QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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(Address of principal executive offices)
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(
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(Registrant’s telephone number)
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(Former name, former address and former fiscal year, if changed since last report)
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Title of each class
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Trading symbol(s)
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Name of each exchange on which registered
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Large accelerated filer ☐
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Accelerated filer ☐
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Smaller Reporting Company
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Emerging growth company
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Page
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Part I — Financial Information
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Item 1.
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Financial Statements (Unaudited):
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3
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|||
4
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5
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6
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|||
7
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|||
Item 2.
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17
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Item 3.
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30
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Item 4.
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30
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31
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Item 1.
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31
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Item 1A.
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31
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Item 2.
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34
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Item 3.
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34
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Item 4.
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34
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Item 5.
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34
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Item 6.
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34
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35
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36
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PART 1.
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FINANCIAL INFORMATION
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ITEM 1.
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FINANCIAL STATEMENTS
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September 30, 2022
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December 31, 2021
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|||||||
ASSETS
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(unaudited)
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|||||||
Current assets:
|
||||||||
Cash and cash equivalents
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$
|
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$
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||||
Prepaid expenses and other
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|
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||||||
Total current assets
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||||||
Property and equipment, net
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||||||
Financing lease right-to-use assets
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||||||||
Operating lease right-to-use asset
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||||||
Total assets
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$
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$
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||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||||||
Current liabilities:
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||||||||
Accounts payable
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$
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$
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|
||||
Accrued expenses
|
|
|
||||||
Financing lease obligation-short term
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||||||||
Operating lease obligation-short term
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|
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||||||
Total current liabilities
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||||||
Noncurrent liabilities:
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||||||||
Note payable, net of debt discount
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||||||||
Financing lease obligation-long term
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||||||||
Operating lease obligation-long term
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||||||
Total liabilities:
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$
|
|
$
|
|
||||
STOCKHOLDERS’ EQUITY
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||||||||
