Imunon, Inc. (IMNN) Q2 2024 Earnings Report, Transcript and Summary

Good morning, everyone. My name is Jamie, and I will be your operator today. At this time, I would like to welcome you to Imunon Second Quarter 2024 Financial Results Conference Call [Operator Instructions]. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Kim Golodetz. Please go ahead.

Thank you, and good morning, everyone. This is Kim Golodetz with LHA. Welcome to Imunon's second quarter 2024 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 expects, 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 14, 2024. 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 Michael Tardugno, Imunon's Executive Chairman. Michael?

Thank you, Kim. And good morning, everyone. I just wanted to take the liberty to say a few words before turning the call over to Stacy Lindborg, our President and Chief Executive Officer; and to David Gaiero, who is our Interim Chief Financial Officer, as we seek a permanent replacement for our retired CFO, Jeff Church. And just to point, following our prepared remarks, there will be time for questions and this is your opportunity. We encourage you to, if you have a question, to use this time to ask us. We're happy to respond to your questions and concerns. On the fundamentals, I can report that your company is sound. The second quarter and recent weeks give testament to that and to Dr. Lindborg's strategy and leadership. As you know, we recently reported long awaited top line data from our Phase II study of IMNN-001, our unique IL-12 candidate, in ovarian cancer. These are women with very few options facing a standard of care that has seen very little change over the past 25 years. And given that, I can report that the results from our study in a word outstanding, unequivocally outstanding. In support of this remarkable outcome, Stacy has streamlined the company, refocused its attention, reduced expenses and despite the challenging comparable deal terms that we've seen recently closed on a truly investor friendly financing in this tough, tough capital market. I am delighted with our company's progress over the past quarter as I hope you are and with the future promise that IMNN-001 has for ovarian cancer patients. I'll also remind you that during the second quarter, Dr. Lindborg was appointed President and Chief Executive of Imunon. I'm sure that it was a difficult decision for her as she left a similar position with a company that she very, very much believed in to lead the development of our lead asset, IMNN-001 and to shape the company's strategy. I trust that you will agree with me that she has hit the ground running. So now it's my pleasure to turn the call over to Stacy.

Thank you, Michael. As Michael has indicated, it has been an exciting and fulfilling time over the last few months in Imunon as the promise of our science comes closer to making a real difference in the lives of patients. I'm further emboldened by the talent and dedication I see in the community of treating physicians and in the Imunon team. Let me assure you we are ready for Imunon's next chapter. We're motivated and honored by the role that we get to play in advancing the treatment of women with ovarian cancer. Just a short time ago, a couple of weeks, we reported top line data from our OVATION 2 study, as you know, a Phase 2 trial in ovarian cancer, and we may have in our hands the first and only immunotherapy that is effective for the treatment of ovarian cancer. This is a terrible cancer that in the US alone leads to more than 20,000 new diagnoses and about 13,000 deaths every year with more than a quarter million women diagnosed with the disease globally each year. I'll take just a moment to briefly review the trial before addressing our plans. IMNN-001 is a DNA mediated IL-12 immunotherapy being evaluated for the localized treatment of advanced ovarian cancer. OVATION 2 is an open label, well controlled, randomized study of 112 patients, evaluating the dosing, safety, efficacy and biological activity of intraperitoneal administration of IMNN-001 in combination with neoadjuvant chemotherapy or NACT as we often refer to it. We're studying naive treatment patients newly diagnosed with the disease, including epithelial ovarian, fallopian tube or primary peritoneal cancers. The trial design compares NACT plus IMNN-001 administered weekly versus standard of care NACT alone. Patients randomized to the IMNN-001 treatment arm received up to 17 doses of 100 milligrams per meter squared of our drug in combination and in addition to NACT. So now to the extraordinary findings, which we have -- which have relevance to our contemplated Phase 3 pivotal trial, including the following. An 11.1 month improvement in overall survival with IMNN-001 in the intent to treat population with a hazard ratio translating to a 35% improvement in overall survival. This is by all standards or measures a clinically meaningful improvement in a difficult disease -- difficult to treat disease. For the 90% of patients receiving three or more of the 17 specified doses, median overall survival was improved by close to 16 months. This is consistent with the dose dependent signal that was clearly demonstrated in OVATION 1. Furthermore, we saw potential for a remarkable improvement in overall survival benefit with IMNN-001 in patients exposed to standard of care PARP inhibitor therapy, and this was in 38% of the intent to treat population. For this group, the hazard ratio dropped to 0.41% and the median overall survival in the IMNN-001 treatment arm had not yet been reached at the time of the data lock, which compares with the median overall survival of 37.1 months in the standard of care treatment arm. Regarding our next steps, we have taken a number of steps to conserve capital and align our critical needs with available funds. We are within days of requesting an end of Phase 2 meeting with the FDA to validate our conclusions and clarify our path for the registration study ahead. This means we can expect an end of Phase 2 meeting with the FDA this fall, and this will permit us to begin our Phase 3 ovarian cancer study in the first quarter 2025. The pace of the study will depend on several factors, including access to capital and patient recruitment. But at this point, we are targeting top line data readout at the end of 2028. As you know, OVATION 2 is not the only study with IMNN-001 in ovarian cancer. We have an ongoing study principally funded by the Breakthrough Cancer Foundation that is proceeding at the University of Texas MD Anderson Cancer Center and Memorial Sloan Kettering Cancer Center under the leadership of study PI, Dr. Amir Jazaeri. The study is evaluating IMNN-001 on minimal residual disease or MRD as determined by second look laparoscopy when administered in combination with bioequivalent Avastin and NACT. Subjects newly diagnosed with ovarian cancer, fallopian tube or primary peritoneal cancer will be included. And to date, seven patients have been enrolled and received treatment. As the first few patients have reached the primary endpoint, Dr. Jazaeri will now conduct a pilot study to test circulating tumor DNA levels following treatment using a next generation ctDNA assay. We look forward to sharing insights with you from this data and harnessing insights from this data for OVATION 3. Switching now to the proof of concept Phase 1 study of our DNA vaccine candidate for COVID-19. During the second quarter, we began patient enrollment with IMNN-101 as a seasonal COVID-19 booster vaccine and we believe that the preclinical efficacy we've generated along with a superior handling logistics, which we've discussed on past calls, will make this vaccine attractive to a pharma partner. Our plan is to complete Phase I report data by the end of the year. And at that point, we will actively seek a partner to continue development. Now I'll turn the call over to Dave Gaiero, our Interim CFO, for a discussion of our quarterly financial results. Dave?

