Inovio Pharmaceuticals, Inc. (NASDAQ:INO) Q4 2023 Earnings Call Transcript
Inovio Pharmaceuticals, Inc. (NASDAQ:INO) Q4 2023 Earnings Call Transcript March 6, 2024
Inovio Pharmaceuticals, Inc. beats earnings expectations. Reported EPS is $-1.12, expectations were $-1.58. Inovio Pharmaceuticals, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good afternoon, ladies and gentlemen and welcome to the INOVIO Fourth Quarter and Year-End 2023 Financial Results Conference Call. At this time all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded on Wednesday, March 06, 2024. I would now like to turn the conference over to Thomas Hong, Manager of Investor Relations. Please go ahead.
Thomas Hong: Good afternoon, and thank you for joining the INOVIO 2023 fourth quarter and full-year financial results conference call. Joining me on today's call are Dr. Jacque Shea, President and CEO; Dr. Michael Sumner, Chief Medical Officer; Mark Twyman, Chief Commercial Officer; and Peter Kies, Chief Financial Officer. Today's call will review our corporate and financial information for the quarter and full-year ended December 31, 2023, as well as provide a general business update. Following prepared remarks, we will conduct a question-and-answer segment. During the call, we will be making forward-looking statements regarding future events and the future performance of the company. These events relate to our business plans to develop INOVIO's DNA medicines platform, which include clinical and regulatory developments and timing of clinical data readouts, along with capital resources and strategic matters.
All of these statements are based on the beliefs and expectations of management as of today. Actual events or results could differ materially. We refer you to the documents we file from time to time with the SEC, which under the heading “Risk Factors” identify important factors that could cause actual results to differ materially from those expressed by the company verbally as well as statements made within this afternoon's press release. This call is being webcast live, and a link can be found on our website, ir.inovio.com, and a replay will be made available shortly after this call is concluded. I will now turn the call over to INOVIO's President and CEO, Dr. Jacque Shea.
Jacqueline Shea: Good afternoon, and thank you to everyone for joining today's call. The past 12 months have been transformational for INOVIO. Today we are a company planning to submit our first BLA in the second half of this year and preparing for the potential commercial launch of our first product in 2025. If approved, INO-3107 could also become the first non-surgical therapeutic option for patients with RRP and be the first DNA medicine available in the United States. To achieve this transformation, we have prioritized our product pipeline to focus on 3107 and other promising late-stage assets, all with high unmet medical need and strong commercial potential. We remain committed to financial discipline cutting our operating expenses nearly in half compared with 2022 and focused on leveraging the advantages of our platform to deliver on the promise of DNA medicine.
In addition to the significant progress made with 3107, our strategic refocus helped drive progress across the pipeline including a new clinical collaboration and supply agreement with Coherus BioSciences to develop INO-3107 in combination with LOQTORZI for throat cancer. We also shared encouraging results for INO-4201 as an Ebola booster vaccine, continue to advance other clinical-stage candidates and made progress with promising preclinical research opportunities for next generation candidates adding to the positive momentum. Looking ahead, several key catalysts will help continue that momentum across our pipeline. In addition to submitting our BLA for 3107 under FDA's accelerated approval program, we plan to initiate a confirmatory trial in the second half of 2024 and will continue preparations for a potential 2025 launch.
For our immuno-oncology candidates, we plan to finalize the trial design for evaluation of 3112 in combination with LOQTORZI in patients with throat cancer as well as determine next steps for 5401 in glioblastoma a deadly form of brain cancer. We also expect some key milestones for our infectious disease candidates including discussions with collaborators and potential partners around development plans for INO-4201 as an Ebola booster vaccine in the first half of 2024 and a readout of the first clinical data from the Phase 1 trial evaluating the anti-SARS-CoV-2 dMAbs candidates in the second half of 2024. I'd now like to pass the call over to our CMO, Mike Sumner, who will provide some additional details on our clinical progress over the past year and our goals for the year ahead.
Michael Sumner: Thank you very much, Jacque, and greetings everyone. As Jacque outlined, we have made significant progress across our pipeline over the past year. Thanks to a strong strategic vision that prioritizes promising candidates with strong commercial potential. One of the highlights has been the significant progress of INO-3107 for the treatment of Recurrent Respiratory Papillomatosis or RRP. For those who are not familiar with RRP, it is a devastating rare disease of the respiratory tract caused by HPV-6 and HPV-11. It is characterized by wart-like growth called papillomas that can develop throughout the respiratory tract but primarily affect the larynx and vocal cords. RRP most commonly causes difficulty speaking or complete voice loss, difficulty swallowing, shortness of breath, and choking episodes.
