Greetings. Welcome to PDS Biotechnology Fourth Quarter 2022 and Full-Year Earnings Conference Call. [Operator Instructions]. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's my pleasure to turn the call over to Gabby DeGravina CG Capital Investor Relations. Please go ahead.

Good morning. And welcome to PDS Biotechnology's fourth quarter and year-end 2022 earnings conference call and audio webcast. On the call from the company are Dr. Frank Bedu-Addo, Chief Executive Officer; Dr. Lauren B. Wood, Chief Medical Officer; and Matt Hill, Chief Financial Officer. Earlier this morning, PDS Biotech issued a press release announcing financial results for the quarter and full year ended December 31, 2022. We encourage everyone to read the press release as well as PDS Biotech's report on Form 10-K, which will be filed with the SEC shortly. The company's press release is available on the PDS website at pdsbiotech.com. In addition, this conference call is being webcast and will be archived on the company website for future reference. Before we begin, we need to remind everyone that, on today's call, the company will be making forward-looking statements regarding regulatory and product candidate development plans, as well as research activity. Certain information in this presentation may include forward-looking statements, including within the meaning of Section 21E of the United States Securities Exchange Act of 1934 as amended, and Section 27A of the United States Securities Act of 1933 as amended concerning PDS Biotechnology Corporation and other matters. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations, or financial condition or otherwise based on current beliefs of the company's management, as well as assumptions made by, and information currently available to, the management. These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted. A description of these risks can be found in PDS Biotech's most recent filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this conference call. Except to the extent required by applicable law or regulation, PDSB undertakes no obligation to update the forward-looking statements included today to reflect subsequent events or circumstances. With that, I will hand the call over to Dr. Frank Bedu-Addo. Frank?

Thank you, Gabby. And thank you all for joining us on our year-end call today. We have made tremendous progress this past year, achieving several significant milestones as we continue to advance our oncology pipeline. Most importantly, progressing closer to what's a registrational trial for our lead candidate, PDS0101. PDS0101 is a novel investigational human papilloma virus, or HPV, targeted immunotherapy that stimulates a potent targeted T cell attack against HPV positive cancers. Our goal is to commercialize PDS0101 as rapidly as possible by performing a well-designed Phase 3 trial that maximizes our potential for both speed and success. Therefore, our key priority in 2023 is to move forward efficiently with finalizing the development of PDS0101 for the treatment of HPV positive head and neck cancer and immune checkpoint inhibitor, or ICI naive patients. Before we move into the fourth quarter updates, I would like to briefly mention the recent meetings we have had with the US Food and Drug Administration, also known as the FDA. These meetings were held to discuss the registrational pathways for our two most advanced phase two trials, VERSATILE-002 and the National Cancer Institute led, or NCI led, triple combination trial. In both meetings, the FDA provided very useful guidance on key elements of both trial designs. Therefore, we will be transitioning into Phase 3 clinical development this year, informed by the ongoing and maturing data from VERSATILE-002. This randomized, controlled Phase 3 trial will investigate PDS0101 in combination with KEYTRUDA versus KEYTRUDA alone in ICI naïve patients with recurrent or metastatic HPV 16 Positive head and neck cancer. The Phase 3 trial will be called VERSATILE-003. In parallel, we will continue activities necessary to progress the NCI led triple combination of PDS0101, PDS0301, formerly known as M9241 or NHS IL-12, with an approved immune…

