Imunon, Inc. (IMNN) Q2 2023 Earnings Report, Transcript and Summary

Good morning. My name is Alan, and I will be your operator today. At this time I would like to welcome you to Imunon's Second Quarter 2023 Financial Results Conference Call. [Operator Instructions]. I would like now to turn the call over to Kim Golodetz. Please go ahead.

Thank you and good morning everyone. This is Kim Golodetz with LHA. Welcome to Imunon's 2023 second quarter financial results and business update conference call. During today's call, management will be making forward-looking statements regarding Imunon's expectations and projections about future events. In general, forward-looking statements can be identified by words such as expect, anticipates, believes or other similar expressions. These statements are based on current expectations and are subject to a number of risks and uncertainties, including those set forth in the company's periodic filings with the Securities and Exchange Commission. No forward-looking statements can be guaranteed, and actual results may differ materially from such statements. I also caution that the content of this conference call is accurate only as of the date of the live broadcast, August 10, 2023. Imunon undertakes no obligation to revise or update comments made during this call except as required by law. With that said, I would like to turn the call over to Dr. Corinne Le Goff, Imunon's President and Chief Executive Officer. Corinne.

Thank you, Kim. And good morning, everyone. Today, joining me is Jeffrey Church, our Chief Financial Officer. In addition, Dr. Khursheed Anwer, our Chief Science Officer will be available during the Q&A session at the end of our prepared remarks. As I have discussed during previous calls, Imunon's growth and development is dependent on four pillars. The one I'd like to spend most of our time on today is the development of our PlaCCine prophylactic vaccines modality as an out licensing and partnership opportunity. PlaCCine is our proprietary mono-or multi-cistronic non-viral and synthetic DNA technology for the expression of pathogen antigens. It is currently being evaluated in preclinical studies for the development of next-generation vaccines. We have made exceptional progress advancing this technology as a Prophylactic Vaccines modality with important features, both as a commercial product platform and as a potential solution to addressing the next pathogens of interest. I will review some of our most recent preclinical data with PlaCCine, which suggests this asset has been derisked and is performing as we anticipated. During the quarter, Dr. Anwer presented results from preclinical studies in a PlaCCine COVID-19 vaccine at the Vaccine Technology Summit Conference and 2023 Virus and Cells Gordon Research Conference in Barcelona that demonstrated characteristics that address the limitations of current commercial vaccines by offering enhanced breadth of protection to emerging variants, persistence and robust cellular immunity, as well as stability at workable temperatures. Importantly, humoral immune responses specific to the SARS-CoV-2 spike antigen were persistent over a 14-month post-vaccination period, while the T-cell responses from PlaCCine COVID-19 vaccines after 14 months were higher than a commercial mRNA vaccine. In another mouse study, the humoral response to a single dose of a commercial mRNA vaccine plateaued within 14 days after vaccination while the response continued to increase over time with a PlaCCine vaccine, demonstrating improved durability. We believe that our DNA Tested Vaccine will provide greater protection against, reinfection, hospitalization or death. More recently, we have shown that PlaCCine is stable for at least 12 months at refrigerated temperatures, and for at least 1 month at room temperature. I can't emphasize enough how important these attributes are to a commercial vaccine product. Especially as many new pathogens may arise in geographies where there are challenges with refrigeration storage and distribution networks. In addition, our ability to rapidly switch out antigens and load [ph] multiple antigens into the same vaccine should be instrumental in addressing the spread of disease. Beyond the development of a next-generation COVID-19 booster vaccine which I will come back to in a minute, we at Imunon are interested in developing the PlaCCine modality across many pathogens of interest, like [inaudible] viruses or Arenaviruses viruses, where a data-based approach may be beneficial. Today, the U.S. and global public health policy and commercial vaccine manufacturers continue to play catch up with the reoccurrence of existing infectious disease spread and new emerging pathogens. Haemorrhagic fever, which are posed by viruses like Lassa, Marburg or Ebola are prime examples and are among the most serious threat stress to public health, both in the endemic regions of West Africa and worldwide due to high mobility and mortality rates, and these viruses cause lethal haemorrhagic fevers in several cases and are classified at risk such that need to be handled in biosafety level 4 facilities. And there are also potential biodefense spreads