Common stock, $
|
|
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||||||
Additional paid-in capital
|
|
|
||||||
Accumulated deficit
|
(
|
)
|
(
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)
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||||
Total stockholders’ equity
|
|
|
||||||
Total liabilities and stockholders’ equity
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$
|
|
$
|
|
Three Months Ended September 30,
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Nine Months Ended September 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development expenses
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
General and administrative expenses
|
|
|
|
|
||||||||||||
Total operating expenses
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|
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|
||||||||||||
Loss from operations
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Interest (expenses) income, net:
|
||||||||||||||||
Interest (expense) income, net
|
(
|
)
|
|
(
|
)
|
|
||||||||||
Loss before income taxes | ( |
) |
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Benefit for income taxes | ||||||||||||||||
Net loss and comprehensive loss
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Per share information:
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||||||||||||||||
Net loss per share, basic and diluted
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Weighted average common shares outstanding, basic, and diluted
|
|
|
|
|
Common Stock
|
||||||||||||||||||||
Shares
Issued
|
Amount
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Total
Equity
|
||||||||||||||||
January 1, 2021
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Stock - based compensation expense
|
–
|
|
|
|
|
|||||||||||||||
Issuance of common stock from 401K match
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|
|
|
|
|
|||||||||||||||
Net loss
|
–
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Balance - March 31, 2021
|
|
|
|
(
|
)
|
|
||||||||||||||
Stock based compensation expense
|
–
|
|
|
|
|
|||||||||||||||
Issuance of common stock from 401K match
|
|
|
(
|
)
|
|
|
||||||||||||||
Issuance of common stock, from exercise of stock options
|
|
|
|
|
|
|||||||||||||||
Issuances of common stock, net of issuance costs
|
|
|
|
|
|
|||||||||||||||
Net loss
|
–
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Balance - June 30, 2021
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Stock based compensation expense
|
– | |||||||||||||||||||
Issuance of common stock, from exercise of stock options
|
||||||||||||||||||||
Net loss
|
– | ( |
) | ( |
) | |||||||||||||||
Balance - September 30, 2021
|
$ | $ | $ | ( |
) | $ |
Common Stock
|
||||||||||||||||||||
Shares
Issued
|
Amount
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Total
Equity
|
||||||||||||||||
January 1, 2022
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Stock based compensation expense
|
–
|
|
|
|
|
|||||||||||||||
Issuances of common stock, from exercise of stock options
|
|
|
|
|
|
|||||||||||||||
Net loss
|
–
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Balance - March 31, 2022
|
|
|
|
(
|
)
|
|
||||||||||||||
Stock based compensation expense
|
–
|
|
|
|
|
|||||||||||||||
Issuances of common stock, from exercise of stock options
|
|
|
|
|
|
|||||||||||||||
Net loss
|
–
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Balance - June 30, 2022
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Stock based compensation expense
|
– | |||||||||||||||||||
Issuance of warrants
|
– | |||||||||||||||||||
Net loss
|
– | ( |
) | ( |
) | |||||||||||||||
Balance - September 30, 2022
|
$ | $ | $ | ( |
) | $ |
Nine Months Ended September 30,
|
||||||||
2022
|
2021
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Stock-based compensation expense
|
|
|
||||||
Stock-based 401K company common match
|
|
|
||||||
Amortization of debt discount
|
||||||||
Depreciation expense
|
|
|
||||||
Operating lease expense
|
|
|
||||||
Finance lease amortization expense
|
||||||||
Changes in assets and liabilities:
|
||||||||
Prepaid expenses and other assets
|
(
|
)
|
(
|
)
|
||||
Finance lease right-to-use asset
|
( |
) | ||||||
Accounts payable
|
|
|
||||||
Accrued expenses
|
|
|
||||||
Finance lease liabilities
|
||||||||
Operating lease liabilities
|
(
|
)
|
(
|
)
|
||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of note payable
|
||||||||
Payment for debt issuance costs
|
( |
) | ||||||
Proceeds from exercise of stock options
|
||||||||
Proceeds from issuance of common stock, net of issuance costs
|
||||||||
Net cash provided by financing activities
|
|
|||||||
Net increase in cash and cash equivalents
|
|
|
||||||
Cash and cash equivalents at beginning of period
|
|
|
||||||
Cash and cash equivalents at end of period | ||||||||
Supplemental information of cash and non-cash transactions:
|
||||||||
Cash paid for interest
|
$
|
|
$
|
|
||||
Fair value of warrants issued in connection with debt
|
$ |
$ |
(A) |
Unaudited interim financial statements:
|
(B) |
Use of estimates:
|
(C) |
Significant risks and uncertainties:
|
(D) |
Cash equivalents and concentration of cash balance:
|
(E) |
Research and development:
|
(F) |
Patent costs:
|
(G) |
Stock-based compensation:
|
(H) |
Net loss per common share:
|
As of September 30,
|
||||||||
2022
|
2021
|
|||||||
Stock options to purchase Common Stock
|
|
|
||||||
Warrants to purchase Common Stock
|
|
|
||||||
Total
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||||||
Total
|
Quoted Prices in
Active Markets
(Level 1)
|
Quoted Prices in
