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Item 2. Management’s Discussion and Analysis

2021-05-13 compared with 2020-11-13 · 297 added, 370 removed, 90 unchanged (88% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim

condensed consolidated financial statements and related notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”) and with the audited financial statements and notes

thereto of the Company as of and for the year ended December 31, 2019 on Form 10-K, filed with the Securities and Exchange Commission, or SEC, on March 27, 2020.

As further described in “Note 1 – Nature of Operations” and “Note 4 – Reverse Merger”

in this Quarterly Report, Private PDS was determined to be the accounting acquirer in the Merger and, accordingly, the pre-Merger historical financial information presented in this Quarterly Report reflects the standalone financial statements of

Private PDS and, therefore, period-over-period comparisons may not be meaningful.

Except as otherwise indicated herein or as the context otherwise requires, references in this Quarterly Report to “PDS” “the

Company,” “we,” “us” and “our” refer to PDS Biotechnology Corporation , a Delaware corporation, on a post-Merger basis, and the term “Private PDS” refers to the business of privately held PDS Biotechnology

Corporation prior to completion of the Merger.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited

interim condensed consolidated financial statements and related notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”) and with the audited financial statements

and notes thereto of the Company as of and for the year ended December 31, 2020 on Form 10-K, filed with the Securities and Exchange Commission, or SEC, on March 18, 2021.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report contains forward-looking statements that involve substantial risks and uncertainties.

All statements other than statements of historical facts contained in this

Quarterly Report, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations, are forward-looking statements.

All statements other than statements of historical facts contained in this Quarterly

Report, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations, are forward-looking statements.

In some cases, you can identify forward-looking

14 unchanged sentences

Risk Factors.

Any forward-looking statements in this Quarterly Report reflect our views and assumptions only as of the date that this report is signed with respect to future events or to our future

financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or

implied by these forward-looking statements.

Any forward-looking statements in this Quarterly Report reflect our views and assumptions only as of the date that this report is signed with respect to future events or to our future financial

performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by

these forward-looking statements.

Given these uncertainties, you should not place undue reliance on these forward-looking statements.

Except as required by law, we assume no obligation to update or revise these forward-looking statements

for any reason, even if new information becomes available in the future.

Except as required by law, we assume no obligation to update or revise these forward-looking statements for any

reason, even if new information becomes available in the future.

We qualify all of our forward-looking statements by these cautionary statements.

In addition, with respect to all of our forward-looking statements, we claim the protection of the

safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

We are a clinical-stage immunotherapy company developing a growing pipeline of cancer immunotherapies and infectious disease vaccines designed to overcome the well-established limitations of current

In addition, with respect to all of our forward-looking statements, we claim the protection of the safe harbor for

forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Company Overview

We are a clinical-stage immunotherapy company developing a growing pipeline of cancer immunotherapy and infectious disease vaccine candidates designed to overcome the limitations of current

immunotherapy technologies.

PDS owns Versamune ® , a proprietary T-cell activating platform designed to train the immune system to better attack and destroy disease.

When paired with an antigen, a disease-related protein that is recognizable

by the immune system, Versamune ® has been shown to induce, in vivo, large quantities of high-quality, highly potent polyfunctional CD8+ killer T-cells, a specific sub-type of CD8+ killer T-cell

that is more effective at killing infected or target cells.

The induction of CD8+ (killer) T-cells is important to achieving robust efficacy in cancer immunotherapy and long-term efficacy in most infectious disease vaccines.

It is well documented that the

most critical attribute of an effective cancer immunotherapy is induction of high levels of active tumor-specific CD8+ (killer) T-cells.

Priming adequate levels of active CD8+ T-cells in-vivo continues to be

a major obstacle impeding the achievement of durable efficacy in immunotherapy treatment.

Current preventive and prophylactic vaccine approaches and technologies predominantly focus on creating strong induction of antibody responses.

induction of T-cell responses, in addition to antibody responses, provides more durable and broad protection against infectious diseases.

Versamune ® activates an important immunological signaling pathway, critical to induction of robust and sustained anti-viral and anti-tumor immune responses, known as the Type I interferon

(IFN) signaling pathway.

Versamune ® has demonstrated the following:

Prolonged and localized induction of chemokines and cytokines within lymph nodes, resulting in sustained recruitment of T cells and B-Cells, enhanced potency, and minimized risk of systemic toxicity, resulting in an improved safety profile in clinical and preclinical safety/toxicology studies.

Dramatic enhancement of antibody titers in the context of dose sparing of multiple antigens.

Induction of polyfunctional, highly potent antigen-specific CD8+ T-cells associated with the type of long-term memory responses necessary for effective cancer immunotherapy and also to provide long term

protection against viral infection.

Demonstrated high levels of antigen-specific antibody, CD8+ and CD4+ T cell responses within 2 weeks of a single vaccination in human clinical studies.

Spontaneously forming spherical nanoparticles composed of a single synthetic lipid;

a process that results in relatively low projected commercial cost of goods and potential for rapid commercial scale-up.

PDS’s lead clinical stage program, PDS0101, has demonstrated unique in-vivo induction of high levels of active HPV-specific CD8+ T-cells in humans,

confirming impressive preclinical CD8+ T-cell study results, as well as successful induction of CD8+ T-cells against a viral target (HPV).

This strong CD8+ T-cell induction data, coupled with preclinical data demonstrating the induction of high

levels of neutralizing antibody responses, suggested strong potential to successfully develop and progress novel Versamune ® -based vaccines to treat infectious diseases, and thus informed PDS’ subsequent pipeline expansion into selected

infectious disease indications.

Versamune ® ’s immunostimulatory properties have been confirmed in preclinical studies and may be administered with a diverse array of disease-specific proteins called antigens.

antigens may be used in the form of recombinant proteins, peptides, DNA and RNA antigens.

The mechanism of action was published in the Journal of Immunology in June 2019.

We believe that the Versamune ® platform has shown strong potential to become an industry-leading immunotherapy technology;

it is the platform technology underpinning PDS’ robust pipeline

of cancer immunotherapies and infectious disease vaccines.

We expect substantial value accretion as our pipeline products successfully progress through Phase 2 clinical trials;

two of the three PDS0101 clinical trials planned for initiation in the

second half of 2020 were delayed by the adverse impact the COVID-19 pandemic is having and has had on clinical trial operations for cancer indications in the United States.

All three phase 2 clinical trials of PDS0101 in various advanced

HPV-associated cancers are now in progress.

The unique combination of high potency and excellent safety of the Versamune ® platform observed in preclinical studies was corroborated in the successfully-completed 12-patient PDS0101

Phase 1/2a clinical trial.

On September 19, 2019, PDS reported retrospective clinical outcome data from this study.

Despite most of the patients being infected with multiple HPV strains other than HPV 16, regression was seen in 8 out of 10 patients,

with complete regression of pre-cancerous lesions documented in 6 out of 10 patients at their first post-treatment evaluation, which occurred within 1-3 months of completing treatment.

In addition, the fact that no disease recurrence occurred over

the two-year evaluation period strongly suggested a robust and durable therapeutic immune response due to the induction of T-cells by PDS0101 administration that were clinically active.

As a result of this information strongly suggesting the unique

ability of PDS0101 to generate potent and biologically active CD8+ T-cells in-vivo , PDS focused its clinical strategy on areas of more severe unmet medical need in which PDS0101 is combined with other

immune-modulating agents, including checkpoint inhibitors and standard of care e.g.

chemoradiotherapy, to provide improved clinical benefit to patients.

