PDS Biotechnology - Earnings Call - Q1 2025

Executive Summary

• Q1 2025 net loss improved to $8.49M ($0.21 per share) from $10.60M ($0.30) in Q1 2024, driven by a $1.17M NJ NOL tax benefit and lower operating expenses; consensus EPS was -$0.25, implying a beat of ~$0.04 per share (actual -$0.21 vs. consensus -$0.2467*).
• Phase 3 VERSATILE-003 initiated and sites activated (Mayo added); design: ~350 patients, 2:1 randomization vs pembrolizumab, OS primary endpoint, with two interim analyses for potential accelerated pathway discussions.
• Cash was $40.0M at quarter-end (vs. $41.7M at FY24); subsequent debt refinancing extended term to 36 months (first 4 months interest-only), and February offering raised ~$11M upfront with warrants for up to ~$11M more, bolstering liquidity for Phase 3 execution.
• Additional pipeline momentum: FDA cleared IND for Versamune MUC1 + PDS01ADC in mCRC (NCI-led Phase 1/2), and Infectimune universal flu vaccine data featured at IMMUNOLOGY2025; three PDS0101 ASCO posters pending (durability emphasis).

What Went Well and What Went Wrong

What Went Well

• “Site activation is progressing, and Mayo Clinic sites have recently been added to the trial,” reinforcing Phase 3 execution cadence (CEO).
• Operating discipline: Total OpEx fell to $9.11M (from $10.10M YoY), with R&D down to $5.83M (from $6.70M) on lower clinical trial expenses; G&A also decreased slightly.
• Regulatory/pipeline: IND clearance for Versamune MUC1 + PDS01ADC in mCRC and Fast Track retained for Versamune HPV in HNSCC; multiple ASCO selections signal scientific validation.

What Went Wrong

• Net interest expense increased to $0.55M net (interest income $0.38M; interest expense $0.93M), reflecting financing costs and highlighting sensitivity to debt structure.
• Cash balance declined modestly to $40.0M vs. $41.7M at FY24, underscoring continuing cash utilization for clinical operations prior to incremental financings.
• The company does not provide numerical financial guidance; analysts queried OpEx trajectory and enrollment pacing, with management signaling stable trial spend after initial CRO ramp and deferring specific enrollment updates until more visibility.

Transcript

Operator (participant)

Greetings and welcome to the PDS Biotech first quarter in 2025 earnings conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mike Moyer, LifeSci Advisors. Thank you, sir. You may begin.

Mike Moyer (Managing Director)

Thank you, Operator. Good morning, everyone, and welcome to PDS Biotech's first quarter 2025 results and clinical programs update call. I am joined on the call today by the following members of the company's management team: Dr. Frank Bedu-Addo, Chief Executive Officer; Dr. Kirk Shepard, Chief Medical Officer; and Lars Boesgaard, Chief Financial Officer. Dr. Bedu-Addo will begin with an overview of the company's recent progress in its clinical development program. Mr. Boesgaard will review the financial results for the quarter ended March 31, 2025, and Dr. Shepard will then join the call to help address questions from our covering analysts. As a reminder, during this call, we will be making forward-looking statements which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements.

Any such statements should be considered in conjunction with cautionary statements in our press releases and risk factors discussed in our filings with the SEC, including our quarterly reports on Form 10-Q and annual report on Form 10-K, and cautionary statements made during this call. We assume no obligation to update any of these forward-looking statements or information. Now, I'd like to turn the call over to Dr. Bedu-Addo. Frank.

Frank Bedu-Addo (CEO and Director)

Thank you, Mike, and good morning, everyone. It's our pleasure to speak with you again and to provide this brief update on our progress in advancing our clinical programs. The first quarter of 2025 and recent weeks have been a productive period for PDS Biotech, led by the initiation of our VERSATILE-003 phase 3 clinical trial of Versamune HPV plus Pembrolizumab. Versamune HPV plus Pembrolizumab is a potential treatment for first-line recurrent and/or metastatic HPV16-positive head and neck squamous cell carcinoma or head and neck cancer. Patients with recurrent or metastatic HPV16-positive head and neck cancer are difficult to treat and represent a large, fast-growing population in need of targeted therapies to treat the underlying cause of the cancer.

It is projected that by the mid-2030s, HPV16-positive head and neck cancer will become the most prevalent type of head and neck cancer in the United States and Europe. Considering the strength and durability of the clinical responses observed in our VERSATILE-002 phase 2 study, we are excited to get the VERSATILE-003 registrational trial underway and are confident in the potential of the combination of Versamune HPV and pembrolizumab to significantly improve outcomes for patients with recurrent and/or metastatic HPV16-positive head and neck cancer. We are pleased to announce that new sites, including Mayo Clinic sites, were recently added to the trial, and we continue the process of activating additional clinical sites. We look forward to the continued progression of this trial. As we announced previously, the VERSATILE-003 trial design includes approximately 350 patients.

