Executive Summary / Key Takeaways

• PDS Biotech is advancing a focused strategy centered on its lead program, Versamune® HPV in combination with pembrolizumab, for the first-line treatment of recurrent/metastatic HPV16-positive head and neck squamous cell carcinoma (HNSCC), a rapidly growing patient population with significant unmet needs.
• The company recently initiated the pivotal VERSATILE-003 Phase 3 clinical trial, a data-driven decision informed by compelling and durable clinical responses observed in the Phase 2 VERSATILE-002 study.
• VERSATILE-002 data demonstrated a median overall survival of 30 months with the combination, significantly exceeding published results for pembrolizumab monotherapy (17.9 months) in a comparable patient population, alongside encouraging objective response rates, deep tumor shrinkage, and a favorable safety profile.
• While operating as a clinical-stage company with no product revenue, PDS Biotech faces ongoing liquidity challenges, evidenced by net losses and negative cash flow, necessitating future financing to complete the pivotal trial and support operations.
• The company's differentiated Versamune® technology, designed to induce potent, targeted T cell responses, and its strategic collaborations, particularly with the National Cancer Institute, underpin its competitive positioning and pipeline development beyond the lead program.

Setting the Stage: A Targeted Approach in Immuno-Oncology

PDS Biotechnology Corporation is a clinical-stage immunotherapy company dedicated to developing molecularly targeted therapies aimed at overcoming the inherent limitations of current immunotherapy and vaccine technologies. At its core, PDS Biotech's approach revolves around its proprietary platforms, primarily Versamune® and, more recently, the licensed PDS01ADC, an IL-12 fused antibody drug conjugate. These technologies are designed to precisely train and activate the immune system to recognize and destroy diseased cells, particularly in the challenging landscape of solid tumors.

The company's strategic focus is increasingly centered on addressing cancers driven by human papillomavirus (HPV), specifically HPV16, which is becoming the most prevalent type of head and neck cancer in the United States and Europe. This patient population represents a significant and growing unmet medical need, as existing standard-of-care treatments, while offering some benefit, often fall short in providing durable responses and long-term survival, particularly in recurrent or metastatic settings.

In the competitive immuno-oncology landscape, PDS Biotech faces established giants like Merck & Co. (MRK) with its blockbuster Keytruda (pembrolizumab), Bristol-Myers Squibb (BMY) with Opdivo (nivolumab), and AstraZeneca (AZN) with Imfinzi (durvalumab), all of whom have broad approvals and significant market share. These large players often focus on checkpoint inhibitors as monotherapies or in combination with chemotherapy. PDS Biotech aims to carve out a distinct niche by offering a targeted, antigen-specific immunotherapy designed to work synergistically with checkpoint inhibitors, potentially enhancing efficacy and durability while maintaining a favorable safety profile. While companies like BioNTech (BNTX) are exploring novel platforms like mRNA for cancer vaccines, PDS Biotech's Versamune® platform, based on synthetic peptides and a lipid-based delivery system, offers a different mechanistic approach to T cell activation.

PDS Biotech's technology is designed to induce large quantities of high-quality, highly potent polyfunctional CD4 helper and CD8 killer T cells. When paired with a disease-related antigen, Versamune® facilitates the effective presentation of that antigen to the immune system and activates critical immunological signaling pathways. PDS01ADC complements this by delivering Interleukin 12 (IL-12), a potent immune-stimulating cytokine, directly into the tumor microenvironment, aiming to overcome the tumor's defenses and enhance the proliferation, potency, and longevity of tumor-infiltrating T cells. This dual approach, targeting both systemic T cell activation and the tumor microenvironment, is intended to provide a more robust and durable anti-tumor response compared to approaches that rely solely on T cell activation or checkpoint blockade. The potential quantifiable benefits, as evidenced by clinical data, include improved survival rates and deeper, more durable tumor responses compared to standard-of-care checkpoint inhibitors alone, as discussed in detail below.

