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Lars Boesgaard

Thank you, Frank. And good morning, everyone.
A net loss for the year ended December 31, 2024, was approximately $37.6 million or $1.03 per basic and diluted share. This compares to a net loss of $42.9 million or $1.39 per basic and diluted share for the prior year period.
The reduced net loss was primarily the result of decreased operating expenses, which were partially offset by increased net interest expense. Research and development expenses for 2024 were $22.6 million compared to $27.8 million in 2023. The decrease of $5.2 million was primarily attributable to decreases in clinical costs of $4.1 million personnel cost of $1 million and professional fees of $0.1 million.
General and administrative expenses for 2024 were $13.8 million compared to $15.3 million in 2023. The $1.5 million decrease was primarily attributable to decreases in professional fees of $1.3 million and facilities cost of $0.2 million.
Total operating expenses for 2024 were $36.3 million which compared to $43 million in 2023. Net interest expense was $2.2 million for 2024 compared to $1.3 million in 2023. This change was due to increased debt interest and lower interest income on the company's cash balances.
On February 27, 2025, we announced an up to $22 million dollar registered direct offering. The securities purchase agreements with new and existing healthcare for institutional investors included $11 million upfront gross proceeds with up to an additional $11 million of aggregate gross proceeds upon cash exercise in full of warrants issued to the investors.
The company's cash balance as of December 31, 2024, was $41.7 million. And that balance, of course, does not include the aforementioned direct offering which we concluded in February.
With that, I'll just turn the call back to the operator.

Question and Answer Session

Operator

(Operator Instructions)
Joe Pantginis, H. C. Wainwright.

Joseph Pantginis

Hey guys, good morning, thanks for taking the questions.
So first I wanted to get a sense of the enrollment, trajectory for Versamune-003, and I guess, well, projected timelines number one, and I know that might be hard to project. Since it's very early, but the sites that you're targeting, what kind of balance are you looking at with regard to sites that are familiar with Versamune versus new sites that might require, some level of a learning curve?

Frank Bedu-Addo

Thank you, Joe, for the question. Kirk, I'll hand that question over to you.

Kirk Shepard

So we're happy that as you know we initiated the first sight of this month and we're happy also to say that. The sites that were involved, almost all of them from the phase 2 trial are re-engaged with us now with phase 3. And as I think you referred to in your question, this helps out a lot as far as their familiarity with the drug.
I think their belief in the good results and so that's really sped us along quite a bit. As far as the patient accrual in the future, I mean, you're right, that'll be determined by how fast we bring these sites on, and so far, we're tracking very well, and, of course, how well each of the sites do perform.

Joseph Pantginis

No, that's helpful, thanks. And I guess, as Lars was describing too, in this day and age you guys are, I guess in a good position to have a decent cash balance. So, I guess, as people look to study completion and pipeline development, how do you view the current funding environment for your current studies?

Frank Bedu-Addo

Lars, I'll hand that over to you.

Lars Boesgaard

Sure. Hey, Joe, thanks for the question.
Yeah, you're right. As I mentioned, we did raise $11 million recently and definitely, the current funding environment and market conditions are difficult and challenging. So we, we're quite pleased that we were able to raise the funds in a way that enables us to start the trial.
And so we're progressing, as Kirk just mentioned. But of course, I think it should be clear also that we currently don't have enough, raised on the balance sheet for that matter to complete the trial.
So our plan is to raise necessary capital in a stepwise manner as we make progress with our phase 3 trial. And our plan is to essentially make use of all options available to us, which includes equity, and non-diluted sources such as debt. And we will continue to balance our funding needs against dilution of current shareholders.

Joseph Pantginis

No, that's totally fair. I appreciate that. And when you said potentially non-dilutive options, I guess maybe I'll throw the potential of business development into the mix and what do you think that role might play in being able to bring even pipeline programs forward?

Lars Boesgaard

So, sorry, so in terms of non-diluted, right, I think that includes, as I mentioned, debt, but it includes all various sources. So, we don't necessarily want to get ahead of ourselves in terms of talking about specific, partnerships or specific collaborations.
Suppose to say, and I think it's also important, as Frank alluded to in his, in his prepared remarks. That most of our pipeline beyond the phase three are essentially IITs in which our funding is very limited, and the funding needs are very limited as far as we're concerned. So, we're focused solely on Versatile-003, with regard to our funding needs.

Joseph Pantginis

Totally fair appreciate all the comments, guys.

Operator

Mayank Mamtani, B. Riley Securities.

Mayank Mamtani

Yes, good morning team. Thanks for taking our questions and, pleased to see the phase 3 VERSATILE-003 trial kicked off. I see you say in press result there are multiple and readouts, built in the study and your, total patient sample size came in a little bit lower than perhaps what you had originally thought. We would love to hear the rationale for that and also obviously any color you can give on, how you've, built in these OS in Interim? And then then I have a follow up.

