Greetings. Welcome to PDS Biotech Second Quarter 2022 Earnings Call and Webcast. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. . Please note that this conference is being recorded. At this time, I'll turn the conference over to Gabby DeGravina with Investor Relations. Gabby, you may now begin.

Good morning. And welcome to PDS Biotechnology's second quarter 2022 earnings conference call and audio webcast. With me today 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 ended June 30, 2022. We encourage everyone to read the press release as well as PDS Biotech's report on Form 10-Q, 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 in 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, management. These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted. A description of these 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 which is required by applicable law or regulation, PDSB undertakes no obligation to update the forward-looking statements included today to reflect subsequent events or circumstances. As you can see, we're utilizing slides to help summarize our programs and milestones and aiming to streamline the presentation of background information and updates. We know your time is a precious commodity, and we want to leave as much time as possible for Q&A. Your feedback on this structure would be welcome. With that, I would now like to turn the call over to Dr. Frank Bedu-Addo. Frank?

Thank you, Gabby. And thanks to all of you for joining us this morning. This past quarter, the PDS Biotech team has worked diligently to advance the development of our oncology and infectious disease pipelines, and we have made tremendous progress on these fronts. Here you can see the broad overview of our lead Versamune-based candidate, PDS0101, an investigational immunotherapy designed to treat human papilloma virus or HPV16 associated cancers. As a reminder, our Versamune technology platform promotes the delivery of tumor associated proteins, also called antigens to the immune system and simultaneously activates the immune system to induce antigen-specific killer T cells. PDS0101 combines Versamune with HPV16 antigens, and therefore promotes the induction of CDA positive killer T cells that target and kill tumors that are HPV16 positive. Our second proprietary oncology platform combines Versamune with cytokines such as IL-12. This combination of Versamune with cytokines leads to the reduction in the population of immune suppressive cells, such as myeloid derived suppressor cells, also called MDSC. Preclinical data with this platform suggests that this technology may allow us to treat a broader population of advanced cancer patients beyond those who respond to checkpoint inhibitors. We are evaluating PDS0101 across four ongoing Phase 2 clinical trials. In the three most progressed studies, we are evaluating PDS0101 as a combination treatment with various anti-cancer agents in advanced and refractory cancers. We are studying these combinations in multiple HPV associated diseases and at different stages of the disease from locally advanced cancer to terminally ill patients with recurrent metastatic checkpoint inhibitor refractory disease. We are performing these studies in collaboration with some of the most respected cancer centers in the world. In the fourth trial, investigators at Mayo Clinic are leading a study to evaluate PDS0101 as a monotherapy or in combination…

Thank you, Frank. And thanks to all of you for joining us on the call today. As Frank just mentioned, we recently presented encouraging preclinical data from our influenza vaccine program in a poster at the American Society of Virology Meeting. In this study, it was found overall that PDS0202 neutralized multiple strains of influenza and provided full protection against lethal infection in animals. The PDS0202 universal flu vaccine contains the Infectimune nanoparticles formulated with computationally optimized broadly reactive antigens, or COBRA, influenza antigens developed by the laboratory of renowned influence expert Dr. Ted Ross. The vaccine was evaluated for its potential ability to induce broadly neutralizing and diverse types of influenza antibodies. These antibodies were demonstrated to be effective against multiple influenza strains and also provided full protection against lethal doses of the flu virus. Highlights of the poster included: Animals vaccinated with PDS0202 demonstrated significantly higher antibody levels against multiple influenza strains compared to animals vaccinated without Infectimune. 100% of animals vaccinated with PDS0202 survived a lethal dose of the flu virus without sickness. All animals in the COBRA antigen-only group got sick and showed significant body weight loss and only 40% survived. None of the untreated animals survived the lethal challenge. PDS0202 was equally effective, using 25-fold lower doses of the COBRA antigens. Importantly, no detectable virus was found in lungs from animals vaccinated with PDS0202. Another advantage of PDS0202 is the induction of T cells in addition to antibodies to provide robust protection against disease. Currently, there is no universal flu vaccine that provides broad protection against multiple strains of influenza. According to the World Health Organization, the flu is estimated to result in about 3 million to 5 million cases of severe illness and up to 650,000 deaths each year. We are pleased by these…