which is used as biological weapons against civilians. So, let's now turn to IMNN-001, our first Sanofi vaccine designed as the next-generation COVID-19 booster. All the pre-clinical studies in mice and NHPs have supported the development of pre-IND application that we submitted earlier this year to the FDA. We have just received the written response from the FDA. And I am pleased to tell you that the FDA provided encouraging feedback on our data and clinical development plan. Which gives us comfort that we are well on track to submit an IND in the first quarter of 2024 and enter the clinic soon thereafter. The IND will be for a proposed Phase I/II program, which is designed to provide proof of principle in humans. The FDA also confirmed that the plug-and-play strategy for our platform was acceptable. So this confirms the flexibility and the versatility of our modality, which allows for the rapid production and department of any vaccine by simply changing the antigen coding cassette. IMNN-101 is a Moderna COVID-19 vaccine candidate of the Omicron XBB1.5 variant as per the FDA recommendation. You remember that the FDA VRBPAC, the Vaccines and Related Biological Products Advisory Committee met on June 15 this year to discuss and make recommendations for SARS-Cov-2 strains for updated COVID-19 vaccine for use in the United States beginning in the fall of 2023. For the plug-and-play model, using the Plasmid DNA backbone, has shown excellent results, not only in COVID-19 strength, but our early work also suggests a PlaCCine vaccine could be useful in monkeypox know also as Mpox, Initial data appear to confirm the validity of PlaCCine as a platform with broad applicability. Mice immunized at the 0 and 14 with an Mpox vaccine initiated three separate hematological responses associated with the virus. And we also have generated immunological responses against flu and arenaviruses in preclinical work. Last quarter, I mentioned that we are developing two more modalities as a logical expansion of our prophylactic vaccine modality. FixPlas concerns the application of our DNA technology to produce universal cancer vaccines, also called tumor-associated antigen cancer vaccines. We have initiated preclinical work to develop a Trp2 and [inaudible] tumor-associated antigen cancer vaccine in melanoma, which we call IMNN-201. This new modality is based on antigen selection and optimization along with the option to include a potent immune modifier on a single nucleic acid factor. This represents a promising strategy to induce a specific and long-lasting immune response against tumor antigens. We have completed our initial proof of concept study, working in announced __ model, to potential cost selecting benefits, multivalent trip II bivalent trip II NY-ESO-1 vaccines. We are very happy with the results as the fixed class vaccination, followed by a tumor challenge, delayed the tumor growth and improved survival. Now the therapeutic studies evaluating the strategic benefits of our vaccines and consisting of a tumor challenge followed by the vaccination are ongoing and will be completed in the second half of the year. And we are also in early discovery of our fourth modality IndiPlas for personalized neo-antigen cancer vaccines. I'd like now to touch on IMNN-001, our DNA-based immunotherapy for the localized treatment of advanced ovarian cancer currently in Phase II development. Recall that last September, we reached full enrollment of 110 patients, and we expect to report an additional set of interim, more mature data in the second half of 2023. Enrollment with our study with Break Through Cancer is now open at MD Anderson, and the Break Through Cancer Foundation is working to add more sites. This study, as you remember, is looking at IMNN-001 in combination with AVASTIN. As part of our strategy to reduce reliance on outsourced manufacturers, in June we unveiled our new CGMP clinical materials production facility on the Hudfeild Alabama Campus of the HudsonAlpha Institute of Biotechnology. The facility will support R&D efficiencies and lower development costs for infectious disease and cancer vaccines and non-viral data-based immuno-oncology therapies. This new capability complements our existing CGMP quality control facility for testing clinical products at the Hudsfeild site. We have designed and built our own manufacturing capabilities to produce GMP-grade plasmid DNA and DNA facilitating agents to support Phase I/II studies with our PLACCINE infectious disease modality and our IndiPlas and FixPlas cancer vaccine modalities. The PLACCINE DNA and DNA activating agents are key components of the final vaccine formulation with JMP fill-and-finish carried out at a CDMO partner site. Our scientist can now select any protein from the human or pathogen proteoms to be engineered. Our existing labs also have the ability to conduct testing and run experiments in a variety of animal disease models. These internal capabilities will allow us to control both, the cost and the process. I will turn the call over to Jeff Church now, who will discuss our financial results. Then I'll come back and provide a review of upcoming milestones and activities. Jeff.

