PDS Biotechnology - Earnings Call - Q2 2025

Executive Summary

• Reported net loss of $9.43M and diluted EPS of -$0.21 for Q2 2025; operating expenses fell year over year (Q2 2025 OpEx $7.62M vs $8.68M in Q2 2024) as R&D and G&A declined, offset by notably higher net interest expense tied to debt repayment costs.
• EPS beat Wall Street consensus: actual -$0.21 vs consensus -$0.23; revenue in line at $0, consistent with development-stage status; prior quarter Q1 2025 likewise beat (-$0.21 vs -$0.25) [GetEstimates: Q2 2025, Q1 2025]*.
• Clinical momentum: VERSATILE-003 Phase 3 in first-line HPV16+ r/m HNSCC progressing; management reiterated mOS durability at 30.0 months in Phase 2 VERSATILE-002 and highlighted planned full data publication later this year.
• Additional catalysts: NCI-led PDS01ADC colorectal cohort met criteria to expand to Stage 2 with ≥6/9 confirmed responses; Mayo Clinic neoadjuvant window-of-opportunity trial showed ctDNA reduction and activity with only two cycles.
• Funding remains a watch item: cash fell to $31.9M at June 30, 2025 (from $40.0M at March 31); management previously noted more capital will be needed to complete Phase 3, pursuing stepwise equity and non-dilutive options.

What Went Well and What Went Wrong

What Went Well

• VERSATILE-003 registrational trial advancing with investigator enthusiasm; sites from Phase 2 re-engaging, supporting accrual trajectory: “We have had a lot of feedback… sites… participating in the phase two study… have signed on”.
• Durability of clinical benefit: “Median overall survival remained steady at thirty months… suggesting durability of the PDS0101 induced clinical responses” with improving CI lower bound (18.4 → 23.9 months).
• Pipeline progress: NCI-led PDS01ADC colorectal cohort triggered Stage 2 on ≥6/9 confirmed responses; Mayo Clinic neoadjuvant poster met primary ctDNA endpoint, showing activity with just two cycles.

What Went Wrong

• Net interest expense rose substantially ($1.81M vs $0.51M YoY) due to debt repayment costs, increasing net loss YoY despite lower operating expenses.
• Cash drawdown through the quarter (to $31.9M) alongside CFO commentary that cash on hand is not sufficient to complete the Phase 3, implying continued financing need and potential dilution/debt.
• No revenue and no formal financial guidance; investor visibility on cash runway and OpEx trajectory relies on disclosures rather than targets, with CFO reiterating no guidance policy previously.

Transcript

Speaker 3

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

Speaker 0

Thank you, operator. Good morning, everyone, and welcome to PDS Biotechnology's second quarter 2025 results and clinical programs update call. I'm 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 then review the financial results for the quarter ended June 30, 2025. Dr. Shepard will join the call to help address questions from covering analysts during the Q&A. 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?

Speaker 2

Thank you, Mike. Dr. Bedu-Addo, you're in. Good morning. Thank you. 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 second quarter of 2025 and recent weeks have been a productive period for PDS Biotech. During the quarter, we continued to advance our VERSATILE-003 Phase III clinical trial, evaluating PDS0101 or Versamune HPV in HPV16-positive recurrent and/or metastatic head and neck cancer. We also presented positive updated data from our VERSATILE-002 trial, further demonstrating the durable clinical benefit of PDS0101 in this patient population. As reported in two separate peer-reviewed publications, which compared clinical responses and survival in the different types of head and neck cancer, HPV16-positive head and neck cancer patients were more difficult to treat with worse survival outcomes.

As recently reported in the clinical journal Lancet, HPV16-positive oropharyngeal cancer represents a large and the fastest growing type of head and neck cancer. There are currently no targeted therapies to treat the underlying cause of HPV16-positive cancer. Based on independent market research conducted in November of 2024 among head and neck cancer oncologists, over 50% of head and neck cancer cases in the United States are HPV16-positive. HPV-positive and HPV-negative head and neck cancer are two distinct diseases with different underlying causes, origin, risk factors, and contributions to the development of head and neck cancer. Current clinical guidelines do not differentiate between HPV-positive and HPV-negative patients, despite the significant biological and pathophysiological differences in disease cause, development, and progression, thus presenting a significant opportunity for an effective HPV-targeted immunotherapy.