We believe that rational design of combination immunotherapies using agents that promote synergy with each other and reduce the potential for compounded toxicity will substantially enhance the

potential for combination therapies to deliver improved clinical benefit for cancer patients.

Versamune ® appears to activate an appropriate combination of immunological pathways to promote strong CD8+ T-cell induction while also altering

the tumor microenvironment to make tumors more susceptible to T-cell attack, which PDS believes makes it an ideal complement to checkpoint inhibitors and other immune-modulating agents by enhancing their potency as part of combination therapies.

addition, the differences in mechanism of action between Versamune ® and checkpoint inhibitors, as well as the initial demonstrated safety profile of Versamune ® , suggests that these combinations may be much better tolerated by

patients than many or most other combination therapies involving checkpoint inhibitors and other cancer treatments such as immune-cytokines and chemotherapy.

In October 2019, we entered into an amendment to an existing clinical trial collaboration agreement with a subsidiary of Merck (known as MSD outside the United States and Canada) to evaluate a

combination of our lead Versamune ® -based immunotherapy, PDS0101, with Merck’s anti-PD-1 therapy, KEYTRUDA ® (pembrolizumab), in a Phase 2 clinical trial.

The clinical trial will evaluate the efficacy and safety of this

therapeutic combination as a first-line treatment in patients with recurrent or metastatic head and neck cancer and high-risk human papillomavirus-16 (HPV16) infection.

This amendment, primarily related to a modification to the original clinical

trial design to evaluate PDS0101 in combination with KEYTRUDA ® as first-line treatment, was the result of the FDA’s approval, on June 10, 2019, for first line treatment of patients with metastatic or unresectable recurrent head and neck

squamous cell carcinoma (HNSCC) using KEYTRUDA ® in combination with platinum and fluorouracil (FU) for all patients, and as a single agent for patients whose tumors express PD-L1 as determined by an FDA-approved test.

This Phase 2 trial,

previously anticipated to begin in June 2020, was put on hold in April 2020, primarily due to the effect of COVID-19 on clinical trial operations in the United States.

In November 2020 the PDS VERSATILE-002 Phase 2 clinical trial evaluating the

combination of PDS0101 in combination with KEYTRUDA ® for first-line treatment of head and neck cancer opened and is actively recruiting patients.

PDS previously announced a Cooperative Research and Development Agreement (CRADA) with the National Cancer Institute (NCI) for development of the PDS0101 HPV cancer immunotherapy in combination with

other immune-modulating agents as a potential treatment for advanced HPV-related cancers.

Preclinical study results arising from this CRADA were recently published in the Journal for ImmunoTherapy of Cancer, Immunomodulation

to enhance the efficacy of and HPV therapeutic vaccine (Journal for ImmunoTherapy of Cancer 2020;8:e000612.

doi:10.1136/ jitc-2020-000612) , indicating that PDS0101 generated both human papillomavirus

(HPV)-specific T-cells and an associated antitumor response when used as a monotherapy.

When PDS0101 was combined with two other novel clinical-stage anti-cancer agents, Bintrafusp alfa (M7824) and NHS-IL12 owned by EMD Serono, preclinical data

suggested that all three therapeutic agents worked synergistically to provide enhanced tumor T-cell response and subsequent tumor regression and when compared to any of the agents alone or 2-component combinations.

In June 2020, the first patient was

dosed under this PDS0101 CRADA, in a NCI-led Phase 2 clinical study evaluating PDS0101, NHS-IL12, and M7824, owned by EMD Serono (Merck KGaA).

Recently, this investigator-led study achieved its initial safety benchmark – meaning that not more than 1 dose-limiting toxicity was observed in the first 6 patients who received the combination.

The trial has completed recruitment for the first 8 patients, in order to perform the initial efficacy assessment.

If three or more patients demonstrate an objective response to the triple combination, the trial will progress to full recruitment.

We expect the initial efficacy results and a decision regarding expansion of the trial during the first half of 2021.

Our Versamune ® technology is a proprietary T-cell activating platform designed to train the immune system to better attack and destroy disease.

When paired with an antigen (which is a disease-related protein

that is recognizable by the immune system) Versamune ® induces, in vivo, large quantities of high-quality, highly potent polyfunctional CD8+ killer T-cells, a specific sub-type of CD8+ killer

T-cell that is more effective at killing infected or target cells.

We believe that the Versamune® platform has the potential to become an industry-leading immuno-oncology technology and is currently being applied to the development of a robust pipeline of valuable

“new-generation, multi-functional” immunotherapies, both as single agents and as part of combination therapies with other leading immuno-oncology technologies.

We believe our product candidates are of interest for potential combination therapies in

relation to Human Papillomavirus (HPV) associated cancers, melanoma, colorectal, lung, breast and prostate cancers in advanced cancer or as monotherapies in early-stage disease.

It is well documented that the most critical attribute of an effective cancer immunotherapy is the induction of high levels of active antigen-specific CD8+ (killer) T-cells.

Priming adequate levels

of active CD8+ T-cells in-vivo continues to be a major obstacle facing immunotherapy.

PDS0101 in its first human clinical trial provided data supporting the earlier promising preclinical study results and demonstrated the unique in-vivo induction

of high levels of active HPV-specific CD8+ T-cells in humans.

PDS0101 in Combination with KEYTRUDA ® Clinical Trial:

In November 2020, our VERSATILE-002 Phase 2 clinical trial evaluating the combination of PDS0101 (Versamune ® with multiple HPV16 antigens) in combination with Merck’s anti-PD-1 therapy,

KEYTRUDA ® (pembrolizumab) for first-line treatment of recurrent/ metastatic head and neck cancer opened and is actively recruiting patients.

The clinical trial will evaluate the efficacy and safety of this therapeutic combination as a

first-line treatment in patients with recurrent or metastatic head and neck cancer and high-risk human papillomavirus-16 (HPV16) infection.

In June 2019, the FDA approved using KEYTRUDA ® in combination with platinum and fluorouracil

(FU) for all patients for first line treatment of patients with metastatic or unresectable recurrent head and neck squamous cell carcinoma, or HNSCC, and as a single agent for patients whose tumors express PD-L1 as determined by an FDA-approved

In this sponsored trial, patients whose cancer has returned or spread following initial treatment, will be able to avoid chemotherapy and take this combination of two immuno-therapy drugs.

Enrolling patients with more functional immune systems that have not been compromised by extensive chemotherapy may allow improved efficacy of the combination.

Patients in the study will receive a total of 5 cycles of combination therapy in the

context of standard of care KEYTRUDA™ therapy administered every three weeks until disease progression.

The primary endpoint of VERSATILE-002 is the objective response rate – or ORR – at nine months following initiation of treatment.

be a lead-in cohort of 12 patients to assess the safety of the combination, and a formal planned interim analysis evaluating response to treatment in the first 38 patients.

Sites have implemented institution-specific measures securing the safety of

patients and staff to ensure the integrity of the study in the face of the ongoing pandemic.

The study’s Lead Principal Investigator is Dr.

Jared Weiss, who serves as the section chief of Thoracic and Head and Neck/Neck Oncology at the University

of North Carolina School of Medicine Lineberger Comprehensive Cancer Care Center.

This trial is actively recruiting patients.

PDS0101 in Combination with Bintrafusp alfa (M7824) and NHS-IL12 Clinical Trial:

In June 2020, the first patient was dosed under a PDS0101 Cooperative Research and Development Agreement, which we refer to as the CRADA, in a National Cancer Institute, or NCI, led Phase 2

clinical study evaluating PDS0101, NHS-IL12, and M7824, owned by EMD Serono (Merck KGaA).