The two-arm registrational trial design has been given the go-ahead by the U.S. Food and Drug Administration, or FDA. The two arms of the trial include a treatment arm of the Versamune HPV and Pembrolizumab combination versus the control arm of Pembrolizumab only. Patients are enrolled in a two-to-one randomization. Median overall survival is the primary endpoint. The trial design is informed by the observed durability of the clinical responses in our Versal 002 clinical trial seen over the last year and a half, with the most recent data presented at the European Society for Medical Oncology ESMO Congress in September. The encouraging patient survival and clinical responses, coupled with promising tolerability as seen in the Versal 002 clinical trial, will be the subject of a poster presentation at the 2025 American Society of Clinical Oncology Annual Meeting, or ASCO.

These data underscore our belief in the potential of the combination to be the first HPV16 targeted therapy for head and neck cancer and a significant advancement in the treatment of the growing population of patients with HPV16 positive head and neck cancer. The VERSATILE-003 trial in progress is the first phase 3 trial in the high-risk HPV16 population and has also been accepted for presentation at the 2025 ASCO Annual Meeting. Thirdly, Mayo Clinic will present the results of the MC-200710 study investigating Versamune HPV alone or with pembrolizumab prior to surgery or radiation therapy for locally advanced HPV16 positive oropharyngeal cancer. All three presentations will be held on Monday, June 2, 2025, from 9:00 AM to 12:00 PM Central Daylight Time during the head and neck cancer poster session.

Elsewhere in our pipeline, last week we announced that at the American Association of Immunologists' Immunology 2025 Annual Meeting, preclinical efficacy and immune response data in mice and ferrets with a novel infecti-immune-based universal flu vaccine were featured in two presentations on universal influenza vaccines, including an oral symposium. These studies were funded by and performed by investigators at the National Institute of Allergy and Infectious Diseases, NIAID, Center for Influenza Vaccine Research for High-Risk Populations. The collaborative approach between NIAID and PDS Biotech allows PDS Biotech to focus our resources on our VERSATILE-003 clinical trial. In March, we were pleased to announce FDA clearance of our investigational new drug IND application for the combination of Versamune MUC1 and our IL-12 fused antibody drug conjugate, PDS01ADC, to treat metastatic colorectal cancer.

Several highly prevalent solid tumors are MUC1 positive, including non-small cell lung cancer, ovarian cancer, breast cancer, liver cancer, and others. We are pleased to continue our strong relationship with the National Cancer Institute, NCI, and this phase 1-2 clinical trial is scheduled to be run under our collaborative research and development agreement with the NCI. PDS Biotech will continue to focus our efforts on progressing the VERSATILE-003 phase 3 clinical trial. Now, I will turn it over to Lars for a review of our results for 2025. Lars?

Lars Boesgaard (CFO)

Thanks, Frank. Good morning, everyone. For the first quarter of 2025, we reported a net loss of approximately $8.5 million, or about $0.21 per basic and diluted share for the three months ended March 31. That compares to $10.6 million, or $0.30 per basic and diluted share for the three months ended March 31, 2024. This decrease was due to increased benefit from income taxes as well as lower operating expenses. Research and development expenses were $5.8 million for the first quarter compared to $6.7 million for the prior year quarter. This decrease was primarily due to lower clinical trial expenses. General administrative expenses were $3.3 million for the first quarter compared to $3.4 million for the prior year quarter. Overall total operating expenses were $9.1 million for the first quarter compared to approximately $10.1 million for the prior year quarter.

Net interest expenses were $0.6 million for the first quarter, which compared to approximately $0.5 million for the prior year period. Our cash balance as of March 31, 2025, was $40 million compared to $41.7 million as of December 31, 2024. You'll recall that on February 27 this year, we announced that we had entered into a securities purchase agreement with new and existing healthcare-focused institutional investors, as well as participation from certain directors for the company. Under that arrangement, we raised approximately $11 million upon the closing, with an additional $11 million that may be funded upon full cash exercise of the warrants that were included in the agreement. Also, more recently, at the end of April, we completed a refinancing of our debt with new lenders, resulting in the extension of the term to 36 months, with the first four months being interest-only. With that, Operator, we can open the call to questions.

Operator (participant)

Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. We ask that analysts limit themselves to one question and a follow-up so that others can do so as well. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from Mam Tani with B. Riley Securities. Please proceed with your question.

