2Q23 Achieves Important Milestones With More To Follow

New PDS0301 Combination Data To Be Presented

Answering Questions About The VERSATILE-002 Data

Reiterating Outperform – Phase 2 Trial Meets Efficacy Endpoint

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Healthcare

Biotechnology

PDS Biotechnology Corporation

Investment Appraisal
PDS Biotechnology, Corp. yesterday announced Q1/F2020 financial results and provided a business update. Among other highlights, on April 16, 2020, the Company announced the start of new infectious disease programs to develop novel vaccines PDS0203 and PDS0202 for the prevention of COVID-19 and influenza infections, respectively (Exhibit 1,2). We view the expansion of the product pipeline into infectious diseases area as a validation of the versatility and commercial potential of the Company&#8217;s platform technology, Versamune. Versamune is designed to develop novel vaccines for the prevention and treatment of cancer and infectious diseases. 
Also yesterday, PDS Biotechnology announced the publication of an abstract on preclinical studies of PDS0102 at the American Society of Clinical Oncology (ASCO) Virtual Scientific Program being held May 29-31, 2020. The abstract confirms the ability of the Versamune®&nbsp;platform to induce powerful killer T-cell responses across tumor types. The published data demonstrates that Versamune ®, when combined with the proprietary &#8220;T-cell receptor gamma alternate reading frame protein&#8221; (TARP), has the ability to activate a powerful killer T-cell response which specifically recognizes and attacks TARP-expressing cancer cells. This data confirms previous results obtained by PDS Biotechnology (Exhibit 3). PDS0102 is being developed to treat prostate and breast cancers, the majority of which express the TARP protein. 
Abstract e15211: &#8220;R-DOTAP (Versamune®): A Novel Enantiospecific Cationic Lipid Nanoparticle That Induces CD4 and CD8 Cellular Immune Responses to Whole Protein and Tumor-Specific Peptide Antigens&#8221; is available on the ASCO meeting website at abstracts.asco.org.
Other Highlights of the quarter included:
<ul type="disc">
<li>PDS Biotechnology initiated a collaboration with Farmacore Biotechnology for tuberculosis. On February 27, 2020, management announced the signing of an agreement with Farmacore Biotechnology to develop PDS0201, a novel therapeutic tuberculosis vaccine. Tuberculosis is an infectious disease caused by a bacteria known as &#8220;Mycobacterium tuberculosis&#8221;. There are an estimated 8.6 million people suffering from tuberculosis worldwide. A prophylactic (prevention) vaccine known as Bacillus Calmette-GuÃ©rin (BCG) is used for the prevention of tuberculosis. At present, there is no available therapeutic vaccine for this disease.&nbsp; </li>
<li>Delayed initiation of Phase II VERSATILE-002 trial for PDS0101 in recurrent metastatic head and neck cancer due to the impact of the global COVID-19 pandemic.</li>
<li>Secured U.S. composition of matter patent for the Versamune®&nbsp;platform. On March 5, 2020, PDS Biotechnology announced that it has been granted U.S. Patent No. 15/702,063 titled &#8220;Stimulation of an Immune Response by Enantiomers of Cationic Lipids&#8221; by the United States Patent and Trademark Office (USPTO). This patent protects composition of matter for the Versamune platform including its chemical design and methods of delivery including oral, injectable and topical. </li>
</ul>
<ul>
<li>Expanded the previously disclosed &#8220;Cooperative Research and Development Agreement&#8221; with the National Cancer Institute (NCI) to include preclinical and clinical development of PDS0103 for the treatment of cancers associated with the mucin-1 (MUC1) tumor antigen including ovarian, breast, colorectal and lung cancers. MUC1 is overexpressed in a wide variety of human cancers and is associated with resistance to therapy and poor prognosis. PDS0103 is an investigational immunotherapy consisting of the Versamune&nbsp;platform combined with novel highly immunogenic agonist epitopes corresponding to the C-terminal region of tumor antigen MUC1 (Exhibit 4). </li>
</ul>
<ul type="disc">
<li>In the quarter, PDS Biotechnology completed an underwritten public offering of its common stock. Net proceeds from the offering were approximately $11.9 million. At the end of the quarter, the Company had cash and cash equivalents of $21 mm, which we believe allows PDS Biotechnology to initiate and advance Phase II immune-oncology clinical programs until releasing interim efficacy results next year. </li>
</ul>
Summary of Q1/F2020 Financial Results
PDS Biotechnology reported a net loss of $4.0 mm, or $0.39 per basic share and fully diluted share, compared to net income of approximately $6.8 mm, or $1.82 per basic share and $1.47 per diluted share in the corresponding quarter last year (reflecting impact of the reverse merger transaction with Edge Therapeutics in Q1/2019).
