GeoVax (NASDAQ: GOVX) Reports 2023 First Quarter Financial Results and Provides Corporate Update

Good afternoon and thank you for participating in the GeoVax corporate update call. Since the start of 2023, we have expanded patient enrollment and supported the Gedeptin® Phase 2 clinical trial and the two Phase 2 trials for GEO-CMO4S1; also, the third Phase 2 clinical program in support of CM04S1, evaluating the vaccine as a booster among patients with chronic lymphocytic leukemia has been viewed by the FDA and is expected to initiate soon. We also recently expanded our rights related to CM04S1 to include all omicron variants, monkeypox, and smallpox, further differentiating our COVID-19 vaccine. While the clinical development progress Gedeptin and the CM04S1 remain our priority, we are also focused on GEO-MVA, our vaccine against monkeypox and smallpox; as well as the implementation of the transformative MVA continuous cell line manufacturing process.

Last year, we strengthened our balance sheet adding $37 million during a very difficult investment environment especially for the biotech industry. This enabled us to expand our current clinical programs, including additional sites, while also adding near-term opportunities related to further development opportunities, including our MVA manufacturing process, and expanding our oncology programs. We expect that our cash position will support our increased clinical program expansions and other initiatives through the remainder of this year.

In the interim we will evaluate opportunities to further strengthen our balance sheet, resulting from supportive stock activities, business development opportunities, and non-dilutive opportunities related to government, and NGO funding. 

Gedeptin is a cancer therapy currently and has expanded multisite evaluation among patients suffering from advanced head and neck cancers. The product has received orphan drug designation and funding for the current clinical trial from the FDA orphan drug has clinical trials program.

Our target population for the initial indication includes head and neck cancer patients, who are receiving palliative care, having failed other therapies and medical interventions. There are approximately 67,000 new cases of head and neck cancers annually in the US, and approximately 13,000 deaths annually resulting from head-and-neck cancers. This represents our initial targeted patient population. Worldwide, there are approximately 900,000 new cases of head and neck cancers annually, and approximately 400,000 deaths.

Patients suffering from advanced head and neck cancer represents a critical unmet medical need which we hope to address. The FDA funding the initial 10 patient portion of the clinical program underscores the recognition of this critical unmet medical need. Our focus is on completing the 10-patient study funded by the FDA. We anticipate completion of the initial 10 patient studies yet this year including our review of the results. 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 BLA filing.

We are excited about the outlook and promise of Gedeptin within advanced head and neck cancers, as well as other opportunities related to the expanded use in other indications. We foresee significant opportunities in addressing various tumors as monotherapy, as well as potential combo therapy in conjunction with other therapies such as immune checkpoint inhibitors. We also anticipate potential synergy with the GeoVax Mark-1 tumor-associated antigen approach. Relative to commercialization, we anticipate partnering and collaborations in support of worldwide use for which business development activities have already been initiated.

We hold worldwide rights for the use of Gedeptin and all indications. The vast array of unmet medical needs within oncology represents significant opportunities for GeoVax to advance novel approaches, addressing various cancer patient needs worldwide. Throughout 2023, we are participating in various oncology conferences, some of which we expect Gedeptin presentations and with others, Gedeptin partnering discussions. 

GEO-CM04S1, 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 durable protection than the current authorized vaccines. This is critically important in addressing the high-risk populations of immune compromised individuals for whom the current authorized vaccines and monoclonal antibodies 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 immunosuppressive therapy. In general, patient groups with abated immune systems unable to respond adequately to approved mRNA vaccines are at such high risk.

In the U.S., there are approximately 12 million to 15 million individuals within this overall population, with over 200 million worldwide. There is a major critical need for next-generation COVID-19 vaccines to support such individuals. And we believe the CM04S1 is the leading next-generation vaccine in clinical development. Our recently published article in the New England Journal of Medicine highlights the critical need for a vaccine to induce both antibodies and T-cells for optimal protection against SARS-CoV-2 infection. CM04S1 is specifically constructed to include the spike protein and the nucleocapsid protein, and to induce a broader focused immune response specific to those proteins on the SARS-CoV-2 virus.