Thanks, Frank. I'd like to recap some of the exciting data we announced in the last several months. With respect to PDS0301 monotherapy, clinical research conducted by the NCI was recently published in the peer reviewed journal International Immunopharmacology. The study assessed immune changes in relation to the dose level and dosing schedule of PDS0301. The study also evaluated the correlates of several treatment-related immunologic changes with clinical responses. Researchers evaluated a subset of 23 patients with advanced cancers who participated in a Phase 1 clinical trial of PDS0301. Patients receiving the higher dose of PDS0301 generated more robust immune responses. Importantly, stronger immune responses were seen at the higher dose level. These data highlight the immunological activity of PDS0301 which supports the immune response data seen to date in the NCI triple combination study. The ability to increase IL-12's presence within the tumors and to limit its exposure in the circulating blood constitutes a significant advancement in the development of cytokine-based immunotherapy. The research published by the NCI demonstrates the potential of PDS0301 as a tumor-targeting IL-12 and its ability to stimulate immune activation and increase the frequency of immune responses that potentially overcome the immunosuppressive tumor microenvironment. Published studies of biologically active doses of PDS0301 monotherapy were associated with greater than or equal to grade 3 treatment-related adverse events in 20% of patients, and all of these were transient. One grade 4 treatment-related adverse event was observed and no grade 5 treatment related adverse events occurred. This was published by Strauss and colleagues in 2019 in clinical cancer research. Importantly, these biologically active doses are associated with increases in specific immune cells and improved clinical outcomes. Now moving on to our preclinical programs. Recently, data on both PDS0102 and PDS0103 were presented at the 2022 American Association for…

Thank you, Lauren. We had an extraordinary year at PDS Biotech. As we move the business forward, our financial strategy continues to seek to mitigate financial risk while supporting our overall commercial strategy. Our goal remains to select the most promising combinations and indications and rapidly progress into registrational trials. We're excited to prepare our lead candidate, PDS0101, for a registrational trial. We currently estimate our Phase 3 VERSATILE-003 trial will cost approximately $60 million, which is part of our operational budget and projections. Now let's take a look at our summary financials for the year ended December 31, 2022. Net loss for the year ended December 31, 2022 was approximately $40.9 million or $1.43 per basic share and diluted share compared to a net loss of approximately $16.9 million, or $0.66 per basic share and diluted share for the year ended December 31, 2021. The higher net loss was primarily due to personnel costs, clinical research and quality of manufacturing costs and the cost to license our PDS0301 asset. Research and development expenses for the year ended December 31, 2022 increased to approximately $29.4 million compared to approximately $11.3 million for the year ended December 31, 2021. The increase of $18.2 million was primarily attributable to an increase in personnel costs of $2.3 million, clinical costs of $2.3 million, manufacturing costs of $3.6 million, and $10 million for the rights to PDS0301 from Merck KGaA, Darmstadt Germany. Of the $10 million, $5 million was in cash and the balance in shares of our common stock. General and administrative expenses for the year ended December 31, 2022 increased to approximately $12.2 million compared to approximately $10.2 million for the year ended December 31, 2021. The $2 million increase was primarily attributable to an increase in personnel costs of $1.3 million and professional fees of $0.7 million. Total operating expenses for the year ended December 31, 2022 were approximately $41.7 million compared to total operating expenses of approximately $21.4 million for the year ended December 31, 2021. Loss per basic and diluted share for the year ended December 31, 2022 was $1.43 as compared to a loss of $0.66 cents per basic and diluted share for the year ended December 31, 2021. The increase in loss per share can be primarily attributed to the investment in R&D and $10 million recorded to in-license PDS0301 which was all expensed in the fourth quarter. It accounts for approximately $0.35 of loss per basic and diluted share. We ended the year with approximately $73.8 million in cash, which is attributed to our continued prudent financial discipline and efficient execution of our ATM. Based on the company's available cash resources and cash flow projections, the company believes this balance is sufficient to fund the company, operations and research and development programs into the third quarter of 2024. This concludes my portion of the call and I'd like to turn the call over to the operator for our question-and-answer session. Operator?

[Operator Instructions]. Our first question today is coming from Leland Gershell from Oppenheimer.

Congratulations on all the progress. Just a question maybe for Lauren. As we look forward to the VERSATILE-003 trial, I know you're still collecting data from 002 with respect to informing the statistical considerations, but do you have a sense of the size of the enrollment of what 003 may look like?

The design and the total sample size of VERSATILE-003 will be informed by the VERSATILE-002 data that's maturing in the ICI naïve population. We are looking for consistencies in trends. And we anticipate that we will have additional updates to that data in the spring that will allow us to finalize the protocol and give us a sample size to conduct the trial as efficiently as possible.

With regard to the triple combo study, you have yet to identify the ICI you'll be using except that it'll be a commercially available one. Is there any information you are awaiting to learn that will allow you to settle on the choice of that ICI or at least allow the public to know what that is?