Importantly, in addition to this, patients with HPV-positive head and neck cancer are generally not candidates for surgery due to the pathophysiology of the HPV-positive tumors and therefore not anticipated by oncologists to benefit from the recent approval of Keytruda as neoadjuvant and adjuvant therapy for locally advanced head and neck cancer. It is projected in a recent issue of the British Dental Journal 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. All these reasons make the increasing prevalence of HPV16-positive head and neck cancer a growing and severe unmet medical need. PDS Biotechnology is specifically addressing head and neck cancer related to HPV16, which is confirmed to be the most carcinogenic type of HPV.

HPV16 is a specific type of HPV that must be confirmed using a polymerase chain reaction or PCR test rather than the commonly used P16 histochemistry test. Our VERSATILE-003 trial differs from other ongoing Phase III clinical trials addressing first-line recurrent and/or metastatic head and neck cancer in its specific targeting of the HPV16-positive head and neck cancer population and its therapeutic approach. The two-arm registrational trial design includes approximately 350 patients. The two arms of the trial include a treatment arm of the PDS0101 pembrolizumab combination versus the control arm of pembrolizumab only. Patients are being enrolled in a two-to-one randomization. Median overall survival is the primary endpoint. An overview of this trial was presented as a poster at the ASCO 2025 annual meeting. This trial has been informed and supported by the encouraging data and observed durability we continue to see from our VERSATILE-002 trial.

The most recent data from this trial were also presented at the ASCO annual meeting and underscore our belief in the potential of the combination to be the first HPV16-targeted immunotherapy for head and neck cancer. Median overall survival remains steady at 30 months over the last one and a half years, suggesting durability of the PDS0101-induced clinical responses. The lower limit of the 95% confidence interval for median overall survival increased from 18.4 months in 2023 to 23.9 months as the data has matured. All data were reported according to RECIST version 1.1 criteria, requiring clinical responses on at least two consecutive tumor scans at least four weeks apart. Enrollment in the trial is complete. Twenty-two patients continue to be followed for survival. No new safety signals have emerged.

Considering the strength and durability of the clinical responses observed in our VERSATILE-002 Phase II study to date, we are confident in the potential of the combination of PDS0101 and pembrolizumab to significantly improve outcomes for patients with recurrent and/or metastatic HPV16-positive head and neck cancer. At ASCO, a third abstract was presented as a poster by Dr. David M. Rautman, MD, Assistant Professor of Radiation Oncology at the Mayo Clinic. This poster highlighted results of the MC-200710 study investigating PDS0101 alone or with pembrolizumab as neoadjuvant treatment prior to surgery or radiation therapy for locally advanced HPV16-positive oropharyngeal cancer. In the prospective Phase II trial, newly diagnosed patients were administered two cycles of PDS0101 alone or in combination with pembrolizumab before surgical resection or chemoradiotherapy. Results showed that clinical activity was seen with only two cycles of PDS0101 alone and also with two cycles of Versamune HPV with pembrolizumab.

70% of patients who received two cycles of PDS0101 alone had clinical responses with stable disease, and 100% of patients who received two cycles of PDS0101 with pembrolizumab had stable disease or partial response. The combination of PDS0101 and pembrolizumab met the trial's primary endpoint of 50% reduction in circulating tumor DNA response. The biomarker ctDNA is measured as part of the protocol of our VERSATILE-003 Phase III trial. Elsewhere in our pipeline, we announced that the colorectal cancer cohort of the Phase II clinical trial with PDS01ADC met the criteria for expansion to Stage II following positive Stage I results. This trial is being led by the National Cancer Institute. In the metastatic colorectal cancer cohort of the study, a promising response rate of at least six out of nine confirmed objective responses by RECIST version 1.1 criteria was observed.

These encouraging results triggered enrollment expansion into Stage II under the Simon II Stage design of the trial. Colorectal cancer is among the most deadly and difficult to treat cancers. In 2020, it was estimated that more than 930,000 deaths were due to colorectal cancer worldwide, according to the World Health Organization, and more effective treatments are desperately needed. This novel investigational approach to the targeting and use of our antibody-fused IL-12 results in little or no systemic exposure to IL-12 and may allow patients to reap the benefits of cytokine therapy without the typical treatment-limiting toxicities. We are delighted that the NCI has achieved this milestone, and we anticipate completion of patient recruitment for the metastatic colorectal cancer cohort of the study by the fourth quarter of 2025.