The Strategic Journey: From Trials to Pivotal Focus

PDS Biotech's path has been shaped by a series of clinical trials and strategic decisions. Key early initiatives included the VERSATILE-2 Phase 2 trial evaluating Versamune HPV with Keytruda in recurrent/metastatic head and neck cancer, and the NCI-led CRADA trial exploring a triple combination (Versamune HPV, PDS01ADC, and an investigational ICI) in various advanced HPV-positive cancers. The acquisition of PDS01ADC in late 2022 was a pivotal moment, integrating a promising IL-12 ADC into the pipeline and enabling exploration of combination strategies.

Data emerging from these trials provided crucial insights. The NCI-led triple combination trial yielded compelling survival and response data across various HPV-associated cancers, including impressive median overall survival figures in both ICI-naive and ICI-resistant patients (mOS 42.4 months and 17 months, respectively, in the JAMA Oncology publication, compared to historical results of 7-12 months and 3-4 months). The VERSATILE-2 trial, specifically in recurrent/metastatic HPV16-positive HNSCC, also generated increasingly positive and durable data over time.

This maturing data set led to a strategic refinement. Initially, the company considered prioritizing the triple combination for pivotal development. However, based on further data analysis, particularly the durability seen with the Versamune HPV and pembrolizumab doublet in VERSATILE-2, and guidance from the FDA, the company made the data-driven decision to focus its resources on advancing the doublet combination into a registrational trial first. This approach is seen as potentially offering the fastest regulatory pathway while positioning the triple combination as a potential future development, leveraging the established safety and efficacy profile of the doublet.

VERSATILE-002: The Foundation for a Pivotal Push

The decision to initiate a Phase 3 trial for the Versamune HPV and pembrolizumab doublet is strongly underpinned by the results from the Phase 2 VERSATILE-002 study. This trial evaluated the combination in patients with recurrent or metastatic HPV16-positive HNSCC, including both ICI-naive and ICI-resistant cohorts. The updated interim data from the ICI-naive cohort, presented through May/June 2025, has been particularly encouraging.

Key findings from VERSATILE-002 include:

• Median Overall Survival (mOS): The mOS remained durable at 30 months with additional follow-up. This compares favorably to published mOS results of approximately 17.9 months for pembrolizumab monotherapy in a comparable first-line recurrent/metastatic HNSCC population with CPS ≥1. Management highlighted the significant difference in the probability of living for 12 months (50% with standard of care vs 50% probability of living 30+ months with the combination in VERSATILE-002).
• Objective Response Rate (ORR): The ORR improved to 36% as data matured, compared to published ORR figures of 19%-25% for pembrolizumab.
• Disease Control Rate (DCR): DCR reached 77%.
• Deep Responses: Notably, 21% of patients achieved deep tumor responses with 90%-100% tumor shrinkage, and 9% had a complete response.
• Safety Profile: The combination appeared well-tolerated, with Grade 3 or higher treatment-related adverse events (TRAEs) seen in 11-13% of patients, which compares favorably to published rates of 13%-17% for approved ICI monotherapy.

These results, demonstrating durable survival, enhanced response rates, and a manageable safety profile compared to existing standards, provide the critical clinical rationale and confidence for advancing the Versamune HPV and pembrolizumab combination into a pivotal study.

The Pivotal Trial: VERSATILE-003 Takes Center Stage

With the compelling data from VERSATILE-002 in hand, PDS Biotech initiated the VERSATILE-003 Phase 3 clinical trial in March 2025. This global, multi-center, randomized, controlled, and open-label trial is designed to evaluate the safety and efficacy of Versamune HPV in combination with pembrolizumab as a first-line treatment specifically for patients with recurrent/metastatic HPV16-positive HNSCC.

The trial is designed to enroll approximately 350 patients, randomized 2:1 to receive either the combination therapy or pembrolizumab alone. The primary endpoint is median overall survival, aligning with FDA guidance that OS is the gold standard for oncology approvals, particularly given the historical discordance between ORR/PFS and OS in this setting. Secondary endpoints include ORR, progression-free survival (PFS), DCR, and duration of response (DOR).

The updated trial size of approximately 350 patients, reduced from an earlier consideration of over 400, was informed by the observed durability of responses in VERSATILE-002, allowing the trial to retain statistical power while potentially reducing overall cost and accelerating the timeline to data readouts. The trial design includes two interim data readouts, estimated at approximately 6 months and 18 months following full enrollment, respectively. The final readout is expected approximately 24 months after full enrollment. Site initiation is underway, including key centers like the Mayo Clinic, with the goal of achieving steady recruitment. The timeline to these readouts is dependent on the rate of patient enrollment and the occurrence of death events, which will become clearer as the trial progresses.