That's an excellent question. Well, in terms of the design of the triple combination study, we plan to leverage and also have maturing data from the ICI refractory population of VERSATILE-002. As Frank iterated, overall survival, we know, is going to be key to informing the design of that trial. And we would like to have maturing data from VERSATILE-002 in the ICI refractory population since that will be the focus of the triple combination study. As you're aware, there are two immune checkpoint inhibitors that have approval in the head and neck recurrent metastatic disease indication. And we will be making that determination as we get more informed data on overall survival from ICI refractory patients.

Just to add a little bit to what Lauren said, as you know, there are two commercial checkpoint inhibitors that have been approved, right? KEYTRUDA and OPDIVO for head and neck cancers. So, it's going to be one of those two. But also in terms of the strategy to design the trial, one of the things we want to do is to be prudent in getting all the information we need. So, one of the reasons why we've seen the kind of data we've seen today in our clinical trials is that we were very systematic in our preclinical studies, and making sure that we did all the necessary studies, understand exactly how this technology is working, select the optimal conditions, go into the clinical trials. And based upon that, we've seen very consistent results from trial to trial. That's the reason why we're running all these various Phase 2 clinical trials, right, to gain as much information as possible that can then inform design of these trials. And now since we are going to a commercial checkpoint inhibitor with PDS0101, that's exactly what we are evaluating in the ICI refractory arm of VERSATILE-002. And so, really having some information on how that's performing could be very informative in terms of how we design the trial. For example, assume we design a 350 patient trial, but wait a few months later and understand exactly whether we actually see an improvement in overall survival potentially with a dual combination, maybe we end up starting a few months later, but with a much smaller design that's a lot more efficient, which would then dramatically reduce our cost and speed to commercialization. So we just want to make sure that we're doing what's in the best interest of our shareholders, making sure we get the information that we specifically designed the trials to provide, and then based upon that information, progress into final design of that trial.

Next question is coming from Louise Chen from Cantor Fitzgerald.

Congratulations on all the progress this quarter. I wanted to ask you a little bit more on the Phase 3 VERSATILE-003 study and see if you could provide some more details, maybe broadly speaking how you wanted to design that study versus the VERSATILE-002? And then how did the results of 002 inform your thinking on the Phase 3 design for 003? Secondly, are you expecting to present any new data at major medical oncology conferences or even from your virus – your Infectimune platform this year? And if so, where would you be presenting those and what venues? Lastly, just thinking about OpEx for 2023, is the fourth quarter of 2022 a good starting point for thinking about how to build things? And you're starting a major study, so curious how you think about the cadence of R&D expense in 2023.

I'll start and then hand over to Lauren to finish up. But in terms in terms of the Phase 3 trial, you are correct. We are looking to get as much information as possible from the VERSATILE-002 trial. As I mentioned, overall survival is what we believe will be the key parameter that the FDA would want us to power the trial to really understand. But also what we want to do as we design the trial is also take information from VERSATILE-002. For example, what do our PFS numbers look like? Does increase in PFS in VERSATILE-002 correlate with increase in overall survival, for example. And those were some of the key parameters that we needed to get insight into because, if that's the case, then we can design that with certain interim data points that may allow us to get data that we could then start discussing with the FDA sooner than later regarding a potential approval. So, right now, for example, there has been recent guidance from the FDA in terms of how they would look at accelerated approvals and how they would look at single control trials for accelerated and final approval. Right? So, with all that information, part of the key things that we would want to do, as we finalize this design, get input from the other countries into the design, finalize the numbers, but also give ourselves the opportunity to see data sooner than later. And if it's positive, be able to start having discussions with the regulatory agency. So, that's one of the key reasons why we needed to really understand how our PFS numbers were beginning to look as well as overall survival and see if there was improvement over published KEYTRUDA monotherapy data in terms of improvement in both sets of parameters. I'll hand over to Lauren to address the additional questions.

