Executive Summary / Key Takeaways

• Pivotal Phase 3 Underway: PDS Biotech has initiated the VERSATILE-003 Phase 3 trial for PDS0101 (Versamune HPV) plus pembrolizumab, targeting the rapidly growing and underserved HPV16-positive recurrent/metastatic head and neck squamous cell carcinoma (HNSCC) market, which is projected to be the most prevalent HNSCC type by the mid-2030s.
• Durable Clinical Benefit: Final topline data from the VERSATILE-002 Phase 2 trial demonstrated a median overall survival (mOS) of 39.3 months in patients with CPS ≥ 1, significantly outperforming the 17.9 months reported for standard-of-care pembrolizumab or its combination with chemotherapy, with no discontinuations due to treatment-related adverse events.
• Differentiated Technology Platform: PDS Biotech's proprietary Versamune platform is designed to induce large quantities of high-quality, highly potent polyfunctional CD4 helper and CD8 killer T cells, offering a unique mechanism to overcome immune suppression and drive durable anti-tumor responses.
• Strategic Pipeline Expansion: Beyond its lead program, PDS Biotech is advancing PDS01ADC in colorectal cancer (Phase 2 expansion) and Versamune MUC1 in metastatic colorectal cancer (IND cleared), leveraging NCI collaborations to progress these programs without diverting core capital.
• Funding Remains Critical: Despite recent capital raises and debt refinancing, the company acknowledges it does not have sufficient funds to complete the VERSATILE-003 trial, necessitating a stepwise capital raise strategy and presenting a "going concern" risk.

The Unmet Need: PDS Biotech's Vision in Immuno-Oncology

PDS Biotechnology Corporation (PDSB) stands at a critical juncture, poised to address a significant and rapidly expanding unmet medical need in oncology. As a clinical-stage immunotherapy company, PDS Biotech is dedicated to transforming cancer treatment by harnessing the body's immune system. Its core strategy revolves around developing molecularly targeted immunotherapies, particularly for Human Papillomavirus (HPV)-associated cancers, which are increasingly recognized as distinct diseases requiring specialized approaches.

The company's primary focus is on HPV16-positive recurrent and/or metastatic head and neck squamous cell carcinoma (HNSCC). This patient population is not only large but also the fastest-growing segment of head and neck cancer, projected to become the most prevalent type in the United States and Europe by the mid-2030s. Independent market research from November 2024 indicates that over 50% of HNSCC cases in the U.S. are HPV16-positive, with some key opinion leaders reporting that over 70% of their new patients fall into this category. This demographic shift underscores the urgent demand for targeted therapies that address the underlying viral cause of these malignancies.

The Science Behind the Promise: Technological Differentiation

PDS Biotech's investment thesis is fundamentally rooted in its innovative technology platforms: Versamune, PDS01ADC, and Infectimune. These platforms are engineered to overcome the limitations of conventional immunotherapy and vaccine technologies by precisely training and activating the immune system.

The Versamune platform, exemplified by PDS0101 (Versamune HPV), is designed to induce, in vivo, large quantities of high-quality, highly potent polyfunctional CD4 helper and CD8 killer T cells. These specific T-cell subtypes are crucial for effectively killing infected or target cells. This mechanism is a significant differentiator, as it aims to convert the immune-suppressive tumor microenvironment into an immunogenic one, fostering a robust and sustained anti-tumor response. The tangible benefit lies in the potential for more durable and profound clinical outcomes, as evidenced by the company's clinical data.

PDS01ADC represents another critical technological advancement. This novel investigational tumor-targeting fusion protein of Interleukin-12 (IL-12) is designed to enhance the proliferation, potency, infiltration, and longevity of T cells directly within the tumor microenvironment. A key advantage of PDS01ADC is its ability to reduce systemic exposure to IL-12, thereby mitigating the high toxicity and limited therapeutic potential typically associated with traditional cytokine therapies. By concentrating IL-12 at the tumor site, PDS01ADC aims to maximize its immune-activating effects while minimizing adverse systemic side effects. This targeted delivery mechanism offers a significant competitive edge, potentially leading to better patient tolerability and improved treatment adherence.

