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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim
condensed consolidated financial statements and related notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”) and with the audited financial statements and notes
thereto of the Company as of and for the year ended December 31, 2023 on Form 10-K, filed with the Securities and Exchange Commission, or SEC, on March 28, 2024.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report contains forward-looking statements (including within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and
Section 27A of the United States Securities Act of 1933, as amended) concerning the Company and other matters. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial
condition, or otherwise, based on current beliefs of the Company’s management, as well as assumptions made by, and information currently available to, management. Forward-looking statements generally include statements that are predictive in nature
and depend upon or refer to future events or conditions, and include words such as “may,” “will,” “should,” “would,” “expect,” “anticipate,” “plan,” “likely,” “believe,” “estimate,” “project,” “intend,” “forecast,” “guidance”, “outlook” and other
similar expressions among others. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual results could differ materially from those
contained in any forward-looking statement as a result of various factors, including, without limitation:
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the Company’s ability to protect its intellectual property rights;
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the Company’s anticipated capital requirements, including the Company’s anticipated cash runway and the Company’s current expectations regarding its plans for future equity financings;
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the Company’s dependence on additional financing to fund its operations and complete the development and commercialization of its clinical and product candidates, and the risks that raising such additional
capital may restrict the Company’s operations or require the Company to relinquish rights to the Company’s technologies or clinical and product candidates;
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the Company’s limited operating history in the current line of business, which makes it difficult to evaluate the Company’s prospects, the Company’s business plan or the likelihood of the Company’s successful
implementation of such business plan;
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the timing for the Company or its partners to initiate the planned clinical trials for its Versamune® products, including Versamune® HPV (formerly
PDS0101), PDS0103, and others, alone or in combination with PDS01ADC, as well as Infectimune® based clinical candidates and the future success of such trials;
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the successful implementation of the Company’s research and development programs and collaborations, including any collaboration trials concerning the Company’s Versamune®, PDS01ADC and Infectimune® based
clinical and product candidates and the Company’s interpretation of the results and findings of such programs and collaborations and whether such results are sufficient to support the future success of the Company’s clinical and product
candidates;
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the success, timing and cost of the Company’s ongoing clinical trials and anticipated clinical trials for the Company’s current clinical candidates, including statements regarding the timing of initiation, pace
of enrollment and completion of the trials (including our ability to fully fund our disclosed clinical trials, which assumes no material changes to our currently projected expenses), futility analyses, presentations at conferences and data
reported in an abstract, and receipt of interim results (including, without limitation, any preclinical results or data), which are not necessarily indicative of the final results of the Company’s ongoing clinical trials;
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expectations for the clinical and preclinical development, manufacturing, regulatory approval, and commercialization of the Company’s clinical and product candidates;
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any Company statements about its understanding of clinical and product candidates’ mechanisms of action and interpretation of preclinical and early clinical results from its clinical development programs and
any collaboration trials; the acceptance by the market of the Company’s clinical and product candidates, if approved;
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the timing of and the Company’s ability to obtain and maintain U.S. Food and Drug Administration or other regulatory authority approval of, or other action with respect to, the Company’s clinical and product
candidates; and
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other factors, including legislative, regulatory, political and economic developments not within the Company’s control, including unforeseen circumstances or other disruptions to normal business operations
arising from or related to those listed under Part II, Item 1A. Risk Factors.
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Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events or to our future financial performance and involve known and
unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements.
Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, whether as a result of new
information, future events or otherwise.
In this Quarterly Report, unless otherwise stated or the context otherwise indicates, references to “PDS Biotech,” “the Company,” “we,” “us,” “our” and similar references refer
to PDS Biotechnology Corporation, a Delaware corporation.
Company Overview
We are a clinical-stage immunotherapy company developing a growing pipeline of targeted cancer and infectious disease immunotherapies based on our Versamune® T cell activator
and Versamune® in combination with our interleukin 12 (IL-12) fused anti-body drug conjugate (ADC), PDS01ADC. In addition, we are developing the Infectimune® T cell-activator in infectious diseases.
We believe our investigational targeted immunotherapies have the potential to overcome limitations of current immunotherapy approaches through effective conversion of the
immune suppressive tumor to an immunogenic microenvironment in addition to the induction of the right type, potency and quantity of tumor-targeting killer (CD8) T cells. Our Versamune® immunotherapies and Versamune® in combination with PDS01ADC,
are being developed for treatments in oncology, and Infectimune® is being developed for preventive vaccines against infectious agents. When paired with an antigen, which is a disease-related protein that is recognizable by the immune system,
Versamune® and Infectimune® have both been shown to induce, in vivo, large quantities of high-quality, highly potent polyfunctional disease-specific CD4 helper and CD8 killer T cells, a specific sub-type of T cell that has shown potential to be
more effective at killing infected or target cells. Infectimune® is also designed to promote the induction of disease-specific neutralizing antibodies. PDS01ADC is an investigational tumor targeting IL-12 that we believe may enhance the
proliferation, potency and longevity of T cells in the tumor microenvironment and reduces the prevalence of immune suppressive cells and components within the tumor. We believe that our proprietary combinations of Versamune® and PDS01ADC together
with immune checkpoint inhibitors or other standards of care, may enhance the proliferation, potency and longevity of antigen specific multifunctional CD8 T cells in the tumor microenvironment and work synergistically to inhibit or treat cancer.
In December 2022, we executed an exclusive global license
agreement with Merck KGaA, Darmstadt, Germany for the tumor targeting IL-12 fused antibody drug conjugate, M9241, which joined our pipeline as PDS01ADC. PDS01ADC is a novel investigational tumor-targeting fusion protein of Interleukin 12 that
enhances the proliferation, potency, infiltration and longevity of T cells in the tumor microenvironment and is therefore designed to overcome the limitations of cytokine therapy which today have resulted in high toxicity and limited therapeutic
potential. The proprietary combination of Versamune®HPV and PDS01ADC is designed to overcome tumor immune suppression utilizing a
different mechanism from immune checkpoint inhibitors (ICI). The combination of Versamune® and PDS01ADC to overcome immune suppression is patented by us, and we believe our ownership of both assets will streamline the clinical development,
registrational process and their potential therapeutic use. In a Phase 2 National Cancer Institute (NCI)-led clinical trial in ICI resistant patients, the combination of VERSAMUNE® HPV and PDS01ADC administered with an investigational
bi-functional ICI resulted in a median overall survival of approximately 20 months. The historical median survival reported in ICI resistant HPV-positive cancers when treated with ICIs is 3-4 months, and best reported median survival to date with
systemic therapy is 8.2 months in ICI resistant head and neck cancer.
In February 2023, we announced a successful completion of a Type B meeting with the FDA for the triple combination of Versamune®HPV and PDS01ADC with an FDA-approved immune checkpoint inhibitor for the treatment of recurrent/metastatic, ICI resistant head and neck cancer that is positive for the HPV type 16. In recent interactions with the FDA, we confirmed the
required contents of a clinical protocol for the potential registrational trial.
In June 2023, an abstract was presented at the 2023 American Society of Clinical Oncology: Abstract number 6012, Safety and Efficacy of Immune Checkpoint Inhibitor (ICI) Naïve Cohort from Study of
Versamune®HPV and Pembrolizumab in HPV16-Positive Head and Neck Squamous Cell Carcinoma (HNSCC). The abstract was also selected as one of the featured posters reviewed by an expert panel in the Head and Neck Cancer discussion session.
In September 2023, data on our investigational universal flu vaccine, PDS0202, was presented at the 9th European
Scientific Working Group on Influenza (ESWI) conference. This data demonstrated broad neutralization across multiple influenza strains in animals and provided protection against infection after challenging animals not previously exposed to flu with
lethal doses of the pandemic H1N1 flu virus.
In October 2023, data demonstrating Versamune®HPV in combination with standard-of-care (SOC) chemoradiotherapy was associated with a rapid decline in human papillomavirus circulating cell-free DNA
(ctHPV-DNA), a potential predictive biomarker of treatment response. The data from the IMMUNOCERV Phase 2 clinical trial were featured in an oral presentation at the American Society for Radiation Oncology Annual Meeting.
