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Item 2. Management’s Discussion and Analysis

2022-05-11 compared with 2021-11-10 · 332 added, 372 removed, 133 unchanged (84% 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, 2020 on Form 10-K, filed with the Securities and Exchange Commission, or SEC, on March 18, 2021.

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, 2021 on Form

10-K, filed with the Securities and Exchange Commission, or SEC, on March 31, 2022.

Cautionary Note Regarding Forward-Looking Statements

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

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 statements by terminology such as “may,” “will,” “should,” “could,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue”

or the negative of these terms or other comparable terminology.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described under the heading “Risk Factors” below.

In light of these

risks, uncertainties and assumptions, actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements in this Quarterly Report and you should not place undue reliance on these forward-looking

These forward-looking statements may include, but are not limited to, statements about:

the accuracy of estimates of our expenses, future revenue, capital requirements and our needs for additional financing;

our ability to obtain funding for our operations in the event we determine the need to raise additional capital;

our ability to retain key management personnel;

the accuracy of our estimates regarding expenses, future revenues and capital requirements;

Our ability to efficiently and effectively conduct our clinical trials;

our ability to maintain our listing on the Nasdaq Stock Market;

regulatory developments in the United States and foreign countries;

unforeseen circumstances or other disruptions to normal business operations arising from or related to COVID-19;

our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (“JOBS

other risks and uncertainties, including those listed under Part II, Item 1A.

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements (including within the

meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended) concerning the Company and other matters.

These statements may discuss goals, intentions

and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs of the Company’s management, as well as assumptions made by, and information currently available to, management.

Forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as “may,” “will,” “should,” “would,” “expect,” “anticipate,” “plan,” “likely,”

“believe,” “estimate,” “project,” “intend,” “forecast,” “guidance”, “outlook” and other similar expressions among others.

Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not

guarantees of future performance.

Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation:

the Company’s ability to protect its intellectual property rights;

the Company’s anticipated capital requirements, including the Company’s anticipated cash runway and the Company’s current expectations regarding its plans

for future equity financings;

the Company’s dependence on additional financing to fund its operations and complete the development and commercialization of its product candidates, and

the risks that raising such additional capital may restrict the Company’s operations or require the Company to relinquish rights to the Company’s technologies or product candidates;

the Company’s limited operating history in the Company’s current line of business, which makes it difficult to evaluate the Company’s prospects, the

Company’s business plan or the likelihood of the Company’s successful implementation of such business plan;

the timing for the Company or its partners to initiate the planned clinical trials for PDS0101, PDS0103, PDS0203 and other Versamune and

Infectimune based products and the future success of such trials;

the successful implementation of the Company’s research and development programs and collaborations, including any collaboration studies concerning

PDS0101, PDS0203 and other Versamune and Infectimune based products and the Company’s interpretation of the results and findings of such programs and collaborations and whether such results are sufficient to support the future success of the

Company’s product candidates;

th e success, timing and cost of the Company’s ongoing clinical trials and

anticipated clinical trials for the Company’s current product candidates, including statements regarding the timing of initiation, pace of enrollment and completion of the trials (including our ability to fully fund our disclosed clinical

trials, which assumes no material changes to our currently projected expenses), futility analyses, presentations at conferences and data reported in an abstract, and receipt of interim results (including, without limitation, any preclinical

results or data), which are not necessarily indicative of the final results of the Company’s ongoing clinical trials;

expectations for the clinical and preclinical development, manufacturing, regulatory approval, and commercialization of our product candidates;

any Company statements about its understanding of product candidates mechanisms of action and interpretation of preclinical and early clinical results

from its clinical development programs and any collaboration studies;

the acceptance by the market of the Company’s product candidates, if approved;

the timing of and the Company’s ability to obtain and maintain U.S.

Food and Drug

Administration or other regulatory authority approval of, or other action with respect to, the Company’s product candidates;

other factors, including legislative, regulatory, political and economic developments not within the Company’s control, including unforeseen circumstances

or other disruptions to normal business operations arising from or related to COVID-19 and those listed under Part II, Item 1A.

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 current views 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.

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.

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

for any reason, whether as a result of new information, future events or otherwise.

In this Quarterly Report, unless otherwise stated or the context otherwise indicates, references to “PDS,” “the Company,”

“we,” “us,” “our” and similar references refer to PDS Biotechnology Corporation, a Delaware corporation.

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.

Our Versamune ® technology is a proprietary T-cell activating platform designed to treat diseases such as cancer by training the immune system to better recognize, attack and

destroy diseased cells.

When paired with an antigen (which is a disease-related protein that is recognizable by the immune system), in pre-clinical studies, 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 T-cell that is more effective at killing infected or

targeted cancer cells.

Versamune ® has also been shown in pre-clinical studies to induce antigen-specific highly

potent polyfunctional CD4+ helper T-cells as well as neutralizing antibodies.

PDS0101 in its first human clinical trial provided data supporting the previously reported preclinical study results and demonstrated the unique in vivo induction of high levels of

active HPV-specific CD8+ T-cells in humans.

Positive preliminary clinical results of PDS0101 in combination with investigational immune-modulating agents Bintrafusp alfa (M7824), and NHS-IL12 (M9241), discussed in more detail below, suggest that PDS0101 induction of in vivo highly active tumor-attacking HPV16 killer (CD8+) T-cells

even in advanced, refractory cancer patients who have failed multiple treatments, who may be immunologically limited patients presents the potential for effective disease reduction and prolonged survival.