Thank you, Lauren. And thanks to all of you on the call today. We continue to manage our cash carefully and have been fiscally prudent with our clinical strategy, leveraging partners to allocate costs to cover the investigation of a wide range of HPV16 associated cancers. We wish to warmly thank all of those partners for their interest and confidence in PDS0101 and the Versamune platform. Moving into our summary financials. For the second quarter ended June 30, 2022, research and development expenses increased to $3.8 million for the three months ended June 30, 2022 and $2.8 million for the three months ended June 30, 2021. The increase of $1 million was primarily attributable to an increase of $0.4 million in clinical study and research and development costs, $0.7 million in personnel costs, $0.1 million in facilities, and this was partially offset by a decrease of $0.2 million in manufacturing services. General and administrative expenses increased to $3.3 million for the three months ended June 30, 2022, up from $2.3 million for the three months ended June 30, 2021. The increase of $1 million is primarily attributable to an increase of $0.8 million in personnel costs and $0.2 million in legal fees. We finished the quarter with nearly $53 million in cash, a strong position as a result of our partnering model and continuous financial discipline, which we expect will fund our operations into 2024. PDS has brought in key resources to set ourselves up for the next stage of growth. We've also expanded our team with the addition of experienced biotech and pharma veterans to lead our business development and legal functions. In May, we welcomed Sanjay Zaveri as Senior Vice President, Business Development to lead our business strategy and manage the company's potential licensing and partnering opportunities in support of our pipeline. And in June, we welcomed Spencer Brown as Senior Vice President and General Counsel. With that, let's open it up to questions. Operator?

. Our first question is from the line of Louise Chen with Cantor Fitzgerald.

Congratulations on all the progress this quarter. I had a few here for you. First question I wanted to ask you was you talked about the EU opportunity. So, I'm curious if you could size that or help us think about that opportunity for you. And then the next steps for your flu vaccine. What are you thinking about here? And could you compare and contrast your platform with the mRNA platforms we've seen some data from? And the last question I have for you is, what was the physician feedback on your pipeline at ASCO when you presented your data? Thank you.

I will start answering and I'll also hand over to Lauren to add any additional comments. With the EU opportunity, I think, as you know, head and neck cancer is widely spread. And one of the key components of an efficient clinical trial is recruitment. We believe that expanding the trial into EU is going to significantly enhance our ability to enroll patients and to run the trial efficiently. Now we are we are looking forward to potentially moving into a pivotal trial pending the feedback from the FDA. And we anticipate that getting the EU sites, getting those regulators familiar with our products and our data to date, even if we have to transition into a pivotal trial, will be very beneficial in getting those trials running outside the United States. As you may be aware, sometimes it takes several months and even sometimes close to a year to get some of those ex-US sites up and running. And so, getting those activities going sooner than later, we believe, could potentially be very important in allowing us to efficiently enroll in the trial and get the trial executed efficiently. And so, that was one of our key goals in getting the EU sites up and going. And that is, as I mentioned, taken account in our financial projections. It's not a new activity that we are undertaking currently. Moving on to the flu vaccine. Yes, the mRNA platforms have been extremely impressive in their ability to rapidly generate vaccines against multiple agents, in the viral agents, for example. I think there has been some data announced recently showing that the seasonal flu vaccine result is comparable to what's seen with the current flu vaccine, Fluzone, for example. Now, what we are doing is very different. What we are developing…

The feedback at ASCO 2022 regarding the VERSATILE-002 poster, as well as the NCI triple combination poster was significant. The feedback from physicians on VERSATILE-002 was not only the objective response rate of 41%, which is historically greater than a doubling of the 17% objective response rate seen with KEYNOTE-048. So, they were impressed by that. There was a lot of commentary regarding that. The second focus of the comments that we got was the tolerability of the regimen and specifically that there were no greater than or equal to grade 3 treatment-related adverse events, and that there were no discontinuations of drug therapy associated with the combination regimen. This contrast to greater than grade 3 events of 17% reported with KEYNOTE-048. So, physicians were very impressed by that differentiating tolerability of the combination. Regarding the triple combination, everyone was very, very impressed and there was a lot of commentary on the survival data, not only in the CPI naïve patients where the follow up was more extended, 17 months of follow up, but the fact that even in CPR refractory subjects that had received the triple combination, whether it was low dose or high dose, that the survival was approximately 77%. So, it was really about survival associated with the triple combination, as well as the differentiating tolerability of the dual combination profile in the VERSATILE-002 study.

The next question comes from the line of Jim Malloy with Alliance Global Partners.

I had a quick question. I was wondering if you could talk a little bit about characterization of potential partnership markets. I know, obviously, KEYTRUDA and Merck, the obvious elephant in the room. But how would you characterize opportunities for potential partnerships, given some of the data you've seen, strong data you've seen so far?