In October 2023, updated interim data based on an August 2, 2023 cut off from our VERSATILE-002 Phase 2 clinical trial evaluating the combination of Versamune®HPV in combination with Merck’s
anti-PD-1 therapy, Keytruda® (pembrolizumab) which is the FDA-approved standard of care for first-line treatment of recurrent/metastatic head and neck cancer was presented at a key opinion leader roundtable that we sponsored.
In October 2023, interim safety and immune response data was presented for the first-in-human Phase1/2 clinical trial evaluating PDS01ADC in combination with current SOC chemotherapy, docetaxel, to
treat metastatic castration sensitive and castration resistant prostate cancer. The data was featured in an oral presentation at the 11th Annual Meeting of the
International Cytokine & Interferon Society.
In October 2023, immune response data from a preliminary analysis of a subset of patients in our VERSATILE-002 Phase 2 clinical trial was presented at the European Society for Medical Oncology
Congress 2023.
In November 2023, we announced updated survival data from our NCI-led Phase 2 trial investigating the triple combination of Versamune®HPV, PDS01ADC and an investigational immune checkpoint inhibitor
(ICI) in two groups of advanced cancer patients with various types of human papillomavirus (HPV) 16-positive cancers. The data showed 75% Survival of ICI naïve patients at 36 months.
In November 2023, preclinical data from our NCI-led trial including Versamune®HPV, PDS01ADC and an HDAC inhibitor in ICI-resistant HPV-16 positive cancer was presented during a poster presentation at
the Society for Immunotherapy of Cancer 38th Annual Meeting.
In September 2024, we announced updated data from our VERSATILE-002 Phase 2 clinical trial presented during a poster session at the European Society for Medical Oncology (ESMO) Congress 2024.
Clinical Candidate Pipeline
VERSATILE-002: Versamune® HPV (PDS0101) + Keytruda®
In November 2020, our VERSATILE-002 Phase 2 clinical trial evaluating the combination of Versamune® HPV in combination with Merck’s anti-PD-1 therapy, Keytruda® (pembrolizumab) which is the
FDA-approved standard of care for first-line treatment of recurrent/metastatic head and neck cancer commenced. Enrollment in stage 2 of 2 for the ICI naïve arm and the ICI resistant arms are complete. The clinical trial will evaluate the efficacy
and safety of this therapeutic combination as a first and second line treatment in patients with recurrent or metastatic head and neck cancer and high-risk human papillomavirus-16 (HPV16) infection.
In this trial sponsored by PDS Biotech, patients whose cancer has returned following initial treatment or spread will be treated with the combination of Versamune® HPV and Keytruda® to evaluate if the addition of Versamune® HPV might improve the efficacy reported in published studies of Keytruda® alone. Patients in the trial will receive a total of 5 cycles of
combination therapy in the context of standard of care Keytruda® therapy administered every three weeks until disease progression. The primary endpoint of VERSATILE-002 is the objective response rate, or
ORR, at six months following initiation of treatment. There are two cohorts in the trial. Cohort 1 is for patients who have yet to be treated with an immune checkpoint inhibitor (ICI naïve) and cohort 2
which consists of patients who have failed immune checkpoint inhibitor therapy (ICI resistant).
In February 2022, we achieved the preliminary efficacy milestone of at least four or more objective responses of the first 17 patients in the ICI naïve arm that allowed that arm to proceed to full
enrollment. We also announced detailed preliminary safety data which showed that the combination is well tolerated without evidence of enhanced or significant toxicity in the first 18 patients in the ICI naïve arm. We
have completed enrollment in Stage 1 of the ICI resistant arm and we are waiting for sufficient follow up to conduct the futility analysis.
In June 2022, we presented additional preliminary efficacy and safety data from this trial at the ASCO Annual Meeting (Weiss J et al. J Clin Oncol 40, 2022 (suppl
16; abstr 6041)). The abstract provided preliminary data on 19 patients (safety) with available imaging data for 17 of the 19 patients (efficacy). Data on 17 patients was presented. Highlights from the abstract were as follows:
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Confirmed and unconfirmed response rates thus far (tumor shrinkage greater than 30%) seen in 7/17 (41.2%) patients in comparison to the published results of approximately 19% for approved ICIs, used as monotherapy for recurrent or
metastatic head and neck cancer, with 2 of the 7 having complete responses (CR)
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Stable disease (SD) was reported in 6/17 (35.3%) patients, with 4 of the 6 (67%) experiencing tumor shrinkage of less than 30%
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Clinical efficacy (ORR + SD) was seen in 13/17 (76.5%) patients
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Progressive/ongoing disease was reported in 4/17 (23.5%) patients
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Patients had received a median of 4/5 doses of Versamune®HPV (range 1-5) and 9/35 doses of Keytruda® (range 1-18)
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There were no treatment-related adverse events greater than or equal to Grade 3 (N=19)
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No patients required dose interruption or reduction on the combination treatment
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No patients discontinued the combination treatment
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At 9 months of follow up (median not yet achieved):
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Progression free survival (PFS) rate was 55.2%
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Overall survival (OS) rate was 87.2%
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No control or comparative studies have been conducted between ICIs and Versamune®HPV
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In May 2022, we expanded this trial into Europe and in June 2022, as described above, we received Fast Track designation from the FDA for Versamune®HPV in
combination with Keytruda®.
In August 2022, our independent Data Monitoring Committee (DMC) met and evaluated data from 43 patients and noted there were no Grade 3 or greater treatment-related adverse events attributed to the
combination. The DMC recommended continuing the trial with no modifications.
In October 2022, we announced the results of an end-of-phase 2 meeting with the FDA for Versamune® HPV in combination with Keytruda®. We also announced the completion of our plan for a potential
Phase 3 clinical program that will support the submission of a BLA for Versamune® HPV and the submission of our plan to the FDA.
In May 2023, we completed enrollment in the ICI naïve arm. We filed our amended IND with the FDA in the third quarter of 2023. In October 2023, we received feedback from the
FDA on the amended IND.
In June 2023, an abstract was presented at the 2023 American Society of Clinical Oncology: Abstract number 6012, Safety and Efficacy of Immune Checkpoint
Inhibitor (ICI) Naïve Cohort from Study of Versamune® HPV and Pembrolizumab in HPV16-Positive Head and Neck Squamous Cell Carcinoma (HNSCC). The abstract was also selected as one of the featured posters to be reviewed by an expert panel in the Head
and Neck Cancer discussion session. Data on 34 patients was presented. The data from the abstract is as follows:
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Estimated 12-month overall survival rate was 87.1%. Published results are 36-50% with approved ICIs used alone.
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Median progression-free survival was 10.4 months (95% CI 4.2, 15.3). Published results are median PFS of 2-3 months for approved ICIs when used as monotherapy in patients with similar PD-L1 levels.
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A disease control rate (disease stabilization or tumor shrinkage) of 70.6% (24/34)
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Confirmed and unconfirmed objective response rate is 41.2% (14/34 patients), which is identical to the preliminary response rate data PDS Biotech previously reported at ASCO 2022 (7/17 patients). To date these responses have been confirmed
in nine of the 34 patients (26.5%), including one complete response.
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15/34 patients (44.1%) had stable disease.
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9/34 patients (26.5%) had progressive disease.
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4/48 (8.3%) of patients had a Grade 3 treatment-related adverse event (TRAE). No Grade 4 or higher TRAEs were observed.
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In October 2023, at a key opinion roundtable updated interim data was presented based on an August 2, 2023 cut-off from our VERSATILE-002 Phase 2 clinical trial evaluating the combination of
Versamune® HPV in combination with Merck’s anti-PD-1 therapy, Keytruda® (pembrolizumab) which is an FDA-approved standard of care for first-line treatment of recurrent/metastatic head and neck cancer. Data on 52 patients was presented. The data from
the roundtable based on investigator assessment was as follows:
Highlights from the ICI naïve cohort included:
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24-month overall survival (OS) rate of 74%; published 24-month survival rate of less than 30% for approved ICI.
