been asked that I was going to ask, although I will say I concur with your thoughts on the financial aspects and not using debt because I think that does limit your ability to do many things. On the CMO for S1 and the development, given that it does allow you to throttle back on the cash or move forward on the cash when you do your raise with your other programs. What is the anticipated speed that you think that product will complete its enrollment?

Speaker 6

And what is the timing do you think that those trials will conclude? And is there a lot of competition to attract those patients? Obviously, with Godaptan, you have an easier time recruiting, but just wanted to hear your thoughts on recruitment with this. And it's great that obviously it's funded, but I wanted to hear your timing on that also.

Speaker 2

Sure. Kelly, are you on? Would you like to address that?

Speaker 7

Yes. I finally got back on. Sorry about that.

Speaker 6

Thank you, Manny.

Speaker 7

Yes. So to talk about the recruitment, so we've the ongoing trial that we have in patients with blood cancers that have received cell transplants, we have 2, 3 sites currently active, 2 of which have been enrolling fairly briskly. Now briskly, you have to put that into context, but we've they've been enrolling over a couple of patients a month, which is pretty much what we projected them to do. And we're planning to activate 2 additional sites here in the States. And that trial we intend to continue probably for the next year, while we are preparing to launch sort of a follow on study, which will be an international trial that will involve sites in the U.

Speaker 7

S, Canada and the UK. The U. K, we've been in serious discussions with about this follow on trial and they're very, very enthusiastic about enrolling patients. We've had discussions with patient groups over there who have are clamoring for the opportunity to participate in that trial. So with regard to sort of projected recruitment challenges, I think they're going to diminish over time as we sort of mature the current trial and get the roll into the next trial within the next year or 2.

Speaker 7

Okay. Thank you.

Speaker 2

And Jeff, this is David. Let me just add, relative to the project NextGen, there are 5 vaccines that have been provided Project NextGen awards. Each one

Speaker 6

is going

Speaker 2

to conduct 10,000 patient trial and there's estimated 100 sites in each trial. So there's a lot of competition out there for patients, but they're healthy adults and So we think that'll go well. We're thrilled at how fast this is moving for us on our behalf. We made the announcement on June 18 and here we are with a month and a half past and of the 100 sites, there's currently 80 confirmed sites that have already been identified and signed on to this and others, there are additional ones, but they just haven't completed the confirmation process. So we see from what I understand that the Alucine, Kelly and others are is that we're anticipating that drillment will take about 6 months, which is pretty fast to say the least of that.

Speaker 2

And we're following for, I think it's for a year, whatever it is. But basically, this will go very nicely and we're off to an incredibly fast successful start of this program. I could not be more thrilled and delighted at the pace that things are going. So that's where it is. That may help you understand it also.

Speaker 6

Great. Thank you very much, David.

Speaker 2

You're welcome.

Operator

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

Speaker 2

Okay. Thank you. Thank you everyone for participating in today's update, reviewing our progress, our achievements and our outlook. We believe that this past quarter, Q2 represented a watershed in the GFX development as a result of the Project NextGen award and our decision to proceed with an expanded Gadeptan Phase 2 clinical trial. Your interest is greatly appreciated and we look forward to ongoing interactions.

Speaker 2

As always, we want to acknowledge and thank our Board of Directors and Advisors, our GFX staff and the many other parties entities that continue to support us towards achieving success. We're also committed to providing meaningful career development opportunities for highly competitive, quality oriented individuals seeking to disrupt the current paradigm of cancer therapy and infectious disease vaccine developments. We're most proud and appreciative of our team, including those external partners who can continue to contribute to the progress success underway at GeoVax. For all of us, it's a great pleasure serving our shareholders and being part of this team. Our overriding goal is to improve lives worldwide by our development and commercialization of novel, critically needed cancer therapies and infectious disease vaccines.

Speaker 2

Have a safe and enjoyable day. Thank you.

Operator

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

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