I think the more data we continue to generate, the stronger and stronger the PDS story becomes, and the more compelling the data also becomes. And I think also, with the large pharma companies, as you know, partnering is one of our strategies, but I think they will make their internal decisions as to what is critical or important for them in their partnering strategy. But I think at PDS, we continue to progress our data generation. And we believe that the more data we continue to generate, the stronger the story becomes and also creates strong opportunities for partnering with Merck and beyond Merck, right? So, I think we are looking at a broad business development strategy. And also, very importantly, if we get the green light from the FDA to move into pivotal trials, that ultimately puts us in a different category, right? That that makes us even more attractive for potential partnering. And we have brought on a senior vice president of business development whose key focus is really to start understanding and generating those business development opportunities. So, we are certainly looking broadly. We believe the data that has been generated to date – as I mentioned, we have data already from 80 patients across both trials. The data from both trials provide strong indications that PDS0101 is working across both indications of both trials and across the entire spectrum of HPV cancers. So that's a very compelling package of data. 80 patients is a very significant number of patients. We believe we have very strong data. And that's what has caused us to activate this approach of beginning those business development discussions. So, yes, Jim, it is an important piece of our business strategy, and that's something that we're focused on. And we're looking very broadly just beyond our current partners.

Maybe a quick follow-up, if I could. Can you talk a little bit on timing of end of Phase 2, potentially starting a pivotal Phase 3 for the VERSATILE program, the combo with KEYTRUDA and then potential timing for a start of Phase 1 for the universal flu?

Jim, could you please repeat the first part of the question?

Current expectations and timing for an end of Phase 2 with the FDA and starting potentially pivotal Phase 3 for the KEYTRUDA combo.

We're anticipating talking to the FDA regarding that trial and our proposal for a pivotal trial this quarter. And so, by the end of this quarter, we should have strong feedback from the FDA in terms of whether or not we can move that trial forward into a pivotal. If we do get the green light to do so, we anticipate that the trial could be started sometime in the first half of next year. But, again, that is contingent on the response that we get from the FDA. That would be our hope, and that's what we are preparing to do. And, hopefully, we will be able to move that into pivotals early next year. With the universal flu vaccine, I think as I mentioned during the earlier part of the call, we are working with the NIAID. We are hopeful that we will be attract some non-dilutive funding to move that into human clinical trials. It's very difficult to project what the exact timing would be. And Dr. Ted Ross is really a strong advocate for the program. And he's working with the NIAID to also present to them the data, the opportunity and so forth. And as I mentioned, Ted Ross himself and the NIAID have met. The PDS team has also met with the NIAID to provide them with the information that they would hopefully need to make that decision. So we are hopeful. But that decision has not been finalized at the NIAID yet. And so, my anticipation is that I would say the earliest it could potentially go into human clinical trials will be sometime next year if everything works out and this program is green lighted and funded by the NIAID, but we will updated on that progress.

Our next question comes from the line of Leland Gershell with Oppenheimer.

Congratulations on the progress. A couple questions for me. Just one kind of sort of science question. Frank, in the VERSATILE-002 data you presented at ASCO, there was an analysis based on the CPS, the complete positive score. It didn't show sort of any clear correlation between those levels and response with the regimen. I'm just wondering if there's any further analysis that you've done to look at that.

Lauren, do you want to take that?

For everyone on the call, just to reinforce, the entry criteria for all study subjects on VERSATILE-002 is that the composite score, the CPS score, measuring PD-L1 in the patient's tumor tissue, they must have a CPS score greater than or equal to 1. That is the current standard of care requirement to receive KEYTRUDA monotherapy. In doing the PD-L1 characterization, we also look to see whether or not individuals have composite scores that are greater than 1, specifically greater than 20%. At this preliminary stage, Leland, we have not seen any correlation at all between CPS score and greater than 20. But this is a small number of subjects that we presented at ASCO and we're going to continue to characterize and look at whether or not the CPS score has any impact on correlation with the clinical outcomes. We have additional studies that are planned regarding characterizing immunogenicity and HPV16 specific responses to see whether or not that correlates with clinical outcomes as well. But that's what we have today.

Just a question on the cervical cancer side. Obviously looking forward to the Phase 2 IMMUNOCERV data that will be coming up. Frank, I just want to ask how those data may change or add to your plans in 2023 and beyond with respect to continued development of the candidate in cancer. Obviously, a huge need in cervical cancer as well. So, just want to ask how you may look to deploy resources alongside the KEYTRUDA combo and head and neck as pending the IMMUNOCERV data set.

That's an important question. I think one of the things to bear in mind is the strategy that we've currently taken of looking at multiple combinations in multiple indications is very important in our strategy of really rapidly understanding which combinations provide the most benefit in which indications. I think one of the things that we would have to do is also to look at the standard of care and how quickly we can improve or what the potential is to improve the standard of care. I think the data that's been generated with VERSATILE and the triple combination are very compelling today. Those are more or less in later stage patients. The early data that's been generated by MD Anderson is also very compelling, but it's still it's still early. So, I think we would like to see what the data looks like, the full data package, when it's available. And I think at that point, we will have to make a decision. If we see some compelling improvement over the standard of care and, as we see with VERSATILE-002, no compounding of the toxicity, I think that would be, again, very compelling. We will have to determine how we prioritize the trials and which ones we want to move into pivotals as we're planning to do now with the triple and the dual. But that's a little bit behind those studies, and very interesting data to date. But I think once the whole package is available, we'll sit down and determine what the real opportunity is in terms of that specific indication.

