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GOVX: Update on First Quarter Financials

By Grant Zeng, CFA


Net revenues for the 1Q17 ended March 31, 2017 were $295,735, which related to grants from the NIH. This compared to $47,600 of grant revenues reported for the same period in 2016. 

R&D expenses were $551,795 for the three months ended March 31, 2017, compared with $438,004 for the comparable period in 2016. 

G&A expenses for 1Q17 were $292,667, compared to $906,505 for the three months ended March 31, 2016. G&A expense for the 2016 period included a non-cash charge of $469,799 related to certain stock purchase warrant modifications. 

Net loss for the three months ended March 31, 2017 was $548,341, or $0.01 per share, based on 55.4 million weighted average shares outstanding. For the three months ended March 31, 2016, the Company reported a loss of $1,296,279, or $0.04 per share, based on 34.6 million weighted average shares outstanding.

Cash balances were $166,749 at March 31, 2017, as compared to $454,030 at December 31, 2016.

In early April, GeoVax (OTC:GOVX) received a Notice of Award from the National Institute of Allergy and Infectious Disease (NIAID), part of the U.S. National Institutes of Health (NIH), for a Phase II Small Business Innovative Research (SBIR) grant in support of its HIV vaccine development program. The grant award of $658,159 will fund the second year of a two-year project period with a total budget of $1,398,615.

The grant supports preclinical studies in non-human primates (NHP) evaluating the immunogenicity and protective efficacy of the GeoVax Clade B HIV preventive vaccine (GOVX-B11) with or without a bivalent (two component) protein boost.

In early August 2016, GeoVax was awarded a NIH contract worth up to $7.8 million. The award is a Staged Vaccine Development contract to further develop GeoVax’s preventive HIV vaccine (GOVX-B11) and to manufacture the DNA component of GOVX-B11 for use in advanced human clinical trials.

The base portion of the contract, with a value of $199,442, will support preparatory work for initiation of manufacturing. The contract also includes $7.6 million in additional development options that may be exercised by NIH, bringing the total potential value of the contract to $7.8 million. The scope of the product development plan covered by the contract includes process development, cGMP-compliant manufacturing of vaccine bulk drug substance and final drug product, testing and characterization of the manufactured products, stability studies, and regulatory filings.

The multi-year contract will pay 100% of the manufacturing cost of the DNA vaccine component of GeoVax’s HIV vaccine candidate, GOVX-B11. The amount of DNA vaccine to be produced pursuant to the full contract will be sufficient for efficacy testing of GOVX-B11 in the presence and absence of a gp120 protein boost.

Also in June 2016, GeoVax was awarded a Small Business Innovative Research (SBIR) grant by the NIH in support of its clade C HIV vaccine development program for Africa. The grant award of $294,038 is for the second year of a two-year project period which began July 1, 2015, with a two-year project budget of $593,623

The grant is supporting the preclinical testing in non-human primates of a vaccine designed for the clade C subtype of HIV prevalent in Sub-Saharan Africa. This project is using GeoVax’s Modified Vaccinia Ankara (MVA) Virus-Like Particle (VLP) vaccine technology, and builds on the GeoVax clade B HIV vaccine, GOVX-B11, which is designed for the epidemic in the Americas and Western Europe. 

We welcome these grants awarded by the government agency which not only boosts the company’s balance sheet in a non-dilutive way, but further validates GeoVax’s vaccine technology and its clinical and preclinical programs. 

Update on the Zika Virus Program

The company has a research collaboration with the Centers for Disease Control and Prevention (CDC) for development of preventive vaccine against Zika virus (ZIKV).  

GeoVax’s vaccine GEO-ZM02 is based on the non-structural-1 (NS1) protein of ZIKV, which is not involved in ADE. Moreover, the NS1 protein is abundantly secreted into the blood of ZIKV infected individuals and plays a critical role in flavivirus acquisition by mosquitoes by overcoming the immune barrier of the mosquito midgut. Therefore, GEO-ZM02 should not only safely protect populations against ZIKV infections but could also block further transmission of ZIKV from humans to its mosquito vector.

On June 4, GeoVax presented animal data of the Zika vaccine at the American Society for Microbiology (ASM) Microbe conference in New Orleans. 

In the study, outbred immunocompetent mice were exposed to a lethal challenge dose of ZIKV delivered directly into the brain. A single dose of GeoVax’s NS1 vaccine candidate GEO-ZM02 protected 100% of vaccinated animals. In contrast, 80-90% of sham-immunized control animals died within 7-10 days.

This is the first report of i) a Zika vaccine based on the ZIKV NS1 protein, and ii) single-dose protection against ZIKV using an immunocompetent lethal mouse challenge model.

GEO-ZM02 has the potential to be a single-dose vaccine, which is practical to combat epidemics in resource strained countries, Furthermore, the vaccine does not bear the risk of enhancing other flavivirus infections, such as Dengue virus, in vaccinated subjects. This phenomenon, called Antibody Dependent Enhancement (ADE), is a safety concern for other Zika vaccines under development, all of which utilize the structural Envelope (E) protein of ZIKV in their vaccine constructs. 

Zika virus disease is a rapidly spreading, emerging infectious disease transmitted by mosquitoes. The rapid spread of ZIKV, its association with abnormal fetal brain development, and lack of a preventive vaccine constitute a global health emergency. As of May 9, 2017, there have been 1,845 and 3,795 cases of pregnant women with evidence of ZIKV infection in the US and US territories, respectively. Seventy-two infants were born in the US alone with ZIKV related birth defects. Protection against mosquito bites and vector control remain the key preventive measures currently available to fight ZIKV infections. ZIKV belongs to the flaviviridae family which also include, dengue, West Nile and yellow fever viruses. 


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