Thank you, Corinne. Details of Imunon's second quarter 2023 financial results are included in the press release we issued this morning and in our Form 10-Q, which we filed today before the market opened. Imunon ended the second quarter with $24.1 million in cash, investments and accrued interest receivable. Our cash or net cash usage for operating activities was $6.8 million in the second quarter of 2023, up from $5.4 million from the prior year period. The increase was primarily due to the cash settlement in April 2023, along with related legal costs for arbitration with a former contract manufacturer for ThermoDox. Cash used by financing activities of $6.2 million during the second quarter of 2023 resulted from the early repayment of the company's loan facility with Silicon Valley Bank. This was offset by equity sales under at-the-market equity facility. Combined with the $1.8 million in planned future sales of Imunon State of New Jersey net operating losses, we believe we have sufficient capital resources to fund the company's operation through 2024. Let me now turn to a review of our financial results. Imunon reported a net loss for the second quarter of 2023 of $5.6 million or $0.61 per share. This compares with a net loss of $6 million or $0.87 per share in the second quarter of 2022. Operating expenses were $5.5 million in the second quarter of 2023. It was down about 10% from the 6.1% that we reported in the second quarter of 2022. Let me break down each one of these line items. Research and development expenses were $3.1 million in the second quarter of 2023, a decrease of about $100,000 from the prior year second quarter. More specifically, research and development costs associated with our PLACCINE DNA vaccine modality increased to $1.3 million from $600,000 a year ago. R&D costs support the OVATION study as well as the Phase III OPTIMA program decreased to $2.3 million from $0.8 million in the second quarter of 2022. R&D costs associated with the preclinical development of IMNN-001 decreased to $0.4 million in the second quarter compared to $0.8 million in the same period of 2022. Other clinical and regulatory costs were $0.4 million this year compared to $0.7 million in the prior year. CMC or manufacturing costs increased $0.7 million this year from $0.3 million, reflecting the development of the in-house pilot manufacturing capability, which Corinne referred to earlier for DNA plasmids and nanoparticle delivery systems. General and administrative expenses were $2.3 million in the second quarter of 2023, compared to $2.9 million for the comparable prior year period. This decrease was primarily attributable to lower non-cash stock compensation and lower professional fees, including legal fees, offset by higher compensation expenses related to the CEO succession plan, which we announced in mid-2022. Other non-operating expenses were $85,000 in the second quarter of 2023. That compared to $65,000 in the prior year period. The company incurred an early debt extinguishment expense of $300,000 on its loan facility with Silicon Valley Bank, which was offset by higher investment income from short-term investments due to the higher returns we're seeing on these investments. Recall that in April 2023, we repaid the loan to First Citizens Bank, which is previously Silicon Valley Bank for a total of $6.4 million, which included principal interest, prepayment fees and end-of-term fees. The $6 million collateral account, which we classified as restricted cash was released and utilized to pay off the loan. Investment income from the company's short-term investments increased by $300,000 for the second quarter compared to the prior year due to higher returns on these investments. Let me take just a brief look at the first half of the year, both first and second quarter. For the six months ended, we reported a net loss of $11.2 million. That compares to $16.5 million in the same period of 2022. Operating expenses were $11.2 million in the first quarter of 2023 – I'm sorry, the first half of 2023 which was an 8% decrease from the 12.1% that we reported in the same period last year. Net cash used for operating activities was $10.8 million for the first six months of 2023 compared to $13.4 million for the same period in 2022. This decrease was primarily related to a one-time payment of $4.5 million in interest expense and related costs, resulting from the sale and subsequent redemption of $30 million of Series A & B convertible redeemable preferred stocks in the year ago period. Cash used by the financing activities of $3.7 million during the first six months of 2023 resulted from, as I mentioned earlier, the earlier repayment of our loan facility with Silicon Valley Bank, offset by $2.7 million of sales of equity under our at-the-market facility. We also received net proceeds of $1.4 million from the sale of unused New Jersey net operating losses in the first quarter 2023. Our projected cash utilization for the balance of 2023 is approximately $4.5 million per quarter. The majority of expenses are related to the development of our PLACCINE Modality. We will now turn the call back over to Corinne.

Thank you, Jeff. Imunon is tightly focused on harnessing the power of being a system by developing novel DNA-based approaches in immuno-oncology and infectious diseases. We believe that the non-viral DNA will be a key driver of the future of global medicines. We are very excited about the potential at Imunon, to improve the health of millions if not billions of people, while creating significant value for our shareholders. Along our achievements, we have de-risk PLACCINE Modality across several pathogens of interest by demonstrating the immunogenicity and safety of our vaccines. We have generated compelling data in SARS-CoV-2 and IMNN-101, the next-generation COVID-19 signal booster will be in the clinic in Q1 next year. We also have generated excellent immunological response for vaccines against pathogen of concerns, especially Monkeypox, arenaviruses, [inaudible]. We unveiled a state-of-the-art manufacturing site in Hansfield to reduce our compliance on others. We entered into collaborations designed to advance our technology, and we are actively building capabilities for the development of cancer vaccine. Looking forward, we expect to reach several value-creating milestones over the next six to 18 months. Some of them are recording additional interim data on IMNN-001 for vision study and the combination study with bevacizumab in advanced ovarian cancer, and reporting top line data from the OVATION 2 study, starting also the IND for our SARS-CoV-2 vaccine and announcing proof-of-concept vaccine data as well for another virus program. We are very excited to tell you about our programs in more detail in an R&D Day that we plan to hold this fall. We will have several leaders discussing our work during this vital program. So please keep an eye out for more details in the coming weeks. With that, I open up the call to your questions. Operator.