Finally, during our second quarter, we also announced that preclinical efficacy and immune response data in mice and ferrets with a novel infect-immune-based universal flu vaccine were featured in two presentations on universal influenza vaccine, including an oral symposium at the American Association of Immunologists' Immunology 2025 annual meeting. These studies were funded by and performed by investigators at the National Institute of Allergy and Infectious Diseases Center for influenza vaccine research for high-risk populations. Our Phase II clinical collaborations with the National Cancer Institute, MD Anderson Cancer Center, and the Mayo Clinic, as well as our preclinical collaboration with the National Institute of Allergy and Infectious Diseases, allow us to focus our resources on our VERSATILE-003 Phase III clinical trial while progressing the development of our pipeline via these investigator-led studies.

Now I will turn it over to Lars for a review of our results for the second quarter of 2025. Lars.

Speaker 1

Thanks, Frank, and good morning, everyone. To brief you on our second quarter financial results, we reported a net loss of approximately $9.4 million or $0.21 per basic and diluted share for the three months ended June 30, 2025, which compared to $8.3 million or $0.23 per share for the three months ended June 30, 2024. The increase in net loss was primarily due to higher net interest expenses, which were partially offset by lower personnel costs. Research and development expenses were $4.2 million for the three months ended June 30, 2025, compared to $4.5 million for the three months ended June 30, 2024. The decrease was primarily due to lower personnel costs, which were partially offset by higher manufacturing costs. General administrative expenses were $3.4 million for the three months ended June 30, 2025, compared to $4.2 million for the same period last year.

The decrease was primarily due to lower personnel costs and lower professional fees. Total operating expenses were $7.6 million for the three months ended June 30, compared to $8.7 million for the same period last year. Net interest expenses were $1.8 million for the three months ended June 30, 2025, compared to $0.5 million for the three months ended June 30, 2024. This increase was primarily due to debt repayment costs. Our cash balance as of June 30, 2025 was $31.9 million compared to $41.7 million as of December 31, 2024. With that, operator, we can open the call to questions.

Speaker 3

Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Mayank Mamtani with B. Riley Securities. Please proceed.

Speaker 5

Yes, good morning. Thanks for taking our questions and congrats on the progress. Regarding the VERSATILE-002 ASCO data presented, I wonder what is the plan for follow-up from that? I believe 22 patients you said are being followed for survival. When might we see you report or even publish final results? I guess the important question is how is the data dissemination helping drive enrollment in VERSATILE-003? I have a couple of follow-ups.

Speaker 2

Mayank, thanks a lot for your question. The VERSATILE-002 trial, as you mentioned, is still in progress. We anticipate that once the final patient gets their final dose of the treatment, meaning, as you know, these patients continue on pembrolizumab for a substantial period of time. Once the final patient gets their final treatment on the trial, we anticipate that the trial will be closed at that point. As we have stated in our projections, we do anticipate that the final data readout will be presented or published sometime before the end of this calendar year or very early next year, pending how long it takes for review and all the usual things that occur with a peer-reviewed publication.

We do anticipate that most likely the total data package, including ORR, PFS, safety, all inclusive, will be disseminated most likely through a peer-reviewed publication later this year or very early next year. You talked about enrollment. I'll let Kirk chime in. As you know, one of the key benefits of this approach to date has been the tolerability, ease of administration, and of course, the very promising median overall survival. If you've listened to all our KOL events, the one key thing that the oncologists keep bringing up is they need something that's going to allow their patients to live long-term without providing significant toxicity. Quality of life and prolonged survival is one of the critical things that all oncologists are looking for.

That's one of the key benefits we have seen from this combination throughout the VERSATILE-002 trial and what keeps on coming up: the durability of the responses that these patients are seeing, the tolerability of the drug, the ease of administration. It's a simple subcutaneous injection, and most importantly, survival. Those are key things that oncologists are looking for. I'll hand over to Kirk because he has been dealing more directly with oncologists and the investigators. Kirk, anything you'd like to add?

Speaker 4

Yeah, thank you, Frank. We've been very encouraged by the response of our investigators to go forth with the study, which began in March of this year, the VERSATILE-003 study. The sites have been very encouraged by the results, of course, with a 30-month median overall survival, as well as Frank mentioned, the tolerability of this therapy. We have had a lot of feedback from the sites, particularly around the fact that many of these sites were participating in the Phase II study. They have signed on, which we're very encouraged by. It's given us a nice core of sites to begin site accrual, and we're right on schedule as far as getting the number of sites that we'll need to do the study. Very encouraged.