Thank you, Stacy. Details of Imunon second quarter 2024 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. As of June 30, 2024, Imunon had $5.3 million in cash investments and accrued interest receivable. Subsequent to the close of the quarter, we received net proceeds of approximately $9 million from a registered direct offering. We will continue to focus on strong cash management. And as Stacy indicated, we have taken steps to evaluate and prioritize our spending and expect our cash runway to extend into the third quarter of 2025. Imunon reported a net loss for the second quarter of 2024 of $4.8 million or $0.51 per share compared with a net loss of $5.6 million or $0.61 per share for the second quarter of 2023. Operating expenses were $5 million for the second quarter of 2024, a decrease of $500,000 or 8% from the second quarter of 2023. R&D expenses were $2.8 million in the second quarter of 2024 compared with $3.1 million in the same period of 2023. CMC costs decreased to $500,000 compared with $700,000 a year ago. The lower CMC costs were primarily due to the establishment of internal capability to produce plasma DNA. Costs associated with our PlaCCine program decreased by $200,000 in the second quarter of 2024 compared to the second quarter of 2023. These decreases were partially offset by a $200,000 increase in regulatory and other clinical costs in the second quarter of 2024 compared to the second quarter of 2023. General and administrative expenses were $2.2 million in the second quarter of 2024 compared with $2.3 million in the same period of 2023. The decrease was primarily attributable to lower noncash stock compensation expense of $100,000 and employee related expenses of $100,000, partially offset by an increase in legal fees of $100,000. Other nonoperating income was $200,000 in the second quarter of 2024 compared with other nonoperating expense of $100,000 in the same period of 2023. The company incurred a loss on extinguishment of debt of $300,000 on its loan facility with Silicon Valley Bank in the second quarter of 2023 upon the repayment in full of this loan facility. Turning briefly to the financial results for the first half of 2024. The company reported a net loss of $9.7 million or $1.03 per share in the first half of 2024 compared with a net loss of $11.2 million or $1.28 per share for the first half of 2023. R&D expenses were $6.1 million in the first half of 2024 compared with $5.8 million in the same period of 2023. Costs associated with the PlaCCine program increased to $2.8 million in the first half of 2024 compared to $2.3 million in the first half of 2023. Regulatory and other clinical costs increased to $1.1 million in the first half of 2024 compared to $700,000 in the first half of 2023. These increases partially offset by a $600,000 decrease in CMC costs in the first half of 2024 compared to the same period of 2023. General and administrative expenses were $3.9 million in the first half of 2024 compared with $5.4 million in the same period of 2023. The decrease was primarily attributable to lower noncash [stock] compensation expense of $400,000, legal expenses of $400,000, employee related expenses of $300,000 and insurance expense of $100,000. Other nonoperating income was $300,000 in the first half of 2024 compared with $8,505 in the same period of 2023. The company incurred interest expense of $200,000 as well as $300,000 of debt extinguishment expense associated with its loan facility with Silicon Valley Bank in the first half of 2023. Investment income from the company's short term investments decreased by $200,000 for the first half of 2024 from the same period in 2023 due to lower investment balances. With that financial review, I'll turn the call back to Stacy.

