Advaxis, Inc.
Q2 2019 Earnings Call Transcript

Published: 11 Jun 2019

[Operator:]

Good morning, and welcome to the Advaxis, Inc. Business Update Call. At this time, all participants are in a listen-only mode. Following management’s prepared remarks, we’ll hold a Q&A session. [Operator Instructions] As a reminder, this conference is being recorded June 11, 2019.I would now like to turn the conference over to Yvonne Briggs from LHA. Please go ahead.

[Yvonne Briggs:]

Good morning. This is Yvonne Briggs from – with LHA, the Investor Relations Agency for Advaxis. Thank you all for participating on today’s call. Joining me from Advaxis are Ken Berlin, President and Chief Executive Officer; Dr. Andres Gutierrez, Chief Medical Officer; and Molly Henderson, Chief Financial Officer.Yesterday, after market closed, Advaxis issued a press release reporting fiscal second quarter financial results and highlights of the company’s clinical pipeline. If you’ve not received this news release or if you would like to be added to the company’s e-mail distribution list, please call LHA at 212-838-3777 and speak with Carolyn Curran.Before we begin, I’d like to remind you that comments made by management during this call will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Advaxis. I encourage you to review the company’s SEC filings, including without limitation, the company’s Form 10-K for the fiscal year ended October 31, 2018 filed on January 11, 2019 and other periodic reports filed with the SEC, including Forms 10-Q and 8-K. These filings identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements and other risk factors related to its business operations.Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, June 11, 2019. Except as required by law, Advaxis undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call.With that said, I’d like to turn the call over to Ken Berlin. Ken?

[Kenneth Berlin:]

Thanks, Yvonne. Good morning, everyone, and thank you for joining us. Today, Dr. Gutierrez and I will be reviewing the status of our various clinical development programs, and Molly Henderson will then provide an update on our financial position.We are continuing to advance multiple clinical programs and are encouraged by the clinical and immune signals we are seeing across these programs as demonstrated by the data we reported out this year, particularly in tumor types that historically have been refractory to immunotherapy. I will highlight a few of these items before turning the call over to Dr. Gutierrez to review our pipeline in further detail.We are very pleased with the promising preliminary data from our personalized neoantigen-directed immunotherapy, ADXS-NEO, and what these data may portend for our HOT program.As we have discussed in the past, we believe neoantigen-directed immunotherapies can become an important addition to the cancer treatment paradigm due to the central role of neoantigens in cancer. We have two approaches to targeting neoantigens with our Lm platform, ADXS-NEO, which are constructs that express personalized tumor antigens and ADXS-HOT, which are constructs that express public or shared antigens and other proprietary antigens.Through our clinical experience with our earlier generation, single antigen Lm constructs, we have accumulated data from multiple clinical trials that demonstrate a manageable safety profile, induction of immune responses and clinical activity.We are now pursuing a more challenging path with monotherapy in late-stage patients in our NEO program, including those patients with tumor types that are often refractory to immuno-oncology agents, such as MSS colorectal cancer. Because some of these late-stage and refractory patients invariably will drop out of this trial, while waiting for their personalized constructs to be manufactured due to disease progression, the pace of trial enrollment is affected.On the plus side, however, studying NEO as monotherapy, as we are doing in Part A of this clinical study, allows us to properly define NEO safety profile and immunological and clinical activities, which cannot be easily discerned from combination therapy data. The information gleaned from our NEO monotherapy arm will also help guide our neoantigen clinical development strategy moving forward.We believe the clinical experience with our platform. We have treated nearly 500 patients with various Lm drug constructs, differentiates us from other neoantigen companies who have limited clinical experience with their platforms.Another competitive advantage we have is the mechanism by which our Lm constructs functions with Lm’s unique ability to mimic a natural infection and redirect a rapid and potent immune response against cancer and other associated effects on the immune system.We have already gained valuable insights from ADXS-NEO platform and we have used that insight to advance our ADXS-HOT drug constructs. We are in discussions with a leading academic institution to finalize an investigator-sponsored trial evaluating ADXS-HOT in patients with prostate cancer and anticipate the IND for this construct will be filed later this year.In addition, we are moving forward with our ADXS-HOT construct for bladder cancer and expect to file an IND for this drug candidate in the first-half of next year. We are continuing to evaluate various ways to accelerate bringing more of our HOT constructs into the clinic, such as through additional investigator-sponsored trials and other collaborations.Regarding our AXAL construct, last month, we were pleased to announce the FDA lifted its partial hold on our AIM2CERV study. As you know, AIM2CERV is a Phase 3 clinical trial with AXAL for the treatment of women with high risk, locally advanced cervical cancer.We continue to be in dialogue with the FDA regarding our request for earlier interim analysis among other revisions to the study protocol. To provide additional support for this late-stage program, we are actively exploring potential partnerships for AXAL, as there is a large unmet need for new therapies for this challenge population with cervical cancer.We are intensely focused on our business development efforts and have retained Treehill Partners, a healthcare focused advisory firm, to assist us with our partnering efforts across our numerous drug constructs. We are also pursuing other indications for our AXAL construct and are in discussions with major research centers to initiate two investigator-sponsored trials for head and neck cancer, exploring novel combinations with co-stim antibodies and targeted therapies.We expect the first trial to commence in the third quarter of 2019, later than originally anticipated due to the duration of the partial clinical hold. The second trial is expected to start early in 2020.Now, let me turn the call over to Dr. Gutierrez for further commentary on our clinical programs. Andres?