In follow up to Frank's comments, our intention, Louise, is to present updated data from VERSATILE-002 at scientific meetings. We are targeting to present data potentially either at ASCO, ESMO, and also potentially SITC related not only to the updated clinical outcomes in the ICI naïve population as it relates to PFS and overall survival, which, again, Frank noted, will inform our design of VERSATILE-003, but also confirmation and examination of the immunogenicity parameters that we are seeing in VERSATILE-002. I think one of the most important things to come out last year was the demonstration that we see in patients, even in heavily treatment experienced patients, the induction of these HPV 16 specific multifunctional potent CD8 killer T cells in patients. And we're looking to present that data from VERSATILE-002 as well during the course of 2022. So, yes, we will be presenting that data. I can't really comment regarding Infectimune presentations. The Viruses publications were very, very impressive for us in terms of the ability to demonstrate broad antigen specific CD4s and CD8 cells that are indeed protected from lethal influenza challenge. And I think any scientific presentations during the rest of this year will be guided by additional preclinical studies that we may be pursuing with the goal of progressing our Infectimune based platform to human clinical trials. And there was a third question that you had. Could you just repeat that?

Yeah, it was a financial question. So I wanted to ask you about OpEx for 2023. Is fourth quarter 2022 a good base to build off of? And then with the start of this VERSATILE-003 by fourth quarter 2023, how should we think about the cadence of R&D expense this coming year?

I think in looking at Q4, you're starting to see the step up and increase in associated costs related to our trials, and that's going to continue into 2024. But I think if you take – obviously, in the fourth quarter numbers, we've got the $10 million that we spent with Merck KGaA. So after eliminating that, that's a good way to think about it. And also, obviously, we're going to have some additional R&D expenditures as well – I'm sorry, general and administrative expenses as well.

Next question is coming from Kalpit Patel from B. Riley.

This is Andy Fleszar on for Kalpit. Congratulations on the progress. We know that you had a successful initial meeting with the FDA for the doublet. But is the agency requiring any more data to be submitted along with the final trial protocol? And when should we expect this protocol to be submitted?

I think with the triple, as we mentioned, we are looking to get some additional data. Hopefully, that will inform how we design the statistical portion of that program. And also, one of the key things that we would want to do – that the FDA would want to see is – I think one of the key things we mentioned a number of times is the contribution of agents. We talked about that quite a bit. Right? And so, pending what that information provides to us, we may be able to go in in terms of looking at PDS0101 and PDS0301 in addition to the triple combination. We anticipate that that may be possible. But again, that's something that we would have to discuss with the FDA. That's also important for us because, if you recall, with the triple combination trial, there are two of the three agents which has been found to be critical in the clinical outcomes – PDS0101 and PDS0301. Right? Both of those were found to be critical for those outcomes. And so, part of what we may potentially do is [indiscernible] two stage where we look at a small number of patients as a medium to their bigger registrational trial. But again, those are things that we are waiting for information for to finalize that design. We think based on what we know today, we think it's going to be a smaller design than the VERSATILE-003. But until we have all the information to design that trial, I probably wouldn't be able to provide too much detail into what you're asking. But these are some of the key things that we're looking at to come up with the most efficient design possible.

Sorry if I misspoke, but I was actually questioning the doublet study.

Oh, the doublet study, okay.

If the agency is requiring any more data before initiating that trial. Yeah, correct.

No, no. We don't we don't require any more data before initiating that trial.

Do you have a sense of the timeline of when that protocol will be submitted?

Right now, we are in discussions with the EU and the regulatory agencies from the other countries in order to get their feedback that we would then put into the final design that would then go to the FDA. And so, we are anticipating that by the time we have all that information from those other countries that we'll put into that protocol, so that's currently ongoing. That will probably be late Q2 or early Q3. So we anticipate that the final amended IND will be filed in Q3. And then once we get the FDA feedback, we will then start activating the various investigational review boards, IRBs, for the various sites. We are hopeful that we will be able to convert a number of the sites, most of the sites we working with today, into the VERSATILE-003 sites. And so, those processes typically will take anywhere from four to six months. With that timeline, what we're working towards and hopeful is that we will be able to get this trial up and running by Q4, considering all these other activities. As I mentioned, the clinical manufacturing has been successfully completed already. So we are finalizing the later stage of the CMC section, right? So, all those activities are progressing really successfully to date. Right? So, that's our timeline in terms of when we anticipate we'll file the IND and when we'll get the IRB approval, get the sites activated, and get the trial initiated by Q4.