The Broader Pipeline and Strategic Collaborations

While VERSATILE-003 is the company's top clinical development priority, PDS Biotech continues to advance other programs, often leveraging strategic collaborations to conserve its own capital resources.

• PDS01ADC and the Triple Combination: Although the doublet is the initial focus for the pivotal trial, the potential of the triple combination (Versamune HPV + PDS01ADC + ICI) remains part of PDS Biotech's long-term strategy. Data from the NCI-led trial, published in JAMA Oncology, demonstrated impressive survival and response rates with the triple combination in various HPV-associated cancers, including in ICI-resistant patients. The strategy is to potentially develop the triple combination as a second-generation product after the doublet is approved, simplifying the regulatory pathway. PDS01ADC is also being evaluated in other NCI-led investigator-initiated trials (IITs) in combination with other standards of care in different cancer types, such as prostate cancer (with docetaxel or enzalutamide) and liver cancer, further exploring its potential beyond HPV-associated malignancies.
• Versamune MUC1 + PDS01ADC: The company recently received FDA clearance for an IND application to evaluate a combination of Versamune MUC1 and PDS01ADC in metastatic colorectal cancer. This Phase 1/2 trial is scheduled to be run under the CRADA with the National Cancer Institute, allowing PDS Biotech to explore this combination in MUC1-positive solid tumors (which include colorectal, ovarian, breast, and lung cancers) while focusing its internal resources on VERSATILE-003.
• IMMUNOCERV: Data from the MD Anderson-led Phase 2 trial evaluating Versamune HPV with chemoradiotherapy in locally advanced cervical cancer showed promising survival, clinical activity, and a favorable safety profile, including earlier and greater ctDNA clearance. The company is evaluating next steps for this program.
• Infectimune: PDS Biotech is also developing its Infectimune platform for infectious diseases, with preclinical data on a universal flu vaccine (PDS0202) presented in collaboration with NIAID. This collaboration allows NIAID to fund and perform studies, enabling PDS Biotech to focus its capital on oncology.

These programs, particularly those advanced through collaborations, provide potential future growth opportunities and demonstrate the broader applicability of PDS Biotech's platform technologies, while the company directs its primary focus and capital towards the high-priority VERSATILE-003 trial.

Financial Health and the Path Forward

As a clinical-stage biotechnology company, PDS Biotech has not generated any product revenue and has incurred net losses and negative cash flows from operations since its inception. For the three months ended March 31, 2025, the company reported a net loss of $8.49 million, an improvement from the $10.60 million net loss in the same period of 2024, primarily due to an income tax benefit from the sale of NOLs and lower operating expenses. Research and development expenses decreased to $5.83 million in Q1 2025 from $6.70 million in Q1 2024, mainly due to reduced clinical trial and manufacturing costs.

General and administrative expenses saw a smaller decrease to $3.27 million.

As of March 31, 2025, PDS Biotech had $39.98 million in cash and cash equivalents, down slightly from $41.69 million at the end of 2024. Cash used in operating activities was $9.03 million in Q1 2025.

The company has actively pursued financing to support its operations and the initiation of the Phase 3 trial. In February 2025, it completed a registered direct offering, raising approximately $10.05 million in net proceeds. In April 2025, the company entered into a Securities Purchase Agreement for senior secured convertible debentures and warrants, raising $20.00 million in total purchase price, with approximately $19.00 million used to retire existing debt.

Despite these financing activities, management has stated that the company does not currently have sufficient funds on hand to complete the VERSATILE-003 trial. The plan is to raise necessary capital in a stepwise manner as the trial progresses, utilizing a mix of equity and debt financing, and potentially collaborations, while balancing funding needs against shareholder dilution. The company's financial condition, including debt covenants requiring minimum cash balances and the need for substantial additional funding, has led to the conclusion that substantial doubt exists about its ability to continue as a going concern for at least 12 months from the filing date of the Q1 2025 10-Q.