[Andres Gutierrez:]

Yes. Thank you, Ken, and hello, everyone. I would like to start by stating that we are very pleased with the advancement of our programs and with the preliminary safety and efficacy data generated to date. In particular, to reiterate Ken’s comments, we’re encouraged by the clinical activity and the immune signals demonstrating tumor types that are typically refractory to immunotherapy.Let me start by discussing ADXS-NEO, which utilizes personalized neoantigen – neoantigens to activate a patient’s immune system. This customized approach creates a targeted T-cell response to neoantigens on patient specific mutations. Our ADXS-NEO platform is applicable to a broad range of tumor types and the ongoing Phase 1 trial is evaluating microsatellite-stable colorectal tumors, or MSS CRC, as well as long bladder and head and neck cancers and melanoma.To date, we’re completing the second cohort with monotherapy at a dose that has been safe and tolerable, which has induced substantial antitumor immunity within one week after the first dose, including T-cell responses to neoantigens and antigen spreading.Furthermore, we recently announced data regarding two microsatellite-stable patients with advanced metastatic colorectal cancer, demonstrating an increase in CD8+ T-cell infiltration in the tumor microenvironment after three doses of ADXS-NEO. Both patients transition from cold tumors, meaning, they exhibited little CD8 T-cell infiltration and potential resistant to immunotherapy into more HOT tumors with ADXS-NEO therapy.The early NEO signals, particularly those in colorectal cancer patients, have generated interest and excitement from our investigators and patients, as these tumors may now be sensitive to new therapies, or other treatment modalities.Now we look forward to starting our combination therapy with our checkpoint inhibitor across different tumor types in Part B of the ADXS-NEO study later this year. Since advanced and refractory metastatic MSS CRC is a difficult to treat patient population with limited therapeutic options, we may also further expand this study to combine ADXS-NEO with other treatment modalities for CRC based on their mechanism of action.Moving to the company’s ADXS-HOT, this program targets hotspot mutations that commonly occur in specific cancer types, as well as other proprietary tumor associated antigens. We believe ADXS-HOT has significant advantages compared with certain other neoantigen-focused therapies in development, as it is off-the-shelf and as such, is immediately available for administration to patients in a more cost effective manner.To date, more than 10 different drug candidates have been designed for various tumor types under the ADXS-HOT program. As you recall, the lead drug candidate from this program is ADXS-503, and that candidate is designed to treat most types of non-small cell lung cancer patients.We’re now enrolling patients in a Phase 1/2 clinical trial that will determine the recommended dose, safety, tolerability, immunogenicity and clinical activity of ADXS-503 administered alone and in combination with a checkpoint inhibitor in approximately 50 patients with non-small cell lung cancer in different lines of therapy. Particular interest has been given to the evaluation of first-line therapy in the combination expansion arm of this study.We anticipate initial data from the first cohort of this trial later this year. And as Ken mentioned, we are aiming to submit two additional INDs in the HOT program for other tumor types in the following nine months.Let’s continue with our review of our Phase 1/2 KEYNOTE-046 study testing ADXS-PSA alone and in combination with Merck’s anti-PD-1 therapy KEYTRUDA in patients with metastatic castration-resistant prostate cancer. The combination of ADXS-PSA and KEYTRUDA, or pembrolizumab has been well-tolerated by patients to date with no additive toxicity observed. Correlated immune analysis have shown T-cell responses against PSA in 75% of subjects and antigen spreading in 85% of subjects.We also recently announced updated data regarding the combination arm of the study, reporting that most of the patients are microsatellite-stable, and therefore, are not expected to respond to treatment with a checkpoint inhibitor. However, patients in the combination arm are indeed showing activity and are demonstrating prolonged overall survival.In fact, median overall survival was 20.1 months of data growth on February 1, 2019 in this dataset of 37 patients. There are still 16 patients in the combination therapy arm of this trial, who are alive and continue to be monitored.So we are encouraged by the combination therapy data, as this population historically has been very difficult to treat and we’re assessing the best route to advance this program in combination with checkpoint blockade and/or with other treatment modalities.I want to conclude this section by highlighting that our clinical program will be focusing on developing Lm constructs for early stages of cancer and front-line combination therapies. The reason of that is the well-documented correlation between strong reduction in metastases by Lm constructs and the prolonged duration of responses when used in the adjuvant setting with other treatment modalities, as demonstrated in clinical and preclinical studies.So with that review of recent progress on clinical data, let me now turn the call over to Molly to provide an update on the company’s financial position. Molly?