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12-month OS rate of 80%; published results of 30-50% with approved ICIs.
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Tumor shrinkage seen in 60% (31/52) of patients.
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Confirmed overall response rate ORR of 27% (14/52) to date.
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Median progression-free survival (PFS) of 8.1 months to date; published results of 2-3 months PFS with approved ICIs.
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13% (8/62) of patients experienced Grade 3 treatment-related adverse events (TRAE) and 0% (0/62) experienced Grade 4 or 5 TRAE; published results report 13-17% Grade 3-5 TRAE with approved ICI monotherapy.
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60% (33/55) of patients had CPS score of 1-19 (who generally have a weaker response to Keytruda®), and 40% (22/55) have CPS score >20 (who generally have a higher response to Keytruda®).
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In May 2024, at a virtual key opinion leader event, updated interim data was presented based on a November 30, 2023 cut-off from our VERSATILE-002 Phase 2 clinical trial evaluating the combination of
Versamune® HPV in combination with Merck’s anti-PD-1 therapy, Keytruda® (pembrolizumab) which is an FDA-approved standard of care for first-line treatment of recurrent/metastatic head and neck cancer. Data from 53 patients was presented. The data
from the event based on investigator assessment was as follows:
Highlights from the ICI naïve cohort with CPS > 1 included:
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Median overall survival of 30 months; published results for ICIs are 7-18 months.
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Confirmed overall response rate ORR of 34% (18/53) to date; published results for comparable patients receiving treatment with ICIs are less than 20%.
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Confirmed complete responses, partial responses and stable disease according to RECIST v1.1 were seen in 75.5% of patients.
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Median progression-free survival (PFS) of 6.3 months to date; published results of 2-3 months PFS with approved ICIs.
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The combination of Versamune® HPV and Keytruda® appeared to be well tolerated with 11% (7/62) of patients experienced Grade 3 treatment-related adverse events (TRAE) and 2% (1/62) experienced Grade 4 or 5
TRAE; published results report 13-17% Grade 3-5 TRAE with approved ICI monotherapy.
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60% (32/53) of patients had CPS score of 1-19 (who generally have a weaker response to Keytruda®), and 40% (21/53) have CPS score >20 (who generally have a higher response to Keytruda®).
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During the May 2024 event, we also announced an updated clinical strategy with a two-part registrational trial focused on the double combination of Versamune® HPV + pembrolizumab, accompanied by an
investigation of the triple combination of Versamune® HPV + PDS01ADC + pembrolizumab as a first line treatment in HPV16-positive recurrent/metastatic HNSCC.
In June 2024, we provided a data update from our VERSATILE-002 clinical trial. Interim data was presented based on a May 17, 2024 cut-off. The data update was as follows:
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Median Overall Survival of 30 months, consistent with data presented our key opinion leader event in May of 2024, which was based on a data cut as of November 30, 2023.
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27 of the censored patients remained alive and were awaiting their next clinical assessment, 6 censored patients had withdrawn consent for further follow-up, and 2 patients had been lost to follow-up, and 18 patients had died.
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The lower limit of the 95% confidence interval is 19.7 months, and the upper limit is not yet estimable, as the majority of patients continue to be followed for survival.
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In August 2024 we provided an update to our clinical strategy following discussions with the FDA. During the August 2024 update, we announced our intent to initiate a registrational study in first
line treatment in HPV16-positive recurrent/metastatic HNSCC with the double combination of Versamune® HPV + pembrolizumab.
In September 2024, we announced updated data from our VERSATILE-002 Phase 2 clinical trial presented during a poster session at the European Society for Medical Oncology (ESMO) Congress 2024. The
data presented was based on a May 17, 2024 data cut-off. The main elements of the update were as follows:
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Median Overall Survival (mOS) was 30 months with a lower 95% confidence interval of 19.7 months; Published mOS for pembrolizumab is 12-18 months
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Objective Response Rate (ORR) of 36% (19/53); Published ORR for pembrolizumab is 19-25%
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Disease Control Rate (DCR) is 77% (41/53)
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21% (11/53) of patients had deep tumor responses and shrinkage of 90-100%
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9% (5/53) of patients had a complete response
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Treatment-related adverse events of Grade ≥3 were seen in 9 patients (Grade 3, n=8 and Grade 4, n=1)
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National Cancer Institute: Versamune® HPV+ M9241 (now PDS01ADC) +Bintrafusp Alfa
In June 2020, the first patient was dosed under a Cooperative Research and Development Agreement (CRADA), in the NCI led Phase 2 investigator-initiated trial evaluating Versamune® HPV with an IL-12
ADC now PDS01ADC, and M7824 (Bintrafusp alfa), which is owned by EMD Serono (Merck KGaA) in patients with advanced HPV-positive cancers who have failed prior treatment. In February 2021, the NCI’s Phase 2 clinical trial of Versamune® HPV for the
treatment of advanced HPV-positive cancers had achieved its preliminary objective response target in patients naïve to check point inhibitors which allowed for full enrollment of approximately 20 patients in this group. In addition, based on
promising results in the ICI naïve arm, the trial was amended to allow enrollment of a separate cohort of IC -resistant patients for assessment of safety and activity of the triple combination. The trial has been closed for enrollment. Preliminary
efficacy assessment of the triple combination in this added group of 29 ICI resistant patients has been completed and evaluation of long-term patient survival is ongoing.
Preclinical study results arising from this CRADA were published in the Journal for ImmunoTherapy of Cancer, Immunomodulation to enhance the efficacy of an HPV
therapeutic vaccine (Journal for ImmunoTherapy of Cancer2020;8:e000612. Doi:10.1136/ jitc-2020-000612), and indicate that Versamune® HPV generated both HPV-specific T cells and an associated antitumor response when used as a monotherapy. When Versamune® HPV was combined with the two other novel clinical-stage anti-cancer agents,
Bintrafusp Alfa and M9241 (which is now owned by us and referred to as PDS01ADC), the preclinical data suggested that all three therapeutic agents worked synergistically to provide superior tumor T cell
responses and subsequent tumor regression when compared to any of the agents alone or the 2-component combinations. The published preclinical data demonstrating powerful activity of the triple combination
appears to be corroborated in the Phase 2 trial, and this triple combination could form the basis of a unique platform providing improved cancer treatments across multiple cancers.
In June 2022, at the 2022 ASCO Annual Meeting, the NCI provided an update to the preliminary data presented at the 2021 meeting (Strauss J et al. J Clin Oncol 40, 2022 [suppl 16; abstr 2518]). This included data from 30 HPV16-positive patients and highlights were as follows:
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Objective response (OR = >30% tumor reduction) was seen in 88% (7/8) of patients with ICI naive disease; 4/7 (57%) patients’ responses are ongoing (median 17 months).
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With ICI resistant patients: PDS01ADC dosing appears to affect response rates, with 5/8 (63%) patients receiving PDS01ADC at 16.8 mcg/kg achieving an OR compared to 1/14 (7%) patients who received PDS01ADC at 8
mcg/kg achieving an OR; 4/6 (67%) patients’ responses are ongoing (median 12 months).
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Tumor reduction was seen in 45% (10/22) of patients with ICI resistant disease, including patients receiving high or low dose PDS01ADC.
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In ICI resistant patients treated with high or low dose PDS01ADC, survival outcomes were similar (p=0.96 by Kaplan Meier analysis). At a median of 12 months of follow up 17/22 (77%) of patients were alive.
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In ICI naïve patients 6/8 (75%) were alive at median 17 months of follow up.
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Similar OR and survival were seen across all types of HPV16-positive cancers.
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Preliminary safety data: 13/30 (43%) of patients experienced Grade 3 treatment-related adverse events (AEs), and 2/30 patients (7%) experienced Grade 4 AEs. There were no grade 5 treatment-related AEs.