In Q1/F2020, research and development expenses were $1.9 mm compared to $1.0 mm for the same period in 2019, an increase of 91%. The increase is related to costs incurred related to PDS Biotechnology&#8217;s ongoing immune-oncology programs. In the quarter, general and administrative expenses were $2.1 million compared to $3.9 mm in the corresponding quarter last year, a decrease of 47%. Total operating expenses were $4.0 mm in Q1/F2020, compared to total operating expenses of $4.9 mm for the same period in 2019, a decrease of 18%. Overall, the financial results are in line with our expectations. As of March 31, 2020, the Company&#8217;s had cash and cash equivalents of $21.0 million. &nbsp;
Versamune as a platform technology to generate vaccines for infectious diseases and cancer
PDS Biotechnology is developing a platform technology known as Versamune for the treatment of cancer and infectious diseases. Versamune is designed to effectively deliver disease-specific antigens to stimulate the immune system as a defense mechanism. Versamune consists of cationic (positively charged) lipids mixed with tumor or viral antigens. These cationic lipid nanoparticles act as a vehicle to deliver specific antigens to dendritic cells, which mature helping induce a potent T-cell immune response to combat cancer and infectious diseases. In our view, PDS Biotechnology&#8217;s Versamune has the advantage over competing vaccine technologies of stimulating both CD4 and CD8 positive T lymphocytes. This is important because it triggers an integrated, complete immune response consisting of cellular immunity (T cells) and humoral immunity (neutralizing antibodies). 
Expanding Infectious Disease Program to Target COVID-19 and Influenza
On April 16, 2020, PDS Biotechnology announced the start of new infectious disease programs to develop novel vaccines PDS0203 and PDS0202 for the prevention of COVID-19 and influenza infections, respectively. &#8220;Coronavirus Disease of 2019&#8221; (COVID-19) is a disease caused by infection with SARS-CoV-2 virus. The symptoms of COVID-19 vary among infected patients, from asymptomatic disease to pneumonia, acute respiratory distress syndrome, to multisystem organ failure and death. There is no effective treatment for the disease. Patients currently receive supportive care, and those developing acute respiratory distress receive &#8220;oxygen mechanical ventilation support&#8221;, but no specific treatment for the disease is available yet. Gilead has commenced to treat severely ill patients with remdesivir, but the effectiveness of this drug is limited. Larger clinical trials with remdesivir are ongoing. 
The entire biotechnology industry is rushing to find an effective vaccine to curtail spreading of the global pandemic, which has become the largest global health crisis since the Influenza pandemic of 1918. As of May 12, 2020, there are more than 4,412,300 people infected with SARS-CoV-2 worldwide, and more than 297,000 people have died from the disease. 
Cellular immunity could potentially provide long-term protection against SARS-CoV-2 infection
PDS Biotechnology is trying to develop a vaccine based on its unique technology, Versamune, which could potentially prevent infection by SARS-CoV-2 virus by stimulating both cellular and humoral immunity. PDS Biotechnology believes that the combination of neutralizing antibodies and specific T cell-based immune responses are necessary for long-term protection against COVID-19 and influenza viruses. Most existing vaccine candidates are designed to elicit neutralizing antibodies, but protective immunity is short lived with antibodies alone. The medical hypothesis is that the addition of cellular immunity, in combination with neutralizing antibodies, gives patients the desired long-term protection. 
Development of a novel influenza vaccine 
PDS Biotechnology is developing PDS0202 as a candidate therapeutic vaccine for the prevention of influenza (Exhibit 1). Existing influenza vaccines, such as Sanofi Pasteur&#8217;s Fluzone, elicit neutralizing antibodies. PDS Biotechnology believes that the combination of Versamune with Fluzone not only increases titers of neutralizing antibodies (Exhibit 1), but also adds a new component, cellular immunity (CD4/CD8 T lymphocytes), which stimulates a more potent immune response (Exhibit 2) providing long-term protection against influenza.
Exhibit 1 &#8211; The combination of PDS Biotechnology&#8217;s Versamune with Sanofi Pasteur&#8217;s Fluzone induces the synthesis of neutralizing antibodies against several strains of influenza virus including H3N2, H1N1 and Influenza B. The haemaglutinin (HAI) titers are significantly higher with the Versamune/Fluzone combination than with Fluzone alone. The potency of Fluzone is significantly increased with the addition of Versamune, as a five-fold lower dose of Fluzone (0.6 versus 3.0) was more effective in generating neutralizing antibody titers (HAI).
<img decoding="async" src="https://www.noblelinx.com/x/research/images/reports/Snip20200513_15.png" style="width: 480px;height: 209px;float: none" /> 