[Molly Henderson:]

Thank you, Andres. When I joined the company one year ago, the area that I knew would require a significant amount of attention was optimizing our cash and support the development of our innovative IO platform. As a result of systematic and strategic financial control measures over the past year, we have effectively reduced our cash burn for the first fiscal six months of 2019 by over 50% compared to the same period last fiscal year.One example of this is that, we have reduced the number of vendors we work with to one half what it was one year ago. This concentration of vendors reduce time, cost and waste associated with contracting and administrative activities. We have simplified our processes and focused the company on areas that will truly have an impact on the mission of our company.As a result of this strategy, research and development expense for the six months ended April 30, 2019 decreased by 53% to $12.7 million, compared to $27.1 million for the prior year period, and general and administrative expense for the six months ended April 30, 2019 decreased by 47% to $5.8 million, compared to $10.8 million for the prior year period, all while having an equal number of programs in the clinic.The key to our business is providing data to the oncology investment community in order to demonstrate the effects of our therapies. This is the most important goal of our company and one which we’re focused on daily. In light of this goal, we need to ensure the business is adequately financed, while also creating shareholder value. It’s this balance we continue to monitor and determine the best path forward to capitalizing the company.As Ken mentioned, we have engaged the consulting firm to assist with our business development and collaboration efforts. We believe non-dilutive financing is certainly preferred, but also recognize these processes take time.And lastly, we previously announced that we anticipate our cash burn to be approximately $45 million for this fiscal year. We are well on track of achieving this cash burn goal and anticipate being able to reduce this amount even further. We will continue to provide business updates throughout the remainder of 2019 as through our anticipated cash usage and our business development activities.Now I will turn it back to Ken.

[Kenneth Berlin:]

Thanks, Molly. Before we take questions, I want to reiterate how excited the Advaxis team is about the various programs in our clinical pipeline, which have demonstrated, in certain cases, early clinical activity in difficult-to-treat patient populations.We are moving forward with our earlier-stage assets that are generating promising preliminary data. Our diversified portfolio provides significant opportunity to successfully advance our pipeline and potentially improve the lives of patients with a broad range of cancers and their loved ones, which is our company’s mission. We look forward to sharing periodic updates and our progress with you and thank you once again for participating on today’s call.This concludes our prepared remarks. Operator, we’re now ready to take questions.

[Operator:]

[Operator Instructions] One moment please for the first question. The first question will come from Jim Molloy with Alliance Global. Please go ahead.

[James Molloy:]

Hey, good morning. Thank you for taking my question. I had a question for Dr. Gutierrez…

[Kenneth Berlin:]

Good morning.

[James Molloy:]

…on the NEO program – a couple of questions actually. On the – you’d mentioned the challenge of, obviously, the disease state of the patients in the NEO and advanced stage of the cancer. How’s the dropout rate compared to where you thought it would be? And how would you quantify the dropout rate you’re experiencing it and because of delay with any kind of the trial results, or is it in line with where you thought it would be?

[Andres Gutierrez:]

No, it’s in line with what we were expecting just based on historical data from other studies. So – but we’re on track to complete that second dose level cohort sometime in Q3, as we had already planned. We are looking forward to start the combination therapy arm in Q4, the latest, and that’s with a combination of a checkpoint inhibitor on the neoantigen vaccine.We’re expecting that, that particular cohort is going to enroll faster. Actually, we have received several requests to be – for patients to be enrolled in that particular study arm. So we’re thinking that we are going to be able to proceed with Part B very quickly.

[James Molloy:]

Excellent, thank you. Then you mentioned as well the CD8 infiltration levels being higher, or are you seeing increased CD8 infiltration that turned the cold tumors hot. Can you quantify sort of around the levels of infiltration? Is it 100 times you expected, 10 times, a couple?

[Andres Gutierrez:]

Yes. So that, that is in the poster that we presented in the New York Academy of Sciences. So in one case, it was 85% increment from baseline to the biopsy on therapy. And in the other case, it was close to 20% increment in that particular biopsy. And in both cases, the tumor biopsies were taking from the same target lesion – non-target lesion.

[James Molloy:]

Excellent. Thank you. Then last question on – you touched on it briefly in terms of partnerships and interest from other partners. I know it will be hard to characterize given our partnerships in signing deals to take a while. But is there any light around sort of how many folks we’ve been looking at the programs or people signing non-disclosures, things like this?