These technological differentiators are not merely theoretical; they form the bedrock of PDS Biotech's competitive moat. By focusing on precise immune activation and targeted delivery, the company aims to achieve superior efficacy and durability, translating into higher patient response rates and prolonged survival. This technological edge is crucial for PDSB to carve out a leadership position in specialized oncology segments and drive long-term value for investors.

Pivotal Progress in HPV16-Positive HNSCC: VERSATILE-002 & -003

PDS Biotech's lead program, PDS0101 (Versamune HPV) in combination with pembrolizumab, has demonstrated compelling results, fueling the company's strategic direction. The VERSATILE-002 Phase 2 clinical trial in HPV16-positive recurrent and/or metastatic HNSCC has yielded final topline survival data that underscore the potential of this combination. The study reported a median overall survival (mOS) of 39.3 months in patients with a Combined Positive Score (CPS) ≥ 1. This figure significantly surpasses the 17.9 months mOS reported for standard-of-care pembrolizumab alone or in combination with chemotherapy. Furthermore, the overall mOS remained steady at 30.0 months over 1.5 years of follow-up, with the lower limit of the 95% confidence interval increasing from 18.4 months in 2023 to 23.9 months as data matured, suggesting remarkable durability of the Versamune HPV-induced clinical responses. Importantly, no patients discontinued the trial due to treatment-related adverse events, highlighting the favorable tolerability profile.

Beyond survival, VERSATILE-002 data, updated at the ESMO Congress in September 2024, showed consistent improvements across other key metrics: the objective response rate (ORR) improved from 26% to 36% (compared to 19-25% for pembrolizumab alone), and the disease control rate (DCR) increased from 70% to 77%. Notably, patients achieving deep tumor regression (90-100% shrinkage) rose from 6% to 21%, with complete responses increasing from 3% to 9%. These robust and durable responses, coupled with a manageable safety profile (Grade 3 or higher TRAEs in 10% of patients, predominantly injection site reactions), provide a strong foundation for the ongoing VERSATILE-003 Phase 3 clinical trial.

Initiated in March 2025, VERSATILE-003 is a pivotal, global, multi-center, randomized, controlled, and open-label study. It evaluates PDS0101 plus pembrolizumab against pembrolizumab alone in approximately 350 patients, randomized 2:1. Median overall survival is the primary endpoint, with secondary endpoints including ORR, progression-free survival (PFS), DCR, and duration of response. The trial design incorporates two interim data readouts, strategically planned to potentially enable early discussions with the FDA regarding accelerated approval, assuming the data replicates the promising Phase 2 outcomes. Enrollment is estimated to take approximately 18 months, with the first interim readout expected about six months after full enrollment.

Further supporting the Versamune HPV platform, the Mayo Clinic's MC-200710 Phase 2 neoadjuvant study in locally advanced HPV16-positive oropharyngeal cancer showed clinical activity with just two cycles of PDS0101 alone (70% stable disease) and 100% stable disease or partial response when combined with pembrolizumab. The combination also met its primary endpoint of a 50% reduction in circulating tumor DNA, indicating early and significant anti-tumor effects.

Expanding the Arsenal: Pipeline Beyond HPV16 HNSCC

While VERSATILE-003 remains the company's primary focus, PDS Biotech is strategically advancing other pipeline candidates, largely through collaborations that mitigate direct capital expenditure.

The PDS01ADC program, leveraging its tumor-targeting IL-12 technology, has shown promising early results. In July 2025, the colorectal cancer cohort of an NCI-led Phase 2 clinical trial met the criteria for expansion to Stage 2, following positive Stage 1 results that observed a promising response rate of at least 6 out of 9 confirmed objective responses. Patient recruitment for this cohort is anticipated to be completed by the fourth quarter of 2025. This program is also being explored in combination with Astellas (ALPMY)' enzalutamide for recurrent prostate cancer in another NCI-led study. Management views PDS01ADC as a potential "second-generation product" to be added to an approved Versamune HPV + pembrolizumab doublet, simplifying the regulatory pathway and potentially addressing both checkpoint inhibitor-naïve and -resistant patients.