Mayank Mamtani (Senior Managing Director and Group Head of Healthcare Equity Research)

Yes. Good morning, team. Thanks for taking our questions, and congrats on getting the VERSATILE-003 phase 3 ramping up. First, on the Keytruda head and neck neoadjuvant data we saw at AACR, could you comment on how such a standard of care changing data set impacts enrollment expectations of your phase 3? Did we sort of learn anything, if anything, on the HPV-positive tumor set and how maybe checkpoint inhibitors' monotherapy response rate looks like in HPV16-positive? I have a follow-up.

Frank Bedu-Addo (CEO and Director)

Mayank, you're referring to the KEYNOTE-689 trial?

Mayank Mamtani (Senior Managing Director and Group Head of Healthcare Equity Research)

That's right.

Frank Bedu-Addo (CEO and Director)

Okay. Kirk, I'll hand over to you to start if you have any comments on that.

Kirk Shepard (Chief Medical Officer)

Sure. Can you hear me okay?

Frank Bedu-Addo (CEO and Director)

Yes, we can hear you.

Kirk Shepard (Chief Medical Officer)

Great. The KEYNOTE-689 trial should not affect our VERSATILE-003. The reason is 689 was a study of mainly HPV-negative patients. That's because the eligibility criteria of the study had to be that the patients were eligible for surgery. Most patients who are HPV positive at this stage are not eligible for surgery. That resulted in only 3%-4% of the patients of this study being HPV positive. The study was focused mainly on HPV-negative patients and not positive.

Frank Bedu-Addo (CEO and Director)

Kirk, thanks a lot. Mike, that is very important because even if this does become standard of care, there is going to be very little impact on the HPV positive population. It may actually speed up the HPV16 population becoming the predominant recurrent/metastatic head and neck cancer population. This is something that we actually had our steering committee evaluate and give us advice on. Their feedback to PDS was, even if this new adjuvant treatment is approved, since very few HPV positive patients are actually eligible for surgery at this stage, there should be negligible impact on the HPV16 recurrent/metastatic head and neck cancer population. That is exactly what we saw, as Kirk mentioned, only about 3% of the patients were actually HPV positive. Mike, I hope that answered your question.

Mayank Mamtani (Senior Managing Director and Group Head of Healthcare Equity Research)

Yes. Yes, it does. Thank you, Booth. Then second on this ASCO poster presentation coming up, could you talk to what we should be looking to learn on durability, incremental from what you've shown before? Maybe if you could comment on just your durability, how might that be tracking relative to also the emerging data from the next generation eGFR targeted therapies? Thanks again for taking our questions.

Frank Bedu-Addo (CEO and Director)

Thanks, Mayank. I'm not going to speak much about the EGFR inhibitors. I think they will make their presentations at ASCO, and we will learn more. At this point, we can't say any more than they have currently presented to the markets. We have no additional information on how their programs are performing. With regards to PDS Biotech and our VERSATILE-002 trial, as you know, one of the key characteristics of this technology and the product is the durability. On our corporate deck, one of the slides shows how these patients react long-term. I think one of the key things within oncology today with the current cytotoxic drugs, including cetuximab, is you get pretty good responses upfront, good objective response rates.

What we have not seen to date in head and neck cancer and many other cancers is once you are able to achieve these clinical responses, can you maintain these responses long-term? That is the challenge. That is exactly what we see with our Versamune HPV plus Keytruda formulation, where the patients who have clinical responses, including stable disease, partial responses, and complete responses, the majority of these patients appear to be maintaining those clinical responses long-term. That has translated also to survival, which is very important. At our last presentation at ESMO, as you recall, we presented a 30-month median overall survival. The standard today is approximately 12 months.

Really just putting that into perspective, today with a standard of care, if a patient had gone on to the standard of care, which would have been Keytruda or Keytruda chemo, their probability of living 12 months was about 50%. You had a 50% probability of living for 12 months. However, if that patient had gone on to our VERSATILE-002 trial, they had a 50% probability of living for 30 months or more. That's the kind of durability we've seen in this HPV16 population, which, by the way, in some studies that have been performed and published have shown that in head and neck cancer, they found that in HPV16 patients had the worst prognosis for survival once the disease becomes an advanced recurrent metastatic disease. Compared to HPV negative and other types of HPV, the HPV16-positive patients had by far the worst survival prognosis. This is, for us, an extremely encouraging result. What we intend to do is to give an additional update on a more recent data cut on that durability and survival of these patients in the VERSATILE-002 trial.