[Kenneth Berlin:]

So, hey, Jim, good morning, it’s Ken. So good question. It’s always, as you point out, hard to handicap kind of if and when deals will happen. I think the only thing to say is, we’ve seen a high level of interest, both from big pharma and small companies, as well as from folks looking for regional deals, say in Asia, we just came out of a very heavy meeting agenda at Bio, where we had over 40 meetings, many of which were pretty substantive and have follow ups.So, I think that should give you a sense of kind of the interest level and the number of meetings we’ve been having and, obviously, their meetings outside of bio that take place. So there’s a good deal of interest. Remember, we’ve got a lot of programs, a lot of assets, and even within the HOT program, they’re greater than 10 different constructs that have been designed.NEO could take many different flavors in terms of partnership. People can partner on certain aspects of NEO. If you are interested in neuro-oncology, for example, you could sort of partner around bladder and if we move that into prostate as well. So there are a lot of different permutations and combinations.And in addition, I’d point out that, we have another asset that that’s early in development in the vet space, where we are utilizing the optimized construct that we’ve developed for HOT and NEO, where we put multiple antigens in there. And now we – we’re able to do that in the vet space like we did successfully with our HER2 construct that’s on the market today.And so, we think there’s a nice monetization opportunity, very intriguing opportunity in the vet space to monetize through partnerships. We obviously have a partner today that’s getting acquired, so that would be the first place we would go to, to have a conversation. But just to point out that there are many different ways that we can monetize the science as we already have monetized HER2, both for vet use and for use in humans for pediatric osteosarcoma. And we’ll continue to look for ways to continue to monetize the platform, such as through the vet applications that I mentioned.

[James Molloy:]

Great. Thank you for taking the questions.

[Kenneth Berlin:]

Thank you, Jim.

[Operator:]

[Operator Instructions] The next question will come from Sean Lee with H.C. Wainwright. Please go ahead.

[Sean Lee:]

Good morning, guys, and thanks for taking my questions. I just have two quick ones. On the ADXS-HOT program, I think in the prepared remarks, you mentioned that we can expect more data from it later this year. Could you expand on it a little bit, maybe how many patients have been treated so far and what kind of data can we expect?

[Kenneth Berlin:]

So yes, I’ll take that, Sean. Thanks for the question. Good morning to you. So, we’ve enrolled a couple of patients. We have one site up and running, another site about to be up and running by the end of the month. We expect to begin to fill out Part A of that study pretty rapidly to move to Part B.We don’t have the same dropout issue that we described as it relates to NEO, because this is off-the-shelf that the product is ready when the patients are ready. And then the kind of data that you’d expect to see is similar to what we published on NEO when we had our first bits of data on NEO, which is namely, the first thing we want to look for is, are we generating T-cells against the relevant targets.So here, we preselected the targets for HOT as opposed to NEO, which is customized based on the patient’s own unique mutations and neoantigens. So we’re going to look for T-cells against those targets that are in the construct, plus we’re going to look for T-cells against other antigens to see if we’re seeing some antigens spreading, as we have seen historically in all of our constructs. And I think that’s another competitive advantage we have is that, we’re able to generate antigen spreading, which is important in order to see if you can have a clinical response.

[Sean Lee:]

I see, that’s very helpful. My second question is on the ADXS-PSA program. So what are the next steps in there? Are you in discussions with Merck to continually late-stage study, or perhaps looking for another partner?

[Kenneth Berlin:]

So I don’t want to get into too much detail on that. But first, I think as we pointed out in the prepared comments, there are 16 patients that are still being monitored from the combination arm, which will continue to get data from over the next several months. We expect that to conclude within probably five, six months from now. And yes, we’re in discussions with Merck about what to do next, because I think as we’ve seen, they’ve seen some nice synergies between KEYTRUDA and our PSA construct.And so, once we conclude those discussions, we’ll determine the best path forward. And other people have expressed interest in the PSA construct itself, because it’s a nice indication right now in late-stage metastatic prostate cancer, where there is an unmet need for these patients who have failed chemotherapy and have failed the novel hormone agents. And so there’s some interest in the PSA construct, both in the U.S. and outside the U.S. So we are in discussions with others about potential collaborations in that regard.

[Sean Lee:]

I see. Thanks for taking my questions. That’s all I have.

[Kenneth Berlin:]

Thank you, Sean.

[Operator:]

At this time, there are no further questions. Please proceed with your presentation or any closing comments.

[Kenneth Berlin:]

Again, I’d like to thank you all for participating on today’s call and for your questions. We look forward to keeping you updated with our progress and appreciate your continued interest in Advaxis. Thanks, again.

[Operator:]

Ladies and gentlemen, that concludes your conference call for today. We thank you for your participation, and ask that you please disconnect your lines at this time.