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We believe the trial results to date suggest that all 3 drugs contribute to the clinical outcomes, consistent with the published preclinical studies.
In September 2022, we determined, in agreement with the NCI, to select the ICI resistant patients as the preferred treatment group in the on-going Versamune®
HPV-based triple combination therapy in advanced HPV-positive cancers and the trial was closed to further enrollment given the ICI resistant arm had been fully recruited.
In October 2022, we presented additional interim data as follows:
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Survival data: 66% (19/29) of HPV16-positive ICI resistant patients in the cohort were alive at a median follow up of 16 months.
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Safety profile: 48% (24/50) patients experienced Grade 3 treatment-related adverse events (AEs), and 4% (2/50) patients experienced Grade 4 AEs. There were no Grade 5 treatment-related AEs.
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HPV16-positive ICI naïve patients: 75% (6/8) were alive at a median follow up of 25 months and 38% (3/8) of responders had a complete response.
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In December 2022, we presented interim data as follows:
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Median OS was 21 months in 29 checkpoint inhibitor resistant patients who received the triple combination. The reported historical median OS in patients with ICI resistant disease is 3-4 months seen with
checkpoint inhibitors and best reported median survival to date with systemic therapy of 8.2 months in ICI resistant head and neck cancer.
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In ICI naïve subjects, 75% remain alive at a median follow-up of 27 months. As a result, median OS had not yet been reached. Historically, median OS for similar patients with platinum experienced ICI naïve
disease is 7-11 months.
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Objective response rate (ORR) in ICI resistant patients who received the optimal dose of the triple combination is 63% (5/8). In current approaches ORR is reported to be less than 10%.
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ORR in ICI naïve patients with the triple combination is 88%. In current approaches ORR is reported to be less than 25% with FDA-approved ICIs in HPV-positive cancers.
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Safety data had not changed since October’s update. 48% (24/50) of patients experienced Grade 3 (moderate) treatment-related adverse events (AEs), and 4% (2/50) patients experienced Grade 4 (severe) AEs,
compared with approximately 70% of patients receiving the combination of ICIs and chemotherapy reporting Grade 3 and higher treatment-related AEs.
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In February 2023, we announced the completion of a Type B meeting with the FDA for the combination therapy of Versamune® HPV, PDS01ADC, and an FDA-approved immune checkpoint
inhibitor for the treatment of recurrent/metastatic HPV-positive ICI-resistant head and neck cancer. We confirmed the required contents of the trial design for a potential registrational trial of the combination.
In November 2023, we released updated interim survival data as follows:
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75% of immune checkpoint inhibitor (ICI) naïve patients remain alive at 36 months; published median overall survival (OS) in similar patients is 7-11 months
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12-month survival rate in (ICI) resistant patients of 72%
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Median OS in ICI resistant HPV-positive patients of approximately 20 months; published median OS is 3.4 months
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MD Anderson Cancer Center (IMMUNOCERV): Versamune® HPV + Chemoradiotherapy
In October 2020, a Phase 2 Investigator Initiated Trial (IIT) was initiated with The University of Texas MD Anderson Cancer Center and is actively recruiting
patients. This clinical trial is investigating the safety and anti-tumor efficacy of Versamune® HPV in combination with standard-of-care chemo-radiotherapy, or CRT, and their correlation with critical
immunological biomarkers in patients with locally advanced cervical cancer. We believe that Versamune® has strong T cell induction with the potential to enhance efficacy of the current standard of care CRT treatment in this indication with the FDA
at this meeting.
In November 2022, data from this trial was included in a poster presentation at the 2022 SITC Annual Meeting which included the following:
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9 of the 17 patients had completed a Day 170 post-treatment Positron Emission Tomography, Computed Tomography (PET CT) scan to assess the status of the cancer. This included 78% (7/9) of treated patients with
advanced cervical cancer (FIGO stage III or IV).
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100% (9/9) of patients treated with the combination of Versamune® HPV and CRT had an objective response.
|
|
● |
89% (8/9) of patients treated with the combination of Versamune® HPV and CRT demonstrated a complete response (CR) on Day 170 by PET CT. One patient who received
3 of the 5 scheduled doses of Versamune® HPV showed signs of residual disease. One patient who had a CR died from an event unrelated to either their underlying disease or treatment.
|
|
● |
1-year disease-free survival and 1-year overall survival of 89% (8/9) in patients treated with the combination of VERSAMUNE® HPV and CRT.
|
|
● |
As previously reported, data confirm VERSAMUNE® HPV treatment activates HPV16-specific CD8 T cells. This increase was not seen in patients who did not receive VERSAMUNE® HPV. The increase in HPV16-specific T
cells generated by the treatment is positively correlated with tumor cell death, suggesting cytotoxic CD8 T cells are important mediators of antigen-specific immunity.
|
|
● |
The data affirms that VERSAMUNE® HPV activates Type 1 interferon pathway in humans, mimicking the mechanism previously demonstrated in preclinical studies in animal models.
|
|
● |
Toxicity of VERSAMUNE® HPV remains limited to low-grade local injection site reactions.
|
In October 2023, data demonstrating Versamune® HPV in combination with standard-of-care (SOC) chemoradiotherapy was associated with a rapid decline in human papillomavirus circulating cell-free DNA
(ctHPV-DNA), a potential predictive biomarker of treatment response. The data from the IMMUNOCERV Phase 2 clinical trial was featured in an oral presentation at the American Society for Radiation Oncology Annual Meeting which included the following:
|
● |
Earlier and greater proportion of ctDNA clearance with VERSAMUNE® HPV plus chemoradiation (CRT) vs. SOC CRT alone (81.3% clearance after 3 weeks vs. 30.3% with SOC (p=0.0018), and 91.7% of clearance at 5 weeks vs. 53.1% with SOC
(p=0.0179).
|
|
● |
Baseline ctDNA levels correlated with the International Federation of Gynecology and Obstetrics (FIGO) stage and lymph node involvement; 100% of patients treated with VERSAMUNE® HPV had cancer that had spread to the lymph nodes.
|
Mayo Clinic: Versamune® HPV Monotherapy and in combination with Keytruda®
In February 2022, we initiated an IIT, MC200710, for Versamune® HPV alone or in combination with the immune checkpoint inhibitor, Keytruda®, in patients with HPV-positive
oropharyngeal cancer (HPV(+)OPSCC) at high risk of recurrence. The trial is being led by Drs. David Routman, Katharine Price, Kathryn Van Abel, and Ashish Chintakuntlawar at Mayo Clinic, a nationally and internationally recognized center of
excellence for the treatment of head and neck cancers. We believe that this trial not only broadens our addressable patient population of those affected by the increasing incidence of HPV(+)OPSCC, but also allows us to better understand the activity
of Versamune® HPV alone or in combination with Keytruda® in earlier stages of disease. This trial is currently open for enrollment.
In this trial, treatment will be administered before patients proceed to transoral robotic surgery (TORS) with curative intent. Treatment in this setting is referred to as
neoadjuvant treatment. Versamune® HPV has been shown to induce killer T cells that target and kill HPV-positive cancers, either alone or in combination with ICIs in preclinical studies, and in combination in clinical studies of patients with advanced
recurrent/metastatic HPV-positive cancers. This trial will explore whether Versamune® HPV with or without checkpoint inhibition may increase HPV-specific anti-tumor responses, potentially resulting in tumor shrinkage, pathologic regression, and
decreases in circulating tumor DNA (ctDNA).
PDS0102
PDS0102 is an investigational immunotherapy utilizing tumor-associated and immunologically active T cell receptor gamma alternate reading framed protein (TARP) from the NCI.
PDS0102 is designed to treat TARP-associated cancers including, acute myeloid leukemia (AML), prostate and breast cancer. In our preclinical work, in the administration of PDS0102, the Versamune®+TARP antigen combination led to the induction of large
numbers of tumor targeted killer T cells. In addition, the TARP tumor antigen alone has already been studied at the NCI in men with prostate cancer and has been shown to be safe, and immunogenic with slowing tumor growth rates (NCT00972309).
