GeoVax Labs, Inc. (GOVX) on Q1 2021 Results - Earnings Call Transcript
Operator: Good afternoon, and welcome everyone to the GeoVax First Quarter 2021 Conference Call. I am Debbie, with Chorus Call and will facilitate today's call. With me are David Dodd, Chairman and CEO; Mark Reynolds, Chief Financial Officer; and Mark Newman, Ph.D., Chief Scientific Officer. After today’s presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Jules Abraham of CORE IR, who will provide a forward-looking statement regarding this call and information herein.
Jules Abraham: Thank you, Debbie. Good afternoon, everyone. Please note the following certain statements in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors, including whether: GeoVax can develop and manufacture its vaccines with the desired characteristics in a timely manner, GeoVax's vaccines will be safe for human use, GeoVax's vaccines will effectively prevent targeted infections in humans, GeoVax's vaccines will receive regulatory approvals necessary to be licensed and marketed, GeoVax raises required capital to complete vaccine development, there is development of competitive products that may be more effective or easier to use than GeoVax's products, GeoVax will be able to enter into favorable manufacturing and distribution agreements and other factors, over which GeoVax has no control. GeoVax assumes no obligation to update these forward-looking statements and does not intended to do so. More information about these factors is contained in GeoVax's filings with the Securities and Exchange Commission, including those set forth risk factors in GeoVax's form 10-K. It is now my pleasure to introduce Chairman and CEO of GeoVax, David Dodd. David?
David Dodd: Thank you, Jules. Good afternoon and thank you for participating in the 2021 first quarter update call. We're pleased to have this opportunity to review and discuss our continued progress and accelerating our priority development programs towards clinical development and continuing to secure significant resources and support of GeoVax growth and development. During first quarter, we strengthened our cash position, while advancing towards important data milestones related to several of our programs. We remain focused on delivering meaningful results and value milestones over the next 12 months to 18 months, advancing our priority program related to COVID-19 and immuno-oncology, developing increased value for shareholders, stakeholders and public health worldwide. Increasingly variants of the SARS-CoV-2 are emerging presenting further pandemic threats to health worldwide. As a result, the NIH and SAFI have issued requests for proposals for pan coronas vaccine development projects, specifically, seeking to fund preventive vaccines able to provide broad and durable protection against coronaviruses specifically, SARS-CoV-2 and others with pandemic potential.
Mark Newman: Thank you, David. So, as we've noticed previously, the GeoVax vaccine approach is based on the use of modified Vaccinia Virus Ankara, denoted as MVA, as the vaccine delivery vector. MVA was developed as a smallpox vaccine for use in the elderly and immunocompromised individuals with a focus on increased safety. So, MVA will infect cells after infection, but it will not replicate itself. So, it is safe and ideally suited for use as a vaccine factor in the general population. The primary advantage MVA is the genetic coding capacity, which allows us to include genes for multiple virus proteins in a single vaccine, which is routinely encode viral proteins needed to support the formation of virus like particles within the vaccinated person as a means to accurately mimic the structure of the actual infectious viruses and to induce the correct immune responses being both antibodies and cellular immune responses and ideally this works with just a single dose. Experimental COVID vaccines are designed to take advantage of this MVA-VLP technology. They encode the S protein, which is the basis for all the first generation products in use today and the target of neutralizing antibodies. This is used in combination with the membrane and protein and the envelope e-protein. The E proteins provide the structural components required for the virus like or VLP formation in the body. They also serve as additional targets for the cellular immune responses. This design represents a first critical step towards a COVID vaccines that we expect to reduce broadly specific immune responses that are not significantly impacted by the variants that are arising as the S protein evolves within the population, this is character as I said, this is characterized primarily by S mutations in the S protein. We are working with this approach specifically to get ahead of the evolution of COVID rather than to chase the new variants with modifier vaccines, which is what is being -- which is commonly done now flu vaccines on a yearly basis.