We believe that the Versamune® platform has the potential to become an industry-leading immuno-oncology technology.

is currently being applied to the development of a robust pipeline of high-value, novel and first-in-class immunotherapies, potentially as single agents and also as part of combination therapies with other leading immuno-oncology technologies and

standard of care therapies.

To date, Versamune® based therapies have not been linked to any dose limiting toxicities in any human clinical trial.

Based upon the promising efficacy data and the positive safety data so far, PDS is preparing to move at

least one additional product into Phase 1/2 clinical trials in 2022.

We believe our product candidates could be of interest for use in combination with other cancer therapies in the treatment of several advanced, metastatic, and recurrent cancers

including HPV-associated cancers, colorectal, lung, breast and prostate cancers or potentially as monotherapies in earlier-stage disease.

PDS0101 in Combination with KEYTRUDA ® Clinical Trial (VERSATILE-002):

In November 2020, our VERSATILE-002 Phase 2 clinical trial evaluating the combination of PDS0101 (Versamune ® plus

a mixture of HPV16 antigens) in combination with Merck’s anti-PD-1 therapy, KEYTRUDA ® (pembrolizumab) for treatment of recurrent/ metastatic HPV16-positive head and neck cancer opened and is actively recruiting patients.

The clinical trial

is evaluating the efficacy and safety of this therapeutic combination as a treatment in patients with recurrent or metastatic head and neck cancer caused by high-risk HPV16 infection.

In this sponsored trial, patients whose cancer has returned or spread following initial treatment, will take this

combination of two immuno-therapy drugs in lieu of chemotherapy.

Enrolling patients with more functional immune systems earlier in disease recurrence that have not been compromised by extensive chemotherapy may allow improved efficacy of the

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 or intolerance to therapy.

The original study design for this combination trial was restricted to patients who have not been treated with a

checkpoint inhibitor and are therefore naïve to checkpoint inhibitor (CPI) therapy.

PDS amended the protocol in May 2021 to expand this study to include patients with advanced head and neck cancer who have failed multiple treatments, including CPI

therapy (CPI refractory patients), a treatment refractory population with extremely high unmet medical need.

The amended study design is a Simon two stage design.

The primary efficacy endpoint in both CPI naïve and CPI refractory subjects will be the

best overall response (BOR) of confirmed complete response (CR) or confirmed partial response (PR) per Response Evaluation Criteria in Solid Tumors (RECIST) 1.1 of the combination of pembrolizumab and PDS0101.

Objective response is measured by

radiographic tumor responses according to RECIST 1.1.

The lead-in cohort of the initial twelve (12) patients to assess the safety of the combination was successfully enrolled in September 2021.

The Data Monitoring Committee assessed the safety data

from 13 patients on September 15, 2021 and observed no dose limiting toxicities.

On October 4, 2021, we announced that full enrollment of 17 patients was achieved in the first stage of the CPI naïve arm of the study.

If an objective response is

achieved among at least four (4) of these seventeen (17) patients, then the study will advance to the second stage of enrollment of the planned 54 patients in this arm.

In the expansion CPI refractory arm, the first twenty-one (21) patients will be

evaluated for efficacy with a minimum of two (2) or more patients with objective response required to progress to full enrollment of this arm.

If the endpoints are achieved, this study may serve as confirmation that PDS0101 enhances the therapeutic benefit of

checkpoint inhibitors and could expand evaluation of Versamune®-based therapies in multiple cancer indications.

Total enrollment of both study arms is expected to be approximately ninety-five (95) patients, essentially unchanged from the accrual

target of ninety-six (96) patients in the original study design.

Preliminary data is expected between the fourth quarter of 2021 and the first quarter of 2022.

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, in combination with two investi gational immune-modulating agents

Bintrafusp alfa (M7824), a bifunctional “trap” fusion protein targeting TGF-β and PD-L1, and NHS-IL12 (M9241), a tumor-targeting immune-cytokine.

Both bintrafusp alfa and NHS-IL12 are owned by and are being developed by Merck KGaA,

Darmstadt, Germany.

The NCI-led trial is evaluating the novel triple combination for the treatment of both CPI naïve and refractory patients with advanced HPV-associated cancers that have progressed or returned after treatment.

Almost all types of

HPV-related cancers (anal, cervical, head and neck, vaginal and vulvar cancers) are represented among the study subjects to date.

Objective response (tumor reduction >

30%) is measured by radiographic tumor responses according to RECIST 1.1.

Full enrollment of a total of 56 patients is expected to be completed during the first quarter of 2022.

The recruitment in the trial was temporarily suspended for

administrative reasons on October 20, 2021.

The pause in recruitment was unrelated to safety or efficacy of the combination and we continue to communicate with the NCI regarding enrollment.

The treatment of already enrolled patients has continued

without interruption.

At this time, this pause is not expected to affect the timing of clinical data from the trial.

The study was accepted for oral presentation at the 2021 meeting of the American Society of Clinical Oncology (ASCO)

held June 4-8, 2021.

On May 20, 2021, we announced the abstract summarizing interim data of 14 patients from the study.

Objective responses were observed in 83% (5 of 6) of HPV16-positive checkpoint inhibitor naïve patients with advanced disease.

Objective responses were observed in 63% (5 of 8) of HPV16-positive advanced cancer patients who had also failed checkpoint inhibitor therapy.

On June 7, 2021, updated interim data (Abstract 2501) was presented at ASCO by the study’s Principal Investigator Dr.

Julius Strauss.

This data included an update on the initial 14 patients with an additional four (4) subsequently recruited CPI refractory HPV16-positive patients whose data became available after the abstract submission as well as an additional seven

(7) HPV16-negative patients (patients whose cancer was not caused by HPV16 infection) who were not discussed in the abstract.