Clinical evaluation demonstrated that CM04S1 does, in fact, induce both strong antibody and T-cell responses against both the spike and nucleocapsid proteins. The results of this clinical study were reported last year in the Lancet Microbe publication of the Phase 1 data. The adoption of T-cell immune responses is especially critical among those patient populations, who have immune systems with depleted ability to mount effective antibody responses.

New safety and immune response data from the Phase 2 trial were presented at the World Vaccine Congress in Washington DC, during April of 2023, highlighting the potential effectiveness of this vaccine in patients undergoing different types of treatments for hematologic cancer. Clinical testing of this vaccine continues to provide compelling data supporting development and alternate use in the targeted patient populations. While the noise of COVID seems to have died down, SARS-CoV-2 continues to evolve with threatening variants of concern. It is well accepted that the current authorized vaccines are not sufficiently protective and that their durability is unsatisfactory.

In fact, just a few weeks ago, the White House announced Project Next Gen, a $5 billion initiative, the follow-up from Operation Warp Speed seeking COVID-19 vaccines with enhanced breadth of protection against variants and improved durability, particularly being interested in novel vaccine candidates in clinical trial or capable of entering clinical trials within the next nine months. We believe the CM04S1 is the leading example of the desired next-generation vaccines. 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 will likely exist due to our focus on high-risk populations unserved by the current COVID-19 vaccines as well as the monoclonal antibody therapy. Also, we anticipate partnering collaborations and support of worldwide commercialization and distribution.

Our focus for the remainder of 2023 includes accelerating efforts in support of Gedeptin and the CM04S1 Phase 2 clinical programs, advancing the GeoVax MVA vaccine specific for monkeypox and smallpox into development, and further advancement of our program focused on improved MVA manufacturing processes. Presentations are expected at various scientific and medical conferences to update the progress on both Gedeptin and CM04S1. We anticipate reporting further preclinical information related to the use of the Gedeptin technology used in conjunction with immune checkpoint inhibitors yet this year.

Regarding GEO-MVA, it is a vaccine against monkeypox and smallpox. Our intent is to be the first and primary US based supplier of an MVA based vaccine to protect against Mpox or monkeypox, or smallpox, providing expanded supply and access worldwide, especially related to low and middle-income countries which have consistently experienced significant difficulty in the supply of many critical vaccines. We are advancing this initiative and look forward to reporting progress quarterly.

Last year, 2022, we strengthened our balance sheet, adding $37 million during a time of which many biotech firms were furloughing programs and or people. We feel that our capital development success has reflected investor support and belief in the value growth opportunities underway at GeoVax. We continue to receive strong interest related investment capital, which we will evaluate, but we’re focused on execution towards our 2023 goals, strengthening shareholder value and achieving critical reporting milestones for our development programs.

Thank you, David. I’ll begin with a brief overview of our income statement. And I’ll first point out that we reported no grant revenues during 2023 as compared to a small amount in 2022, which is reflective of the wind down of our grant from the U.S. Army for our last fever preclinical program. I’ll note, however, that we are actively seeking additional non-dilutive government funding for our preclinical and clinical development programs, and we expect this to be an important component of our financing mix in the future.

Research and development expenses were $2.8 million in the first quarter of 2023 versus $1.3 million in 2022. The increase was planned and expected and is associated with clinical trial activity for our CM04S1 and Gedeptin programs. The increase is also reflective of higher personnel and consulting costs as we staffed up during 2022.

G&A expenses were $1.5 million in the first quarter of ‘23 as compared to $1.2 million in ‘22, with the increases also associated with higher personnel and consulting costs as well as patent costs. So, overall, net loss for the first quarter of 2023 was $4 million or $0.15 per share, versus $2.4 million in 2022 or $0.34 per share. Again, with the increases primarily associated with the ramp-up of organizational infrastructure and other costs associated with the CM04S1 and Gedeptin clinical trials.

Turning now to the balance sheet, our cash balances at March 31 were $23.9 million, as compared to $27.6 million at December 31. The change in cash is reflective of $3.8 million used in operating activities. There were no significant financing or investing activities during the first quarter. Our outstanding common shares now stand at 26.4 million. Funding our three ongoing Phase 2 clinical programs is obviously the most important use of our cash and our top financial priority. Our cash runway is sufficient to fund these programs through the milestones expected to occur over the course of this year, as David previously mentioned. We believe the advancement of our clinical programs will create an attractive investment opportunity for new fundraising activities, and I’ll be happy to answer any questions during the Q&A period.

