Inovio Q2 Loss Wider-than-Expected, Deal with AstraZeneca - Analyst Blog
Inovio Pharmaceuticals, Inc. INO reported a second-quarter 2015 loss of 10 cents per share, narrower than the year-ago loss of 19 cents. The company benefited from higher revenues. The Zacks Consensus Estimate was loss of 5 cents.
Inovio Pharmaceuticals Inc. - Earnings Surprise | FindTheBest
In the second quarter, the company reported revenues of $5.3 million, missing the Zacks Consensus Estimate of $11 million, but increasing from $3.8 million in the year-ago period. The year-over-year rise came on the back of payments received from Roche RHHBY.
Inovio has a collaboration agreement with Roche for the co-development of hepatitis B virus candidate, INO-1800. The initiation of the study triggered a $3 million milestone payment from Roche.
In the second quarter of 2015, research and development expenses were $16.7 million, up 73.7% from the year-ago quarter due to increased investment in the pipeline. General and administrative expenses increased 8.5% year over year to $4.7 million.
Apart from its second-quarter results, Inovio announced that it has entered into a license and collaboration agreement with MedImmune, the global biologics research and development arm of AstraZeneca AZN. As per the terms of the agreement, AstraZeneca will acquire exclusive rights to Inovio's INO-3112 (phase I/II study - cervical and head and neck cancers).
AstraZeneca will make an upfront payment of $27.5 million and potential milestones payments totaling up to $700 million. AstraZeneca will fund all development costs. Inovio is entitled to receive royalties (double-digit tiered) on INO-3112 sales.
Our Take
The second-quarter results were disappointing with the company reporting a wider-than-expected loss and missing revenue estimates. However, we are pleased with the company securing its second major partnership with a large pharmaceutical company, AstraZeneca, following the agreement with Roche.
Inovio carries a Zack Rank #3 (Hold). A better-ranked stock in the health care sector is Valeant Pharmaceuticals International, Inc. VRX, which carries a Zacks Rank #1 (Strong Buy).
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