Tumor reduction and objective response was seen in 83% (5/8) of CPI naïve patients with one (1) achieving a complete

After a median of eight (8) months of follow-up, 100% (6/6) of these patients were alive, compared to the historical median survival of 7-11 months.

In the CPI refractory arm, tumor reduction was observed in 58% (7/12) patients.

patients included the initial 8 patients reported in the abstract where 5 of 8, or 63% had tumor reduction.

Of the 4 additional patients in this updated data set, 2 patients already had ongoing tumor reduction but had not yet met the criteria for

objective response.

Objective response was achieved in 42% (5/12) patients with one (1) achieving a complete response in this refractory arm.

The objective response rates reported in checkpoint refractory, advanced HPV-cancer patients are lower than

those naïve to checkpoint inhibitors, generally only 5-12%.

Importantly, 83% (10/12) of all checkpoint inhibitor refractory patients were still alive at median eight (8) months of follow-up;

historic average median survival for this patient

population is 3-4 months.

Overall, tumor reduction occurred in 67% (12/18) of the HPV16-positive patients, including both CPI naïve and CPI refractory patients.

Of note, in the 7 HPV16-negative patients- those with an HPV type other than HPV16 that

do not express the molecular target of PDS0101, zero (0) of seven (7) patients experienced tumor reduction or an objective response, providing insight into the potential role of PDS0101 in the observed activity of the triple combination.

suggest that HPV16-specific CD8+ and CD4+ T-cell induction by PDS0101 as demonstrated in preclinical studies and phase 1 clinical studies, may promote tumor reduction and enhanced clinical benefit of the triple combination.

Moreover, PDS0101 did not appear to compound the toxicities already reported to be induced by Bintrafusp alfa and

This is an important consideration for combination oncology treatment regimens where a key goal is to avoid additional or excess toxicity associated with limited anti-tumor activity.

As would be expected with both PDS0101 and M9241 being

delivered subcutaneously, injection site reactions were seen in 20% of patients.

No new or additional toxicities have been observed to date from the addition of PDS0101 to the combination of the other two immunotherapies.

PDS0101 in Combination with Chemo-Radiotherapy Clinical Trial (IMMUNOCERV):

In October 2020, a third PDS0101 Phase 2 clinical trial was initiated with The University of Texas MD Anderson Cancer

company developing a growing pipeline of molecularly targeted immunotherapies designed to overcome the limitations of current immunotherapy and vaccine technologies.

We own the proprietary T-cell activating platforms designed to train the immune

system to better attack and destroy disease;

Versamune ® , for treatments in oncology and Infectimune™, for treatments in infectious disease.

with an antigen, which is a disease-related protein that is recognizable by the immune system, Versamune and Infectimune have both been shown to induce, in vivo, large quantities of high-quality, highly potent polyfunctional CD4+ helper and CD8+ killer T-cells, a specific sub-type of T-cell that is more

effective at killing infected or target cells.

Infectimune is also designed to promote the induction of disease-specific neutralizing antibodies.

Our immuno-oncology product candidates are of potential interest for use as a component of combination

product candidates (for example, in combination with other leading technologies such as checkpoint inhibitors) to provide more effective treatments across a range of advanced and/or refractory cancers.

We are also evaluating our immunotherapies as

monotherapies in early-stage disease for oncology.

We are developing targeted product candidates to treat several cancers including Human Papillomavirus (HPV) associated cancers, melanoma, colorectal, lung, breast and prostate cancers.

infectious disease candidates are of potential interest as vaccines to prevent COVID-19 and universal influenza.

In April 2022, we announced two abstracts had been accepted for presentation at the 2022 American Society of Clinical

Oncology Annual Meeting:

Abstract number 6041, PDS0101 a novel type 1 interferon and CD8+ T-cell activating immunotherapy in combination with pembrolizumab in subjects with recurrent/metastatic HPV16-positive squamous cell carcinoma (HNSCC) and

Abstract number 2518, Phase II evaluation of the combination of PDS0101, M9241, and bintrafusp alfa with HPV16+ malignancies.

Our current pipeline of Versamune-based targeted immunotherapies and Infectimune-based therapies focuses on the use of

selected disease-associated antigens that have been demonstrated to be associated with a variety of solid tumors, as well as specific infectious diseases.

VERSATILE-002:

PDS0101 + KEYTRUDA®

In November 2020, our VERSATILE-002 Phase 2

clinical trial evaluating the combination of PDS0101 in combination with Merck’s anti-PD-1 therapy, KEYTRUDA ® (pembrolizumab) which is the FDA-approved

standard of care for first-line treatment of recurrent/ metastatic head and neck cancer commenced 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 this PDS Biotech-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 trial 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 six months following

initiation of treatment.

There are two cohorts in the trial.

Cohort 1 is for patients that are yet to be treated with a checkpoint inhibitor (CPI naïve) and cohort 2 which consists of patients that have failed checkpoint inhibitor therapy (CPI

In February 2022, we announced we had achieved the preliminary efficacy milestone of at least four or more objective responses of the first

17 patients in the CPI naïve arm which now allows that arm to proceed to full enrollment.

We also announced detailed preliminary safety data which showed that the combination is well tolerated without evidence of enhanced or significant toxicity in the

first 18 patients in the CPI naïve arm.

We continue to enroll patients in the first stage of the CPI refractory arm.