Inactive Markets
(Level 2)
|
Significant
Unobservable Inputs
(Level 3)
|
|||||||||||||
As of September 30, 2022: (unaudited)
|
||||||||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
As of December
31, 2021
|
||||||||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
As of September 30,
|
||||||||
2022
|
2021
|
|||||||
Cash paid for operating lease liabilities
|
$
|
|
$
|
|
Year ended December 31,
|
||||
2022 (remaining three months)
|
$
|
|
||
2023
|
|
|||
2024
|
|
|||
2025
|
|
|||
2026 and after
|
|
|||
Total future minimum lease payments
|
|
|||
Less imputed interest
|
(
|
)
|
||
$
|
|
As of September 30,
|
||||||||
2022
|
2021
|
|||||||
Cash paid for finance lease liabilities
|
$
|
|
$
|
|
Year ended December 31,
|
||||
2022 (remaining three months)
|
$
|
|
||
2023
|
|
|||
2024
|
|
|||
2025
|
|
|||
2026 and after
|
|
|||
Total future minimum lease payments
|
|
|||
Less imputed interest
|
(
|
)
|
||
Remaining lease liability
|
$
|
|
As of
September 30, 2022
|
As of
December 31, 2021
|
|||||||
Accrued research and development
|
$
|
|
$
|
|
||||
Accrued professional fees
|
|
|
||||||
Accrued compensation
|
|
|
||||||
Accrued interest on debt
|
||||||||
Accrued rent | ||||||||
Total
|
$
|
|
$
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
Stock-Based Compensation
|
||||||||||||||||
Research and development
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
General and administrative
|
|
|
|
|
|
|||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Weighted
Average
|
Weighted
Average
|
Weighted
Average
|
Weighted
Average
|
|||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
Volatility
|
|
%
|
|
%
|
|
%
|
|
%
|
||||||||
Risk-Free Interest Rate
|
|
%
|
|
%
|
|
%
|
|
%
|
||||||||
Expected Term in Years
|
|
|
|
|
||||||||||||
Dividend Rate
|
|
|
|
|
||||||||||||
Fair Value of Option on Grant Date
|
$
|
|
$
|
|
$
|
|
$
|
|
Number
of Shares
|
Weighted
Average
Exercise Price
|
Weighted Average
Remaining
Contractual
Life in Years
|
Aggregate
Intrinsic Value
|
|||||||||||||
Options outstanding at December 31, 2021
|
|
$
|
|
|
$
|
|
||||||||||
Granted
|
|
|
|
|
|
|||||||||||
Exercised
|
(
|
)
|
|
|
|
|||||||||||
Forfeited and expired
|
(
|
)
|
|
|
|
|||||||||||
Options outstanding at September 30, 2022
|
|
$
|
|
|
$
|
|
||||||||||
Vested and expected to vest at September 30, 2022
|
|
$
|
|
|
$
|
|
||||||||||
Exercisable at September 30, 2022
|
|
$
|
|
|
$
|
|
ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
● |
the Company’s ability to protect its intellectual property rights;
|
● |
the Company’s anticipated capital requirements, including the Company’s anticipated cash runway and the Company’s current expectations regarding its plans for future equity financings;
|
● |
the Company’s dependence on additional financing to fund its operations and complete the development and commercialization of its product candidates, and the risks that raising such additional capital may restrict
the Company’s operations or require the Company to relinquish rights to the Company’s technologies or product candidates;
|
● |
the Company’s limited operating history in the Company’s current line of business, which makes it difficult to evaluate the Company’s prospects, the Company’s business plan or the likelihood of the Company’s
successful implementation of such business plan;
|
● |
the timing for the Company or its partners to initiate the planned clinical trials for PDS0101, PDS0103, PDS0203 and other Versamune and
Infectimune based products and the future success of such trials;
|
● |
the successful implementation of the Company’s research and development programs and collaborations, including any collaboration studies concerning PDS0101, PDS0203 and other Versamune and Infectimune based
products and the Company’s interpretation of the results and findings of such programs and collaborations and whether such results are sufficient to support the future success of the Company’s product candidates;
|
● |
the success, timing and cost of the Company’s ongoing clinical trials and anticipated clinical trials for the Company’s current product candidates, including statements regarding the timing of initiation, pace of
enrollment and completion of the trials (including our ability to fully fund our disclosed clinical trials, which assumes no material changes to our currently projected expenses), futility analyses, presentations at conferences and data
reported in an abstract, and receipt of interim results (including, without limitation, any preclinical results or data), which are not necessarily indicative of the final results of the Company’s ongoing clinical trials;
|
● |
expectations for the clinical and preclinical development, manufacturing, regulatory approval, and commercialization of our product candidates;
|
● |
any Company statements about its understanding of product candidates’ mechanisms of action and interpretation of preclinical and early clinical results from its clinical development programs and any collaboration
studies; the acceptance by the market of the Company’s product candidates, if approved;
|
● |
the timing of and the Company’s ability to obtain and maintain U.S. Food and Drug Administration or other regulatory authority approval of, or other action with respect to, the Company’s product candidates; and
|
● |
other factors, including legislative, regulatory, political and economic developments not within the Company’s control, including unforeseen circumstances or other disruptions to normal business operations arising
from or related to COVID-19 and those listed under Part II, Item 1A. Risk Factors.