The Versamune MUC1 (PDS0103) program, targeting MUC1-positive solid tumors prevalent in non-small cell lung, ovarian, breast, liver, and colorectal cancers, received FDA clearance for its IND application in March 2025. This Phase 1/2 trial, evaluating Versamune MUC1 in combination with PDS01ADC for metastatic colorectal cancer, will be conducted under a collaborative research agreement with the NCI. The MUC1 antigens utilized are novel agonist epitopes designed by the NCI to be more immunologically potent, aiming to overcome historical challenges with MUC1-targeted therapies by combining a superior antigen with PDS Biotech's effective immune-activating platform.

In cervical cancer, the IMMUNOCERV Phase 2 clinical study evaluating PDS0101 with chemoradiotherapy demonstrated compelling results. The 36-month overall survival rate was 100% for patients who received all five doses of Versamune HPV, and 84.2% for those receiving at least two doses, compared to a published 82.6% for Keytruda plus chemoradiotherapy. The 36-month PFS rate was 100% for patients who took all five doses, with complete responses of 88% in patients receiving two or more doses. PDS Biotech is currently evaluating the next steps for this promising program.

Additionally, the Infectimune platform is being developed for infectious diseases, with preclinical data for a universal flu vaccine (PDS0202) presented at the IMMUNOLOGY2025™ Annual Meeting. These studies, funded by NIAID, highlight the platform's potential to induce broad and durable immune responses, aligning with NIAID's focus on more effective flu vaccines.

Competitive Landscape: Carving a Niche in a Giant's World

PDS Biotech operates in a highly competitive biopharmaceutical landscape dominated by large players like Merck , Bristol-Myers Squibb (BMY), AstraZeneca (AZN), and Pfizer (PFE). These established companies boast extensive global reach, diversified portfolios, and robust financial resources, enabling them to invest heavily in R&D and commercialization. However, PDSB is strategically carving a distinct niche by focusing on HPV16-positive HNSCC, a segment increasingly recognized as biologically distinct from HPV-negative HNSCC and requiring a targeted approach.

PDSB's competitive edge is primarily driven by the superior durability and efficacy demonstrated by its Versamune HPV platform. For instance, the 39.3 months mOS from VERSATILE-002 significantly surpasses the 17.9 months mOS for standard-of-care pembrolizumab, a key product from Merck . This qualitative difference in survival outcomes is critical, as the FDA emphasizes overall survival as the "gold standard" for oncology approvals, noting that objective response rates and progression-free survival do not always translate to improved OS.

In contrast to competitors like Merus (MRUS), which has shown impressive objective response rates with its EGFR bispecific in HNSCC but lacks survival data and has treated only a handful of HPV-positive patients, PDSB's focus on long-term survival in a specific, growing HPV16-positive population provides a clear differentiation. The company's technology, designed for potent and polyfunctional T-cell activation, aims to provide a more profound and lasting anti-tumor immune response compared to traditional cytotoxic drugs or EGFR inhibitors like cetuximab, which have historically shown limited efficacy in HPV-positive HNSCC.

Furthermore, PDSB's management believes that the recent approval of Merck's (MRK) KEYTRUDA in the neoadjuvant/adjuvant setting for locally advanced HNSCC (KEYNOTE-689) will have a negligible impact on its target population. This is because most HPV-positive HNSCC patients are generally not candidates for surgery, a prerequisite for KEYNOTE-689, thus preserving PDSB's market opportunity. While larger competitors benefit from economies of scale and broader market access, PDSB's agility and specialized focus allow it to innovate and adapt more quickly to the specific needs of this underserved patient group. The company's strategic collaborations with institutions like the NCI also enable it to advance its pipeline efficiently, leveraging external resources to compete effectively in a capital-intensive industry.

