GOVX: Second Quarter 2019 Results and Update

By John Vandermosten, CFA


GeoVax Labs, Inc. (OTC:GOVX) filed its second quarter 2019 10-Q and issued the accompanying press release on August 14, 2019 providing an operational and financial update on the company’s performance. During the second quarter GeoVax announced a reverse stock split, presented data from several programs and participated in scientific conferences. Following the end of the quarter, the company issued shares of convertible preferred stock to raise $700,000 in capital for continued program development. Looking forward to the rest of 2019, we expect GeoVax will continue to seek additional capital to support its initiatives in immuno-oncology and apply for further grant funding to support the many vaccine programs in development.

Grant and collaboration revenues for 2Q:19 were $210,000, representing a 125% increase over 2Q:18 levels. Revenues were recognized for the Lassa Fever US Army grant, contributing to the change. Total expenditures for the first quarter were $864,000, up 18% from prior year levels. R&D expenditures of $0.5 million compared to $0.4 million in the prior year. G&A was $0.4 million, rising 15% from 2Q:18 levels with the increase attributable to greater stock based compensation and a variety of other services.

As of June 30, cash on the balance sheet was $216,000 and notes outstanding totaled $45,000. Cash burn for the three month period was ($0.5) million, which compares to ($0.4) million last year. GeoVax received $500,000 in proceeds from sale of preferred stock and also paid down about $3,000 in principal of the notes outstanding in 2Q. Following the end of the quarter, GeoVax issued 700 shares of Series I Convertible Preferred Stock for gross proceeds of $700,000. Additional warrants were also exercised post quarter end.

GeoVax executed a reverse stock split on May 2, 2019, issuing one share for each 500 outstanding. The ticker symbol temporarily changed to GOVXD for the month of May to reflect the post-split price. During the first week of June the shares reverted to trading under the symbol GOVX.

Convertible Preferred Stock

GeoVax issued Series F and G convertible preferred stock in return for the exchange of outstanding Series C and E preferred stock and $500,000 of additional capital during February 2019. The lack of other alternatives led to the difficult terms of the financing. The purchase agreement also included the option for GeoVax to raise an additional $500,000 in subsequent closings for an additional 500 shares of Series G convertible preferred stock. On July 16, GeoVax exchanged Series F and G preferred stock for 3,257 shares of Series H Preferred Stock. The terms for the Series H convertible stock allow the holder to convert shares at the lesser of $7.50 (adjusted for reverse stock split) or at a 20% discount to trading price. On July 24th, the company sold 700 shares of Series I Convertible Preferred Stock which has similar terms as the Series H. The lack of a floor for the convertible preferred stock has the effect of diluting outstanding shares as the share price declines1. This has raised concerns for new investors who are at risk of being diluted if the share price continues to decline following their new investment. We believe that this structure has led to the drop in share price.


GeoVax has a full pipeline of programs with HIV holding the most advanced position with Phase II work being done. The remainder of the portfolio is centered on infectious disease and immuno-oncology preclinical work. Below, we summarize current status of the programs.

Cancer Immunotherapy – Collaborations with Leidos, University of Pittsburgh and ViaMune are underway. Work with Leidos is evaluating the delivery of a PD-1 checkpoint inhibitor with the MVA-VLP platform. The academic collaboration is focused on MUC1 with the goal of raising protective anti-tumor antibodies and T cell responses in cancer patients. Efforts with ViaMune are also centered on MUC1 and is seeking to combine a MUC1 vaccine for use with checkpoint inhibitors. Preclinical work in animal models have shown efficacy. Additional work with Vaxeal, Emory Vaccine Center, Virometrix and Leidos are also taking place in immuno-oncology. The immuno-oncology program is likely to be advanced into the clinic if sufficient capital is raised and GeoVax is prioritizing efforts in this area.