Next question is coming from James Molloy from Alliance Global Partners.

I had a quick question on the amended IND and the Phase 3 VERSATILE-003 trial. Did you walk through the amendments to the IND, what exactly you're amending on there? What sort of breakpoints should we anticipate? The trial is going to take a little bit of time to run. Can we anticipate some interim looks at some point? Any way to guide to where sort of the next catalyst to be looking for once the trial gets up and running of potential data coming out?

We called amended IND. But if you're really updating your IND, the initial IND was filed for the Phase 2 trial, which was a single arm trial, and now we're going into a controlled Phase 3 trial, right? So those updates have to be made. We have to update the manufacturing process. We've now selected our commercial manufacturer. We've transferred the process. We're going to have to update the manufacturing process. As we update the manufacturing process for Phase 3 manufacture of the peptides, those have to be updated in the CMC, manufacture of the R-DOTAP, the raw material for Versamune, that's also been scaled up to the Phase 3. All those updates have to be made to the IND. And so, that's why we call it the amended ind. Really look at it as an updated IND with all the new information, transitioning from the Phase 2 to the Phase 3, with a lot of those pertaining to what the commercial manufacturing and CMC package would look like. So, that's really what we're doing there.

Any thoughts on expectation for potential interim looks or data points here once the trial is up and running? What should we be thinking on timing [indiscernible] and data coming out?

I think that's when we're looking at, for example, with PFS. So, I think one of the key things we mentioned is whatever interim data points you come up with, it would have to give some indication that you are prolonging overall survival. As I mentioned during the presentation, objective response rates, for example, haven't really correlated with overall survival in most immunotherapies or many of the immunotherapies that the FDA has been evaluating recently. And so, one of the key reasons we are looking at the data for PFS and overall survival is that in VERSATILE-002 that we see an improvement in PFS as well as overall survival. And based upon that improvement, what's the delta between what we're seeing with our VERSATILE-002 versus what's reported in KEYNOTE 048 with KEYTRUDA monotherapy. And then based upon that delta for both the PFS and the overall survival, that will inform us in determining how we design the trial and what we could use as an interim data look. And so, that delta is really going to determine the statistics in terms of what's the size of the patient population that we're going to need before we see PFS, if we have seen an increase in PFS, but very importantly, we would also want that to be associated with an increase in overall survival, at least an indication that we improved on overall survival. And that's why those numbers were very important and that's why we have to wait to get some clarity to those numbers before being able to design the trial. We're now waiting for the feedback from the various countries. That may cause us to tweak things a little bit before we finalize that design. But we are absolutely looking to design this trial to get some early looks to be able to go and have discussions with the FDA rather than waiting to go through the entire trial to completion of the trial before having discussions with the FDA. So we're looking specifically at that design in our design.

The final question would be on the triple combo. I know that you highlighted earlier how it's somewhat out of your hands with a partner running the trial. Can you walk through expectations or the current expectations for sort of data – next data from this? I know 003 is clear, the focus here. But any thoughts on potentially a Phase 3 study in the triple combo at some point in the future?

Absolutely. I think with the triple combination, so the triple combination is not out of our hands. The NCI trial is essentially completed. Right now, what we've done is we have acquired PDS0301. So, really, it's now in our control in terms of the partnership with Merck KGaA. They are providing us with the material, we're designing the trial. However, to complete design of that trial and to have an efficient trial, we're also looking at PDS0101 plus KEYTRUDA which is a commercial checkpoint inhibitor in this exact patient population we're going to be treating, which is recurrent metastatic head and neck cancer. And, therefore, we anticipate that we should see this data sometime in Q3. That data, even though we're looking at PDS0101 and KEYTRUDA without IL-12, we know that IL-12 is critical in these checkpoint inhibitor refractory patients. So that data will not necessarily be essentially what we would anticipate seeing in the Phase 3 trial, but it will be very informative. If, for example, we already see an improvement in overall survival, even without IL-12 in that patient population. That information then allows us to more efficiently design the statistical portion of that Phase 3 clinical trial. So, those are the key pieces of information we're looking for. We're also, at the same time, doing the work needed to identify the correct commercial manufacturer for that product as we take it over. So, essentially, what we want to do as we go into our Phase 3 clinical trials is to make sure that it's going to be pretty much very similar to what the commercial product is going to look like in terms of the manufacturing. That mitigates your risk significantly. It speeds up going from your BLA to actually producing and selling your commercial product. So, those are some of the key things that we did for VERSATILE-003 and would like to take the same approach with the triple combination to make that process much more efficient once we start it from beginning to end. So, currently, we are prioritizing getting VERSATILE-003 up and running. But once that's happened, our then primary goal is – primary focus would then be getting the triple combination also up and running. Our key here is commercialization of PDS0101 and commercialization of PDS0101 Plus PDS0301. So that's really the approach we're taking to make sure that we mitigate risk as much as possible and make sure that we can execute the most efficient trial possible.