|
● |
Response rates thus far* (tumor shrinkage greater than 30%) seen in 7/17 (41.2%) patients in comparison to the published results of approximately 19% for approved checkpoint inhibitors, used as monotherapy for
recurrent or metastatic head and neck cancer, with 2 of the 7 having complete responses (CR)
|
● |
Stable disease (SD) was reported in 6/17 (35.3%) patients, with 4 of the 6 (67%) experiencing tumor shrinkage of less than 30%
|
● |
Clinical efficacy (ORR* + SD) was seen in 13/17 (76.5%) patients
|
● |
Progressive/ongoing disease was reported in 4/17 (23.5%) patients
|
● |
Patients had received a median of 4/5 doses of PDS0101 (range 1-5) and 9/35 doses of KEYTRUDA® (range 1-18)
|
● |
There were no treatment-related adverse events greater than or equal to Grade 3 (N=19)
|
● |
No patients required dose interruption or reduction on the combination treatment
|
● |
No patients discontinued the combination treatment
|
● |
At 9 months of follow up (median not yet achieved):
|
● |
Progression free survival (PFS) rate was 55.2%
|
● |
Overall survival (OS) rate was 87.2%
|
● |
no control or comparative studies have been conducted between checkpoint inhibitors and PDS0101
|
● |
Objective response (OR = >30% tumor reduction) was seen in 88% (7/8) of patients with checkpoint-naive disease; 4/7 (57%) patients’ responses are ongoing (median 17 months).
|
● |
With checkpoint refractory patients: M9241 dosing appears to affect response rates, with 5/8 (63%) patients receiving M9241 at 16.8 mcg/kg achieving an OR compared to 1/14 (7%) patients who received M9241 at 8
mcg/kg achieving an OR; 4/6 (67%) patients’ responses are ongoing (median 12 months).
|
● |
Tumor reduction was seen in 45% (10/22) of patients with checkpoint-refractory disease, including patients receiving high or low dose M9241.
|
● |
In checkpoint refractory patients treated with high or low dose M9241, survival outcomes were similar (p=0.96 by Kaplan Meier analysis). At a median of 12 months of follow up 17/22 (77%) of patients were alive.
|
● |
In checkpoint naïve patients 6/8 (75%) were alive at median 17 months of follow up.
|
● |
Similar OR and survival were seen across all types of HPV16-positive cancers.
|
● |
Preliminary safety data: 13/30 (43%) of patients experienced Grade 3 treatment-related adverse events (AEs), and 2/30 patients (7%) experienced Grade 4 AEs. There were no grade 5 treatment-related AEs.
|
● |
The study results to date strongly suggest, in agreement with the published preclinical studies, that all 3 drugs contribute to the clinical outcomes.
|
● |
Survival data: 66% (19/29) of HPV16-positive CPI refractory patients in the cohort were alive at a median follow up of 16 months
|
● |
Safety profile: 48% (24/50) patients experienced Grade 3 treatment-related adverse events (AEs), and 4% (2/50) patients experienced Grade 4 AEs. There were no Grade 3 treatment-related AEs.
|
● |
HPV16-positive CPI naïve patients: 75% (6/8) were alive at a median follow up of 25 months and 38% (3/8) of responders had a complete response.
|
● |
9 of the 17 patients have now completed a Day 170 post-treatment Positron Emission Tomography, Computed Tomography (PET CT) scan to assess the status of the cancer. This includes 78% (7/9) of treated patients with
advanced cervical cancer (FIGO stage III or IV).
|
● |
100% (9/9) of patients treated with the combination of PDS0101 and CRT had an objective response.