National Cancer Institute:

PDS0101+ M9241 +Bintrafusp Alfa

In June 2020, the first patient was dosed under a PDS0101 Cooperative Research and Development Agreement (CRADA), in

NCI, led Phase 2 clinical trial evaluating PDS0101 with NHS-IL12 (M9241), and M7824 (Bintrafusp Alfa), both of which are owned by EMD Serono (Merck KGaA) in patients with advanced/refractory HPV-associated cancers who have failed prior treatment.

February 2021, we announced that the NCI’s Phase 2 clinical trial of PDS0101 for the treatment of advanced/refractory HPV-associated cancers achieved its preliminary objective response target in patients naïve to checkpoint inhibitors which allowed

for full enrollment of approximately 20 patients in this group.

In addition, based on promising results in the CPI naïve arm, the trial was amended to allow enrollment of a separate cohort of checkpoint inhibitor-refractory patients 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.

The NCI recently achieved the intended enrollment objective of

30 patients in the CPI refractory arm of the trial.

The trial has enrolled 45 patients and we plan to continue enrollment in the trial until the total enrollment of 56 patients is achieved.

Preclinical study results arising from this

CRADA were recently published in the Journal for ImmunoTherapy of Cancer, Immunomodulation to enhance the efficacy of an HPV therapeutic vaccine (Journal for ImmunoTherapy of Cancer 2020;8:e000612.

jitc-2020-000612) , indicating that PDS0101 generated both 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 and M9241, the preclinical data suggested that all three therapeutic agents worked synergistically to provide superior tumor T-cell responses and subsequent tumor

regression when compared to any of the agents alone or the 2-component combinations.

If the published preclinical data demonstrating powerful activity of the triple combination 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.

In June 2021, at the American Society of Clinical Oncology (ASCO) conference the NCI announced interim data in this

trial which included, data in both CPI naïve and refractory patients.

In the CPI naïve group 83% (5/6) of patients had an objective response, and 1 subject had achieved a complete response with no evidence of disease.

100% of the CPI naïve patients

were alive at a median duration of 8 months.

In the CPI refractory group 42% (5/12) of patients had an objective response, and 1 subject had achieved a complete response with no evidence of disease.

10/12 (83%) of CPI refractory patients were alive

at a median duration of 8 months.

An update provided in January 2022 showed as of December 31, 2021, that >40 subjects had been recruited into the trial and 30 HPV16-positive patients had been evaluated.

The median survival of all patients (3:1

CPI refractor to naïve) was 12 months and progressing.

The historical survival of CPI naïve and CPI refractory advanced HPV-associated cancers when treated with CPI are 7-11 months and 3-4 months respectively.

MD Anderson Cancer Center (IMMUNOCERV):

PDS0101+ Chemoradiotherapy

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 trial is investigating the safety and preliminary 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.

The study goals include evaluation of the rate of regression in patients with a primary tumor that is greater than or equal to 5cm among approximately thirty-five (35)

The rate of complete metabolic response is measured by PET-CT at day 170 and the rate of > 90% tumor volume reduction evaluated by MRI at 30-40 days from the start of treatment.

Preliminary data is expected from this study in 2022.

believe 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.

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.

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.

The enrollment

rate in this trial continues to be negatively impacted by the COVID-19 pandemic and enrollment is on-going.

PDS0101 Monotherapy and in combination with KEYTRUDA

In February 2022 we announced the

initiation of an Investigator-Initiated Trial (ITT), MC200710, for PDS0101 alone or in combination with the checkpoint inhibitor, KEYTRUDA ® , in patients with HPV-associated oropharyngeal cancer (HPV(+)OPSCC) at high risk of recurrence.

trial is being led by Drs.

David Routman, Katharine Price, Kathryn Van Abel, and Ashish Chintakuntlawar of Mayo Clinic, a nationally and internationally recognized center of excellence for the treatment of head and neck cancers.

We believe that this

upcoming trial not only broadens our addressable patient population of those affected by the increasing incidence of HPV(+)OPSCC, but also allows us to better understand the activity of PDS0101 alone or in combination with KEYTRUDA ® in

earlier stages of disease.

This trial is currently open for enrollment.

In this trial treatment will be administered before patients proceed to transoral robotic surgery (TORS) with curative intent.

in this setting is referred to as neoadjuvant treatment.

PDS0101 has been shown to induce killer T-cells that target and kill HPV-positive cancers, either alone or in combination with checkpoint inhibitors in preclinical studies, and in combination in

clinical studies of patients with advanced recurrent/metastatic HPV-associated cancers.

This trial will explore whether PDS0101 with or without checkpoint inhibition may increase HPV-specific anti-tumor responses, potentially resulting in tumor

shrinkage, pathologic regression, and decreases in circulating tumor DNA (ctDNA).

Our clinical development strategy of combining PDS0101 with standard of care treatment is designed to mitigate risk in

our proof-of-concept phase 2 trials.

It is also designed to demonstrate the potential for significantly enhanced clinical benefit to patients over the standard of care, without compounding toxicity.

If we achieve this goal, we believe that we will

have a clear path towards commercialization of PDS0101 in multiple indications.

After initial commercial approval, our strategy of combining PDS0101 with standard of care also positions us for rapid market penetration and expansion.

Other Versamune ® -Based Products in Development:

PDS0102 – Versamune ® + TARP antigens

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

patients are projected to be diagnosed with prostate or breast cancer this year and 19,900 patients are projected to be diagnosed with AML.

One hundred percent of adult and pediatric AML overexpress the TARP tumor antigen while approximately 90% of

prostate cancers and 50% of breast cancers overexpress TARP, providing a potentially significant therapeutic opportunity to impact these diseases.