HIV Immunotherapy – In 2018, GeoVax received $256,000 for its HIV program from the NIH Small Business Innovative Research (SBIR) grant. Clinical trials for HIV are ongoing. The company plans another Phase I study in the near future with further evaluation of the protein boost. Looking forward, we anticipate a Phase IIb HVTN efficacy trial to being in the next few months. We also foresee human clinical trials starting with the AGT collaboration in 2H:19 where GeoVax’s vaccine will be used to prime T cells in a Phase I study seeking a cure. Following the end of the quarter, GeoVax announced the presentation of Protein-Supplemented DNA/MVA Vaccines: Preclinical Immunogenicity and Protection for Transmitted/Founder and CD4-induced gp120 Proteins at the International AIDS Society Conference in Mexico City. The talk highlighted the results of gp120 boosts which enhanced the magnitude and breadth of binding antibodies to gp120.

Ebola & Marburg – An ongoing outbreak in Congo has highlighted the need for a safe, effective and durable vaccine that can remain viable at room temperatures. GeoVax has had several publications of its preclinical Ebola trial results published in Atlas of Science and Nature. The study demonstrated 100% single-dose protection in a large primate model. The company has offered the vaccines to public health agencies to use for free if they decide to advance their development. In July, the company announced 100% protection from preclinical challenge studies utilizing the Marburg virus vaccine.

Lassa fever – A $300,000 Fast Track Phase I/II SBIR grant was received in support of further advancing the Lassa fever development program. Total project budget is $1.9 million for a Phase II award, which we anticipate will be secured. A U.S. Department of Defense (DoD) award for $2,442,307 was also granted in a cooperative agreement to develop Lassa vaccine. The Lassa vaccine has demonstrated 100% single dose protection in a mouse model.

Zika – A two year, $600,000 Small Business Innovative Research (SBIR) grant was awarded in June 2017 in support of the development program. Efforts will focus on preclinical testing of the Zika vaccine in nonhuman primates in preparation for human clinical trials. The Zika program is likely to be advanced into human clinical trials if sufficient funding is raised. Furthermore, there are ongoing discussions with Brazilian entities which may yield additional collaborations.

Malaria – An ongoing collaboration with the Australian Burnet Institute is underway to develop a vaccine using the MVA-VLP platform. A second collaboration is with Leidos, which was announced in February 2019. Leidos is developing candidates against Plasmodium falciparum malaria and will use the MVA-VLP platform in its development efforts under a contract with the US Agency for International Development (USAID) Malaria Vaccine Development Program (MVDP).

Hepatitis B – Collaborations with Georgia State University Research Foundation (GSURF) and CaroGen Corporation are advancing work in this area.

Vaccine Delivery – A collaboration was announced with Enesi Pharma in January 2019 to develop needle free vaccine formulations. The formulations will be used in conjunction with Enesi’s ImplaVax device which may provide better consistency, stability in the vaccine administration and minimization of vaccination and needle phobia.

Year to Date Highlights

‣ Collaboration with Enesi Pharma to develop vaccines using ImplaVax – January 2019
‣ Ebola vaccine study published in Atlas of Science – March 2019
‣ Expansion of Leidos collaboration in malaria – March 2019
‣ Execution of 500:1 reverse stock split – May 2019
‣ Marburg Virus Vaccine Study Results – July 2019

View Exhibit I – GeoVax Vaccine Pipeline


GeoVax continues to develop programs with a variety of grants while it seeks a partner and funding for later phase development of HIV projects. The company has been focused on preclinical work in other pipeline programs while pursuing funding or partnerships to launch a registrational trial in HIV. The value of vaccines to global health should not be ignored and they can be a fundamental element in eliminating the HIV epidemic in the US. Additionally, the public health value of preventing the spread of Ebola, Lassa fever, Zika or any of the other infectious diseases targeted by the company’s MVA-VLP programs is immense. GeoVax plans to allocate additional resources towards its immuno-oncology indication if it can obtain sufficient financing.

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1. As the share price declines, each unit of convertible preferred converts into a greater number of outstanding shares.