Frank Bedu-Addo

Hi, Mike. Thanks a lot for your question. So yes, you are correct that the trial size was initially over 400, as I alluded to in my remarks, we have seen significant durability of the responses and also significant improvement of all the clinical outcomes over the last year.
And good durability of the median overall survival, which is going to be our primary readout for this trial. So based upon the durability of the responses and the increases in those responses, we're able to go back to our statisticians to tighten the trial design based on the fact that we had a lot more confidence in those numbers due to the prolonged follow-up of those patients.
And so that took it from over 400 patients down to 350 patients with the same power, by the way. So, we retained the statistical power. That amended IND was then presented to the FDA who gave us the go ahead with this, with this redesigned trial.
And so as median overall survival as you mentioned, is our primary data readout. And so the goal here based upon the data we've seen in our VERSATILE-002, which is highly encouraging, was to give us the opportunity.
If we are able to replicate these results in the phase 3 clinical trial, give us that opportunity to be able to discuss results early on with the FDA. And so, our design built in two interim data readouts. The first interim data readout will come approximately six months after full enrollment into the trial.
And these endpoints are based on specific death events. So, they're based on a certain number of death events occurring by that time. And then 12 months after that, we give ourselves another interim data readout. And so really what this trial design does based on median overall survival, which has been really durable, is to give us that opportunity to have early discussions with the FDA regarding potential accelerated approval pending what the data readouts look like at that specific time. Kirk is there anything you'd like to add to that?

Kirk Shepard

No, Frank, I think you covered it well. Yeah, I think the important thing is that we do have a good opportunity, the first interim analysis to go back to the FDA with the survival data for hopefully an accelerated review and then an approval, but no, I have nothing to add to what you said before.

Mayank Mamtani

Yeah, so what we see on clinicaltrials.gov 2029, essentially you're saying that the time frame for first read out could be maybe half of that period if I had to, kind of, get to the bottom line here? Frank, I just.

Frank Bedu-Addo

Yeah, I don't, as I said, I don't think we want to get ahead of ourselves and also as Kirk said, it will take us a few months to understand the enrollment rates, how these sites are enrolling patients because as really the timeline for a clinical trial is absolutely dependent on how the trial recruitment rates. So it will take us a few months to get a good handle on how quickly these patients are coming in.
The good thing, as Kirk mentioned, is the fact that most of our VERSATILE-002 sites are Interested in participating and part are participating in this phase 3 clinical trial. So, we are hopeful that that familiarity with the trial design, with the with the with the process of enrolling patients will help speed up the process. And also, the really promising data which has been generated in the phase two, which has given a lot of these investigators quite a bit of confidence in the, both the trial design and the
And the Versamune HPV product itself. So, we're hopeful that we'll have a pretty rapid enrollment, but it will take us a few months to get a handle around what the projection, projected timelines could be.

Lars Boesgaard

Yeah, that was quite evident in your, December KOL event. Just, switching gears quickly on the initial humor indications of priority for the mark one candidate and, seems like you're doing a PDS01ADC combination strategy here with, at least within CRC and. Just maybe higher level, is the work on IL-12 ADC in head and neck on pause now and you're letting these ISPs sort of drive data generation activity including obviously in the prostate setting, that you have with Xtandi.
Thanks again for taking my questions.

Frank Bedu-Addo

Well, thanks a lot, Mayank, very good question. So, you're right that today our focus is on the VERSATILE-003 and that is where the company is applying our capital.
But to the point you made, we have actually been very successful in partnering with the National Cancer Institute and other top tier academic institutions. So those institutions are able to independently progress some of these phase 2 trials, including what we're doing with the MUC1 and PDS01ADC.
So this the combination is based on the previous clinical published pre-clinical studies that were done by the NCI where they looked at various combinations with the Versamune-based products as well as PDS01ADC and also with checkpoint inhibitors. And we saw very strong synergy between the Versamune-based product and PDS01ADC. So, as PDS01ADC is a tumor targeting IL-12.
What IL-12 does is it activates T cells, but by getting it into the tumor specifically, we're able to really activate those T cells within the tumor, microenvironment itself. So, we believe this is a highly promising combination. So that's the National Cancer Institute and there are a number of tumor types that express, highly expressed MUC1.
We've selected colorectal cancer as the first target to demonstrate. The proof of concept in the phase one and phase 12 human clinical trial. But then, that then allows us to progress into multiple tumor types just very similar to what we've done with Versamune HPV.
So as last mentioned, when we talk about non-dilutive funding, we have done this quite effectively with a number of programs to do to progress all these programs in cervical cancer, the triple combination, all types of HPV cancers, and now MUC1. With our collaborators who are putting their capital to work to progress these programs for us. And then you mentioned the triple combination.
With the triple combination, our current plan is to follow what we deem to be potentially the simplest regulatory strategy, which will also feed into our product life cycle management strategy for both Verse and PDS01ADC. So one scenario is to get the Versamune HPV plus Pembro approved.
So once that doublet is approved, we can then add PDS01ADC to that approved combination to develop a second generation product that may treat patients who are both checkpoint inhibitor naive in addition to those who are checkpoint inhibitor resistant. As in the recent germ oncology publication that we announced, we see extremely promising survival results both in checkpoint inhibitor naive and checkpoint inhibitor resistant patients, and we see this across board with all types of HPV related cancers.
In that publication, they show data from anal cancer, cervical cancer, vaginal valve, in addition to head and neck cancer. So, these present us with some real opportunities as we develop the product and also potentially get the second generation product out there after the doublet has been successfully approved.
Mayank, I hope this answered your question.