Mayank Mamtani (Senior Managing Director and Group Head of Healthcare Equity Research)

Thank you, Frank.

Frank Bedu-Addo (CEO and Director)

You're welcome.

Operator (participant)

Our next question comes from Joseph Pantginis with H.C. Wainwright. Please proceed with your question.

Joseph Pantginis (Managing Director of Equity Research)

Hey, guys. Good morning. Thanks for taking the question. I want to ask two nuanced questions regarding your two lead programs, and part of it you've already started to discuss. First, with KEYNOTE-689, when you're comparing it again, it's apples and oranges, even though I think from a perception standpoint, there are some, I guess, investors comparing apples to oranges here, at least from a perception standpoint. I'm just curious, how do you view the learning curve here, and does it apply at all, and I don't think it does, to physicians' impact in being able to want to participate in VERSATILE-003? I have a follow-up.

Frank Bedu-Addo (CEO and Director)

No to date, and I'll ask Kirk to give his opinions on that. To date, we have seen very strong enthusiasm from the investigators and the key opinion leaders in actually participating in the VERSATILE-002 trial. I'll actually hand over to Kirk to give any comments before I get back to continuing my answer. Kirk, any comments on interest in the trial based on KEYNOTE-689?

Kirk Shepard (Chief Medical Officer)

Yeah. No, the response was very brisk and all the same from our steering committee, which are the experts in head and neck cancer, that KEYNOTE-689 does not apply to HPV positive patients. This is even before they saw the data broken down, which we saw at the AACR. Sure enough, when we saw the data, as Frank had mentioned, I mentioned earlier too, only 3% of the patients were HPV positive because it is not appropriate to treat these patients with surgery upfront. It has been discussed a lot with our investigators, and especially our steering committee, that this should not affect our patient accrual at all. We are very fortunate that we have a number of VERSATILE-002 investigators with us now who have experience with this drug and are very excited for 003 to get started.

Frank Bedu-Addo (CEO and Director)

Thanks a lot, Kirk. Joe, along those lines, I think very importantly, I think that the oncologists and the key opinion leaders in the space really understand that there are very few people who are going to be HPV positive who will be eligible for that new adjuvant treatment. One of the things you can see in relation to that is that even at Mayo Clinic, one of the studies that we will be presenting at ASCO has to do with utilizing our Versamune HPV plus Keytruda in that new adjuvant setting for HPV16-positive patients.

One of the key things that the KOLs mentioned on our last KOL call was that their very strong recommendation for this combination based upon the tolerability that we've seen in the patients today would be to rapidly move it into that earlier stage setting, which would be locally advanced head and neck cancer. We have already seen the experts in the field, based upon the promising results that we've seen in VERSATILE-002, take that combination to start evaluating it in this patient population who will not be really impacted, who may not get any benefit from the KEYNOTE-689 since they're HPV positive. Can we take our combination and apply it now to those patients who may not be eligible for surgery but can go on this new adjuvant/adjuvant treatment with our combination? We see a significant opportunity for this combination there too.

Joseph Pantginis (Managing Director of Equity Research)

Great. I appreciate that added color, Frank and Kirk. My second nuanced question is your newly or IND-approved MUC1 program. I wanted to do a little bit of historical perspective to where we are today and especially your program. I want to focus on the antigen itself. This has been a key target, I mean, MUC1 for immunotherapy and/or cancer vaccines for more than two decades now. There have been some pretty high-profile failures with this target. I wanted to just get a little more sense again from you guys. Why are you differentiated here? I guess, can you describe interest from sites to participate knowing this history? Thanks a lot.

Frank Bedu-Addo (CEO and Director)

Really great question, Joe. I'll start by saying that very similarly in HPV16-positive head and neck cancer, cervical cancer, over the last 20 years, there have also been some very high-profile failures. However, with our technology, we now see that for the first time, we have a technology and product that has now had really strong data, very durable responses, and moving into a pivotal registrational trial for the first time. There have been many failures in HPV16-positive cancer over the last 20 years. The reason I'm giving you this analogy is it's important to recognize two things, not only the antigen, but the technology, the technology that is able to now perform the immunological function that the previous technologies had not been able to perform.

That's very important in being able to activate the right immunological signaling pathways and also more effectively present those antigens into the right presentation pathways. Having a strong antigen doesn't get you very far if it can't be effectively presented and the right immunological pathways also activated. Both have to go hand in hand. Now, moving from where we've demonstrated that this technology can do this effectively in head and neck cancer with the HPV antigens, we're now moving on to the MUC1 after this solid proof of concept that we've generated today. With the MUC1, these are novel antigens, what we call agonist epitopes that have been designed by the National Cancer Institute.