In April 2020, the above mentioned CRADA between PDS Biotech and the NCI was expanded beyond Versamune® HPV (formerly PDS0101) to include clinical and preclinical development of PDS0103. PDS0103 is
an investigational immune therapy owned by PDS Biotech and designed to treat cancers associated with the mucin-1, or MUC1, oncogenic protein. These include cancers such as ovarian, breast, colorectal and lung cancers. PDS0103 combines Versamune® with
novel highly immunogenic agonist epitopes of MUC1 developed by the NCI and licensed by PDS Biotech. PDS0103 is currently in the tech transfer, clinical scale up and manufacturing stage.
MUC1 is highly expressed in several types of cancer and has been shown to be associated with drug resistance and poor disease prognosis in breast, colorectal, lung and ovarian cancers, for which
PDS0103 is being developed. Expression of MUC1 is often associated with poor disease prognosis, due in part to drug resistance. In preclinical studies, and similarly to VERSAMUNE® HPV, PDS0103 demonstrated the ability to generate powerful
MUC1-specific CD8 killer T cells.
In the first quarter of 2022, we held a pre-IND meeting with the FDA regarding PDS0103. Due to prioritization of our resources, the IND submission date may be impacted by our decision to pursue
initiation of a pivotal trial for Versamune® HPV in combination with pembrolizumab.
IL-12 Oncology Immunocytokine Pipeline
PDS01ADC is a novel investigational IL-12 fused antibody drug conjugate (IgG1), tumor-targeting interleukin 12 (IL-12) immune-cytokine that enhances the proliferation, potency
and longevity of T cells in the tumor microenvironment. Together with Versamune® based immunotherapies, PDS01ADC works synergistically to overcome tumor immune suppression and to promote a targeted T cell attack against cancers. As with Versamune®,
PDS01ADC is given by a simple subcutaneous injection. Clinical data suggests the addition of PDS01ADC to Versamune® based immunotherapies may demonstrate significant disease control in advanced cancer patients by shrinking tumors and/or prolonging
life.
With the exclusive global license agreement with Merck KGaA, Darmstadt, Germany for PDS01ADC, we believe we have simplified our registrational pathway for the NCI-led triple combination by owning
both VERSAMUNE® HPV and PDS01ADC and combining these agents with an FDA approved ICI. PDS01ADC has been designed to overcome the limitations of cytokine therapy as explained above, and based on extensive preclinical studies performed at the NCI
evaluating PDS01ADC as a monotherapy and also in combinations with established standard of care treatments for cancer, we believe that PDS01ADC has significant potential as a cytokine therapy independent of Versamune®. Based on the informative
preclinical studies, a number of IIT Phase 2 trials are currently in progress at the NCI, some of which are outlined below:
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● |
Phase 2 Study Evaluating ICI Naïve and Resistant Patients with HPV-positive malignancies treated with PDS01ADC, VERSAMUNE® HPV and bintrafusp alfa.
|
|
● |
A Phase 2 Study Evaluating T-Cell Clonality After Stereotactic Body Radiation Therapy Alone and in Combination with the Immunocytokine PDS01ADC in Localized High and Intermediate Risk Prostate Cancer Treated with Androgen Deprivation
Therapy
|
|
● |
A Phase 1/2 Study of PDS01ADC in Combination with Docetaxel in Adults with Metastatic Castration Sensitive and Castration Resistant Prostate Cancer
|
|
● |
Phase 1/2 of PDS01ADC going forward as a Monotherapy in Advanced Kaposi Sarcoma
|
|
● |
Phase 1/2 of PDS01ADC in Combination of with a Histone Deacetylase (HDAC) Inhibitor in ICI resistant MUC1-positive colon and bladder cancers among others
|
In October 2023, interim safety and immune response data was presented for the first-in-human Phase 1/2 clinical trial evaluating PDS01ADC in combination with current SOC chemotherapy, docetaxel,
to treat metastatic castration sensitive and castration resistant prostate cancer. The data was featured in an oral presentation at the 11th Annual Meeting of the
International Cytokine & Interferon Society. The data presented included the following:
|
● |
Decrease in PSA levels was seen in all patients at all three tested doses of PDS01ADC and 61% of patients had at least a 60% decrease in PSA levels.
|
|
● |
All doses of the combination were well-tolerated with one patient experiencing Grade 4 neutropenia.
|
|
● |
Administration of the combination was associated with decreases in T reg cells and increases in activated natural killer (NK) cells, memory CD8 T cells, proliferating CD4 and CD8 T cells and cytokines INF-γ and Interleukin 10 (IL-10).
|
|
● |
The changes in immune responses with the combination were independent of the PDS01ADC dose.
|
We are working closely with the NCI to determine the best pathway forward for the prioritized PDS01ADC studies, as well as evaluating the use of PDS01ADC in combination with other Versamune® based
clinical candidates.
Infectimune® Development Strategy
We believe that the key differentiating attributes of the Infectimune® platform technology are strong induction of CD8 and CD4 T cells as well as antibodies which can be leveraged to improve
treatment and preventive options in several infectious disease indications. In January 2022, we presented preclinical data on our universal flu program sponsored by the National Institute of Allergy and Infectious Disease (NIAID) demonstrating the
potential of the Infectimune® technology with computationally designed influenza proteins developed by the laboratory of Dr. Ted Ross at the University of Georgia to generate broadly protective anti-influenza immune responses across multiple strains
of influenza. This data has provided a unique opportunity to highlight Infectimune®’s potentially transformative utility in the development of more broadly effective and longer lasting protective vaccines. Current preventive and prophylactic vaccine
approaches and technologies predominantly focus on creating strong induction of antibody responses. However, the induction of T cell responses, in addition to antibody responses, provides more durable and broad protection against infectious diseases.
Based on the preclinical data with the universal seasonal flu vaccine and the current focus of the NIAID in developing more effective flu vaccines, we have decided to focus our near-term infectious
disease activities to align with the interests of the NIAID Collaborative Influenza Vaccine Innovation Centers (CIVICs) program. This will involve development of a universal seasonal flu vaccine and the potential development of a universal pandemic
influenza vaccine based on similar computationally designed antigens as have shown promise with Infectimune®.
In July 2022, universal flu vaccine preclinical data for PDS0202 at the 41st American Society of Virology meeting:
Abstract number 3733830, Infectimune® enhances antibodies elicited by COBRA hemagglutinin influenza vaccine. We are evaluating the next steps in the clinical development and funding for PDS0202.
The preclinical results for Infectimune® based vaccines were published in two separate articles in the peer reviewed journal Viruses in
February 2023: 1. preclinical studies demonstrating complete protection against sickness after lethal challenge with live SARS-CoV-2 or influenza viruses (Gandhapudi SK et al. Viruses 2023, 15, 432) and 2. Dramatically enhanced CD4 T cell responses to recombinant influenza proteins compared to leading commercial vaccine adjuvants (Henson TR et al. Viruses
2023, 15, 538).
In September 2023, preclinical data on our investigational universal flu vaccine, PDS0202, was presented at the 9th
European Scientific Working Group on Influenza (ESWI) conference. This data demonstrated active neutralization across multiple influenza viruses in animals and provided protection against infection and weight loss after challenging with high doses of
H1N1 viruses when they were not previously exposed to flu.
Our current clinical pipeline of Versamune®, and PDS01ADC based therapies is as follows:
We have never been profitable and have incurred net losses in each year since inception. Our net losses were $29.7 million and $32.0 million for the nine months ended September
30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $174.2 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from
general and administrative costs associated with these operations.
As of September 30, 2024, we had $49.8 million in cash and cash equivalents.