Mayank Mamtani

Yes, there were multiple parts. Thank you for taking all of them, and I'll hope back in the queue.

Operator

James Molloy, Alliance Global Partners.

James Molloy

Hi, good morning.
Thank you for taking my questions. I just to follow up on that last point, Frank, so the phase 3 triple, that would that even start before the phase 2 double trial wraps up, or is that something that will, you'll wait for the phase 2 double trial data before going to the phase starting to phase 3 triple?

Frank Bedu-Addo

Hey, James. So, what, as I just said, we, we're looking for, we're doing this as part of anticipated project, product life cycle management strategy and also, it's following the simplest regulatory strategy. So, the simplest regulatory strategy would be to get the doublet approved.
Once that doublet is approved, we can then add the aisle 12 on top of that approved doublet. It simplifies the pro regulatory pathway of having multiple investigational products involved in the trial. And so based upon our discussions with the FDA and suggestions that have been made, we see this as potentially the simplest regulatory strategy and also a good product life cycle management strategy in head and neck cancer specifically.
The initial focus is on checkpoint inhibitor naive patients. But once we add IL-12 on top of that, potentially this could address both ICI naive, and ICI resistant patients based upon the data that was recently published in JAMA Oncology.

James Molloy

Perfect. Thank you very much.
Well, the expectation for the muck one sort of kicking off and sort of the next cut point for potential data, and then, the TARP, the phase one TARP, is that still on track for potential IND in 2025?

Frank Bedu-Addo

No, so let's start with the MUC1. So, with the MUC1, as I mentioned, that is going to be led by the National Cancer Institute. And so, what the IND has been successfully filed, and we've had the green light from the FDA. And so right now, what we would do would be, we will be dependent on the National Cancer Institute's timelines.
And so we will wait to hear from them in terms of their intended start date. So again, we don't want to put any start dates out there until they have been confirmed by the National Cancer Institute. They will be leading the trial while we focus on the VERSATILE-003 trial design similar approach to triple.

James Molloy

Understood. And then, is the TARP [102 IND] and TARP expressing cancers is that still potentially on for '25 or is that also NCI-led?

Frank Bedu-Addo

No, the TARP, right now we're focusing on the MUC1 and the Versamune HPV. We have not presented any timelines yet for the top. The TARP as is the focus there is prostate cancer. Approximately 95% and higher percent of prostate cancers expressed the TARP antigen. But for now, once we get a better handle on how the MUC1 is progressing and the VERSATILE-003 will then provide some guidance on how we intend to progress the TARP program.
But we have not provided any guidance to date on progression of the TARP program. Today, our focus is the Versamune HPV and also now handing the MUC1 over under our crater to the National Cancer Institute for further development.

James Molloy

Great, thank you very much for taking the questions.

Operator

I'll turn the floor back to Dr. Bedu Addo for closing remarks.

Frank Bedu-Addo

Thank you very much, operator.
So in closing, we are very pleased to have initiated the VERSATILE-003 registration trial this quarter. This study is the first phase 3 clinical trial specifically in the growing population of HPV16 positive head and neck cancer.
We are excited based on the strong VERSATILE-002 results and our fast track designation about the potential for Versamune HPV to be the first product of its kind on the market in head and neck cancer. We expect to provide final results from our ongoing phase 2 VERSATILE-002 study later this year.
Our engagement with investors and clinical investigators has validated our approach and the long-term opportunity that we believe the HPV16 targeted immunotherapy presents in the HPV16 positive head and neck cancer indication. We look forward to keeping you updated on our progress.
Thank you very much.

Operator

Thank you. This will conclude today's conference. Disconnect your lines at this time. We thank you for your participation.