On April 28, 2021 we announced that initial efficacy and safety data from this study was accepted for oral presentation at the 2021 American Society of Clinical Oncology (ASCO) Annual Meeting

taking place in early June.

Preclinical study results arising from this CRADA were published in the Journal for ImmunoTherapy of Cancer, Immunomodulation to enhance the efficacy of and HPV therapeutic vaccine (Journal for ImmunoTherapy of Cancer 2020;8:e000612.

doi:10.1136/ jitc-2020-000612) , indicating that PDS0101 generated both HPV-specific T-cells and an associated antitumor response when used as a

When PDS0101 was combined with two other novel clinical-stage anti-cancer agents, Bintrafusp alfa (M7824) and NHS-IL12 preclinical data suggested that all three therapeutic agents worked synergistically to provide enhanced tumor

T-cell response and subsequent tumor regression and when compared to any of the agents alone or 2-component combinations.

If this preclinical data is successfully confirmed in the ongoing Phase 2 trial, this triple combination could form the

basis of a unique platform providing improved cancer treatments across multiple cancers.

This investigator-led study has achieved its initial safety benchmark – meaning that not more than 1 dose-limiting toxicity was observed in the first 6 patients who received the combination.

February 2021, we announced that this trial achieved its preliminary objective response target in patients naïve to checkpoint inhibitors.

The trial is progressing to full enrollment of approximately 20 patients in this group.

In addition, the

trial was amended to allow enrollment of a separate cohort of checkpoint inhibitor-refractory patients, or patients who have received prior treatment with checkpoint inhibitors, for assessment of safety and activity of the triple combination.

Preliminary efficacy assessment of the triple combination in this added group of 20 checkpoint inhibitor refractory patients is ongoing.

PDS0101 in Combination with Chemo-Radiotherapy Clinical Trial:

In October 2020, a third PDS0101 Phase 2 clinical trial was initiated with The University of Texas MD Anderson Cancer Center and is actively recruiting patients.

This clinical trial is

investigating the safety and anti-tumor efficacy of PDS0101 in combination with standard-of-care chemo-radiotherapy, or CRT, and their correlation with critical immunological biomarkers in patients with locally advanced cervical cancer.

believes that Versamune ® ’s strong T-cell induction has the potential to meaningfully enhance efficacy of the current standard of care CRT treatment in this indication.

Other Versamune ® Products Under Development:

PDS0102 – Versamune ® + TARP antigens

The TARP antigen is over-expressed in acute myelogenous leukemia (AML), prostate and breast cancers.

450,000 patients are projected to be diagnosed with prostate or breast cancer this

Approximately 90% of prostate cancers and 50% of breast cancers overexpress the TARP tumor antigen.

19,900 patients are projected to be diagnosed with AML this year.

100% of AML overexpress the TARP tumor antigen.

clinical study, the National Cancer Institute demonstrated that its proprietary TARP antigens were effectively recognized by the immune system in prostate cancer patients with PSA biochemical recurrence leading to a notable reduction in tumor

In preclinical studies, a dramatically enhanced TARP-specific killer T-cell response was observed when our designed TARP antigens were combined with Versamune® (PDS0102).

Preclinical development is ongoing.

PDS0103 – Versamune ® + MUC-1 antigens

In April 2020, the PDS-NCI CRADA was expanded beyond PDS0101 to include clinical and preclinical development of PDS0103.

PDS0103 is an investigational immunotherapy owned by PDS and designed to

treat cancers associated with the mucin-1 (MUC-1) oncogenic protein.

These include cancers such as ovarian, breast, colorectal and lung cancers.

PDS0103 combines Versamune ® with novel highly immunogenic agonist epitopes of MUC-1 developed

by the NCI and licensed by PDS.

PDS0103 is an investigational immunotherapy owned by us and designed to

treat cancers associated with the mucin-1, or MUC-1, oncogenic protein.

PDS0103 combines Versamune ® with novel highly immunogenic agonist epitopes of MUC-1 developed by the NCI and licensed by PDS.

MUC1 is highly expressed in several

types of cancer and has been shown to be associated with drug resistance and poor disease prognosis in breast, colorectal, lung and ovarian cancers, for which PDS0103 is being developed.

In preclinical studies, and similarly to PDS0101, PDS0103

demonstrated the ability to generate powerful MUC-1-specific CD8 killer T-cells.

PDS0103 is currently in late preclinical development.

In October 2020, a third PDS0101 Phase 2 clinical study was initiated with The University of Texas MD Anderson Cancer Center and is actively recruiting patients.

This clinical study will investigate

the safety and anti-tumor efficacy of PDS0101 in combination with standard-of-care chemo-radiotherapy (CRT), and their correlation with critical immunological biomarkers in patients with locally advanced cervical cancer.

PDS believes that Versamune ® ’s

strong T-cell induction has the potential to meaningfully enhance efficacy of the current standard of care CRT treatment in this indication.

PDS believes that the key differentiating attributes of the Versamune® platform technology, strong induction of CD8+ and CD4+ T-cells as well as antibodies, can also be leveraged to improve treatment

and preventive options in several infectious disease indications.

Specifically, the emerging COVID-19 pandemic has provided a unique opportunity to highlight Versamune ® ’s potentially transformative immunostimulatory activities.

newly-expanded infectious diseases pipeline now covers three infectious pathogens and vaccines.

In December 2019, we entered into an Amended and Restated Material Transfer Agreement (MTA) with the Brazilian pharmaceutical company Farmacore Biotechnology to develop a novel tuberculosis (TB)

immunotherapy based on a combination of Farmacore’s proprietary TB antigens with Versamune ® .

PDS0104 – Versamune ® + TRP-2 and melanoma antigens

The rates of melanoma have been rising rapidly over the past few decades and approximately 96,480 new melanomas will be diagnosed this year alone.

More than 7,000 of these will prove fatal.

combines Versamune ® with various melanoma antigens including the Tyrosinase-related protein 2 (TRP2) which is highly expressed in melanoma.

PDS0104 has been demonstrated in pre-clinical animal models of aggressive melanoma to have unique and

significant anti-tumor activity as a monotherapy and has also demonstrated strong anti-tumor synergy in combination with checkpoint inhibitors.

Preclinical development is ongoing.

Infectious Diseases

Our focus remains on developing our oncology products and progressing clinical trials described above, however we are also developing preventative vaccines to address several infectious diseases.

Based on the key characteristics of Versamune ® we are progressing preclinical development of PDS0202, a universal influenza vaccine candidate, which combines Versamune ® with novel influenza vaccine antigens.

pre-clinical development is being supported by an agreement with the National Institute of Allergy and Infectious Diseases Collaborative Influenza Vaccine Innovation Centers, or CIVICs, program, with a goal of progressing into a human clinical

PDS0203 is being designed with the goal to potentially provide long-term and broad protection against infection from COVID-19 and its potential mutations.

This second generation COVID-19 vaccine

is based on the understood potential of Versamune ® to prime the immune system to generate both antibodies for near term protection and T-cell responses for long term protection against pathogens.

We are jointly developing PDS0203 under

a collaboration agreement with Farmacore.

On March 11, 2021, we announced that the COVID-19 vaccine consortium consisting of PDS, Farmacore Biotechnology and Blanver Farmoquímica, received a commitment from the Secretary for Research and

Scientific Training of The Ministry of Science, Technology and Innovation of Brazil (“MCTI”) to fund up to approximately US$60 million to support the clinical development and commercialization of a Versamune®-based COVID-19 vaccine in Brazil.

are advised that MCTI intends to make a portion of the funding available, upon authorization by the Brazilian regulatory agency, Agência Nacional de Vigilância Sanitária (Anvisa) to initiate a combined Phase 1/2 clinical trial in Brazil.

majority of the capital provided by MCTI will fund the manufacturing process scale up, production and the Phase 3 trial, pending the results of the Phase 1/2 trial.