Mark Reynolds: Thank you, Mark. So I'm going to start with financial review with our balance sheet since that really sets the stage for progress moving forward. Our cash balances at March 31st were $20.8 million, as compared to $9.9 million at December 31st. And we had working capital of $20.5 million, as compared to $9.4 million at the end of 2020. The increase in our cash balances is due primarily to the February overnight offering that David mentioned earlier. And that brought in net proceeds to us of $9.4 million, and in that offering it was a clean deal, we issued 1.6 million common shares at a price of $6.25, with no warrants, no other bells and whistles on that deal, straight common.
David Dodd: All right. Thank you, Mark. My colleagues and I will now answer your questions and therefore, turning the call over to Debbie from Chorus Call for instructions on the question-and-answer period.
Operator: We will now begin the question-and-answer session. The first question comes from Jason McCarthy with Maxim Group. Please go ahead.
Jason McCarthy: Hi, guys. Thanks for taking the questions. Looks like things are going very, very well. Can you talk a little bit about -- you had discussed “chasing variants”, quote unquote, with I'm assuming the mRNA vaccines that are spaced around the spike protein. But maybe you could talk a little bit more specifically about mRNA approaches? And really kind of the lack of T-Cell immunity for long-term immunity and why MVA gives you more broad T-Cell memory, maybe one shot and you're done with an MVA-based vaccine. We've seen that with smallpox. Can we see that with COVID? Can you discuss that a little bit?
David Dodd: Sure. Thank you, Jason. I’ll ask Mark Newman to discuss and he may also want to include some points relative to the Adenovirus. So Mark?
Mark Newman: Sure. So that's an extensive set of questions, obviously. Let me address the kind of the T-Cell immunity and the memory responses and things first. Yes, this is a smallpox vaccine. And it was designed, as we said, for safety, but also it's designed -- it was developed in its lost a lot of it’s what's called a Immune Evasion capabilities. So very potent vaccine and induces immune responses. Viruses always grow and evolve with the ability to evade the immune system somewhat and so because MVA has been growing in eggs, not its natural source, it has lost that. So that -- it's a very potent smallpox vaccine, as you said. And that also makes it a very potent vaccine vector because when we immunize a person, we're essentially immunizing him against smallpox, but that effect that immune response to smallpox actually boosts in a non-specific way, the COVID response or the anti-tumor response, whatever else you're including in the vector. So we're very high on the concept of using the vector and believe it really will add something different. Now, as far as chasing the variants, I think we've all heard that the mRNA products, people are already queuing up the next variant or the next seasonal variant, just like you would see with flu. What is circulating now is different than what was circulating six months ago. And we're trying to predict what will be the dominant variant circulating again in six months and that's these will be the booster immunizations that we're hearing about. What we're trying to do here is to induce immune responses to non or less variable parts of the virus. And these are structural and non-structural proteins in the virus. They're the things that make coronavirus, a coronavirus, whether it's a cold coronavirus or an animal coronavirus. These things are more conserved because they are coronavirus specific. So if you can induce responses to this, we're expecting to see a lot less variation within the population, a lot less evolution in the population, because the virus can change these, if it starts changing these structural proteins then it becomes a non-coronavirus, which means it won't be -- will lose replicative capacity, will not grow well or not infect well. So that's the logic. It's not just designed to target the binding factor or the infection factor, which is the S protein, but to target these more structurally conserved products, and induce cellular immune responses against parts of the virus that can't be changed. And that's a long answer. I hope that covers it.
Jason McCarthy: That covers it as well. And then can you talk a little bit about some of the other programs around here. Hemorrhagic fever viruses like Ebola or Lassa. Those programs have been, “quietly active”, but are very much could emerge as drivers for this company. And again, you know, on that MVA kind of backbone approach, the government that funds these types of programs has experience in stockpiling smallpox vaccine with MVA, right. So are you guys looked at as a go to for them, possibly for these types of hemorrhagic viruses?
Mark Newman: Will let David answer that one.
