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Inovio (INO) Q2 Earnings & Revenues Fall Shy of Estimates

Zacks Equity Research

Inovio Pharmaceuticals, Inc. INO incurred a loss of 30 cents per share in second-quarter 2019, wider than the Zacks Consensus Estimate of a loss of 28 cents and also the year-ago loss of 8 cents.

Moreover, Inovio’s revenues of $0.1 million significantly missed the Zacks Consensus Estimate of $5 million. Also, the top line plunged a massive 99% from the year-ago quarter’s $24.4 million, which got a huge boost from the recognition of a $23-million up-front payment from ApolloBio. Notably, in second-quarter 2018, ApolloBio had gained the rights to develop/commercialize VGX-3100 for the treatment of HPV-related precancers in Greater China, which triggered the payment.

Shares of Inovio fell 5.5% in after-hours trading following the company’s earnings release on Thursday Aug 8. In fact, the stock has declined 36.5% so far this year compared with the industry’s decrease of 2.6%.

Research and development expenses were $22.5 million in second-quarter 2019, flat year over year.

General and administrative expenses dropped 18.1% to $5.9 million in the quarter under review owing to lower foreign non-income taxes and advisory fees.

Pipeline and Other Updates

In July, Inovio announced a strategic restructuring to prioritize the development of its late-stage HPV assets and reallocate capital to develop fast-to-market product candidates. Following this, 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 for the treatment of advanced bladder cancer due to high expenses.

Notably, in April this year, Inovio completed patient enrollment in the phase I/II study on its immuno-oncology combo of INO-5401 plus INO-9012 in combination with Regeneron/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 on the above study by this year-end and the overall survival data in 2020.

Meanwhile, Inovio plans to advance the study of 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 to treat head and neck cancer. AstraZeneca hopes to complete this study in August 2020.

Inovio’s novel therapy INO-3107 is being developed for treating patients with recurrent respiratory papillomatosis (RRP), an HPV-associated disease. The company plans to initiate the next study on the candidate by mid-2020.

We would like to remind investors that VGX-3100, an HPV immunotherapy, is the most advanced candidate in the company’s pipeline.

In June, Inovio completed enrolling patients 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 same, Inovio plans to submit a regulatory filing, seeking an approval for VGX-3100 in 2021.

Moreover, last 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.

This apart, Inovio is progressing well with its Lassa fever vaccine candidate INO-4500 and the Middle East respiratory syndrome (MERS) vaccine candidate INO-4700.

Meanwhile, in May, Inovio formed a companion diagnostic partnership with the Dutch pharmaceutical company Qiagen N.V. QGEN. This collaboration is aimed at creating a liquid biopsy companion diagnostic test to guide the selection of patients, who would benefit from Inovio’s VGX-3100.

Inovio Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

Inovio Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

Inovio Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Inovio Pharmaceuticals, Inc. Quote

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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