All funding is contingent on the availability of financial resources within the

MCTI, understanding that the public health response and political situation in Brazil is constantly evolving.

The pre-Investigational Medicinal Product Dossier, or “pre-IMPD” package for the Phase 1/2 trial is currently under review by Anvisa and the trial is anticipated to begin by the end of this year.

The majority of the capital provided by MCTI will fund the manufacturing process scale up, production and the Phase 3 trial, pending the results of the Phase 1/2 trial.

The Phase 1 and 2 trials, which will be run together, are anticipated to

enroll approximately 360 patients and will assess the safety and efficacy of the vaccine as well as both the antibody and killer T-cell responses induced by the vaccine to the novel coronavirus.

The clinical trials are planned to be conducted in

As the license holder of PDS0203 in Latin America, Farmacore Biotechnology will continue to lead the regulatory and clinical trial efforts in Brazil and has selected a top clinical research

organization, to conduct clinical trials in Brazil.

We will continue to contribute scientific expertise and operational support.

Blanver Farmoquímica will manufacture, promote, distribute, and commercialize the Versamune®-based COVID-19 vaccine

in Latin America.

In December 2019, we entered into an Amended and Restated Material Transfer Agreement (MTA) with Farmacore to develop a novel tuberculosis, or TB, immunotherapy based on a combination of

Farmacore’s proprietary TB antigens with Versamune®.

In preliminary evaluations, our Versamune®-based TB product, PDS0201, demonstrated highly promising TB-specific T-cell induction in-vivo.

Under the Farmacore MTA, PDS will undertake product development and Farmacore will conduct in-vivo preclinical studies to evaluate product efficacy.

be performed in Brazil has been significantly hampered by the COVID-19 pandemic.

The term of the agreement extends until the end of the initial product testing period.

Based on the key characteristics of Versamune ® we are progressing development of PDS0202, a universal influenza vaccine, which combines Versamune ® with novel influenza vaccine

PDS0202 development is being supported by an agreement with the National Institute of Allergy and Infectious Diseases (NIAID) Collaborative Influenza Vaccine Innovation Centers (CIVICs) program, with a goal of rapidly progressing into a

human clinical trial.

Preclinical development studies will be performed at three sites:

PDS’ Princeton, NJ laboratories, The University of Kentucky School of Medicine, and the CIVICs Center for Influenza Vaccine Research for High-Risk Populations

We anticipate that PDS0202 could provide broad and long-term protection against multiple influenza strains.

PDS0203, combines Versamune ® with the S1-domain from the SARS-CoV-2 virus.

PDS0203 is being designed to potentially provide long-term and broad protection against infection from COVID-19

and its potential mutations, based on Versamune®’s ability to prime the immune system to generate both antibodies for near term protection and T-cell responses for long term protection against pathogens.

Preclinical data confirms that PDS0203 elicits

the induction of highly active and potent virus-specific CD8 killer and CD4 helper T-cells within 14 days of treatment.

The study also demonstrated induction of the long-lasting virus-specific memory T-cells necessary for longer term protection.

PDS0203 demonstrated a 30-45 fold increase in COVID-19 specific T-cells by Day 14 when compared to the vaccine without Versamune ® .

These preclinical studies also confirmed induction of strong anti-SARS-CoV-2 neutralizing antibodies within

14 days, with a 20-25-fold increase when compared to the vaccine without Versamune ® .

Lastly, these preclinical studies showed a further substantial increase in neutralizing antibody levels continuing more than 30 days after vaccination.

This broader projected range of effective immunity is a result of Versamune®’s unique ability to specifically activate Type I interferons (IFNs) critical to developing effective anti-viral immune

responses, and also to promote presentation of the unique disease-associated protein or peptide to the appropriate compartment of the dendritic cells of the immune system.

As a result of this capability, Versamune® has demonstrated enhanced

immunogenicity in the context of dose sparing of both flu and COVID-19 antigens through strong induction of neutralizing antibodies.

Finally, the simple chemical composition of PDS0203 is expected to permit rapid manufacturing scale-up for global

In June 2020, we announced a second collaboration with Farmacore to develop PDS0204, a vaccine to prevent COVID-19, combining Versamune ® with Farmacore’s recombinant SARS-CoV-2 antigen.

Initial financial support for the program has been provided by the Brazilian government for preclinical development.

Based on the highly promising antibody and T-cell data generated with PDS0203, PDS and Farmacore have decided to streamline the

process and to prioritize the advancement of PDS0203 to human clinical trials.

PDS and Farmacore are working diligently to finalize the steps necessary to move PDS0203 into phase 1 clinical testing in Brazil.

Since our inception in 2005, we have devoted substantially all our resources to developing our Versamune ® platform and our Versamune ® -based products, advancing preclinical

programs, conducting clinical trials, manufacturing PDS0101 for clinical trials, and providing general and administrative support.

We have funded our operations primarily from the issuance of common stock.

We have not generated any product revenue to

We have never been profitable and have incurred net losses in each year since our inception.

Our net losses were $7.0 million and $3.8 million for the years ended December 31, 2019

and 2018, respectively.

As of September 30, 2020, we had an accumulated deficit of $39.8 million.

Substantially all of our net losses have resulted from costs incurred in connection with its research and development programs and from general and

administrative costs associated with these operations.

As of September 30, 2020, we had $33.5 million in cash and cash equivalents.

Under the Farmacore MTA, we will undertake product

development and Farmacore will conduct in-vivo preclinical studies to evaluate product efficacy.

We continue to primarily devote the majority of our resources and attention on the clinical oncology assets and execution of our oncology programs.

Our current pipeline of Versamune®-based

therapies is as follows:

From the Company’s inception, it has devoted substantially all of its efforts to drug development, business planning, engaging regulatory, manufacturing and other technical consultants, acquiring

operating assets, planning and executing clinical trials and raising capital.

We currently operate the existing business of Private PDS (as defined below) as a publicly traded company under the name PDS Biotechnology Corporation.

incorporated as Edge Therapeutics, Inc., or Edge, on January 22, 2009.

On March 15, 2019, privately held PDS Biotechnology Corporation, or Private PDS, completed a reverse merger, or the Merger, with Edge, pursuant to which Private PDS survived as

a wholly owned subsidiary of Edge.

Under the terms of the Merger, Edge changed its name to PDS Biotechnology Corporation and Private PDS changed its name to PDS Biotechnology Corporation.

We have never been profitable and have incurred net losses in each year since inception.

Our net losses were $3.0 million, and $4.0 million for the three months ended March 31, 2021 and 2020,

respectively.

As of March 31, 2021, we had an accumulated deficit of $46.8 million.

Substantially all of our net losses have resulted from costs incurred in connection with its research and development programs and from general and administrative

costs associated with these operations.

As of March 31, 2021, we had $25.0 million in cash and cash equivalents.

Our future funding requirements will depend on many factors, including the following:

the timing and costs of our planned clinical trials;

the timing and costs of our planned preclinical studies of our Versamune®-based products;

the timing and costs of our planned preclinical studies of our Versamune® platform;

the outcome, timing and costs of seeking regulatory approvals;

the impact of COVID-19 on company operations;

the terms and timing of any future collaborations, licensing, consulting or other arrangements that we may enter into;

the amount and timing of any payments we may be required to make in connection with the licensing, filing, prosecution, maintenance, defense and enforcement of any patents or patent applications or other

intellectual property rights;

the extent to which we in-license or acquire other products and technologies.