Thank you, Dave, and thank you for so seamlessly stepping in following Jeff's retirement. It's been a very smooth transition. As Michael mentioned, we recently announced a financing with a $10 million in gross proceeds under highly competitive terms. This was priced at $2 per share in an at the market deal that included one warrant for each share sold. The warrants have a stock price of $2. The additional capital added to our June balance brings our cash to approximately $14.5 million, which historically -- this is well over 3.5 quarters of operating runway, before consideration of further capital conservation initiatives and assures on bridge to important catalysts, which we can discuss. Following our discussions and with many premier healthcare investors, we have every confidence in our ability to access capital going forward, including the use of our ATM and possible interest from partners. I hope that you'll agree that the future of Imunon is bright and that together with shareholders, we will deliver on our mission to have a meaningful impact on patients' lives. With that, I'd like to open up the call to your questions. Operator?

[Operator Instructions] Our first question today comes from Emily Bodnar from H.C. Wainwright.

Kind of want to follow-up to some of the financing and funding discussions that you made. Could you maybe just talk about how you're thinking about strategy for financing a Phase 3 study, given obviously, those tend to be pretty large studies? Maybe if you can kind of comment on how extensive you think such a study could cause? And if you're potentially looking to raise additional capital or other strategies that you're evaluating and potentially if you've gotten any partnership interest since the OVATION 2 data came out? And then second, on the COVID booster, could you discuss the blinding for the Phase 1 study and if you're able to see the data as it kind of accrues?

So I'll start with both questions and then, Michael, I think you may want to add to it. So we're anticipating that this trial could cost in the order of $50 million. So adding $10 million to the balance sheet and as we talked about with our cash runway, it really takes us takes us very well into 2025, actually well into the third quarter. Our goal, of course, this allows us to start the trial as we have planned. We're really intending with our -- with the way that we manage our company to continue to be able to achieve our core business objectives. And this really is a bridge then for -- and provides time for us to raise additional capital. And Michael, do you want to offer additional…

It's always a challenge, particularly in recent days for micro-cap companies to raise capital, you know that and you probably cover a number of them. But I can say unequivocally that the quality of the investors that we spoke to during this financing roadshow, we're among the very best. And I think across the board, except maybe for a very small number, and we spoke to a good number of quality investors. And I think across the board, the reaction was overwhelmingly positive. Market conditions, among other things, may have limited their most recent interest. But I think that the story to tell from this financing roadshow is a little bit more time with the data, they like to see more maturity. I think that will give us an opportunity to reengage and reengage successfully. In the meantime, the company is looking forward to some additional catalysts that may provide an opportunity to use the ATM, engage strategic partners or consider another equity round financing. On the whole, this has been the kind of the history of many companies like ours. And I don't think, honestly, from the data that we've seen and the impact on the lives of ovarian cancer patients that this study will go without important financial support.

And Emily, you asked one other question about the trial. So we are intending for this trial to be an open label study as I think we all understand that with the route of administration for Imunon being through a catheter directly into the micro tumor environment. This is really more of an ethical decision that the only way you could preserve [volume] would be to require for the control arm to also have that, which would be an unnecessary surgical procedure. So we are intending that there will be full agreement with FDA that this will be open label. And we'll certainly get buy in on plans for event driven endpoints and the ability to report out appropriately in the trial.

I think she was talking about the COVID vaccine.

So for the IMNN-101, that was your question?

Yes.