In rare cases, papillomas can spread to the lungs or become malignant. Incidents and prevalence of RRP is variable globally and depends on several factors. The most widely cited U.S. epidemiology data published in 1995 estimated that there were 14,000 active cases for both adults and juveniles and about 1.8 new cases per 100,000 adults per year. The only way to remove the papillomas is surgery. But surgery doesn't address the underlying HPV infection, so the papillomas grow back, often forcing patients to have multiple surgeries a year. In the worst cases, that could be 100 of surgeries over a lifetime. This puts an extreme physical and emotional burden on patients, including the threat of permanent vocal cord damage, impacting the patient's ability to speak normally ever again.
A recent study found that even patients who have had less than five surgery, face a 50% chance of permanent vocal cord damage. In patients who have had ten or more surgeries, that increases to a 98% chance. From our conversations with patients and healthcare providers, RRP patients are desperate for a non-surgical treatment option. As Kim McClellan, President of the RRP Foundation, reiterated last week at the White House Forum on Rare Diseases, even one less surgery a year would be life changing for patients. This slide shows the very real impact of INO-3107 has had in reducing surgeries for RRP patients in our Phase 1/2 trial. As you can see here, the majority of patients, 81%, saw a reduction in surgery after treatment, with 28% needing no surgeries at all during the year after treatment.
As a reminder, we counted all surgeries, including any surgeries performed during the dosing window. We believe 3107 has the potential to completely change the treatment paradigm for patients as a therapeutic adjunct to surgery. As you can see on this updated timeline, we have achieved some major development and regulatory milestones in just over a year. In the first quarter of 2023, we shared positive results from our Phase 1/2 trial, which were later published in a leading peer-reviewed journal read by our future physician customer base. In the second quarter, we received Orphan Drug Designation in the European Union followed by Breakthrough Therapy Designation from the FDA in the fourth quarter. We now have an established path to BLA submission under the FDA's accelerated approval program and announced plans earlier this year to submit a BLA in the second half of 2024.
Looking forward, some of the key catalysts on the horizon for INO-3107 include: completing submission of our BLA under the accelerated approval program in the second half of ’24, initiating our confirmatory trial prior to that submission, requesting rolling submission and priority review, which would lead to possible action on our BLA application within six months compared to the usual 10 month review. We will also target publication of our immunological data supporting the mechanism of action of 3107 in the second half of the year. And finally, commercial launch in 2025 if we receive FDA approval. Our Chief Commercial Officer, Mark Twyman, will provide an update on our commercial preparations, and we look forward to accelerating the development of this promising product candidate over the next year and ultimately delivering on the promise of our DNA medicine for RRP patients across the United States.
Shifting gears now to another late-stage DNA medicine. I'd like to spend some time talking about INO-3112 and our exciting new clinical collaboration and supply agreement with Coherus BioSciences that we announced earlier this year. This partnership will allow us to evaluate 3112 in combination with LOQTORZI, a PD-1 inhibitor that recently received FDA approval for treatment of nasopharangeal carcinoma. We will be studying this combination therapy as a potential treatment for patients with locoregionally advanced high-risk HPV-16 and HPV-18 positive oropharyngeal squamous cell carcinoma. In combination, this therapeutic approach is designed to leverage the antigen specific T-cells elicited by 3112 and the anti-tumor immunity generated by LOQTORZI to potentially provide improved patient outcomes.
Under the terms of the agreement, Coherus will provide LOQTORZI for use in a planned Phase 3 clinical trial and provide support for regulatory interactions. With this collaboration in place, we have submitted our clinical development plans to the FDA and expect to receive feedback in the second quarter. So, what is oropharyngeal squamous cell carcinoma? It's a type of head and neck cancer that occurs in the base of the tongue, tonsils, and/or soft palate, and is most commonly referred to as throat cancer. Throat cancer is typically causally related to high-risk subtypes of HPV, which are responsible for 70% to 80% of all oropharyngeal cancers diagnosed in the United States. They are also associated with tobacco and alcohol use. HPV-positive throat cancer is rapidly increasing in instance among patients in high income countries and has surpassed cervical cancer as the most common HPV-related cancer diagnosed in the U.S. with nearly 20,000 new cases each year.