Corporate Information

We currently operate the existing business of Private PDS (as defined below) as a publicly traded company under the name PDS Biotechnology Corporation.

We were incorporated as Edge

Therapeutics, Inc., or Edge, on January 22, 2009.

Upon closing of the Merger (as defined below), we discontinued Edge’s prior business and acquired the business of PDS Biotechnology Corporation, a privately held Delaware corporation, which we refer

to as Private PDS, which is a clinical-stage biopharmaceutical company developing multi-functional cancer immunotherapies and transformative infectious disease vaccines that are designed to overcome the limitations of the current approaches.

In March 2019, we completed our previously disclosed reverse merger with Private PDS, which we refer to as the Merger, pursuant to and in accordance with the terms of the Agreement

and Plan of Merger, dated as of November 23, 2018, as amended on January 24, 2019, by and among Edge, Echos Merger Sub, a wholly-owned subsidiary of Edge, which we refer to as Merger Sub, and Private PDS, whereby Private PDS merged with and into

Merger Sub, with Private PDS surviving as our wholly-owned subsidiary.

In connection with and immediately following completion of the Merger, we effected a 1-for-20 reverse stock split, or the Reverse Stock Split, and changed our corporate name from

Edge Therapeutics, Inc.

to PDS Biotechnology Corporation, and Private PDS changed its name to PDS Operating Corporation.

All of the outstanding stock of Private PDS was converted into shares of our common stock or canceled upon closing of the Merger.

Following the Merger, the stockholders of Private PDS effectively control the combined company, and, accordingly, Private PDS is deemed to be the accounting acquirer in the Merger.

Accordingly, upon consummation of the Merger, the historical financial statements of Private PDS became our historical financial statements, and the historical financial statements of Private PDS are included in the comparative prior periods below.

See “Note 4 – Reverse Merger” in the financial notes to our unaudited interim financial statements in Part I for more information on the Merger.

the extent to which we license or acquire other products and technologies.

KEY COMPONENTS OF OUR STATEMENT OF OPERATIONS

We have not generated any revenues from commercial product sales and do not expect to generate any such revenue in the near future.

We may generate revenue in the future from a

combination of research and development payments, license fees and other upfront payments or milestone payments.

Research and Development

Research and development expenses include employee-related expenses, licensing fees to use certain technology in our research and development projects, costs of acquiring, developing

and manufacturing clinical trial materials, as well as fees paid to consultants and various entities that perform certain research and testing on our behalf.

Costs for certain development activities, such as clinical trials, are recognized based on

an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations or information provided by vendors on their actual costs incurred.

We may generate revenue in the future from a combination of

research and development payments, license fees and other upfront payments or milestone payments.

Research and Development Expenses

Research and development expenses include employee-related expenses, licensing fees to use certain technology in our research and development projects, costs of acquiring, developing and

manufacturing clinical trial materials, as well as fees paid to consultants and various entities that perform certain research and testing on our behalf.

Costs for certain development activities, such as clinical trials, are recognized based on an

evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations or information provided by vendors on their actual costs incurred.

Payments for these activities are based on the terms of

the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the condensed consolidated financial statements as prepaid or accrued expenses.

Costs incurred in connection with research and development

activities are expensed as incurred.

The adverse impact of COVID-19 on research and development activities is being monitored closely including its impact on clinical trial initiation and enrollment.

We expect that our research and development expenses will increase significantly over the next several years as we advance our Versamune ® -based immuno-oncology and

infectious disease candidates into and through clinical trials, pursue regulatory approval of our injectable Versamune ® candidates and prepare for a possible commercial launch, all of which will also require a significant investment in

contract and internal manufacturing and inventory related costs.

the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the consolidated financial statements as prepaid or accrued expenses.

Costs incurred in connection with research and development activities are

expensed as incurred.

We expect that our research and development expenses will increase significantly over the next several years as we advance our Versamune®-based immuno-oncology, or I-O, candidates into and through

clinical trials, pursues regulatory approval of our injectable Versamune® candidates and prepare for a possible commercial launch, all of which will also require a significant investment in contract and internal manufacturing and inventory related

The process of conducting human clinical trials necessary to obtain regulatory approval is costly and time consuming.

We may never succeed in achieving marketing approval for our

Versamune ® based products.

The probability of successful commercialization of our immuno-oncology and infectious disease candidates may be affected by numerous factors, including unforeseen circumstances or other disruptions to normal

business operations arising from or related to COVID-19, competition, manufacturing capability and commercial viability.

As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to

what extent we will generate revenue from the commercialization and sale of any of our product candidates.

We may never succeed in achieving marketing approval for our injectable I-O

The probability of successful commercialization of our I-O candidates may be affected by numerous factors, including clinical data obtained in future trials, competition, manufacturing capability and commercial viability.

we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of any of our product candidates.

Results of Operations

The following table summarizes the results of our operations for the three months ended September 30, 2020 and 2019:

The following table summarizes the results of our operations for the three months ended March 31, 2021 and 2020:

Three Months Ended

September 30,

Increase (Decrease)

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General and administrative expenses

Lease termination costs

Total operating expenses

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Research and Development Expenses

Research and development (R&D) expenses increased to $2.1million for the three months ended September 30, 2020 from $1.8 million for the three months ended September 30, 2019.

increase of $0.3 is primarily attributable to an increase of $0.2 in technical operations (manufacturing), $0.3 in clinical studies, offset by a decrease of $0.1 in professional fees and $0.1 in regulatory expenses.

General and Administrative Expenses

General and administrative expenses decreased to $1.8 million for the three months ended September 30, 2020 from $3.0 million for the three months ended September 30, 2019.

decrease of $1.2 million is primarily attributable to a decrease of $0.2 million in salary and benefits, $0.1 million in facilities and office expense, $0.3 million in insurance expense, $0.6 million in professional fees, $0.1 million in legal fees

offset by an increase of $0.1 million in licenses, taxes and fees.

Lease Termination Costs

The lease termination costs relate to moving the Company’s corporate offices and consists of $0.6 million for lease termination fees and $0.3 million for disposal of leasehold

improvements and office furniture.

Interest income

Interest income was $0.001 million for the three months ended September 30, 2020 and $0.096 million for the three months ended September 30, 2019.

The decrease of $0.095 million is

due to a decrease of interest received on invested cash and cash equivalents.

Comparison of the Nine Months Ended September 30, 2020 and 2019

The following table summarizes the results of our operations for the nine months ended September 30, 2020 and 2019:

Nine Months Ended

September 30,

Increase (Decrease)

(in thousands)

Operating expenses:

Research and development expenses

General and administrative expenses

Lease termination costs

Total operating expenses

Loss from operations

Gain on bargain purchase

Interest income, net

Net loss and comprehensive loss

Research and Development Expenses

Research and development (R&D) expenses increased to $5.5 million for the nine months ended September 30, 2020 from $4.8 million for the same period in 2019.

The increase of $0.7

million was primarily attributable to an increase in personnel costs of $0.5 million, pre-clinical studies of $0.2 million, clinical studies of $0.2 offset by decreases in regulatory consulting of $0.2 million.

Research and development (R&D) expenses decreased to $1.4 million for the three months ended March 31, 2021 from $2.0 million for the three months ended March 31, 2020.

The decrease of $0.6

million in 2021 was primarily attributable to a decrease of $0.3 million in professional services and $0.3 million in clinical studies.

General and Administrative Expenses

General and administrative expenses decreased to $5.4 million for the nine months ended September 30, 2020 from $9.4 million for the same period in 2019.