Source &#8211; PDS Biotechnologies, Corp.&nbsp; 
Exhibit 2 &#8211; The combination of PDS Biotechnology&#8217;s Versamune with &#8220;Influenza viral antigens&#8221; elicits a potent immune response consisting of both CD4 and CD8 positive T lymphocytes. CD8 positive killer T lymphocytes recognize and destroy human cells infected with influenza virus, whereas CD4 positive T cells (helper T cells) induce a potent humoral immune response eliciting the synthesis of neutralizing antibodies against the influenza virus. ( Adjuvant &#8211; complete Freund&#8217;s adjuvant used as a control)
<img decoding="async" src="https://www.noblelinx.com/x/research/images/reports/Snip20200513_16.png" style="width: 494px;height: 247px;float: none" /> 

Source &#8211; PDS Biotechnologies, Corp.&nbsp;
Exhibit 3 &#8211; Treatment with Versamune-TARP (PDS0102) induces the proliferation and activation of killer T cells specifically recognizing TARP-expressing cancer cells. Using IFN-gamma ELISPOT methodology, it was demonstrated that Versamune-TARP, but not conjugated Freud adjuvant (CFA) induced activation of killer T cells.
<img decoding="async" src="https://www.noblelinx.com/x/research/images/reports/Snip20200513_12.png" style="width: 451px;height: 249px;float: none" /> 

Source &#8211; PDS Biotechnologies, Corp.&nbsp; 
Exhibit 4 &#8211; Treatment with the combination of Versamune with MUC1 tumor antigen (Versamune-MUC1 or PDS0103) resulted in a significant increase in polyfunctional killer-T cells relative to the treatment with MUC-1 plus adjuvants. PDS Biotechnology is developing PDS0103 in collaboration with the National Cancer Institute (NCI).
<img decoding="async" src="https://www.noblelinx.com/x/research/images/reports/Snip20200513_11.png" /> 

Source &#8211; PDS Biotechnology, Corp.
Exhibit 5 &#8211; PDS Biotechnology&#8217;s Oncology Product Pipeline. The company combines its proprietary platform technology, Versamune, with known tumor antigens including HPV16 (PDS0101), TARP (PDS0102), MUC-1 (PDS0103) and TRP2 (PDS0104) for the treatment of a variety of human cancers. PDS Biotechnology has partnered with Merck &amp; Co, and the National Cancer Institute (NCI) to execute several of these clinical trials. Some clinical programs are funded by PDS Biotechnology (dark green) and others by the company&#8217;s partner (light green).
<img decoding="async" src="https://www.noblelinx.com/x/research/images/reports/Snip20200513_17.png" style="width: 494px;height: 201px;float: none" /> 

Source &#8211; PDS Biotechnology, Inc.
Reiterating Outperform rating
We value PDS Biotechnology using a risk-adjusted discounted cash flow model. We believe PDS Biotechnology&#8217;s current share price does not reflect the value of the company&#8217;s platform technology, especially given the recent expansion into infectious diseases such as COVID-19, influenza and tuberculosis. At present, the shares are trading below cash value. In our view, previous failures in the cancer vaccine area have fed investors skepticism on the potential of this drug class. We believe that Versamune has been designed to overcome the limitations of previous candidate cancer vaccines. Based on the analysis of available preclinical and clinical data, we believe that Versamune will be effective in Phase II clinical trials. We expect PDS Biotechnology to sign a high value partnership to complete development of Versamune and commercialize its technology, which could potentially generate significant value for the company&#8217;s shareholders. We are reiterating our Outperform rating and $5.45 target price.

PDS Biotechnology Corporation (PDSB)

Q1 Highlighted by Foray into Infectious Diseases Area

Fundamental Analysis:

Rating: Log in to view

2Q23 Achieves Important Milestones With More To Follow (PDSB)

New PDS0301 Combination Data To Be Presented (PDSB)

Answering Questions About The VERSATILE-002 Data (PDSB)

Reiterating Outperform – Phase 2 Trial Meets Efficacy Endpoint (PDSB)

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