David Dodd: Sure. Thank you. Jason, we recognize the value of being in the government's stockpile program, specifically the biodefense stockpile program, of which the hemorrhagic fevers are at the top of the list. I mean, they have fatality rates of 50 to 90%. And we should always point out, we shut down the world for virus as fatality of one that the little over 2% like so. So these are very deadly viruses, they are recognized as potential weaponized infectious threats. We know that there are people trying to develop those in other parts, other nations, unfriendly nations. When we look at the value of the stockpile programs, when we look at the smallpox value, it was 10 year deal for $2 billion dollars initial funds, the first payment was $177 million. So the very lucrative high margin frankly because you have no marketing, commercialization calls for doing it, they are very important. And because we already have the Ebola completed where we demonstrated 100% protection in a single dose without any edge of effective approved product for Merck requires multiple doses. So with that and with the data we have already shown and now that they are in the testing through non-human primates, we are we are, as you might expect, we're in discussions with federal government authorities, they actually reached out to us about it to discuss with us the opportunity and their interest, depending obviously, depending on the results that as we see going forward. I would just say that the cause of the discussion we've had, it's not so much of a prediction, but based on the discussions we've had and what we've seen thus far. Our anticipation is that should the data for the loss of Marburg, Sudan similarly be as strong as we saw with Ebola, we would expect to be funded through in the clinical development and for that leading into the vegans as part of the stockpile program again through a non-dilutive manner. So a very, very strong opportunity, but again, does not require any resources on our part at this stage. We've developed the vaccines. They're being tested on our behalf right now, backcrossing straining any funds for our for ourselves or our shareholders. So we're quite interested in this area.
Jason McCarthy: Do you guys have any comments on this discussion that Biden -- Joe Biden is having about patent protections around coronavirus vaccines and backing some of those maybe waiving patent protections? Is that -- if you have any thoughts on that, or is it potentially impacting GeoVax as you look to move forward with your COVID vaccine?
David Dodd: Well, I don't know that we do have comments, I actually spoke on a on a television interview yet today about this. Our opinion is reflected in the statement in the letter from bio, the President Biden that was delivered I believe yesterday. And that is that we think it's not a good idea. We think it has the potential for inhibiting, obviously, innovation and risk taking. We believe, we all to allow the markets to operate, companies to operate, if you -- we don't think it's necessarily related to COVID, because companies have made it very clear that they are going to ensure that there is full coverage throughout the world. Now, there are certain technologies out there, that make that more difficult to deliver on, but that's where were our types of technologies come in. And I would say that there's full assurance certainly on my part as a member of bios vaccine task force and their Advisory Committee related specifically to COVID et cetera, that there would be no problem access and distribution, that the biggest challenge will be the performance or the requirements of various vaccines to be able to be distributed to various populations in certain parts of the world. But that's why we need more than just simply one technology out there.
Jason McCarthy: Okay. Last question. And I don't know if I missed it on the immuno oncology side. The MUC1 antigen program with the University of Pittsburgh, I believe, when is that expected to move into the clinic? And if so, would it be in combination with some checkpoint, either PD one or PDL One, or would it be model therapy in a kind of a basket study of advanced cancers.
David Dodd: So, the start of the trial will be pretty much dictated by the manufacturing schedule. And that's what we're working on now. But sometime, mid next year, mid, late next year is what we're looking at, end of second quarter, early third. We know it will not be a monotherapy study. It's just not ethical to move into patients with – and avoid standard of care. So the way this would be done is that patients would receive whatever their normal treatment is. And then during a post, we'll say do surgery, do radiation and chemo, then afterwards you could then enter a trial where you would be received something like KEYTRUDA or Opdivo, the checkpoint inhibitor, that would be a commercial product that would be indicated to the patient anyway, and then we will add the vaccine to it. So in the immunotherapy world for cancer vaccines, it's – this is an add on, we're looking to add on to standard of care. I can't imagine a situation where we'll see standalone vaccines that will replace standard of care in cancer treatment.
Jason McCarthy: Great. Thank you guys for taking all the questions.
David Dodd: You’re welcome.
Operator: The next question comes from Kumar Raja with Brookline Capital Markets. Please go ahead.
Kumar Raja: Hi, thanks for taking my questions. And first with regard to the virus like particles, how long does this last in the body? And how does that impact the durability of response? And second, in terms of the viral antigen, is there any difference between where these genes are positioned and how much expression you get from these?