The $4.0 million decrease was

primarily attributable to decreases in personnel costs of $2.7 million, facilities and office expense of $0.2 million, insurance costs of $0.6 million, legal fees of $0.4 million, professional fees of $0.2 million offset by an increase in board fees

of $0.1 million.

Gain on Bargain purchase

Gain on Bargain Purchase was $0.0 for the nine months ended September 30, 2020 and $11.9 million during the nine months ended September 30, 2019.

A decrease of $11.9

million w as due to the bargain purchase gain as a result of the Merger in March of 2019, resulting in excess of the fair value of net assets acquired over the fair value of the common stock issued to acquire

Private PDS in the Merger.

General and administrative expenses decreased to $1.6 million for the three months ended March 31, 2021 from $2.1 million for the three months ended March 31, 2020 .

The decrease of $0.5 million is primarily attributable to a decrease in professional services of $0.7 million which includes legal fees of

$0.2 million, offset by an increase of $0.2 million in personnel costs.

Interest income

Interest income was $0.1 million for the nine months ended September 30, 2020 and $0.3 million for the nine months ended September 30, 2019.

A decrease of $0.2 million was due to

interest received on invested cash and cash equivalents.

Interest income, net was $0.001 million during the three months ended March 31, 2021, an decrease of $0.045 million, as compared to $0.046 million during the three months ended March 31, 2020, due

primarily to interest received on invested cash and cash equivalents.

Liquidity and Capital Resources

On July 29, 2019, we entered into a common stock purchase agreement, or the Aspire Purchase Agreement, with Aspire Capital pursuant to which, we have the right, in our sole

discretion, to present Aspire Capital Fund, LLC, or Aspire Capital, with a purchase notice, directing Aspire Capital (as principal) to purchase up to 100,000 shares of our common stock per business day, in an aggregate amount of up to $20.0 million

of our common stock, or the Purchased Shares, over the term of the Aspire Purchase Agreement.

We may sell an aggregate of 1,034,979 shares of our common stock (which represented 19.99% of our outstanding shares of common stock on the date of the

Aspire Purchase Agreement) without stockholder approval.

We may sell additional shares of our common stock above the 19.99% limit provided that (i) we obtain stockholder approval or (ii) stockholder approval has not been obtained at any time the

1,034,979 share limitation is reached and at all times thereafter the average price paid for all shares issued under the Aspire Purchase Agreement, is equal to or greater than $5.76, which was the consolidated closing bid price of our common stock on

July 26, 2019.

On July 29, 2019, we entered into a common stock purchase agreement, or the Aspire Purchase Agreement, with Aspire Capital pursuant to which, we have the right, in our sole discretion, to present

Aspire Capital Fund, LLC, or Aspire Capital, with a purchase notice, directing Aspire Capital (as principal) to purchase up to 100,000 shares of our common stock per business day, in an aggregate amount of up to $20.0 million of our common stock,

or the Purchased Shares, over the term of the Aspire Purchase Agreement.

We may sell an aggregate of 1,034,979 shares of our common stock (which represented 19.99% of our outstanding shares of common stock on the date of the Aspire Purchase

Agreement) without stockholder approval.

We may sell additional shares of our common stock above the 19.99% limit provided that (i) we obtain stockholder approval or (ii) stockholder approval has not been obtained at any time the 1,034,979 share

limitation is reached and at all times thereafter the average price paid for all shares issued under the Aspire Purchase Agreement, is equal to or greater than $5.76, which was the consolidated closing bid price of our common stock on July 26,

The minimum price at which we can sell shares under the Aspire Purchase Agreement is $0.50.

On July 29, 2019, we issued 100,654 shares of our common stock to Aspire Capital, as consideration for entering into the Aspire Purchase

Agreement, which we refer to as the Commitment Shares.

On July 29, 2019, we issued 100,654 shares of our common stock to Aspire Capital, as consideration for entering into the Aspire Purchase Agreement,

which we refer to as the Commitment Shares.

We recorded the fair value of the shares at July 29, 2019 of $603,924 as an expense in the third quarter of 2019.

Concurrently with the Aspire Purchase Agreement, we entered into a registration

rights agreement with Aspire Capital, or the Registration Rights Agreement.

Concurrently with the Aspire Purchase Agreement, we entered into a registration rights

agreement with Aspire Capital, or the Registration Rights Agreement.

In accordance with the Registration Rights Agreement, on August 20, 2019 we filed a Registration Statement on Form S-1 (File No.

333-232988) to cover the resale of the

Commitment Shares and any Purchased Shares issuable to Aspire Capital under the Aspire Purchase Agreement.

333-232988) to cover the resale of the Commitment

Shares and any Purchased Shares issuable to Aspire Capital under the Aspire Purchase Agreement.

There is market uncertainty regarding the utilization of financing associated from the Aspire Purchase Agreement.

As of September 30, 2020, no

Purchase Shares have been sold to Aspire Capital under the Aspire Purchase Agreement.

As of March 31, 2021, no Purchase

Shares have been sold to Aspire Capital under the Aspire Purchase Agreement.

In February 2020, we completed an underwritten public offering, in which we sold 10,000,000 shares of common stock at a public offering price of $1.30 per share.

The shares sold

included 769,230 shares issued upon the exercise by the underwriter of its option to purchase additional shares at the public offering price, minus underwriting discounts and commissions.

We received gross proceeds of approximately $13 million and

net proceeds of approximately $11.9 million after deducting underwriting discounts and commissions.

Our operations have also been financed from cash of $29.1 million from the consummation of the Merger in March 2019.

As of September 30, 2020, we had

$33.5 million of cash and cash equivalents.

In July 2020, we filed a shelf registration statement, or the 2020 Shelf Registration Statement, with the SEC, for the issuance of common stock, preferred stock, warrants, rights,

debt securities and units, which we refer to collectively as the Shelf Securities, up to an aggregate amount of $100 million.

The shares sold included 769,230

shares issued upon the exercise by the underwriter of its option to purchase additional shares at the public offering price, minus underwriting discounts and commissions.

We received gross proceeds of approximately $13 million and net proceeds of

approximately $11.9 million after deducting underwriting discounts and commissions.

In July 2020, we filed a shelf registration statement, or the 2020 Shelf Registration Statement, with the SEC, for the issuance of common stock, preferred stock, warrants, rights, debt securities

and units, which we refer to collectively as the Shelf Securities, up to an aggregate amount of $100 million.

The 2020 Shelf Registration Statement was declared effective on July 31, 2020.

On August 13, 2020, the Company sold

6,900,000 shares of its common stock at a public offering price of $2.75 per share pursuant to the 2020 Shelf Registration Statement, which includes 900,000 shares issued upon the exercise by the underwriter of its option to purchase additional

shares at the public offering price, minus underwriting discounts and commissions.

We received gross proceeds of approximately $19.0 million and net proceeds of approximately $17.1 million, after deducting underwriting discounts and offering

Approximately $81,000,000 of Shelf Securities remain available for future sale under the 2020 Shelf Registration Statement.

On August 13, 2020, we sold 6,900,000 shares of its common

stock at a public offering price of $2.75 per share pursuant to the 2020 Shelf Registration Statement, which includes 900,000 shares issued upon the exercise by the underwriter of its option to purchase additional shares at the public offering

price, minus underwriting discounts and commissions.

We received gross proceeds of approximately $19.0 million and net proceeds of approximately $17.1 million, after deducting underwriting discounts and offering expenses.

Approximately $81,000,000

of Shelf Securities remain available for future sale under the 2020 Shelf Registration Statement.