In an early human clinical study, the National Cancer Institute demonstrated that its proprietary TARP

antigens (TARP mix) were recognized by the immune system in prostate cancer patients with PSA biochemical recurrence leading to a notable reduction in tumor growth rates.

In preclinical studies, a dramatically enhanced TARP-specific CD8+ killer

T-cell response was observed when our designed TARP antigens were combined with Versamune® (PDS0102).

Preclinical development is ongoing.

On November 5, 2021 PDS and NCI entered into a Patent License Agreement to develop and commercialize a product

including TARP antigens.

The patent for the TARP antigens extends through 2034.

This license agreement is an important step to the further development and commercialization of PDS0102 and plans for a Phase 1/2 clinical trial to start in the second

half of 2022.

PDS0103 – Versamune ® + MUC1 antigens

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

PDS0103 is an investigational immunotherapy owned by PDS and designed to treat cancers associated with the mucin-1, or MUC1, oncogenic protein.

PDS0103 combines Versamune ® with novel highly immunogenic agonist epitopes of MUC1

developed by the NCI and licensed by PDS.

MUC1 is highly expressed in multiple solid tumors 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 and PDS0102, PDS0103 demonstrated the ability to generate powerful MUC1-specific CD8+ killer T-cells.

PDS0103 is currently in late preclinical development, and we requested a pre-IND

meeting with the FDA to align on a clinical development plan.

We are planning to initiate a Phase 2 clinical trial in mid- 2022.

PDS0104 – Versamune ® + TRP-2 and melanoma antigens

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.

PDS0104 combines Versamune ® with various melanoma antigens including the Tyrosinase-related protein 2 (TRP2) antigen which is highly expressed in melanoma.

In pre-clinical B16

animal models of aggressive melanoma, PDS0104 has been shown to have unique and significant anti-tumor activity as a monotherapy and has also demonstrated strong anti-tumor synergy in combination with checkpoint inhibitors.

As the first approval

indications for checkpoint inhibitors occurred in melanoma, there is a growing unmet medical need to identify combination regimens with potential activity in checkpoint inhibitor refractory patients with this disease.

Preclinical development is

Infectious Diseases

Our focus remains on developing our oncology products and progressing the clinical trials described above.

are also developing preventive 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 COBRA (Computationally Optimized Broadly Reactive Antigen) antigens.

These COBRA antigens were designed by renowned influenza expert Dr.

Ted Ross at the University of Georgia.

PDS0202 leverages Versamune ® ’s

ability to induce the immune system to generate high levels of flu-specific neutralizing antibodies, CD4 helper and CD8 killer T-cells, as well as long-acting memory T-cells to potentially provide broad and long-term protection against multiple

influenza strains.

PDS0202 pre-clinical development is being supported by an agreement with the National Institute of Allergy and Infectious Diseases Collaborative Influenza Vaccine Innovation Centers, or CIVIC program.

We have completed

pre-clinical formulation and we have entered into an agreement to license COBRA antigens with the University of Georgia initially to progress into a human clinical trial in 2022.

PDS0203 is being designed with the goal to potentially provide long-term and broad protection against infection from

COVID-19 and its potential mutations, 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 immune memory and long-term protection against

Farmacore Biotechnology has licensed Versamune ® in Latin America to develop PDS0203 in Brazil.

Farmacore is developing and manufacturing the antigen component of the vaccine, leads all regulatory and clinical trial efforts in

Brazil and has selected a top clinical research organization to conduct clinical trials.

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.

All funding is contingent on the availability of financial resources within the MCTI and subject to negotiations among Farmacore, Blanver and MCTI.

We are monitoring the

evolving political and public health situation in Brazil that may pose challenges to developing PDS0203, such as the Brazilian Senate’s vote for compulsory licensing for COVID-19 vaccine technology (legislative process is ongoing).

MCTI indicated that it intends to make the funding available to perform a combined Phase 1/2 clinical trial, upon

authorization by the Brazilian regulatory agency, Agência Nacional de Vigilância Sanitária (ANVISA) to initiate the proposed clinical program in Brazil.

Additional capital planned to be 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.

We plan to contribute Versamune ® scientific expertise and operational support.

Blanver Farmoquímica is expected to manufacture, promote, distribute, and commercialize the Versamune®-based COVID-19 vaccine in Latin America.

We have not received confirmation of the availability of financial resources within

the MCTI to support the clinical development and commercialization of a Versamune®-based COVID-19 vaccine in Brazil.

Clinical development and commercialization of a Versamune®-based COVID-19 vaccine in Brazil has not been initiated.

As part of our

strategic assessment of the program, Farmacore provided a comprehensive update on its efforts to develop a cGMP ready manufacturing plan and product for the antigen component of the vaccine.

Farmacore has presented a proposal to meet certain

development milestones in order to continue development of a COVID-19 vaccine containing Versamune ® .

We have performed a program review and are in discussions with Farmacore to define the upcoming milestones for further development.

Our current pipeline of Versamune ® -based therapies is as follows:

Corporate Information

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.

We were 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.

PDS0102 is an investigational immunotherapy utilizing tumor-associated and immunologically active T-cell receptor gamma

alternate reading framed protein (TARP) from the NCI.

PDS0102 is designed to treat TARP-associated cancers including, acute myeloid leukemia (AML), prostate and breast cancer.

In our preclinical work, the administration of PDS0102, the

Versamuine+TARP antigen combination led to the induction of large numbers of polyfunctional tumor targeted killer T-cells.

In addition, the TARP tumor antigen alone has already been studied at the NCI in men with prostate cancer and been shown to be

safe, immunogenic with slowing tumor growth rates (NCT00972309).