We will now begin the question-and-answer session [Operator Instructions] Our first question comes from Emily Bodnar of HC Wainwright.

Hi, thanks for taking the question. I guess two on the COVID program. First, can you touch on the remaining steps and studies that you might need before you could submit the IND in the first quarter? And then, do you plan to have the Phase I/II study just be in general healthy volunteers or do you think you might focus development on either like elderly or immunocompromised patients? And then just clarifying time lines for OVATION 2. I think you previously talked about interim data in the third quarter. Is that still happening? And then is top line data supposed to be still on track for the first half of next year? Thank you.

Thank you, Emily. I'll start with the time lines on Ovation. Yes, so I confirm that we should have additional interim data in the third quarter. And for the top lines, we are still planning on having the top lines at the end of this second quarter 2024. To your question on COVID. So I'll ask Dr. Khursheed Anwer to complete my answers. Yes, so we'll be ready to submit our IND in the first quarter. What we are working on at the moment is the production of the clinical vector. We – so we have pretty much set and very much on track for the submission of IND. And when it comes to the Phase I/II trial design, we'll be looking at generally healthy volunteers. I think your question on looking at immunocompromised patients actually is an interesting one or model patients. That's something that we actually will address with our advisers. That could be a subsequent study. Khursheed, do you want to add to what I just said?

Yes, sure. I think you've covered it well. Emily, at least two sets of studies that are IND-enabling are currently in progress. One is to look at the safety of in animals. So that safety study is kind of due to start soon and bio-distribution study, the plans made, and the delivery system goes and how long it takes to clear. So those are the two fundamental IND-enabling studies that will complete the submission of the IND. And as Corinne said, Phase I study will be healthy volunteer, because clearly for Phase II part, we could look into some stratification. As Corinne said, maybe some elderly with morbidity, but discussion with our [audio gap].

Okay, great. That’s very helpful. Thank you.

Our next question comes from David Bautz from Zacks. Go ahead.

Hey, good morning everyone. Thanks for taking the questions. First ones on the PlaCCine technology. Do we have any idea right now about how long the antigen is going to be expressed in someone who gets immunized with PlaCCine? Are we talking days or weeks or months? Do you have any clue right now?

Hi David. Yes, we certainly do. Khursheed, can you please answer the question?

Yes. Yes, of course. Well David, compared to mRNA or put the DNA pays for longer period time, especially in [inaudible]. So with other genes, such as reporter gene, we have seen expression for several weeks. So I anticipate the question of the [inaudible] last several weeks after a single injection or even months.

Is there any concern about tolerance development or even an allergic reaction with such long expression of the antigen?

The levels of the antigen are not high or super max to be able to cause any intolerance issue. That generally happens if you have an antigen of protein bolus given over time, supraphysiological levels, then you see intolerance. So these are levels that are enough to initiate immune responses. I don't anticipate intolerance, but again, we haven't specifically looked for that.

What I’d like to add as well, David, is we believe that the increased expression of the antigen or longer expression of the antigen is in fact a benefit, because it gives time to your immune system to build memory cells, right, and that's maybe the concern, a little bit with the RNA but you know memory cells are not too much present.

Okay, that sounds good. And then as far as the Phase I study goes, I guess how do you determine what variant you're going to target for that? And then can you change which variant you target, between going from say the Phase I to the Phase II?

That's a good question. So, you know I mentioned that the FDA every year will tell manufacturers which variant to go after. So they are going to use the same principle as they do for the flu vaccines, right. So they met the VPAC make in 2015 that said what the manufacturers need to put into production is Omicron XBB 1.5, which is what we did. The FDA agreed that that was the right thing for us, and then we'll do a Phase I/II, which means that as soon as we start the Phase I, when we get the safe dose from the Phase I, we'll go immediately into Phase II program with the same variants.

Okay. So is this system being set up kind of like the flu vaccine, where you're not going to have to basically do animal studies again every year with a different variant. You're just going to be able to plug it in and whichever variant – okay.