What these antigens have been designed to do is to be much more immunologically potent than the native MUC1 antigens, therefore having a much stronger ability to activate the immune system to recognize MUC1 as a foreign agent. What we have now done is taken our Versamune technology, combined it with those novel or more potent antigens to facilitate their presentation to the immune system and to facilitate the training of the immune system to recognize them as foreign agents, and then also activate those trained T cells to now be a lot more potent in attacking and killing the MUC1-positive cancers. We have to look at it in the entirety of what is really happening here. The antigen alone does not do much to guarantee you or to generate an effective anti-tumor response.

What we're also doing in the study is combining it with our IL-12 fused antibody drug conjugate. With the IL-12, we have demonstrated also with our HPV programs that by targeting the tumors and really driving the IL-12 away from the circulating blood but into the tumors, which is the required site of T cell activation, by being able to get both our T cells and the IL-12 into the patient's tumors, we've also demonstrated significantly enhanced survival and anti-tumor responses. The goal is to apply this combination again to MUC1. This program is being performed as part of our collaborative research and development agreement with the National Cancer Institute. This is a program where the first trial is going to be a single-site study, and that's going to be done by the NCI. This collaboration also allows us to focus our resources and efforts on running our VERSATILE-003 program.

Joseph Pantginis (Managing Director of Equity Research)

Frank, really appreciate that detailed explanation and looking forward to seeing initial data. Thanks a lot.

Frank Bedu-Addo (CEO and Director)

You're welcome.

Operator (participant)

Our next question comes from James Molloy with Alliance Global Partners. Please proceed with your question.

James Molloy (Managing Director, Equity Research, Biotechnology and Specialty Pharmaceuticals Analyst)

Hey, Frank. Good morning. Thank you for taking my question. Just a quick follow-up on 003. As the first patient, have you guys announced the enrollment of the first patient yet? Did I miss that, or what is the expectation on that? Any anecdotal comments from the docs on enrollment and how sort of that is proceeding or how the conversations are going with the potential enrollees?

Frank Bedu-Addo (CEO and Director)

No, we have not made it public how enrollment is going. As you know, James, once the sites are activated, the sites actually have a number of internal processes they will undergo followed by screening of patients. The patients have to be screened. That is part of the process of getting all these patients into the trial. This process is occurring as we continue to activate more sites, and the goal is to hopefully eventually get to a steady recruitment state. Also, as you know, the larger sites, such as Mayo Clinic, take longer to activate and get going. Our goal here is to update the markets when we have a much better idea of how enrollment is going and when we are able to approximately estimate when we are going to get to that interim data readout point. We will provide more updates when we have much better insight into how the recruitment rates should be and when we'll get to those data readout points.

James Molloy (Managing Director, Equity Research, Biotechnology and Specialty Pharmaceuticals Analyst)

That makes sense. Just starting the trial, literally to try to guess that yet, I guess. Maybe on a mechanistic, looking at the print for the OpEx for the quarter, is this sort of the level we should anticipate going forward, or expect that to kind of ramp up going through 2025 or 2026?

Frank Bedu-Addo (CEO and Director)

Lars, I'll hand over to you for that.

Lars Boesgaard (CFO)

Yeah. Hey, James, this is Lars here. Yeah, we do not currently provide financial guidance, but I think it is fair to say that we are happy the trial has been started well the way it has. As you probably are aware, we do tend to see a bit of a higher spend in the first couple of quarters as we get this year up and running. I think without giving you any specific numbers, we see a relatively stable in terms of the trial spend going forward.

James Molloy (Managing Director, Equity Research, Biotechnology and Specialty Pharmaceuticals Analyst)

Great. Thank you very much for taking the questions.

Operator (participant)

There are no further questions at this time. I would now like to turn the floor back over to Dr. Frank Bedu-Addo for closing comments.

Frank Bedu-Addo (CEO and Director)

Thank you, Operator. In closing, we are very pleased to have initiated the VERSATILE-002 registrational trial this quarter. This study is the first phase 3 clinical trial specifically in the growing population of HPV16-positive head and neck cancer. We are excited based on the strong VERSATILE-002 results and our Fast Track designation about the potential for Versamune HPV in head and neck cancer. We expect to provide updated results from our ongoing phase 2 VERSATILE-002 study at ASCO in a couple of weeks. Our engagement with investors and clinical investigators has validated our approach and the long-term opportunity that we believe the HPV16-targeted immunotherapy presents in the HPV16-positive head and neck cancer indication. We look forward to keeping you updated on our progress, and thank you very much again for your time and support. Thanks a lot.

Operator (participant)

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.