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GOVX: Second Quarter Financials Reported with a Conservative Cash Burn

By Grant Zeng, CFA


On August 7, 2014, GeoVax Labs (GOVX) announced its financial results for the second quarter ended June 30, 2014 and provided a clinical development update. 

Grant revenues were $180,441 for 2Q14, which was related to grants from the NIH in support of its HIV/AIDS vaccine development programs. For 2Q13, GeoVax reported grant revenue of $441,561.

As of June 30, 2014, there is approximately $484,500 in unused grant funds remaining and available for use. 

R&D expenses were $516,202 for 2Q14, as compared to $553,199 for the comparable periods of 2013. R&D expenses included direct costs funded by NIH grants, as well as vaccine manufacturing and testing costs and expenses related to the Company's HIV immunotherapy program.

G&A expenses were $344,862 for 2Q14, compared to $415,784 for 2Q13. 

Net loss was $679,537 ($0.03 per share) for 2Q14, compared to $526,284 ($0.02 per share) for the same period in 2013. 

As of June 30, 2014, GeoVax held a cash balance of $1,371,802, as compared to $2,010,326 at March 31, 2014.

On July 16, 2014, GeoVax received a Notice of Award from the NIH for a Small Business Innovative Research (SBIR) grant. This grant award is approximately $290,000, which is for the second year of a two-year project period. 

This grant will support the continued preclinical studies evaluating the ability of protein boosts to augment antibody responses that can block virus infections and cause antibody dependent cellular cytotoxicity (ADCC antibody). 

Current cash balance, together with our projected cash inflow, can last through the 1Q2015.

Therapeutic HIV Vaccine Update

GeoVax recently completed the first Phase I trial (GV-TH-01) investigating the ability of the Company's unadjuvanted DNA/MVA vaccine GOVX-B11 vaccine to control HIV infections in HIV-infected patients.  

GV-TH-01 is an open label Phase I treatment interruption trial investigating the safety and immunogenicity of the Company's DNA/MVA vaccine in 9 HIV-infected patients who had initiated drug treatment within 18 months of seroconversion and had stably controlled virus for at least 6 months. Patients were vaccinated with two DNA inoculations followed by two MVA inoculations at intervals of two months. Eight weeks following the last inoculation, patients suspended drug therapy for a 12 week period. Vaccinated patients' ability to control the time and temporal height of re-emergent virus in the absence of drugs was then observed. Drug treatment was re-instituted after 12 weeks, and trial participants were observed for an additional 6 months. 

The primary endpoint of this study is to evaluate the safety of GOVX-B11 in HIV-positive patients with well-controlled infections who are being treated with oral HIV medications. A secondary objective is to evaluate the immunogenicity of the GOVX-B11 vaccine during the vaccination phase of the trial. An exploratory objective of the study is to evaluate the ability of the vaccinated patient to control re-emergent virus during a 12-week drug treatment interruption period.

Excellent safety was observed throughout the trial, with none of the 9 participants needing to reinstate antiretroviral drugs during the treatment interruption phase of the trial.

GeoVax’s analysis of the trial data indicates that, during the vaccination phase of the trial, evidence of the beneficial effect of vaccine was measured by enhanced CD8+ T cells elicited in 8 of 9 participants and enhanced CD4+ T cells in 5 of 9 participants. Antibody responses were boosted in 4 of 9 participants. Analyses during the treatment interruption phase suggested that individuals with the best immune responses to the vaccine had lower levels of re-emergent virus.

The Company plans to publish the full study results for GV-TH-01 in a scientific journal in late 2014.

Although the GV-TH-01 results were not suggestive of a significant clinical benefit of GOVX-B11 alone, the immune response data from the trial have given GeoVax a foundation for proceeding with the development of an immunotherapy program as part of the NIH’s "cure agenda." 

GeoVax is currently developing a protocol for a Phase I/II clinical trial using a proprietary agent to induce latently infected cells to produce virus ("shock") while the infected patient remains on ART. Successful re-activation of viral reservoirs is the first step towards a "shock and kill" approach to reducing viral reservoirs.

The positive data from the Phase I trial of GOVX-B11 is another achievement for GeoVax. We are very pleased with the safety of the vaccine and its ability to enhance immune responses in infected and drug-treated patients. The opportunity for GOVX-B11/proprietary agent lies in its ability to complement drug therapies, which can control virus spread but not recognize and kill infected cells, with a vaccine response capable of recognizing and eradicating infected cells. 

Preventive HIV Vaccine Update

GeoVax has recently completed a Phase I trial (HVTN 094) of the adjuvanted DNA/MVA vaccine (GOVX-B21) and a Phase IIa trial (HVTN 205) of GOVX-B11.  All of the human clinical trials of GeoVax's preventive HIV vaccines have been conducted by the HIV Vaccine Trials Network (HVTN) with funding from the NIH.

Based on analysis of all available data generated to date, GeoVax is advancing GOVX-B11 to the next stage of human clinical testing, and is in planning discussions with the HVTN and NIH for a Phase IIb efficacy trial.

The Phase IIb trial is expected to involve as many as 4,000 subjects (vaccine + placebo) with an estimated cost in excess of $50 million. While GeoVax expects the NIH to fund this trial, any formal commitment may not occur until 2015. In advance of this commitment, GeoVax has requested approximately $3 million for the production of the DNA component of its vaccine regimen in sufficient quantities for the proposed Phase IIb trial. The Company expects a response from the NIH to this request during the third quarter of 2014. Should this funding be unavailable, GeoVax will seek other sources for funding vaccine production.


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