And that's what I just mentioned. That's why we're so pleased that the FDA confirmed what we call our plug-and-play strategy, but then you don't have to redo your TUC [ph] studies in animals when you change the cases.

Okay, great. Thanks for taking the questions.

The next question comes from Kemp Dolliver from Brooklyn Capital Markets.

Great, thank you. Just to continue on with the vaccine discussion. So do you expect you would have Phase I data in the second half of '24, given the timing of the IND filing?

I believe so. That's what we're planning to do again.

Okay. All right, thank you. And then you had originally hoped to file the IND by the end of the year. We're not talking about a significant change in the timeline. But I'm curious, does the change in the timeline reflect the timing of FDA feedback or reflect the pre-IND functions that – or the IND enabling functions that you're doing now?

Right, thank you. Yes, we thought we could be a bit faster with our IND filing, you're correct. I think the shift in the timelines reflect the fact that we wanted to here – to make sure that we would pursue a variant that is the one recommended by the FDA. So we wanted to wait for the June 16 meeting. And then of course, the feedback on our Pre-IND package was a bit delayed compared to what we had thought as well, so that's the reason.

Great. Thank you very much.

[Operator Instructions] Our next question comes from James Molloy of Alliance Global Partners. Please go ahead.

Hi, good morning. Thank you for taking my questions. Most of them have been answered, but I had a question on the combo with AVASTIN, Phase I/II underway. What's the expectation for the potential interim look for that and moving into a Phase II portion of that trial?

Right, good morning James. So as I mentioned, this trial is under the sponsorship of the Break Through Cancer Foundation. We're supposed to have four centers enrolling patients in this clinical trial. The first center in Anderson is up and running. They have not enrolled any patients yet, but they are definitely up and running. And we are expecting the other centers to join the study in Q3 – I mean maybe September, October time frame this year. For Phase I/II, which means that the first phase of this trial is really to evaluate the dose that we need to administer to patients in combination with AVASTIN and then the Phase II will come after. So it’s a bit difficult at the moment to give you exactly when we can get some first data, but certainly, in the course of 2024, we have more certainty as the new the new centers involve. Khursheed, do you want to add anything to what I said? I know you've been talking with the investors here as well.

Sure. No, you're right. I mean the infill part as Corinne said, is to demonstrate safety in combination with the AVASTIN and the chemo. And once the four sites that we have targeted come on board, the Phase I portion should not take much. I don't want to put a date or time, but I think it's just starting now. So Phase I sources should not take a longer time before we get into Phase II. So September, October – October time we anticipate all sites to be onboard. It's only a matter of, perhaps I would say, three to four months after that.

Okay, great, thank you. And is there a – I have on sort of my model expectations for maybe another combo at some point with OPDIVO. Is that something that you guys are still looking at for Epithelial Ovarian Cancer?

Hi James. Yes, so I think I would say, in theory I believe that there is a lot of value in testing IL-12 accommodation, because mechanistically that makes a lot of sense to add an IL-12 with a checkpoint inhibitor for instance, right, because it's all about motivating the macro environment. So we might think about this. I mean, we do one thing at a time right. The reason why we engaged in a combination trial with AVASTIN now is because we have very compelling synergistic data in a preclinical model in mice. But it's not out of the question to think that a combination with a checkpoint inhibitor could be an interesting trial as well.

Absolutely. So I know you have limited resources as everyone does. Actually at that point has there been any discussion to the effect of any larger pharma partners that are coming in to partner to help with the R&D?

On the IL-12 program, you’re asking specifically?

Really IL-12 or really across the board, looking at the technology stand, that's pretty good. We want to get in on that?

So yes, I mean collaboration and partnership will be key to our operating model. So we'll – certainly we'll seek partnerships. That's why we're also eager to get into a Phase I program with our vaccine modality, so that we can get to this proof of principle in humans, and then I'm sure that that will open doors for collaborations after that.

Absolutely. Thank you for taking the questions.

Thank you.

This concludes our question-and-answer session. I would like now to turn the conference back over to Dr. Corinne Le Goff for any closing remarks.

Thank you very much. So as you know, we have been using the phrase ‘banking of the future’ to describe our work, and this is exactly what our vision is, is to be the provider of safe and effective vaccines that are superior to current vaccines in terms of durability and buffer protection, that are stable at workable temperatures, that can be manufactured rapidly to respond to evolving pathogens, and offer better compliance for maximization, with no need for a device or virus. We also believe our technology owns excellent promise in immuno-oncology. So we look forward to keeping you informed of our progress for joining us, and we look forward to speaking with you again at our upcoming R&D Day event. Have a very nice day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.