|
● |
89% (8/9) of patients treated with the combination of PDS0101 and CRT demonstrated a complete response (CR) on Day 170 by PET CT. One patient who received 3 of the 5 scheduled doses of PDS0101 showed signs of
residual disease. One patient who had a CR died from an event unrelated to either their underlying disease or treatment.
|
● |
1-year disease-free survival and 1-year overall survival of 89% (8/9) in patients treated with the combination of PDS0101 and CRT
|
● |
As previously reported, data confirm PDS0101 treatment activates HPV16-specific CD8+ T cells. This increase was not seen in patients who did not receive PDS0101. The increase in HPV16-specific T cells generated
by the treatment is positively correlated with tumor cell death, suggesting cytotoxic CD8+ T cells are important mediators of antigen-specific immunity.
|
● |
The data affirm that PDS0101 activates Type 1 interferon pathway in humans, mimicking the mechanism previously demonstrated in preclinical studies in animal models
|
● |
Toxicity of PDS0101 remains limited to low-grade local injection site reactions.
|
● |
the timing and costs of our planned clinical trials;
|
● |
the timing and costs of our planned preclinical studies of our Versamune® platform;
|
● |
the outcome, timing and costs of seeking regulatory approvals;
|
● |
the terms and timing of any future collaborations, licensing, consulting or other arrangements that we may enter into;
|
● |
the amount and timing of any payments we may be required to make in connection with the licensing, filing, prosecution, maintenance, defense and enforcement of any patents or patent applications or other
intellectual property rights; and
|
● |
the extent to which we license or acquire other products and technologies.
|
Three Months Ended
September 30,
|
Increase
|
|||||||||||||||
2022
|
2021
|
$ Amount
|
%
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development expenses
|
$
|
4,353
|
$
|
3,688
|
$
|
665
|
18
|
%
|
||||||||
General and administrative expenses
|
2,926
|
3,274
|
(348
|
)
|
(11
|
)%
|
||||||||||
Total operating expenses
|
7,279
|
6,962
|
317
|
5
|
%
|
|||||||||||
Loss from operations
|
(7,279
|
)
|
(6,962
|
)
|
(317
|
)
|
5
|
%
|
||||||||
Interest income (expense), net
|
(145
|
)
|
1
|
(146
|
)
|
(14,600
|
)%
|
|||||||||
Net loss and comprehensive loss
|
$
|
(7,424
|
)
|
$
|
(6,961
|
)
|
$
|
(463
|
)
|
7
|
%
|
Nine Months Ended
September 30,
|
Increase (Decrease)
|
|||||||||||||||
2022
|
2021
|
$ Amount
|
%
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development expenses
|
$
|
13,276
|
$
|
7,865
|
$
|
5,411
|
69
|
%
|
||||||||
General and administrative expenses
|
9,575
|
7,252
|
2,323
|
32
|
%
|
|||||||||||
Total operating expenses
|
22,851
|
15,117
|
7,734
|
51
|
%
|
|||||||||||
Loss from operations
|
(22,851
|
)
|
(15,117
|
)
|
(7,734
|
)
|
51
|
%
|
||||||||
Interest income (expense), net
|
(65
|
)
|
3
|
(68
|
)
|
(2,267
|
)%
|
|||||||||
Benefit from income taxes
|
1,199
|
4,516
|
(3,317
|
)
|
(73
|
)%
|
||||||||||
Net loss and comprehensive loss
|
$
|
(21,717
|
)
|
$
|
(10,598
|
)
|
$
|
(11,119
|
)
|
105
|
%
|
Nine Months Ended September 30,
|
||||||||
2022
|
2021
|
|||||||
Net cash used in operating activities
|
$
|
(18,181
|
)
|
$
|
(7,985
|
)
|
||
Net cash provided by financing activities
|
24,581
|
48,889
|
||||||
Net increase in cash and cash equivalents
|
$
|
6,400
|
$
|
40,904
|
● |
the initiation, progress, timing, costs and results of our planned clinical trials;
|
● |
the effects of health epidemics, pandemics, or outbreaks of infectious diseases, including the recent COVID-19 pandemic, on our business operations, financial condition, results of operations and cash flows;
|