We are evaluating the next steps in the clinical development of PDS0102 and are seeking nondilutive financings to progress to human trials.

In April 2020, the above mentioned, PDS-NCI CRADA was expanded beyond PDS0101 to include clinical and preclinical

development of PDS0103.

PDS0103 is an investigational immunotherapy owned by us and designed to treat cancers associated with the mucin-1, or 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 currently in late preclinical development.

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.

Expression of MUC-1 is often associated with poor disease

prognosis, due in part to drug resistance.

In preclinical studies, and similarly to PDS0101, PDS0103 demonstrated the ability to generate powerful MUC1-specific CD8 killer T-cells.

In the first quarter of 2022, we held a pre-IND meeting with the

FDA on PDS0103 and plan to submit our IND package in the fourth quarter of 2022.

Infectimune Development Strategy

We believe that the key differentiating attributes of the Infectimune platform technology are strong induction of CD8+

and CD4+ T-cells as well as antibodies which can be leveraged to improve treatment and preventive options in several infectious disease indications.

In January 2022 we announced preclinical data on our universal flu program sponsored by the

National Institute of Allergy and Infectious Disease (NIAID) demonstrating the potential of the Infectimune technology with computationally designed influenza proteins developed by the laboratory of Dr.

Ted Ross at the University of Georgia to

generate broadly protective anti-influenza immune responses across multiple strains of influenza.

This data as well as our COVID-19 data has provided a unique opportunity to highlight Infectimune’s potentially transformative utility in the

development of more broadly effective and longer lasting protective vaccines.

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

However, the induction

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

Earlier announced preclinical studies performed at the University of Kentucky on a potential COVID-19 vaccine indicate

that the vaccine 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 showed induction of the long-lasting virus-specific memory T-cells necessary for longer

term protection.

A 30-45-fold increase in COVID-19 specific T-cells was observed by day 14 when compared to the vaccine without Versamune.

These preclinical studies also indicated 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.

The peer-reviewed scientific publication “ A Newcastle Disease Virus (NDV) Expressing a Membrane-Anchored Spike as a Cost-Effective Inactivated SARS-CoV-2 Vaccine” by Sun et al.

Vaccines ( 2020, volume 8, issue 4, page 771 ) also

provides strong rationale for clinical development of an Infectimune-based COVID-19 vaccine to maximize the full breadth of immune responses induced against SARS-CoV-2.

This research conducted at the Mount Sinai Icahn School of Medicine, NY,

indicated that there is powerful antibody induction by Versamune against SARS-CoV-2 at low antigen doses suggesting potential for an effective antigen dose sparing COVID-19 vaccine.

These data are based on preclinical studies combining our

Infectimune technology with an inactivated Newcastle disease virus (NDV)/SARS-CoV-2 vaccine (NDV vaccine) developed at Mount Sinai.

Based on the highly promising data recently announced with the universal seasonal flu vaccine and the current focus

of the NIAID in developing more effective flu vaccines, we have decided to opportunistically focus our near-term infectious disease activities to align with the interests of the NIAID Collaborative Influenza Vaccine Innovation Centers (CIVICs)

This will involve development of a universal seasonal flu vaccine and also potential development of a universal pandemic influenza vaccine based on similar computationally designed antigens as have shown promise with Infectimune.

We had out-licensed the Covid-19 vaccine (PDS0203) to the Brazilian company Farmacore for development in Latin

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

On February 22, 2021, we and Farmacore announced that Blanver Farmoquímica e Farmacêutica S.A joined their efforts

(collectively the “Consortium”) to develop and commercialize a novel COVID-19 vaccine in Latin America.

Under the terms of the agreement, São Paulo-based Blanver will manufacture, promote, distribute, and commercialize the Infectimune-based COVID-19

vaccine in Latin America.

On March 11, 2021 we announced that the Consortium received a commitment from the Secretary for Research and Scientific Training of the MCTI, Brazil to fund up to approximately US$60 million to support the clinical development

and commercialization of an Infectimune-based COVID-19.

The progression of the Farmacore development program was delayed in the fourth quarter of 2021.

After a review of the program by PDS and Farmacore, the agreement with Farmacore was extended for

six months to May 31, 2022 to provide additional time for Farmacore to commence manufacturing and scale up of drug product for use in clinical trials and any necessary process development work.

We have evaluated the progress of the program and as

described above have determined to strategically focus our near-term efforts on the development of universal flu vaccines.

The licensing agreement with Farmacore will expire on May 31, 2022.

Our current pipeline of Versamune and Infectimune-based therapies is as follows:

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

Our net losses were $10.6

million, and $10.8 million for the nine months ended September 30, 2021 and 2020, respectively.

As of September 30, 2021, we had an accumulated deficit of $54.4 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, 2021, we had $69.7 million in cash and cash equivalents.

Our net losses were $8.5 million,

and $3.0 million for the three months ended March 31, 2022 and 2021, respectively.

As of March 31, 2022, we had an accumulated deficit of $69.2 million.

Substantially all of our net losses have resulted from costs incurred in connection with our

research and development programs and from general and administrative costs associated with these operations.

As of March 31, 2022, we had $58.9 million in cash and cash equivalents.

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

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

KEY COMPONENTS OF OUR STATEMENT OF OPERATIONS

SELECTED FINANCIAL OPERATIONS OVERVIEW

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

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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 investigational 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.

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 Infectimune- based infectious disease candidates into and through clinical trials, pursue regulatory approval of our investigational 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 process of conducting human clinical trials necessary to obtain regulatory approval is costly and time consuming.

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

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.

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.

may never succeed in achieving marketing approval.

