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Inovio (INO) Ends Some Early-Stage R&D Programs, Cuts Jobs

Zacks Equity Research

Inovio Pharmaceuticals, Inc. INO announced a strategic restructuring to prioritize the development of its late-stage HPV assets and reallocate capital to develop fast-to-market product candidates. As part of this corporate strategy, the company reduced its annual burn rate by 25% and cut workforce by 28%. Inovio also decided to trim some early-stage R&D programs while terminating the phase I/II study evaluating INO-5401 in advanced bladder cancer.

Shares of Inovio were down 13.3% in after-hours trading following this announcement on Tuesday. In fact, so far this year, the stock has declined 25% versus the industry’s rise of 0.8%.

Management stated that it will focus on commercializing its investigational HPV (human papillomavirus) immunotherapy — VGX-3100 — the most advanced candidate in Inovio’s pipeline.

Last month, the company completed enrollment in the pivotal phase III study, REVEAL 1, which is currently evaluating VGX-3100 for the treatment of cervical dysplasia caused by human papillomavirus (HPV). In March this year, Inovio had started recruiting patients in the confirmatory REVEAL 2 study. Based on data from the REVEAL 2 study, Inovio plans to submit a regulatory filing, seeking approval for VGX-3100, in 2021.

Earlier this month, the company completed enrollment in a phase II study on VGX-3100 for the treatment of vulvar dysplasia caused by HPV. Another phase II program is studying the efficacy of VGX-3100 in patients with anal dysplasia.

Notably, in April 2019, Inovio’s novel therapy, INO-3107, previously known as INO-3106, demonstrated clinical efficacy in a pilot study. The study was conducted on a couple of patients with recurrent respiratory papillomatosis (RRP), an HPV-associated disease.

A rare HPV-associated disease, RRP is characterized by persistent noncancerous tumor growth in the airways, primarily caused by two strains of HPV, HPV 6 and 11. As part of the realignment, the company is rapidly advancing the INO-3107 study and plans to initiate the next clinical evaluation on the same within the next 12 months.

Meanwhile, Inovio plans to advance MEDI0457 (a combination of Inovio’s VGX-3100 immunotherapy and a DNA-based immune activator encoded for IL-12) in combination with AstraZeneca's AZN checkpoint inhibitor for HPV-related cancers including the phase II study for the treatment of head and neck cancer. AstraZeneca expects to complete this study in August 2020.

We remind investors that in 2015, AstraZeneca’s subsidiary MedImmune in-licensed exclusive rights to Inovio’s INO-3112, which is now known as MEDI0457.

Inovio decided to discontinue the phase I/II study evaluating INO-5401 for advanced bladder cancer due to high expenses. In April this year, Inovio had  completed patient enrollment in the phase I/II study on its immuno-oncology combo of INO-5401 plus INO-9012 in combination with Regeneron REGN/Sanofi’s SNY PD-1 inhibitor, Libtayo (cemiplimab), for treating the newly-diagnosed patients with glioblastoma (GBM).

The company expects to provide the interim progression-free survival and safety data for treating GBM by this year-end and the overall survival data in 2020.

Zacks Rank

Inovio currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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