Jason Kolbert, Dawson James

Great job conserving capital resources and focusing on what’s important clinical expenses, something that we couldn’t say about this company a couple of years ago. One really interesting question I have is what kind of discussions are you having with the government about what they are looking for in terms of a next-generation COVID vaccine? They are probably thinking something ubiquitous for the population, but have you caught their attention and have you had any of those discussions with them yet?

David Dodd

On April 10, the federal government issued the RFI request for information related to Project Next Gen and that specifically outlined what they were looking for relative to criteria. And it was what I actually stated during my comments, about durability, a breadth of protection, and specifically focused on products that were already in the clinic or could enter the clinic within nine months. So, they are looking and recognizing that durability as a key issue, that the breadth of protection is an issue, and they are also – there are populations out there for whom current vaccines and therapies are inadequate. So, they laid that out, that the process for the RFI is that you completed and submitted, which we did very quickly, very well-prepared, I’d say, response to it. They will go through those and then decide with whom they’re going to follow-up for further information. At this stage, there was no discussion or providing information in terms of – or how much money are you seeking for what purposes, we have that all outlined.

Now to address the question, we have had ongoing discussions with individuals within the federal government that includes those who are specifically part of the review team, et cetera, on Project Next Gen. We’ve been having such discussions for some time now, and had some even more recently on that, and have discussed with them, shared with them what we have accomplished thus far and what we’re proceeding towards with the continuous cell-line manufacturing process, which seem to really capture some interest. Ultimately, we’ll have to see how they respond. The process of submitting a response to the RFI is closed on May 25. So, right now, and still different companies are submitting, again, we submitted very, very quickly. We were prepared for it, etcetera. And so, we are waiting. We still are engaging an outreach and discussion with various Federal government individuals, some of whom are part of Project Next Gen and some who are part of related entities, making sure that they are aware, not only of GeoVax, but of what we have already accomplished, where we are in the process of clinical development, and what our plans are in terms of moving forward with this new manufacturing system. So, I hope that answers the questions. So, the answer is yes, we have that dialogue. But we are also working through the process they have laid out also, but we are also working directly through other avenues to make sure we reach out to people.

Jason Kolbert

And David, if you don’t mind, can you just touch on the sequence of milestones. I know you did mention it earlier, but given your CFO’s comments, I would just like to understand how they lay out over the next 12 months?

David Dodd

So, with Gedeptin, now, we have 8 patients of the 10 patients in the program. We had expanded it, as you recall, to three sites. And we anticipate bringing in the last two for this initial 10-patient trial. That’s the one that’s been funded fully by the FDA. Our plan is to have that accomplished sooner rather than later, clearly yet this year to review the data, we have already been in discussions with our advisors about the expanded program that we would propose to the FDA. So, we anticipate yet this year to review the data, to discuss the data, and hopefully initiate it and have initial discussions with the FDA.

Vernon Bernardino, H.C. Wainwright

Thanks for taking my question, and congrats on the progress, especially with the manufacturing for MVA based vaccines and immunotherapies. It's a really important piece. A lot of my questions were asked by Jason, so I don’t have anything other than – just wanted to get your take, as you know, on the Federal Register, did you see as ACIP is going to have a meeting next month – and one of the things, David, intend to discuss is Mpox or formally called monkeypox. I was wondering if there is anything there as well as the other vaccine recommendations that they may have that could help you with your programs. What are you looking for, and what made you change it? As far as your programs are concerned, such candidates could be advanced into the clinic in the near-term future such as next 6 months to 12 months?

David Dodd

We are not aware of anything on that agenda that relates to what we are doing, but I am going to ask John Sharkey to weigh in, since he is leading our MVA vaccine program, that is specifically what we in-licensed or acquired the rights to and are developing against Mpox and smallpox. John?