The probability of successful commercialization of our drug candidates may be affected by numerous factors, including clinical data obtained in future trials, 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

Results of Operations

The following table summarizes the results of our operations for the three months ended September 30, 2021 and 2020:

The following table summarizes the results of our operations for the three months ended March 31, 2022 and 2021:

Three Months Ended

September 30,

Increase (Decrease)

(in thousands)

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Loss from operations

Interest income

Net loss and comprehensive loss

Research and Development Expenses

Research and development expenses increased to $3.7 million for the three months ended September 30, 2021 from $2.1

million for the three months ended September 30, 2020.

The increase of $1.6 million was primarily attributable to an increase of $0.7 million in personnel costs of which $0.5 million was stock compensation costs, and $0.9 million in costs related to

clinical studies.

General and Administrative Expenses

General and administrative expenses increased to $3.2 million for the three months ended September 30, 2021 from $1.8

million for the three months ended September 30, 2020.

The increase of $1.4 million is primarily attributable to an increase in personnel costs of $1.6 million, of which $1.0 million was stock compensation costs and $0.4 million was severance,

partially offset by a decrease in professional fees of $0.2 million.

Comparison of the Nine Months Ended September 30, 2021 and 2020

The following table summarizes the results of our operations for the nine months ended September 30, 2021 and 2020:

Nine months ended

September 30,

Increase (Decrease)

(in thousands)

Operating expenses:

Research and development expenses

General and administrative expenses

Total operating expenses

Loss from operations

Interest income

Benefit from income taxes

Interest income, net

Net loss and comprehensive loss

Research and Development Expenses

Research and development expenses increased to $7.9 million for the nine months ended September 30, 2021 from $5.4

million for the same period in 2020.

The increase of $2.5 million was primarily attributable to an increase in personnel costs of $0.9 million, of which 0.7 million was stock compensation costs, clinical studies of $2.1 million, regulatory fees of

$0.2 million, facility expenses of $0.1 million offset by a decrease in manufacturing costs of $0.8 million.

Research and development (R&D) expenses increased to $5.2 million for the three months ended March 31, 2022 from $1.4 million for the three months ended March 31, 2021 .

The increase of $3.7 million

in 2022 was primarily attributable to an increase of $1.8 million in manufacturing services and quality costs, $1.04 million in clinical study and regulatory costs, $0.8 million in personnel costs and $0.06 million in facilities.

General and Administrative Expenses

General and administrative expenses increased to $7.2 million for the nine months ended September 30, 2021 from $5.4

million for the same period in 2020.

The $1.8 million increase was primarily attributable to an increase in personnel costs of $2.3 million, of which $1.4 million was stock compensation costs and $0.4 million was severance, facility expenses of $0.1

million offset by a decrease in professional services of $0.6 million.

Benefit from Income Taxes

Income tax benefit was $4.5 million for the nine months ended September 30, 2021 and $0 million for the nine months

ended September 30, 2020.

In the second quarter of 2021, we recognized approximately $4.5 million as a Benefit from Income Taxes from the sale of our NJ tax benefits pursuant to the New Jersey Technology Business Tax Certificate Transfer Net

Operating Loss program.

This transaction reduced our reported net loss and comprehensive income for the nine months ended September 30, 2021 to approximately $10.6 million, or approximately $0.2 million less than reported for the same period in 2020

which did not include a similar sale of NJ tax benefits.

General and administrative expenses increased to $3.3 million for the three months ended March 31, 2022 from $1.6 million for the three months ended March 31, 2021 .

The increase of $1.7 million is

primarily attributable to an increase of $1.0 million in personnel costs, $0.6 million in legal fees and $0.1 in marketing expenses.

Liquidity and Capital Resources

Our operations were initially financed from cash of $29.1 million from the consummation of the Merger in March 2019.

In July 2019, we entered into a common stock purchase agreement, or the Aspire Purchase Agreement, with Aspire Capital

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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.

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.

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.

There is market uncertainty regarding the utilization of financing

associated from the Aspire Purchase Agreement.

As of September 30, 2021, no Purchase Shares have been sold to Aspire Capital under the Aspire Purchase Agreement.

The Aspire Purchase Agreement expired in January 2022, and no capital was raised 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

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underwriting discounts and offering expenses.

In May 2021, we received approximately $4.5 million from the net sale of tax benefits to an unrelated, profitable New

Jersey corporation pursuant the Company’s participation in the New Jersey Technology Business Tax Certificate Transfer Net Operating Loss (NOL) program for State Fiscal Year 2020.

In June 2021, we sold 6,088,235 shares of our common stock at a public offering price of $8.50 per share pursuant to the

2020 Shelf Registration Statement, which includes 794,117 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.

In August 2020, we sold 6,900,000 shares of our 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.

In May 2021, we received approximately $4.5 million from the net sale of tax benefits to an unrelated, profitable New

Jersey corporation pursuant our participation in the New Jersey Technology Business Tax Certificate Transfer Net Operating Loss (NOL) program for State Fiscal Year 2020.

In June 2021, we sold 6,088,235 shares of common stock at a public offering price of $8.50 per share pursuant to the 2020

Shelf Registration Statement, which includes 794,117 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 $51.7 million and net proceeds of approximately $48.5 million, after deducting underwriting discounts and offering expenses.

Approximately $29,300,000 of Shelf Securities remain available for future sale under the 2020 Shelf

Registration Statement.

As of September 30, 2021, we had $69.7 million in cash and cash equivalents.

Our primary uses of cash are to fund

operating expenses, primarily research and development expenditures.