Financial Health and the Road Ahead

PDS Biotech's financial performance reflects its status as a clinical-stage biopharmaceutical company. As of June 30, 2025, the company reported cash and cash equivalents of $31.87 million, down from $41.69 million at December 31, 2024. The net loss for Q2 2025 was $9.43 million, an increase from $8.33 million in Q2 2024, primarily due to higher net interest expenses. For the six months ended June 30, 2025, the net loss was $17.92 million, an improvement from $18.93 million in the prior-year period, driven by lower operating expenses and an increased benefit from income taxes.

Operating expenses have seen some fluctuations. Research and development (R&D) expenses decreased to $4.21 million in Q2 2025 from $4.53 million in Q2 2024, mainly due to lower manufacturing and personnel costs, partially offset by increased clinical trial costs. General and administrative (G&A) expenses also decreased to $3.41 million in Q2 2025 from $4.16 million in Q2 2024, primarily due to reductions in personnel costs and professional fees. However, management anticipates R&D expenses to "increase significantly over the next several years" as the VERSATILE-003 trial progresses and regulatory approvals are pursued.

Historically, PDS Biotech has incurred net losses and negative cash flows from operations since its inception, with an accumulated deficit of $200.03 million as of June 30, 2025. The company has no product revenues and expects this trend to continue for the foreseeable future. To fund its operations, PDS Biotech relies on equity and debt financings.

Recent financing activities include a February 2025 offering that raised approximately $10.05 million net proceeds and an April 2025 debt refinancing, extending the term to 36 months with initial interest-only payments. This refinancing involved senior secured convertible debentures with an aggregate principal amount of $22.22 million.

Risks and Investment Considerations

Despite the promising clinical data and strategic focus, PDS Biotech faces significant risks. The company has explicitly stated that "substantial doubt exists about [its] ability to continue as a going concern" for at least 12 months from the 10-Q filing date, underscoring the critical need for additional capital. Management has indicated that current cash balances are insufficient to complete the VERSATILE-003 trial, necessitating a "stepwise manner" approach to raising capital through equity and non-dilutive sources. This exposes investors to potential future dilution.

Furthermore, the JGB Debentures carry restrictive covenants, including maintaining a minimum cash balance (the lesser of $15 million or the outstanding principal plus $3 million) and limitations on incurring additional debt, granting liens, or repurchasing securities. A breach of these covenants could trigger immediate repayment, severely impacting liquidity and operations. The broader global economic uncertainty, geopolitical conflicts, and potential U.S. regulatory shifts (e.g., restrictions on investments in companies with ties to China, pharmaceutical import tariffs, drug pricing policies) also pose risks that could affect PDS Biotech's business, financial condition, and access to capital.

Conclusion

PDS Biotech is pursuing a compelling investment thesis centered on its innovative immunotherapy platforms and a focused strategy to address the rapidly growing unmet medical need in HPV16-positive head and neck cancer. The durable and superior survival data from the VERSATILE-002 trial, coupled with the initiation of the pivotal VERSATILE-003 Phase 3 study, positions the company as a potential leader in this critical oncology segment. Its technological differentiation, particularly the Versamune platform's ability to induce potent T-cell responses and PDS01ADC's targeted IL-12 delivery, offers a distinct competitive advantage against established players.

While the company's financial health presents a significant challenge, with ongoing losses and a stated "going concern" risk, its strategic reliance on collaborations for pipeline expansion and a disciplined approach to capital raises are designed to mitigate these pressures. Investors should closely monitor the progress of the VERSATILE-003 trial, particularly the interim data readouts, and the company's ability to secure necessary financing. PDS Biotech's potential to deliver a first-in-class, highly effective, and well-tolerated therapy for HPV16-positive HNSCC represents a substantial long-term opportunity, contingent on successful clinical execution and prudent financial management.