Our operations have also been financed from cash of $29.1 million from the consummation of the Merger in March 2019.

As of March 31, 2021, we had $25.0 million of cash and cash equivalents.

Our primary uses of cash are to fund operating expenses, primarily research and development expenditures.

Cash used to fund operating expenses is impacted by the timing of when we pay

these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

We evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year

beyond the filing of this Quarterly Report on Form 10-Q.

Based on such evaluation and our current plans, which are subject to change, management believes that our existing cash and cash equivalents as of September 30, 2020 will be sufficient to

satisfy our operating cash needs for at least one year after the filing of this Quarterly Report on Form 10-Q.

Cash used to fund operating expenses is impacted by the timing of when we pay these

expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

We evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year beyond the

filing of this Quarterly Report on Form 10-Q.

Our budgeted cash requirements in 2021 and beyond include expenses related to continuing development and clinical studies.

Based on our available cash resources and cash flow projections as of the

date the consolidated financial statements were available for issuance, we believe there are sufficient funds to continue operations and research and development programs for at least 12 months from the date of this Quarterly Report on Form 10-Q.

We plan to continue to fund our operations and capital funding needs through equity and/or debt financings.

We may also enter into government funding programs and consider selectively

partnering for clinical development and commercialization.

The sale of additional equity would result in additional dilution to our stockholders.

Incurring debt financing would result in debt service obligations, and the instruments governing such

debt could provide for operating and financing covenants that would restrict our operations.

If we are unable to raise additional capital in sufficient amounts or on acceptable terms, we may be required to delay, limit, reduce, or terminate our

product development or future commercialization efforts or grant rights to develop and market immunotherapies that we would otherwise prefer to develop and market ourselves.

Any of these actions could harm our business, results of operations and

However, we cannot be certain that additional financing will be available when needed or

that, if available, financing will be obtained on terms favorable to us or our existing stockholders.

We may also enter into government funding programs and consider selectively partnering for clinical development and commercialization.

of additional equity would result in additional dilution to our stockholders.

Incurring debt financing would result in debt service obligations, and the instruments governing such debt could provide for operating and financing covenants that would

restrict our operations.

If we are unable to raise additional capital in sufficient amounts or on acceptable terms, we may be required to delay, limit, reduce, or terminate our product development or future commercialization efforts or grant rights

to develop and market immunotherapies that we would otherwise prefer to develop and market ourselves.

Any of these actions could harm our business, results of operations and prospects.

Failure to obtain adequate financing also may adversely affect

its ability to operate as a going concern.

The following table shows a summary of our cash flows for each of the periods indicated (in thousands):

Nine Months Ended September 30,

Three Months Ended March 31,

Net cash used in operating activities

Net cash provided by investing activities

Net cash provided by financing activities

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Net Cash Used in Operating Activities

Net cash used in operating activities was $8.5 million and $12.6 million for the nine months ended September 30, 2020 and 2019, respectively.

The decrease in cash used in operating

activities of $4.1 million was primarily due to a decrease in personnel costs due to the continued restructuring in relation to the merger in prior year.

Net Cash Provided by Investing Activities

Net cash provided by investing activities for the nine months ended September 30, 2019 relates entirely to cash received in the Merger.

Net cash used in operating activities was $3.8 million and $3.2 million for the three months ended March 31, 2021and 2020, respectively.

The increase in cash used in operating activities of $0.6

million was primarily due to the increase of prepaid expenses related to the Syneos CRO contract.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2020 was due to the receipt of net proceeds from the issuance of common stock of $29.8 million.

Net cash provided by financing activities for the nine months ended September 30, 2019 was primarily due to the receipt of net proceeds of $0.8 million due to the issuance of common

Net cash provided by financing activities for the three months ended March 31, 2020 was due to the receipt of net proceeds from the issuance of common stock of $12.0 million.

Operating Capital Requirements

To date, we have not generated any product revenue.

We do not know when, or if, we will generate any product revenue and we do not expect to generate significant product revenue

unless and until we obtain regulatory approval and commercialize one of our current or future product candidates.

We anticipate that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue

the development of, and seek regulatory approvals for, our tablet vaccine candidates, and begin to commercialize any approved vaccine candidates.

We are subject to all of the risks incident to the development of new products, and may encounter

unforeseen expenses, difficulties, complications, delays and other unknown factors that may harm our business.

We expect to incur additional costs associated with operating as a public company and anticipate that we will need substantial additional

funding in connection with our continuing operations.

We evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year

beyond the filing of this Quarterly Report.

We do not know when, or if, we will generate any product revenue and we do not expect to generate significant product revenue unless and until we

obtain regulatory approval and commercialize one of our current or future product candidates.

We anticipate that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue the development of,

and seek regulatory approvals for, our tablet vaccine candidates, and begin to commercialize any approved vaccine candidates.

We are subject to all of the risks incident to the development of new products, and may encounter unforeseen expenses,

difficulties, complications, delays and other unknown factors that may harm our business.

We expect to incur additional costs associated with operating as a public company and anticipate that we will need substantial additional funding in

connection with our continuing operations.

We evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year beyond the

filing of this Quarterly Report.

Our budgeted cash requirements in 2021 and beyond include expenses related to continuing development and clinical studies.

We believe that our existing cash and cash equivalents as of September 30, 2020

are sufficient to continue operations and research and development programs for at least the next 12 months from the date of this Quarterly Report.

Until we can generate significant cash from our operations, we expect to continue to fund our

operations with available financial resources.

We believe that our existing cash and cash equivalents as of December 31, 2020 are

sufficient to continue operations and research and development programs for at least the next 12 months from the date of this Quarterly Report.

Until we can generate significant cash from our operations, we expect to continue to fund our operations

with available financial resources.

These financial resources may not be adequate to sustain our operations.

We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all of our available capital resources sooner than we

Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements.

Our future funding

requirements will depend on many factors, including, but not limited to:

We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all of our available capital resources sooner than we expect.

the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements.

Our future funding requirements will

depend on many factors, including, but not limited to:

the initiation, progress, timing, costs and results of our planned clinical trials;

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the outcome, timing and cost of meeting regulatory requirements established by the U.S.

Food and Drug Administration, or FDA, the European Medicines Agency, or EMA, and other comparable foreign regulatory

Food and Drug Administration, or FDA, the European Medicines Agency, or EMA, and other comparable foreign regulatory authorities;

the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights;

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the effect of competing technological and market developments;

the cost of establishing sales, marketing and distribution capabilities in regions where we choose to commercialize our tablet vaccines on our own;

the initiation, progress, timing and results of our commercialization of our tablet vaccine candidates, if approved, for commercial sale.

Please see the section titled “Risk Factors” elsewhere in the Quarterly Report for additional risks associated with our operations.

the cost of establishing sales, marketing and distribution capabilities in regions where we choose to commercialize our products on our own;

the initiation, progress, timing and results of our commercialization of our product candidates, if approved, for commercial sale.

Please see the section titled “Risk Factors” in this Quarterly Report on Form 10-Q for additional risks associated with our operations.

Contractual Obligations and Commitments

The following is a summary of our contractual obligations as of the date indicated:

As of March 31, 2021

Less than One Year

More than 5 Years

Operating lease obligations

Total contractual obligations

Purchase Commitments

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Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S.

The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial

statements, as well as the reported revenue generated and expenses incurred during the reporting periods.

Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the

results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as

well as the reported revenue generated and expenses incurred during the reporting periods.

Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of

which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions.

As a result of the impairment and write-off of the IPR&D asset in the prior year, the only critical accounting policy and estimate we have for the three months ended September 30,

2020 is related to the stock- based compensation.