Our future funding requirements will depend on many factors, including the following:
|
● |
the timing and costs of our planned clinical trials;
|
|
● |
the timing and costs of our planned preclinical studies of our Versamune® platform;
|
|
● |
the outcome, timing and costs of seeking regulatory approvals;
|
|
● |
the terms and timing of any future collaborations, licensing, consulting or other arrangements that we may enter into;
|
|
● |
the amount and timing of any payments we may be required to make in connection with the licensing, filing, prosecution, maintenance, defense and enforcement of any patents or patent applications or other
intellectual property rights; and
|
|
● |
the extent to which we license or acquire other products and technologies.
|
SELECTED FINANCIAL OPERATIONS OVERVIEW
Revenue
We have not generated any revenues from commercial product sales and do not expect to generate any such revenue in the near future. We may generate revenue in the future from a
combination of research and development payments, license fees and other upfront payments or milestone payments.
Research and Development Expenses
Research and development expenses include employee-related expenses, costs to acquire license rights to use certain technology in our research and development projects, costs of
acquiring, developing and manufacturing clinical trial materials, as well as fees paid to consultants and various entities that perform certain research and testing on our behalf. Costs for certain development activities, such as clinical trials, are
recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations or information provided by vendors on their actual costs incurred. Payments for these activities are
based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the Condensed Consolidated Financial Statements as prepaid or accrued expenses. Costs incurred in connection with research
and development activities are expensed as incurred.
We expect that our research and development expenses will increase significantly over the next several years as we advance our Versamune® and PDS01ADC clinical and product
candidates into and through clinical trials, pursue regulatory approval of our Versamune® and PDS01ADC product candidates and prepare for a possible commercial launch, all of which will also require a significant investment in contract research
services, manufacturing process validation and inventory related costs.
The process of conducting human clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in achieving marketing approval for our
clinical and product candidates. The probability of successful commercialization of our clinical and product candidates may be affected by numerous factors, including clinical data obtained in future trials, competition, manufacturing capability and
commercial viability. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of any of our clinical
and product candidates.
Results of Operations
The following table summarizes the results of our operations for the three months ended September 30, 2024 and 2023:
| |
|
Three Months Ended
September 30,
|
|
|
Increase ( Decrease)
|
|
| |
|
2024
|
|
|
2023
|
|
|
$ Amount
|
|
|
%
|
|
| |
|
(in thousands)
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses
|
|
$
|
6,804
|
|
|
$
|
6,449
|
|
|
$
|
355
|
|
|
|
6
|
%
|
|
General and administrative expenses
|
|
|
3,375
|
|
|
|
4,071
|
|
|
|
(696
|
)
|
|
|
(17
|
)%
|
|
Total operating expenses
|
|
|
10,179
|
|
|
|
10,520
|
|
|
|
(341
|
)
|
|
|
(3
|
)%
|
|
Loss from operations
|
|
|
(10,179
|
)
|
|
|
(10,520
|
)
|
|
|
341
|
|
|
|
(3
|
)%
|
|
Interest income (expense), net
|
|
|
(548
|
)
|
|
|
(329
|
)
|
|
|
(219
|
)
|
|
|
67
|
%
|
|
Net loss and comprehensive loss
|
|
$
|
(10,727
|
)
|
|
$
|
(10,849
|
)
|
|
$
|
122
|
|
|
|
(1
|
)%
|
Research and Development Expenses
Research and development expenses increased to $6.8 million for the three months ended September 30, 2024 from $6.4 million for the three months ended September 30, 2023. The increase of $0.4 million
was primarily attributable to an increase of $1.6 million in manufacturing expenses, partially offset by a decrease of $0.8 million in clinical costs and a decrease of $0.4 million in personnel costs.
General and Administrative Expenses
General and administrative expenses decreased to $3.4 million for the three
months ended September 30, 2024 from $4.1 million for the three months ended September 30, 2023. The decrease of $0.7
million was primarily attributable to a decrease of $0.5 million in professional fees and $0.2 million in personnel
costs.
Comparison of the Nine months September 30, 2024 and 2023
The following table summarizes the results of our operations for the nine months ended September 30, 2024 and 2023:
| |
|
Nine Months Ended
September 30,
|
|
|
Increase (Decrease)
|
|
| |
|
2024
|
|
|
2023
|
|
|
$ Amount
|
|
|
%
|
|
| |
|
(in thousands)
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses
|
|
$
|
18,036
|
|
|
$
|
20,297
|
|
|
$
|
(2,261
|
)
|
|
|
(11
|
)%
|
|
General and administrative expenses
|
|
|
10,925
|
|
|
|
12,341
|
|
|
|
(1,416
|
)
|
|
|
(11
|
)%
|
|
Total operating expenses
|
|
|
28,961
|
|
|
|
32,638
|
|
|
|
(3,677
|
)
|
|
|
(11
|
)%
|
|
Loss from operations
|
|
|
(28,961
|
)
|
|
|
(32,638
|
)
|
|
|
3,677
|
|
|
|
(11
|
)%
|
|
Interest income (expense), net
|
|
|
(1,566
|
)
|
|
|
(812
|
)
|
|
|
(754
|
)
|
|
|
93
|
%
|
|
Benefit from income taxes
|
|
|
869
|
|
|
|
1,406
|
|
|
|
(537
|
)
|
|
|
(38
|
)%
|
|
Net loss and comprehensive loss
|
|
$
|
(29,658
|
)
|
|
$
|
(32,044
|
)
|
|
$
|
2,386
|
|
|
|
(7
|
)%
|
Research and Development Expenses
Research and development expenses decreased to $18.0 million for the nine months ended September 30, 2024 from $20.3 million for the nine months ended September 30, 2023. The decrease of $2.3 million was primarily attributable to a decrease of $1.6
million in clinical studies and medical affairs, a decrease of $0.8 million in personnel costs and a decrease in professional fees of $0.1 million,
partially offset by an increase of $0.2 million in manufacturing and quality costs.
General and Administrative Expenses
General and administrative expenses decreased to $10.9 million for the nine months ended September 30, 2024 from $12.3 million for the nine months ended September 30, 2023. The decrease of $1.4 million was primarily attributable to a decrease of $0.8 million in personnel costs, a decrease in professional fees of $0.4 million and a decrease in facility cost of $0.2 million.
Benefit from Income Taxes
Income tax benefit was $0.9 million for the nine months ended September 30, 2024 and $1.4 million for the nine months ended September 30, 2023. The decrease of $0.5
million was due to a decrease in the amount of New Jersey NOL carryforwards sold.
Liquidity and Capital Resources
In August 2022, we filed a shelf registration statement, or the 2022 Shelf Registration Statement, with the SEC for the issuance of common stock, preferred stock, warrants,
rights, debt securities, and units, up to an aggregate amount of $150 million, $50 million of which covers the offer, issuance and sale by us of our common stock under the Sales Agreement (as discussed below). The 2022 Shelf Registration Statement
was declared effective on September 2, 2022.
In August 2022, we entered into an At Market Issuance Sales Agreement, or the Sales Agreement, with B. Riley Securities, Inc. and
BTIG, LLC, each an Agent and collectively the Agents, with respect to an at-the-market offering program under which we may offer and sell, from time to time at our sole discretion, shares of our common stock, having an aggregate offering price
of up to $50 million, or the Placement Shares, through or to the Agents, as sales agents or principals. Upon delivery of a placement notice and subject to the terms and conditions of the Sales Agreement, the Agents may sell the Placement
Shares by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act of 1933, as amended, including, without limitation, sales made through The Nasdaq Capital Market or on any other
existing trading market for our common stock. The Agents will use commercially reasonable efforts to sell the Placement Shares from time to time, based upon our instructions (including any price, time or size limits or other customary
parameters or conditions we may impose). We will pay the Agents a commission equal to three percent (3%) of the gross sales proceeds of any Placement Shares sold through the Agents under the Sales Agreement, and we have also provided the Agents
with customary indemnification and contribution rights. We are not obligated to make any sales of our common stock under the Sales Agreement. The offering of Placement Shares pursuant to the Sales Agreement will terminate upon the earlier of
(i) the sale of all Placement Shares subject to the Sales Agreement or (ii) the termination of the Sales Agreement in accordance with its terms. In August 2024, we entered into an Amended and Restated At Market Issuance Sales Agreement, or the New Sales Agreement, with B. Riley Securities, Inc. and H.C. Wainwright & Co., LLC, with terms that are substantially consistent with those included
in the original Sales Agreement. The New Sales Agreement superseded and replaced the Sales Agreement. For the year ended December 31, 2023, we sold 2,642,269
shares of common stock with a net value of $16.1 million pursuant to the Sales Agreement. During the nine months ended September 30, 2024, we sold 3,428,681 shares of its common stock with a net value of $19.4 million pursuant to the Sales Agreement. There were no shares of our common stock sold pursuant to the New
Sales Agreement during the three months ended September 30, 2024. During the three and nine months ended September 30, 2023, we sold 139,575 shares of our common stock with a net value of $0.8 million and 736,037 shares of our common with a net
value of $5.7 million, respectively, pursuant to the Sales Agreement.