So it is an open label trial. We are -- with this trial really, we do have part of what will be very exciting and interesting are the immunogenicity data that we expect to have by the end of the year. So we, of course, can do them in batches. But really, we're expecting to have the full sample from the trial and to be able to report out based on the effects that we're seeing, and which really will establish proof of concept and we'll set up the partnership discussions.

In the mean time, the DSMB is being -- is evaluating for safety…

That's right. So we have an ongoing, as you would expect, in a Phase 1 trial, where you're needing to have a regular planned DSMB reviews, that trigger the release of additional patients being treated. We've gone through multiple DSMB reviews of our data, seamlessly getting approval to continue and the study is enrolling exactly per the plan. So it's moving very, very well, very efficiently.

Our next question comes from Kemp Dolliver from Brookline Capital Markets.

Just quickly on 101. When you say the study is enrolling exactly the plan, COVID waves are not what they were a couple of years ago. So are you seeing steady enrollment or is this a case where as we get into the fall that with the potential spike in COVID, you'll see a similar spike in enrollment?

So the study is enrolling healthy subjects. We have a very experienced center that's running it. Per the numbers I've reviewed and I look at them quite regularly, we're about 70 -- above 70% of the patients that we will enroll in the trial and they've been dosed. So I don't think the flu season is likely to influence it. In fact, we expect really likely to be ahead of it in terms of completing the trial and the observation.

I'd like to comment on it also. So I mean there are a number of advantages that we believe will be demonstrated in this Phase 1 study, at the least of which is durability. And of course the handling characteristics of all this formulation to be managed that temperatures that are very friendly for global distribution. That said, there maybe an opportunity to replace mRNA vaccines depending upon the data that would be as boosters. As you point out, the market is waning some. But I think the more important outcome from this study is the proof of concept that a DNA vaccine can provide in other indications. And you may want to speak…

Yes, I'd like to add to that. I mean I do think that we were very thoughtful in choosing what we would study to establish proof of concept of our technology. But as you guys are likely quite aware, there have been more than 80 pathogenic viruses discovered since 1980. The target of choice would really need to be decided in conjunction with the party who's going to develop it. We think there is enormous value to the technology that we want to make sure we maximize through a partnership. And there's equally exciting when we think about our core and our strategy down the path, there's even a potential for an oncology vaccine. So the platform itself, the technology is very, very exciting for many reasons.

And then on 001 and the end of Phase 2 process. Where does that stand, are you in a position that you have been able to request the meeting? And if not, when do you anticipate it? Because it strikes me that given your expected timing for presenting the full data set and having clarity around the Phase 3 trial design, you can dovetail those two events together, you're going to have a lot more certainty in the eyes of potential partners and investors.

And we are expecting to be able to present the entire -- the full data set at a major stage in the fall, which we certainly will announce as soon as we have those plans. We are -- and as I shared in my prepared remarks, we're within days of requesting the end of Phase 2 meeting. And as we look at ultimately, our goal, which we are very much in line with in terms of all the steps that really lead up to first patient dose and taking the study off, everything will align extremely well with doing that in Q1. So I do expect there will be many synergies around some of the catalysts you're describing and as well as others.

Our next question comes from David Bautz from Zacks.

So Stacy, I was wondering if you could talk about maybe what are some of the most important design factors for the Phase 3 trial that you're hoping to come into alignment with the FDA during your upcoming meeting?

We are looking forward to certainly motivating what we believe is really a very strong design that we're coming to the table with input from leading clinicians that have been not only treating with Imunon but dedicated their careers to women with ovarian cancer. Coming out of the OVATION 2 study, we certainly see this tantalizing synergistic effect -- potential synergistic effect with PARP inhibitors. So one of the aspects that we're thinking very carefully about is ensuring that there's balance across the treatment arms in women that have genetic mutations that may predispose a strong response in the likely nature of -- with BRCA mutations, for example, HR deficiency, a very likely treatment with PARP inhibitors. So certainly, we want to make sure that we can answer key questions clearly and bring evidence of a very strong treatment effect then across the entire study in addition to these key subgroups. So the primary endpoint, I think, will be very straightforward. We're choosing the definitive endpoint. We expect that will be a very smooth discussion. So those are -- the overall survival is primary. The list of endpoints really which are giving confidence and consistency in the data, which we're seeing very clearly in OVATION 2. Key factors that we're including into the design and then the establishment of the inclusion criteria, which really will set us up for a first line indication statement. Those are the key things top of mind.