People are understanding the importance of the specificity of HPV16-positive therapy and are reacting to that in that they are signing up for the study.

Speaker 5

Thank you. Could you confirm, Kirk, if there is any other large-scale trial out there seeking patients with this comparable screening criteria? Lastly, it would be great to also hear an update on the Mayo Clinic Window of Opportunity trial progress that obviously allows us to compare versus the KEYNOTE 689 neoadjuvant trial, which obviously focuses on the HPV negative. I recognize you guys are obviously focused on the HPV16-positive in that earlier line study. Thanks again for taking our questions.

Speaker 4

Certainly. Your question about competing trials, there are less competing trials than we had maybe a year ago because of a couple of companies dropping off their trials. Also, remember the specificity of our trial for HPV16-positive. There's really only one other major trial with BioNTech who are also recruiting for their study. They are not as far as us. They are Phase II moving into Phase III. Even though we shouldn't compare results from Phase II studies, their median overall survival for the population so far reported is not as high as ours. We feel really good about the lack of competition now compared to what it was a year ago with the number of companies that are trying to be in this space. Your other question regarding the neoadjuvant therapy, the Mayo Clinic study, very important.

As you said, it's a window of opportunity for us that only with two cycles of PDS0101 that we saw responses both with and without pembrolizumab in the neoadjuvant treatment of squamous cell head and neck cancer. This is important as far as the future design of our studies. Mayo Clinic and others who were participating in the study remain excited about pursuing this in the near future. Just one note to add about the KEYNOTE 689. Please remember that the population they treated for this successful study does not really apply to our studies in HPV16-positive. These were patients that the requirement was that they undergo surgery. Most patients, if not all, are not treated with surgery in the stages that they treated. The trial 689 only had around 3% of the patients who were HPV positive. This really applies mostly to HPV negative patients and not HPV positive.

I hope I've answered your question.

Speaker 5

Yes, you did. Thank you, Kirk.

Speaker 2

Mayank, I'll add a little bit to what Kirk also just said. I think it's important to put that in perspective, right, in terms of the fact that we know today that the KEYNOTE 689 approach is addressing predominantly HPV negative patients. We know that the vast majority of head and neck cancer patients in the United States and Europe are going to be HPV16-positive, right? That window of opportunity trial was a really good insight to the potential of PDS0101 and PDS0101 plus pembrolizumab in addressing these locally advanced head and neck cancer patients. One of the key reasons why that was so attractive to Mayo Clinic, as we've mentioned, is the tolerability and ease of administration, right? When you get higher up or earlier in the treatment paradigm, safety becomes extremely important, right?

If you can replace chemotherapy with something a lot more tolerable and easy to administer, you have a significant potential advantage in that particular space. That was very important for the oncologists to get comfortable that with even just two doses, they could see a strong clinical response. For PDS0101 specifically, it was also very important because we had performed a monotherapy study in our Phase I clinical trial, but it was in presacral cancer, right? This was, again, an opportunity to look at PDS0101 as a monotherapy in an advanced cancer population, right? With just two doses, we saw good clinical responses in those patients, right? Again, really understanding the contribution of these agents, right, in terms of the combination and really moving this forward potentially. A really significant opportunity and also very enlightening in terms of the clinical responses that we saw with PDS0101 alone and the combination.

Speaker 5

Mr. Dodd, I'll pop back in the queue. Thank you, Frank.

Speaker 3

There are no further questions at this time. I would like to turn the call back over to Frank for closing remarks.

Speaker 2

Thank you, operator. In closing, we are very pleased to continue advancing our VERSATILE-003 registrational trial of PDS0101 in HPV16-positive head and neck cancer. VERSATILE-003, as we mentioned, is the first Phase III clinical trial focused specifically on 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 of PDS0101 in head and neck cancer. We look forward, as we discussed, to publishing the full dataset for the VERSATILE-002 trial later this year. Our engagement with multiple leading clinical investigators and oncology institutions has validated our approach and the long-term opportunity that we believe our HPV16-targeted immunotherapy represents in the HPV16-positive head and neck cancer indication. We look forward to keeping you updated on our progress. Thank you very much again.

Speaker 3

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.