Our next question comes from the line of Joe Pantginis with H. C. Wainwright.

Frank, more on the flu program. And I want to balance my question by saying obviously the field over the years has been constantly teased with a universal flu vaccine and the data that you presented seemed to differentiate and position you well. I guess I wanted to take the question further, beyond the details you provided today and say, at least what's your broad view of how you can get this to market quickly? Because I know you said you're looking at potential non-dilutive capital or potential grant money from the NIH. How competitive do you think that process is? What would PDS look to potentially do on its own to rapidly advance this asset?

A lot of the things that we have been discussing internally. I think with the universal flu vaccine, one of the things we want to do currently, looking at the infectious diseases versus oncology, is to really focus our resources on the oncology and move those programs towards commercialization as rapidly as possible and to be overall financially efficient. And that's why we've taken the approach of at least trying to get the early data for that universal flu program via some non-dilutive funding approaches. That's really been our key desire to accomplish today. In terms of the differences, I think what's unique here is the antigens that are being utilized. You're right. Universal flu vaccines have been discussed for over a decade. And the approach that has typically been taken has been to put together probably viruses, two or three different strains of the flu together into a single vaccine with the hopes of generating antibodies against those specific strains of the flu that have been incorporated into that particular vaccine. What's been done differently here is the antigen approach in terms of that computational design where a much broader number of strains have been taken into consideration over the last several decades in terms of, okay, what strains of flu have we seen over this last decade, how have they changed over the years, what are the consistent regions of those strains that can be modeled into a specific antigen. Now, when that is done, when you give that vaccine, even without Infectimune, you can see that you get some immune responses, but they are not as broadly protective as when you combine those novel COBRA antigens with Infectimune. The beauty of Infectimune is its ability to do what is necessary to generate a powerful immune response, which…

The next question is coming from the line of Robert LeBoyer with Noble Capital Markets.

I'll keep my question short and just ask about the pivotal trial that could potentially start next year. In terms of what you're seeing, do you have any projections as to the number of patients or length of trial? And secondly, in terms of the out-licensing and business opportunities, do you have any milestones or any parameters as to whether these things are going to be entirely licensed, early stage collaborations to a certain development point or any specific strategy related to those products?

I'll take the first stab and hand it over to Lauren to also give you some additional information on the trial strategy. But in terms of the trials, I think that one of the key things we want to do is to have that discussion with the FDA, have them understand what we're thinking and also get some feedback on what they would like to see in that trial. In terms of how we move forward, we have all options on the table. At least the goal would be that we could potentially partner one or both of them. We're also preparing, just in case, we would want to move them forward on our own independently. Currently, what we would want to do would be to – we have, between now and when we get those trials going, to really understand what the partnering opportunities are and will be and look at what those opportunities are and hopefully make the best decision as we typically would strive to do for the company and the company's shareholders. But, currently, we are evaluating all options and all potential options available to the company. Lauren, would you want to add anything on the clinical trial, the pivotal trials?

We estimate that a pivotal trial looking at the VERSATILE-002 combination, which would involve PDS0101 plus KEYTRUDA versus KEYTRUDA monotherapy in the exact same population that we are currently studying VERSATILE-002 would require approximately 250 to 270 subjects. This is dependent on screen field rates that can vary globally, as well as regionally as well as the incidence of HPV16. As Frank had mentioned, the concurrence with the FDA and advice from the FDA regarding the strategy and the pivotal trial design is going to be critical. And we will hear about that before the end of this quarter, with the hopes that we would start the study in the first half of 2023. The other issue is that, as Frank also mentioned during the call, our expansion into Europe, we believe, is laying the groundwork to not only introduce VERSATILE-002 ex-US, but also set up that infrastructure for our global study. The projected enrollment would be approximately a window of anywhere from 18 months following initiation of the study depending on enrollment rates.

Thank you. We've reached the end of our question-and-answer session. I'll hand the floor back to management for closing remarks.

Thank you very much. Again, thank you for joining us on today's call. As you can see, we've made significant progress during the first half of the year. To date, PDS0101 has been administered to over 100 patients in the ongoing PD-L1 trials and we have provided data from 80 patients in both the KEYTRUDA combination and the National Cancer Institute led triple combination. The fact that recruitment is progressing well and that both the safety and efficacy continue to appear to be strong is extremely encouraging, and we believe provides validation and proof of concept. We look forward to continued progress and success during the next six months ahead. We appreciate your continued support. And we'll update you as we progress our clinical and preclinical programs. We wish you all the best for the remainder of the summer. Thank you very much.

This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.