Now in regards to the MRD study, are you pleased with how enrollment is going? And is there anything maybe that can be done to kind of speed up enrollment in that study?

I was reviewing this just yesterday with our team, is doing a phenomenal job of managing this study internally. It turns out that the rate of enrollment is actually competitive, it's even higher than in OVATION 2, but we had -- and we have seven patients treated right now out of 50. What needs to happen -- so while MD Anderson has done phenomenally, we have two more sites. So Memorial Sloan Kettering is now on board, Johns Hopkins will be anticipated soon. So I think we can expect to see enrollment increasing as these sites now come into the fold and our meeting with patients and entering them into the study. I think in terms of what we'll do, we'll certainly be meeting with each of the PIs making sure that the data that has really very recently come out of OVATION 2 is at their fingertips that they can describe to these women that they're counseling of the potential of our product, and are really armed with what they need to enroll patients that meet this inclusion criteria. So we are very pleased.

I mean we’re [Technical Difficulty] to report some information at the end of the year…

That is correct. So not only by the end of the year, but also Dr. Jazaeri, our PI, is interested and is planning on looking at some pilot study of this. I talked about this a little bit in the opening remarks of circulating to our DNA, a very interesting biomarker. He is, I think, worked a lot of very interesting translational biomarkers, so the rich data that will come out of the study. So instead of sitting and waiting passively, we're really looking at pilot studies. And then with second laparoscopy being the primary endpoint, we do expect to be able to release data on that endpoint before the end of the year.

And just to clarify -- so it sounds like if positive results with 101, the company is going to look to partner to advance that program. But is that to just advance the COVID program or is it for the whole vaccine platform that you're going to look to partner?

So we would look to partner the entire platform.

[Operator Instructions] Our next question comes from James Molloy from Alliance Global Partners.

I had a question on the PlaCCine program in general and the preclinical development [Indiscernible] ex the 102, and you said you're looking to partner the whole thing. Would it be fair to say there's sort of a shift in -- maybe a reshift back to the immunotherapy rather than the PlaCCine DNA plasmid vector for the focus going forward? And could you walk through how the partnership environment currently looks for PlaCCine? And then perhaps as well, I imagine you're open to partnerships for the immunotherapy as well. Should those opportunity present, can you walk through how that partnership environment looks as well, please?

I think that if I reflect back on my time on the Board before joining as an employee and CEO, Imunon really has been a very highly focused company. And from a strategic perspective, we always looked at the PlaCCine platform as a wonderful offshoot of the -- our IL-12 technology, right? So it's an adaptation. We will continue to look for rich opportunities and the ability to bring transformative options into the marketplace. And then we'll also have to decide what we choose to drive forward and what we can gain in terms of furthering our business, non-dilutive funding for our core business as well as really choose things from partnership. So I do think that for several years we've been talking about the potential of this proof of concept study, but it really was for the technology, not truly launching into COVID-19. This was a vehicle to get us there and I think that's something we wanted to really bring clarity to. So that is very much my intent coming in. In fact, that resulted in really being very clear with our internal resources and ensuring we're allocating, aligned with our priorities and we very effectively have been able to accomplish that in the last quarter. It may be premature to comment on partnerships, but I do think that Michael offered some remarks. We are overwhelmed with the -- if you just compare to the current options, there are some strengths that we certainly have highlighted and we'll be very thrilled to highlight on future calls. But there is an amazing potential and I think it just needs to be in the right hands with the right motivation and focus.

And ladies and gentlemen, with that, we'll be concluding today's question-and-answer session. I'd like to turn the floor back over to management for any closing remarks.

Thank you. And really thank you to everyone for participating in this conference call. As our work in providing options to women with ovarian cancer progresses and the population's exposure to potential pandemics increases, we remain very excited about reporting data from ongoing clinical studies in the upcoming months. And I also want to flag that I'm being interviewed in a prerecorded fireside chat that will go live on 7 a.m., September 9th at the start of the H.C. Wainwright 26th Annual Global Investor Conference, which will be held in New York. We'll be putting that information out so you can view the conversation. And for those that are interested, we'll be available for one-on-one meetings at the conference and virtually. So contact if you'd like a meeting. But we look forward to keeping you informed of our progress, and wish you a nice afternoon. Thanks for joining.

And ladies and gentlemen, with that we'll conclude today's presentation. We do thank you for joining. You may now disconnect your lines.