The operating expense burn is expected to be relatively stable going forward, following an initial ramp-up period associated with starting the pivotal trial. The ability to successfully enroll and execute the VERSATILE-003 trial, achieve key data readouts, and secure necessary future funding are critical factors for the company's financial sustainability and the realization of its strategic goals.

Competitive Positioning and Risks

PDS Biotech's competitive positioning in the HPV16-positive HNSCC market is defined by its targeted immunotherapy approach and the promising data generated to date. While competing against established checkpoint inhibitors like Keytruda, PDS Biotech aims to demonstrate that its Versamune HPV combination offers superior efficacy, particularly in terms of durable overall survival, and a potentially better safety profile in this specific patient population. The VERSATILE-003 trial is uniquely positioned as the only ongoing registrational trial exclusively addressing first-line recurrent/metastatic HPV16-positive HNSCC, a niche that is rapidly growing and distinct from HPV-negative disease, where existing therapies may be less effective. Management believes this targeted focus, supported by the strong VERSATILE-002 data, provides a significant opportunity to establish market leadership.

However, significant risks remain. The successful outcome of the VERSATILE-003 trial is not guaranteed, and clinical trials can fail at any stage. Regulatory approval is uncertain and depends on demonstrating sufficient safety and efficacy to the satisfaction of regulatory bodies like the FDA. Competition is intense, and larger companies have significantly greater financial and operational resources, potentially enabling them to accelerate development, pursue broader indications, or withstand market pressures more effectively. While PDS Biotech's collaborations help extend its runway and advance certain programs, dependence on these partners introduces risks related to their priorities and funding. The company's ability to secure substantial future financing on favorable terms is critical but uncertain, and failure to do so could force delays, reductions, or even termination of development programs. Intellectual property protection is also vital in the biotechnology sector, and the company's success depends on its ability to protect its proprietary technologies and defend against potential infringement claims.

Outlook

PDS Biotech's outlook is firmly focused on the execution of the VERSATILE-003 Phase 3 trial. The initiation of this pivotal study represents a significant milestone, driven by the compelling and durable survival data observed in the Phase 2 VERSATILE-002 trial. Management is optimistic about the potential for the Versamune HPV and pembrolizumab combination to offer a significant improvement over the current standard of care for patients with recurrent/metastatic HPV16-positive HNSCC.

The key catalysts for the company in the coming 18-24 months will be the progress of enrollment in VERSATILE-003 and the anticipated interim data readouts. While timelines are dependent on enrollment rates, the trial design is structured to potentially allow for early assessment of efficacy based on overall survival events. Concurrently, the company will continue to support its collaborative programs, such as the NCI-led trials for the MUC1 and PDS01ADC combination and other PDS01ADC studies, which could provide additional data points and future pipeline opportunities.

Financially, the need for additional capital remains a critical factor. The company's ability to successfully raise funds will directly impact the pace and completion of the VERSATILE-003 trial and its overall operational runway. Investors will be closely monitoring not only clinical trial progress and data readouts but also the company's financing activities and cash position.

Conclusion

PDS Biotech stands at a pivotal juncture, having translated promising Phase 2 data into a focused Phase 3 development program for its lead candidate in a specific, high-need patient population. The investment thesis for PDSB is largely predicated on the successful execution of the VERSATILE-003 trial and the potential for the Versamune HPV and pembrolizumab combination to demonstrate a statistically significant and clinically meaningful improvement in overall survival compared to pembrolizumab alone in first-line recurrent/metastatic HPV16-positive HNSCC. The durable survival and encouraging response rates observed in VERSATILE-002 provide a strong foundation for this thesis.

However, the path forward is not without significant challenges, most notably the substantial funding required to complete the pivotal trial and the inherent risks associated with late-stage clinical development and regulatory approval. While the company's differentiated technology and strategic collaborations offer potential long-term value and pipeline optionality, the immediate focus and financial viability hinge on the progress and outcome of VERSATILE-003 and the ability to secure necessary financing. For investors, monitoring enrollment trends, the timing and results of interim data readouts, and the company's capital-raising efforts will be paramount in assessing the potential upside and managing the significant risks associated with this clinical-stage biotechnology opportunity.