In April 2022, we received approximately $1.2 million from the net sale of tax benefits to an unrelated, profitable New

Jersey corporation pursuant the Company’s participation in the New Jersey Technology Business Tax Certificate Transfer NOL program for State Fiscal Year 2020.

As of March 31, 2022, we had $58.9 million in 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 our 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, 2021 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.

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 after 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 March 31, 2022 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.

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

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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

Net decrease in cash and cash equivalents

Net Cash Used in Operating Activities

Net cash used in operating activities was $8.0 million and $8.5 million for the nine months ended September 30, 2021 and

2020, respectively.

The decrease in cash used in operating activities of $0.5 million includes the $4.5 million NOL sale.

Excluding the NOL sale, net cash used in operating activities would have increased $4.0 million primarily due to the increase in

the loss before income taxes of $4.3 million, the change in prepaid expenses and other assets of $2.0 million, accounts payables and accruals of $0.3 million partially offset by an increase in stock-based compensation of $2.1 million, and a decrease

in restructuring reserve of $0.5 million.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2021 was primarily due to the receipt

of net proceeds from the issuance of common stock of $48.5 million.

Net cash provided by financing activities for the nine months ended September 30, 2020 was primarily due to the receipt

of net proceeds from the issuance of common stock of $29.8 million.

Net cash used in operating

activities was $6.4 million and $3.8 million for the three months ended March 31, 2022 and 2021 , respectively.

The increase in net cash used in operating activities of $2.6 million was primarily due to an increase in net loss of $5.4 million, a decrease in accrued expenses of $0.3 million, partially

offset by an increase in accounts payable of $1.9 million, an increase in prepaid expenses of $0.4 million and an increase in stock compensation of $0.8 million.

Operating Capital Requirements

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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 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 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 after 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, 2021 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 March 31, 2022 are sufficient to continue operations and research and development programs for at least one year after 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.

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use all of our available capital resources sooner than we expect.

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.

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:

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cancelable, purchase order basis.

Critical Accounting Polices and Estimates

Critical Accounting Policies and Estimates

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.

Our accounting policies are more fully described in Note 2 to the consolidated financial statements included in this Quarterly Report on Form 10-Q.

As described in Note 2, 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.

Estimates are assessed each period and updated to reflect current information.

Actual results may differ from these

estimates under different assumptions or conditions.

There have been no material changes to our critical accounting policies and estimates during the nine months ended September 30, 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.

The CARES Act provides other reliefs and stimulus measures.

We have evaluated the impact

of the CARES Act, and do not expect that any provision of the CARES Act would result in a material cash benefit to us or have a material impact on our financial statements or internal control over financial reporting.

We believe that the discussion in our management’s discussion and analysis addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial

condition and results of operations and require management’s most difficult, subjective and complex judgments.

There have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2022 from

those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

Operations and Liquidity

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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.

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 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.

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 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.

On March 11, 2020, the WHO declared COVID-19 a pandemic.

The full impact of

the COVID-19 pandemic is unknown and rapidly evolving.

On March 11, 2020, the WHO declared COVID-19 a pandemic and on March 13 the President declared a

national emergency in response to the pandemic.

The full impact of the COVID-19 pandemic is unknown and rapidly evolving.

The COVID-19 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, 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

We licensed Versamune® to Farmacore in Brazil to develop PDS0203;

a vaccine for the prevention of COVID-19.

The Secretary for Research and Scientific Training of The Ministry of Science, Technology and Innovation of Brazil provided a

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

We have not received confirmation of the availability of financial resources within the

MCTI to support the clinical development and commercialization of a Versamune®-based COVID-19 vaccine in Brazil.

Clinical development and commercialization of a Versamune®-based COVID-19 vaccine in Brazil has not been initiated.

To date, two of the

three recently initiated PDS0101 clinical trials were 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.

The FDA issued and since updated

guidance to assist sponsors in assuring the safety of trial participants, maintaining compliance with Good Clinical Practice (GCP) and minimizing risks to trial integrity.

Clinical trial sites have implemented institution-specific measures securing

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

All three studies have since been initiated despite the pandemic challenges;

however, the evolving COVID-19 pandemic has impacted the pace of

enrollment in clinical trials in general and we may be negatively affected with our trials.

COVID-19 related travel and other restrictions may also impact the potential for on-site monitoring visiting and audits and inspections by us, third parties,

and regulators.

There may be shortages of site personnel and equipment necessary for the timely completion of our trials.

We are providing support to address these challenges, but these mitigation measures may not overcome the obstacles that the

pandemic has wrought which continue to impede progress of clinical trials.

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.

As previously stated, we licensed Versamune to Farmacore in Brazil to develop PDS0203;

a vaccine for the prevention of

The Secretary for Research and Scientific Training of The Ministry of Science, Technology and Innovation of Brazil provided a commitment to fund up to approximately US$60 million to support the clinical development and commercialization of a

Versamune-based COVID-19 vaccine in Brazil.

We have not received confirmation of the availability of financial resources within the MCTI to support the clinical development and commercialization of a Versamune-based COVID-19 vaccine in Brazil.

development and commercialization of a Versamune-based COVID-19 vaccine in Brazil has not been initiated.

Due to delays in the program, in the fourth quarter of 2021, we met

with Farmacore and performed a detailed program review.

As the result of that review, we extended the contract with Farmacore for six months through May 31, 2022.

We have evaluated the progress of the program and have determined to strategically

focus on PDS0202 universal flu vaccine.

The licensing agreement with Farmacore will expire on May 31, 2022.

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.

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.

Smaller Reporting Company

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What changed 10-Q

Item 2. Management’s Discussion and Analysis