In August 2022, we entered into a venture loan and security agreement, or the Loan and Security Agreement, with Horizon Technology
Finance Corporation, as lender and collateral agent for itself and the other lenders. The Loan and Security Agreement provides for the following 6 separate and independent term loans: (a) a term loan in the amount of $7,500,000, or Loan A, (b) a
term loan in the amount of $10,000,000, or Loan B, (c) a term loan in the amount of $3,750,000, or Loan C, (d) a term loan in the amount of $3,750,000, or Loan D, (e) a term loan in the amount of $5,000,000, or Loan E, and (f) a term loan in the
amount of $5,000,000, or Loan F, (with each of Loan A, Loan B, Loan C, Loan D, Loan E, and Loan F, individually a Loan and, collectively, the Loans). Loan A, Loan B, Loan C, and Loan D were delivered to us on August 24, 2022. Loan E and Loan F were
uncommitted Loans that could have been advanced by the Lenders prior to July 31, 2023 upon the satisfaction by us of certain agreed upon conditions. At this time
the option has expired and Loan E and Loan F are no longer available to us under the Loan and Security Agreement. We may only use the proceeds of the Loans for working capital or general corporate purposes.
Each Loan matures on the 48-month anniversary following the applicable funding date unless accelerated pursuant to agreed upon events of default. Payments on the principal
balance begin on October 1, 2024 and are paid monthly in the succeeding 24 months. The principal balance of each Loan bears a floating interest. The interest rate is calculated initially and, thereafter, each calendar month as the sum of (a) the per
annum rate of interest from time to time published in The Wall Street Journal as contemplated by the Loan and Security Agreement, or any successor publication thereto, as the “prime rate” then in effect, plus (b) 5.75%; provided that, in the event
such rate of interest is less than 4.00%, such rate shall be deemed to be 4.00% for purposes of calculating the interest rate.
Interest is payable on a monthly basis based on each Loan principal amount outstanding the preceding month. We, at our option upon at least ten (10) business days’ written notice
to the lenders, may prepay all (and not less than all) of the outstanding Loan by simultaneously paying to each lender an amount equal to (i) any accrued and unpaid interest on the outstanding principal balance of the Loans; plus (ii) an amount equal
to (A) if such Loan is prepaid on or before the Loan Amortization Date (as defined in the Loan and Security Agreement) applicable to such Loan, 3% of the then outstanding principal balance of such Loan, (B) if such Loan is prepaid after the Loan
Amortization Date applicable to such Loan, but on or before the date that is 12 months after such Loan Amortization Date, 2% of the then outstanding principal balance of such Loan, or (C) if such Loan is prepaid more than 12 months after the Loan
Amortization Date but prior to the stated maturity date applicable to such Loan, 1% of the then outstanding principal balance of such Loan; plus (iii) the outstanding principal balance of such Loan; plus (iv) all other sums, if any, that shall have become due and payable thereunder. No prepayment premium will be applied to any outstanding balance of any Loan paid on the stated maturity date.
In connection with the Loan and Security Agreement, we issued Horizon Technology Finance Corporation and Powerscourt Investments XXV, LP warrants to purchase an aggregate total
of 381,625 shares of our common stock at an initial exercise price of $3.6685 per share. Each warrant is classified as equity and is exercisable at any time for a period beginning on the date of grant and ending on the earlier of (A) 10 years from
the date of grant, and (B) the closing of (A) (i) the sale, lease, exchange, conveyance or other disposition of all or substantially all of the our property or business, or (ii) its merger into or consolidation with any other corporation (other
than a wholly-owned subsidiary of the Company), or any transaction (including a merger or other reorganization) or series of related transactions, in which more than 50% of the voting power of the Company is disposed of, in each case, for cash or
for marketable securities meeting certain requirements as described in the applicable warrants. The key assumptions used in Black-Scholes option pricing model were (i) expected term of 10 years, (ii) a risk-free rate of 3.11%, (iii) expected
volatility of 93.8%, and (iv) no estimated dividend yield.
In April 2023, we received approximately $1.4 million from the net sale of tax benefits to an unrelated, profitable New Jersey corporation pursuant our participation in the New
Jersey Technology Business Tax Certificate Transfer NOL program for tax year 2021.
In April 2024, we received approximately $0.9 million from the net sale of tax benefits to an unrelated, profitable New Jersey corporation pursuant to its participation in the
New Jersey Technology Business Tax Certificate Transfer NOL program for tax year 2022.
As of September 30, 2024, we had $49.8 million in cash and cash equivalents. Our primary uses of cash are to fund operating expenses, primarily research and development
expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.
We evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one
year beyond the filing of this Quarterly Report on Form 10-Q. Our budgeted cash requirements in 2024 and beyond include expenses related to continuing development and clinical studies as well as payments on our debt.
We plan to continue to fund our operations and capital funding needs through existing cash and additional equity and/or debt financing. However, we cannot be
certain that additional financing will be available when needed or that, if available, financing will be obtained on terms favorable to us or our existing stockholders. We may also enter into government funding programs and consider selectively
partnering for clinical development and commercialization. The sale of additional equity would result in additional dilution to our stockholders. Incurring debt financing would result in debt service obligations, and the instruments governing such
debt could provide for operating and financing covenants that would restrict our operations. If we are unable to raise additional capital in sufficient amounts or on acceptable terms, we may be required to delay, limit, reduce, or terminate our
product development or future commercialization efforts or grant rights to develop and market immunotherapies that we would otherwise prefer to develop and market ourselves. In addition, the Loan and Security Agreement allows for the lenders to
call the outstanding balance of the term loans if the minimum cash balances outlined in the Loans and Security Agreement are not maintained. Any of these actions could harm our business, results of operations and prospects. Failure to
obtain adequate financing also may adversely affect our ability to operate as a going concern.
As a result of these uncertainties, and as its plans are outside of management’s control, we have concluded that substantial doubt exists about our ability to continue as a going concern for a period
of at least 12 months from the date of the issuance of these unaudited Condensed Consolidated Financial Statements. The unaudited Condensed Consolidated Financial Statements do not include any adjustments to the carrying amounts and classifications
of assets and liabilities that would result if we are unable to continue as a going concern.
Cash Flows
The following table shows a summary of our cash flows for each of the periods indicated (in thousands):
| |
|
Nine Months Ended September 30,
|
|
| |
|
2024
|
|
|
2023
|
|
Net cash used in operating activities
|
|
$
|
(26,796
|
)
|
|
$
|
(25,179
|
)
|
|
Net cash used in investing activities
|
|
|
(29
|
)
|
|
|
-
|
|
|
Net cash provided by financing activities
|
|
|
20,016
|
|
|
|
5,610
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
$
|
(6,809
|
)
|
|
$
|
(19,569
|
)
|
Net Cash Used in Operating Activities
Net cash used in operating activities was $26.8 million and $25.2 million for the nine months ended September 30, 2024 and 2023, respectively. The increase in net
cash used in operating activities of $1.6 million was primarily due to accounts payable and accrued expenses of $3.2 million, partially offset by $1.3 million from reduced net loss adjusted for non-cash items.