David Dodd: Yeah, so as far as the virus like particle, to be perfectly honest, we don't know how long they last, I don't anticipate a long time, because they look like a virus. And if you look at the COVID virus like particle, it has an S protein on it. So it's going to bind to the S2 receptor and we won't actually mediate and infection or anything, but these aren't something that are going to circulate a long time. They will be recognized by the immune system and rapidly phagocytosis and cleared from the system or be binding to tissues through normal receptor mechanisms and then be cleared. But inducing immune response is that something where you require a long exposure to the antigen necessarily, a lot of your peptide dendritic, pulse dendritic cells and things. Those peptides are on the dendritic cell for a matter of seconds before they're degraded. So it's getting the signal, getting the correct cells, the signals to the cells to induce the immune response. So, where the virus like particle adds to the benefit is that it mimics a virus in terms of structure. It's not a soluble protein. It's not just nothing that floats around and we hope it gets where it needs to be. But this looks and behaves like a virus in terms of its overall three dimensional structure. It's just not infectious, and it won't replicate. So this is designed to really induce the most – most authentic type of immune response, something you would see it in natural infection. And it's going to give you the virus target in a more concentrated form because it's a particulate. And then I didn't follow your second question.
Kumar Raja: Yes, it was with regard to the open reading frame, where these different genes are inserted, whether that makes a difference in terms of expression of these antigens.
David Dodd: Okay, sure. So, the MDA read the old literature, there's -- what's called six natural or existing deletion sites. And these are genes that vaccine has that were lost when it was replicated in the eggs. And so this is what attenuated the virus. So, the classic thing to look at is one of these six naturally occurring sites, but within these sites -- and you could pick and choose, we have our favorite, of course, but you can pick and choose whatever site you want, or what is free in terms of IP. Within the sites, you can use different promoters and you can neither use medium or strong or not so strong promoters. And you actually will vary the combinations of promoters and things, especially if you're trying to form virus like particle, because we want to form the structure, or we want the structural proteins to be produced at the correct ratios to each other, so that you get the formation of that virus like particle. You can override it by having too much of one and not enough of another. So, that's a trial-and-error type of process, but there's a lot of flexibility within the system in terms of the promoters, and then also multiple places to insert -- put your inserts into the MVA.
Kumar Raja: Okay, great. Thanks.
Operator: Our next question comes from Jeffrey Kraws with Crystal Research. Please go ahead.
Jeffrey Kraws: Thank you. David, several of the questions were answered, but as a focal point and then a couple of follow-ups. There's so much attention being spent on COVID and COVID-19 and, as you mentioned, talking about the patents and the government not desiring to enforce the patents, so they can get more dosages out there, which I concur with you would be a big mistake, because it does stymie innovation. A couple things are missed. And one of the things is the virus has a lot of variants and everybody's so focused on this, but the reality is with a 99.875, or wherever it is now, survival rate, the other diseases that you're going after, whether you're talking about Ebola or any of the other ones have much higher death rates for the people who are infected. So, are you finding the government's response? You touched on it a little bit, but what's everyone just focused on COVID, are you finding the government's response in the other countries to still be significant and then having a very high interest because, you know, as far as death rates go, those other problems are actually having a much higher death rate for them right now and a lot of that has to do with undeveloped countries. That’s first thing. The second thing is and it was touched on, I think, by Mark a couple times and it was answered the questions, but, you know, I think the key is with the VLPs mimicking the viruses in training your body's immune system to recognize the virus and you having that advantage, even, you know, even if you do have to get a couple injections, since this is going to have a variant, your big advantages, you avoid the purification issues associated with the in-vitro production of VLPs and the fact that once your platform is established, you should be able to have that body's immune system trained to recognize and kill those infected cells and control the infection, reducing the duration, I think, much quicker than some of these other vaccines that are having a lot of issues associated with them. So, you can touch on those two.