John Sharkey, Head of Business Development

Sure. Hey, thanks for the question, Vernon. As we have mentioned before, our desire for the MVA is – the monkeypox and smallpox have become U.S. based manufacturers, eventually switching to a continuous cell-line platform, so that we can manufacture on a large scale in quick time frames. Our regulatory strategy, as we have mentioned, is that there are a number of countries outside the U.S. that were unable – were or are still unable to get access to the MVA vaccine. And so we see a market opportunity there. Our strategy right now is engaging. We have retained an outside regulatory consulting group that’s well-known, respected in this space. And we are putting together a strategy to see what regulatory agencies around the world would be open to working with us, given the known safety and efficacy of MVA against smallpox and monkeypox to put together as we have referred an expedited pathway, whether that’s an accelerated pathway or that’s a biosimilar, whatever it is. What is going to be available to get approval from a recognized regulatory agency that we could then use with NGOs and other countries that will be confident with that approval, would now allow use of MVA within their territories. So, that’s our general strategy. Right now, we are in the – we are past the information gathering. We are beginning now to reach out to regulatory agencies to engage in discussions with them about our thinking, and how we would like to work with them to accelerate the approval process to get this product to the market, because we believe there is a need in many parts of the world.

Vernon Bernardino

And as a follow-up, do you anticipate making further progress and announcing progress on those kinds of things you might get as far as what the governments need outside the U.S., outside the Western World such as Europe, later this year?

John Sharkey

Yes. It will definitely be within the next two months. We have looked at this for a couple of months now, and kind of read the regulations of working with our consultants. We have mapped out proposed strategies that we want to present to them, as well as engage them and see what their thinking is on how we might adjust them or tweak them or is there a pathway we may not be familiar with that they would be willing to work with us on. So, this is going to move quickly forward into the engagement phase with the regulators.

James Molloy/Laura

Understood. Also, just one more question. So, for your CM04S1 candidate, as mentioned with the shifting landscape for COVID-19 and as new variants emerge, does this change in any way the development for this candidate moving forward? And then do you also think it may work equally as well against these newer streams?

David Dodd

Well, we don’t know the latter until we have some testing, and we have evidence of it now. The concept of targeting both the antibody side and T-cells to the spike protein and nucleic acids is done to hopefully achieve a broader, more robust type of protection, and where the antibody alone isn’t sufficient more or less that we can more than compensate for that by incorporating with the T-cells. And so that’s what we are hoping to demonstrate. We did announce recently we had added the rights related to Omicron, it to be a license agreement that we have. And we will continue to look at the current vaccine, and CM04S1, and also if we decide that we want to do some alternate modifications because of variants that, again, evolve that they may be significantly different. So, we just have to stay attuned to that. One thing we do know is that the modifications that have been going on with the existing vaccines continue to provide us with the sort of inadequate vaccines for the breadth of populations, and especially, for those individuals with compromised immune systems. And as we have discussed before, we are focusing very heavily to differentiate by going after the populations that are underserved or not adequately served by the current authorized vaccines. And that’s the basis behind the structure of CM04S1. And we believe that the initial data we are seeing shows that it is making a much broader difference. So, we will keep you updated as data comes forward.

Robert LeBoyer, Noble Capital Markets

Thank you. Well, John and Kelly gave a very good answer to my question about the ICI inhibitors and combinations. But the question I still have is about the timing of an announcement for Gedeptin. And based on the earlier comments with the five cycles and looking at the calendar, it looks as if an announcement might come maybe at the end of the year, but more likely in the first quarter? Is that what you are thinking?

David Dodd

Yes. Robert, depending on, again – obviously, when that 10th patient comes in, etcetera, then we – it’s just like we have always done on trials when you know the length of the evaluation period, you just map that out. So, we are as anxious as everyone to get these last two patients in. But, as Kelly mentioned, as he said, these are patients who have failed everything. There is no anticipated survival from this type of therapy. It is really, can we affect the tumors and improve their quality of life during this terminal period of their lives when they are on palliative care.

Thank you and thank you everyone for participating in this update call and sharing our achievements, progress and outlook. We greatly appreciate your interest. Our biggest focus and greatest challenge is to see an accelerated pace of patient enrollment, getting to data milestones sooner, so we can talk about a greater database of results. And we will continue to stay focused on that, that’s what we are focused on, Gedeptin, CM04S1, and the other development programs we have talked about today. Our goal is that by doing this, we will be able to build shareholder value, stakeholder value, and of course, provide motivating career development opportunities for our team. We want to thank our Board of Directors, our staff, our advisors, and all other parties, including some of you who have been asking questions, who continue to support, advise, and guide us towards achieving success. With that, we wish you all a great evening. Have a great weekend. And again, thank you for your interest in GeoVax.