Net Cash Used in Investing Activities
Net cash used in investing activities for the nine months ended September 30, 2024 and 2023 was $29.0 thousand and $0, respectively.
Net Cash Provided by Financing Activities
Net cash provided by financing activities for the nine months ended September 30, 2024 and 2023 was primarily due to the receipt of net proceeds of $19.4 million and $5.6
million, respectively, from the sale of common stock under the Sales Agreement.
Operating Capital Requirements
To date, we have not generated any product revenue. We do not know when, or if, we will generate any product revenue and we do not expect to generate significant product revenue
unless and until we obtain regulatory approval and commercialize one of our current or future product candidates. We anticipate that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue
the development of, and seek regulatory approvals for, our product candidates, and begin to commercialize any approved products. We are subject to all of the risks incident to the development of new products, and may encounter unforeseen expenses,
difficulties, complications, delays and other unknown factors that may harm our business. We expect to incur additional costs associated with operating as a public company and anticipate that we will need substantial additional funding in connection
with our continuing operations.
We evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one
year after the filing of this Quarterly Report. Our budgeted cash requirements in 2024 and beyond include expenses related to continuing development and clinical studies as well as payments on our debt. Until we can generate significant cash from our
operations, we expect to continue to fund our operations with available financial resources. These financial resources may not be adequate to sustain our operations. While we intend to finance our cash needs principally through equity or debt
financings, collaborations, strategic alliances, or license agreements with third parties, there is no assurance that new financing will be available to us on commercially acceptable terms or in the amounts required, if at all. In addition, the Loan
and Security Agreement allows for the lenders to call the outstanding balance of the term loans if we fail to maintain the minimum cash balances outlined in the Loans and Security Agreement. We have concluded that substantial doubt exists about our
ability to continue as a going concern for a period of at least 12 months from the date of the issuance of these unaudited Condensed Consolidated financial statements.
We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all of our available capital resources sooner than we
expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding
requirements will depend on many factors, including, but not limited to:
|
● |
the initiation, progress, timing, costs and results of our planned clinical trials;
|
|
● |
the effects of health epidemics, pandemics, or outbreaks of infectious diseases, on our business operations, financial condition, results of operations and cash flows;
|
|
● |
the outcome, timing and cost of meeting regulatory requirements established by the U.S. Food and Drug Administration, or FDA, the European Medicines Agency, or EMA, and other comparable foreign regulatory
authorities;
|
|
● |
the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights;
|
|
● |
the cost of defending potential intellectual property disputes, including patent infringement actions brought by third parties against us now or in the future;
|
|
● |
the effect of competing technological and market developments;
|
|
● |
the cost of establishing sales, marketing and distribution capabilities in regions where we choose to commercialize our products on our own; and
|
|
● |
the initiation, progress, timing and results of our commercialization of our clinical and product candidates, if approved, for commercial sale.
|
Please see the section titled “Risk Factors” elsewhere in the Quarterly Report and Annual Report for additional risks associated with our operations.
Purchase Commitments
We have no material non-cancelable purchase commitments with service providers as we have generally contracted on a cancelable, purchase order basis.
Critical Accounting Policies and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with
U.S. GAAP. Our accounting policies are more fully described in Note 2 to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q. As described in Note 2, the preparation of these financial statements requires
us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the expenses incurred during the reporting
periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources. Estimates are assessed each period and updated to reflect current information. Actual results may differ from these estimates under different assumptions or conditions. We believe that the
discussion in our management’s discussion and analysis addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require management’s most
difficult, subjective and complex judgments.
There have been no material changes to our critical accounting policies and estimates during the nine months ended September 30, 2024 from those disclosed in our Annual Report on Form 10-K for the
year ended December 31, 2023.
Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Smaller Reporting Company
As of January 1, 2021, we were no longer an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. However, we remain a
“smaller reporting company,” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended. We will cease to be a smaller reporting company if we have a non-affiliate public float in excess of $250 million and annual revenues in
excess of $100 million, or a non-affiliate public float in excess of $700 million, determined on an annual basis. As a smaller reporting company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are
applicable to other public companies that are not smaller reporting companies. We will continue to take advantage of some or all of the available exemptions.
| ITEM 3: |
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
We are exposed to market related changes in interest rates. As of September 30, 2024, our cash equivalents consisted of bank deposits and money market accounts. Additionally,
the principal balance under our Loan and Security Agreement bears a floating interest pegged to the prime rate. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest
rates. Historically, the net impact of fluctuations in interest rates have not been material to us.
Inflation generally affects us by increasing our cost of labor and pricing of contracts. We do not believe that inflation has had a material effect on our business, financial
condition, or results of operations during the three months ended September 30, 2024.
| ITEM 4: |
CONTROLS AND PROCEDURES
|
Evaluation of Disclosure Controls and Procedures
An evaluation was carried out, under the supervision of and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of
our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15 (e)) under the Securities Exchange Act of 1934, or the Exchange Act, as of the end of the period covered by this report. Based on the evaluation, our Chief Executive
Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective to ensure that the information required to be disclosed by us in the reports we file or submit under the Exchange Act was recorded,
processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) identified in connection with the evaluation identified above
that occurred during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| PART II. |
OTHER INFORMATION
|
| ITEM 1. |
LEGAL PROCEEDINGS
|
The information in Note 9 to the Condensed Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q is incorporated herein by
reference. There are no matters which constitute material pending legal proceedings to which we are a party other than those incorporated into this item by reference from Note 9 to our Condensed Consolidated Financial Statements for the quarter ended
September 30, 2024 contained in this Quarterly Report on Form 10-Q.
There have been no material changes from our risk factors as previously reported in our
Annual Report on
Form 10-K for the year ended December 31, 2023. However, any investment in our business involves a high degree of risk. Before making an investment decision, you should carefully consider the information we include in this Quarterly Report on Form
10-Q, including our unaudited interim Condensed Consolidated Financial Statements and accompanying notes, our Annual Report on Form 10-K for the year ended December 31, 2023 filed on March 28, 2024, including
the risk factors and our financial statements and related notes contained therein, and the additional information in the other reports we file with the Securities and Exchange Commission
, including, without limitation, the risk factors previously disclosed in our prior quarterly reports on Form 10-Q filed during this fiscal year. These risks may result
in material harm to our business and our financial condition and results of operations. In this event, the market price of our common stock may decline and you could lose part or all of your investment.
Additional risks that we currently believe are immaterial may also impair our business operations. Our business, financial conditions and future prospects
and
the trading price of our common stock
could be harmed
as a result of any
of these risks.
| ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
There were no unregistered sales of the Company’s equity securities during the three months ended September 30, 2024.
| ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES
|
None.
| ITEM 4. |
MINE SAFETY DISCLOSURES
|
Not applicable.
| ITEM 5. |
OTHER INFORMATION
|
None.
EXHIBIT INDEX
|
Exhibit
Number
|
|
Exhibit Description
|
| |
|
|
|
|
|
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
| |
|
|
|
|
|
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
| |
|
|
|
|
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
|
| |
|
|
|
|
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
|
| |
|
|
|
101.INS*
|
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
| |
|
|
|
101.SCH*
|
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Document
|
| |
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
| |
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
| |
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
| |
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
| |
|
|
|
104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101).
|
| * |
Filed herewith (unless otherwise noted as being furnished herewith)
|
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| |
PDS Biotechnology Corporation
|
| |
|
|
|
November 14, 2024
|
By:
|
/s/ Frank Bedu-Addo
|
| |
|
Frank Bedu-Addo, Ph.D.
|
| |
|
President and Chief Executive Officer
(Principal Executive Officer)
|
| |
|
|
|
November 14, 2024
|
By:
|
/s/ Lars Boesgaard
|
| |
|
Lars Boesgaard
|
| |
|
Chief Financial Officer
|
| |
|
(Principal Financial and Accounting Officer)
|