David Dodd: Sure. Thank you. Thank you, Jeff and thanks for your answers. I'll just say that clearly over the last year, there's been for a good period of time everything became COVID focus, SARS-CoV-2 focus. So no matter what you might -- what other -- and you're right, the survival rate is so strong here, and especially if people are under 70, that you scratch your head. But again threat is a threat, and we want people to be healthy. And so we've had a major focus, and it did become very distracting regarding areas of focus within the federal government. We saw certain programs that were either slowed down or placed on hold. And so that occurred in a number of areas, and resources were allocated increasingly towards the whole COVID-19, not just in vaccine development, but many different areas. And yet, in other parts of the world, there are much greater needs from infectious threats, certainly in the Southern Hemisphere, the Flaviviruses Zika, dengue, chikungunya, specially Zika continues to be a major threat. We have been in discussions, they are concluded -- they are close to concluding, but they are ongoing. But we're in discussions with potential partners in the Southern Hemisphere related to the Zika virus specifically, because we've previously demonstrated 100% protection on the single dose and animal testing of the Zika virus vaccine with no risk of antibody dependent enhancement or ADE, which is a big issue with other vaccine candidates that have been developed. So we think those discussions may continue to proceed, because throughout South America and parts of Africa, those diseases are of paramount importance. Certainly the hemorrhagic fevers with the fatality rates are high. And that's -- and we think that -- with the results, we have the announcements we made about the funding, we announced all this since last August about the funding of progression towards animal, a non-human primate testing. And then we were contacted by the federal government, the people in-charge of the stockpile program to open discussions with us, right around year end of 2020. So we think these things are sort of settling back down, and there's recognition, not that there's been overkill, because nobody believes, I don't think any of us believe that. But that there are these other threats that are major threats, and we need to be addressing for different reasons. So we think that's where our portfolio comes in very well. Now with the MBA, I'll just say that we have recognized as others have, the MBA has always been saddled with a reputation or an acknowledgement that its manufacturing yield and productivity was not there that we might see with other technologies. So if you have an epidemic or pandemic, and you need to produce hundreds of millions, if not billions of doses, then it was hard to have someone get interested in MBA, because what we could demonstrate was excellent data in certain animal models. But the question would be, can you scale up in a manufacturing environment at the rate that we need to within a certain time frame. And rather than wringing our hands about this, as Mark Newman mentioned, with the financing, we've done with the resources we have today. We have focused and we've gone headstrong into that. So we are evaluating the three continuous cell lines in our candidates, and we'll come out with a selection of one and at the same time, we will be selecting a contract development manufacturing operation. So CDMO partner, they’ll be our long-term strategic partner for manufacturer. So we're right into that -- in the middle of that right now, as we said, doing the feasibility work behind the cell lines and evaluating the other elements of that. So that's what we've been able to move forward. Our goal is to be able to demonstrate that we have the manufacturing capability and resources to be able to deliver on epidemics and pandemics proportions, rather than just wishing there was another way of doing it and utilizing the MBA. We believe strongly that the MBA opportunity as Mark Newman has laid out, give certain and carry certain advantages over some of these other technologies. But we have to have it to be able to translate, so that we can get the quantity of products and be able to ship that product to wherever it needs to be shipped, and hopefully in a single dose so that we aren't losing people, which we know happens even with COVID-19 vaccines, not all people going back. So we don't want that to happen.
Jeffrey Kraws: Perfect. I agree. Thank you.
David Dodd: You're welcome,
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to David Dodd for any closing remarks.
David Dodd: Sure. And thank you, and I think you can tell in responding those questions, we get rather passionate about our beliefs in this. So we will look forward to keeping you up to date. But thank you for your continued and supportive interest in our progress and – in fact our transformation of GeoVax. We have several near-term data milestone, which we look forward to updating you. We remain focused on developing a highly valuable company, contributing to improve health options against various infectious, threats and cancers. We anticipate issuing updates regarding the near-term data milestones, we continue to progress with our developer program. We're never satisfied with the pace of the timing of results. We're always anxious and wanting to get them faster and faster. But we have to wait for results of animal results and then be able to move it forward and have discussions. But thank you for your continued support and our commitment to these goals. And as always, I certainly want to underscore and acknowledge and thank our GeoVax staff and the many other parties that continued support, assist and advisors towards achieving success. For all of us, it is truly a great pleasure serving our shareholders and being part of this team. Have a safe and enjoyable afternoon, evening. We'll talk to you next quarter. Thank you.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