[Operator Instructions]. Our next question is coming from Robert LeBoyer from Noble Capital Markets.

Thank you for all the details you've given on the VERSATILE and the triple therapy trials. My question has to do with the MD Anderson and the Mayo Clinic data that's been coming out and whether you have plans to include those in trials or any milestones going forward or things to look forward to from those indications.

As Frank mentioned, both the MD Anderson led IMMUNOCERV trial, as well as the Mayo Clinic trial are investigator-initiated studies. So, we don't have control over the accrual rates or actually the publication or presentation of scientific data from those trials. However, we do know that there has been significant interest and enrollment and accrual to the Mayo IIT trial. Just reminding everyone that this is using and investigating PDS0101 alone or in combination with KEYTRUDA prior to definitive curative surgical resection in individuals who are presenting for initial treatment of HPV 16 oral pharyngeal cancer. Our hope is that we will be hearing from investigators and that they'll be able to present some interim data, hopefully, this year regarding preliminary findings in this population. It's very important to us because this study is going to provide us insight into not only immunogenicity, tumor shrinkage prior to surgery, pathologic response in tissues, but also an important examination of the biomarker of circulating tumor HPV 16 DNA. The IMMUNOCERV data from MD Anderson was on the first nine subjects who had actually completed their day 170 evaluations. We know that there are additional patients from this study that have already undergone treatment, but we're not at that time point to allow presentation of their data at the end of 2022. So, we look forward to additional data as that matures from that study as well.

Lauren, do you want to add a little bit of about the Mayo Clinic and how it could be translated into a potential randomized trial? I think that may also help.

One of the things that we're very interested in is seeing whether or not we can impact differentiating outcomes for patients earlier in disease. And so, we hope to see, in addition to whether or not we see tumor shrinkage and declines in circulating tumor DNA and whether or not those are predictive of disease recurrence, we would potentially design a randomized trial to look at PDS0101 alone versus PDS0101 in combination with KEYTRUDA in this neoadjuvant treatment setting. Merck has published studies examining KEYTRUDA alone in the neoadjuvant treatment setting with some preliminary evidence of tumor shrinkage and minimal pathologic response and we would hope to improve on that.

With both of them, there is a significant commercial opportunity in both trials. And so, the key here is really getting that basic information that will say, okay, yes, move forward. And if it's yes move forward, how do we design that control trial based upon the information that we receive from both trials. So both provide us with a significant commercial opportunity that we are currently waiting for the data to make the next decision.

Thank you. We've reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments.

Thank you very much. Well, thank you very much for joining us today on our fourth quarter and full year ended earnings conference call. So, while 2022 was the year of tremendous progress for both our clinical and preclinical development programs, 2023 is poised to be transformational for our platform technologies in PDS Biotech. I will reiterate that our key goal this year is to prioritize rapid commercialization of PDS0101 first in the VERSATILE-003 study. We have selected and completed manufacturing of PDS0101 at our preferred commercial manufacturer for VERSATILE-003. We will also progress activities needed to commercialize PDS0101 in combination with PDS0301. We will continue with activities necessary to progress PDS0103 to IND this year. And we also plan to continue progressing discussions with NIAID towards hopefully getting PDS0202 for universal flu into the clinic. We thank you for your continued interest. And we will continue to update you as we advance through this exciting journey. Thank you very much.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.