There have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2021 from those disclosed in our Annual Report on Form 10-K for the

year ended December 31, 2020.

Impact of the CARES Act

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, was enacted and signed into law, and GAAP requires recognition of the tax effects of new

legislation during the reporting period that includes the enactment date.

The CARES Act, among other things, includes changes to the tax provisions that benefits business entities and makes certain technical corrections to the 2017 Tax Cuts and Jobs

Act, including, permitting net operating losses, or NOLs, carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021.

In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back

to each of the five preceding taxable years to generate a refund of previously paid income taxes.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, was enacted and signed into law, and GAAP requires recognition of the tax effects of new legislation

during the reporting period that includes the enactment date.

The CARES Act, among other things, includes changes to the tax provisions that benefits business entities and makes certain technical corrections to the 2017 Tax Cuts and Jobs Act,

including, permitting net operating losses, or NOLs, carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021.

In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to

each of the five preceding taxable years to generate a refund of previously paid income taxes.

The CARES Act provides other reliefs and stimulus measures.

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Operations and Liquidity

While the potential economic impact brought by and over the duration of the COVID-19 pandemic may be difficult to assess or predict, the COVID-19 pandemic has resulted

in significant disruption of global financial markets, which could in the future negatively affect our liquidity.

While the potential economic impact brought by and over the duration of the COVID-19 pandemic may be difficult to assess or predict, the COVID-19 pandemic has resulted in significant disruption of

global financial markets, which could in the future negatively affect our liquidity.

In addition, a recession or market volatility resulting from the COVID-19 pandemic could affect our business.

We have taken proactive,

aggressive action throughout the COVID-19 pandemic to protect the health and safety of our employees and expect to continue to implement these measures until we determine

that the COVID-19 pandemic is adequately contained for purposes of our business.

W e may take further actions as government authorities require or recommend or as we determine to be in the best interests of our

Given the nature and type of our short-term investments, we do not believe that the COVID-19 pandemic will have a material impact on our current investment liquidity.

We have taken proactive, aggressive action throughout

the COVID-19 pandemic to protect the health and safety of our employees and expect to continue to implement these measures until we determine that the COVID-19 pandemic is adequately contained for purposes of our business.

We may take further

actions as government authorities require or recommend or as we determine to be in the best interests of our employees.

Given the nature and type of our short-term investments, we do not believe that the COVID-19 pandemic will have a material

impact on our current investment liquidity.

Outlook and Impact of COVID-19 on our Business

In December 2019, a novel (new) coronavirus known as SARS-CoV-2 was first detected in Wuhan, Hubei Province, People’s Republic of China, causing outbreaks of the coronavirus disease,

known as COVID-19, that has now spread globally.

In December 2019, a novel (new) coronavirus known as SARS-CoV-2 was first detected in Wuhan, Hubei Province, People’s Republic of China, causing outbreaks of the coronavirus disease, known as

COVID-19, that has now spread globally.

On January 30, 2020 the World Health Organization (WHO) declared COVID-19 a public health emergency.

The Secretary of Health and Human Services declared a public health emergency on January 31, 2020,

under section 319 of the Public Health Service Act (42 U.S.C.

The Secretary of Health and Human Services declared a public health emergency on January 31, 2020, under

section 319 of the Public Health Service Act (42 U.S.C.

247d), in response to the COVID-19 outbreak.

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pandemic has and could continue to negatively affect the Company’s liquidity and operations.

To date, two of the three currently planned PDS0101 clinical trials have been delayed, specifically as a result of the adverse impact the COVID-19 pandemic

has had on clinical trial operations for cancer indications in the United States.

Even though both of these studies have since been initiated despite the pandemic challenges, the evolving COVID-19 pandemic has also impacted the pace of enrollment in

clinical trials and we may be affected by similar delays as patients may avoid or may not be able to travel to healthcare facilities and physicians’ offices unless due to a health emergency and clinical trial staff can no longer get to the clinic

Although there is uncertainty related to the anticipated impact of the COVID-19 pandemic on our future results, we believe our current cash reserves, which includes approximately

$17.1 million in net proceeds from our August 2020 public offering, leave us well-positioned to manage our business through this crisis as it continues to unfold.

However, the impacts of the COVID-19 pandemic are broad-reaching and continuing and the

financial impacts associated with the COVID-19 pandemic are still uncertain.

Despite the economic uncertainty resulting from the COVID-19 pandemic, we intend to continue to focus on the development of our product candidates.

We continue to monitor the rapidly

evolving situation and guidance from international and domestic authorities, including federal, state and local public health authorities and may take additional actions based on their recommendations.

In these circumstances, there may be

developments outside our control requiring us to adjust our operating plan.

As such, given the dynamic nature of this situation, we cannot reasonably estimate the impacts of COVID-19 on our financial condition, results of operations or cash flows in

To date, two of the three currently planned PDS0101 clinical trials have been delayed, specifically as a result of the adverse impact the COVID-19

pandemic has had on clinical trial operations for cancer indications in the United States.

Even though both of these studies have since been initiated despite the pandemic challenges, the evolving COVID-19 pandemic has also impacted the pace of

enrollment in clinical trials and we may be affected by similar delays as patients may avoid or may not be able to travel to healthcare facilities and physicians’ offices unless due to a health emergency and clinical trial staff can no longer get

to the clinic.

Although there is uncertainty related to the anticipated impact of the COVID-19 pandemic on our future results, we believe our current cash reserves, leave us well-positioned to manage our business

through this crisis as it continues to unfold.

However, the impacts of the COVID-19 pandemic are broad-reaching and continuing and the financial impacts associated with the COVID-19 pandemic are still uncertain.

Despite the economic uncertainty resulting from the COVID-19 pandemic, we intend to continue to focus on the development of our product candidates and we have expanded our infectious disease

pipeline since the pandemic brought renewed resources and interest on technologies such as the Versamune® platform in the context of research and development in prevention of COVID-19.

We are working with a consortium of partners in Brazil to

develop PDS0203;

a vaccine for the prevention of COVID-19.

This consortium received a commitment from the Secretary for Research and Scientific Training of The Ministry of Science, Technology and Innovation of Brazil to fund up to approximately

US$60 million to support the clinical development and commercialization of a Versamune®-based COVID-19 vaccine in Brazil.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

JOBS Act and Sarbanes-Oxley Act

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.

Under the JOBS Act, emerging growth companies

can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.

We have irrevocably elected not to avail ourselves of this exemption from new

or revised accounting standards, and, therefore, will be subject to the same new or revised accounting standards as other public companies that

are not emerging growth companies.

Furthermore, we anticipate that we will no longer be an emerging growth company as of December 31, 2020.

For as long as we continue to be an emerging growth company, we intend to take advantage of exemptions from

various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of

2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding nonbinding advisory votes on executive compensation and

stockholder approval of any golden parachute payments not previously approved.

However, even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company” which would allow us to take advantage of

many of the same exemptions from disclosure requirements including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive

compensation in our periodic reports and proxy statements.

Smaller Reporting Company

As of January 1, 2021, we are no longer an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.

However, we remain a “smaller reporting

company,” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended.

We will cease to be a smaller reporting company if we have a non-affiliate public float in excess of $250 million and annual revenues in excess of $100

million, or a non-affiliate public float in excess of $700 million, determined on an annual basis.

Even though we no longer qualify as an emerging growth company, we may still qualify as a smaller reporting company.

As a smaller reporting company,

we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not smaller reporting companies.

We expect to continue to take advantage of some or all of the available

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What changed 10-Q

Item 2. Management’s Discussion and Analysis