Most throat cancer patients are diagnosed with locoregionally advanced disease, and the current treatment practice is focused on curative options through the use of multi-therapeutic approaches, including surgery and chemo radiotherapy. With this treatment protocol, about 75% of patients do very well as measured by a three year progression free survival. However, those 25% of patients who have their cancer progress face very poor clinical outcomes. Our proposed trial of INO-3112 in combination with LOQTORZI will be in patients who are HPV-16 or HPV-18 positive and exhibit a high-risk of recurrent disease with the goal of preventing disease progression. There are an estimated 3,000 to 4,000 new patients in the U.S. every year, who are deemed to meet these criteria.
Based on previous trial data and the growing body of research indicating that DNA medicines are adept at combating HPV-related diseases, there is a strong rationale in combining 3112 with a proven PD-1 inhibitor. Results from a Phase 1/2 trial of 3112 as a single agent treatment in ‘22 HPV-positive head and neck squamous cell carcinoma patients demonstrated T cell responses and infiltration of CD8+ T cells into the tumors. In early ‘23, updated results were also published from a different Phase 1/2 trial of 3112 in combination with AstraZeneca's PD-L1 checkpoint inhibitor, durvalumab, showing an overall response rate of 28%, which was comprised of four complete responses and four partial responses in 29 evaluable patients. This was accompanied once again by increased peripheral HPV-specific T cells and tumoral CD8+ T cells.
The efficacy of this combination of 3112 with durvalumab resulted in a median overall survival of more than 29 months. This compares favorably to immune checkpoint blockade therapy alone, which reports median overall survival of approximately 12 months. This combined data set provides compelling evidence to support our belief in the potential of INO-3112 and LOQTORZI. I will now turn the call over to Mark, to provide an update on our commercialization efforts for INO-3107. Mark?
Mark Twyman: Thanks, Mike, and hello, everyone. I'm pleased to share that our commercial efforts for INO-3107 are well underway as we continue to prepare for potential 2025 launch. While there's still much work to be done, I'm confident in our commercial launch strategy for several important reasons. First, we have made understanding patients and their experiences a top priority every step of the way. To continue building on our understanding of the market, we held an Advisory Board panel in October of last year with adult patients suffering from RRP. They shared their journeys from diagnosis to treatment and provided invaluable insights into the unmet needs of the RRP patient community at large. We've also conducted other Advisory Boards with healthcare providers specializing in the treatment of RRP and with caregivers of juvenile patients.
Next, we understand that mapping the physician landscape will be critical to our commercial success. To this end, we have initiated a very comprehensive market analysis of physicians that treat RRP that will allow us to focus on commercialization process for innovative products, particularly for rare diseases. Our collective expertise in putting the plans and essential systems in place for successful launch has been essential to our progress thus far and will help ensure that we stay on track moving forward. And perhaps most importantly, we believe that INO-3107 offers potential compelling clinical and commercial advantages that will serve as an important foundation to our commercial efforts. As you can see here, the FDA has advised that we can use the data from our completed Phase 1/2 trial to submit a BLA under the accelerated approval program.
In the trial, INO-3107 was immunogenic and generally well-tolerated and over 80% of patients across the disease severity continuum had a reduction in the number of surgeries compared to the previous year. This data was key in supporting our application for, and subsequent receipt of Breakthrough Therapy Designation from the FDA. From a commercial standpoint, INO-3107 offers several key differentiators. It targets and has shown similar efficacy across both HPV-6 and HPV-11 which cause RRP. Patients in our trial had a range of two to eight surgeries in the prior year with efficacy demonstrated across the range of disease severity. INO-3107 also offers important attributes typical of our DNA medicines platform, including the potential for re-dosing and stability for up to three years at refrigerator temperatures.
Administration with CELLECTRA, our proprietary electroporation device was well-tolerated by patients was easy-to-use for healthcare providers in the Phase 1/2 trial consistent with its use in other trials. Also important for the commercialization of INO-3107 is our well-defined commercial scale manufacturing process as well as Orphan Drug Designation in both the U.S. and EU which offer the potential commercial incentives and regulatory mechanisms in those markets. I'll now turn the call back to our CEO, Jacque Shea, for some additional pipeline updates. Jacque?
Jacqueline Shea: Thank you, Mark. Mike has highlighted the important progress we've made with both INO-3107 and INO-3112 and we are focusing the majority of our internal resources on advancing those candidates. However, we have several other late-stage clinical-stage assets and next generation candidates that we plan to advance through partnerships and collaborations across industry, academia and governmental agencies. I'd like to provide a brief update on each of them. Earlier I mentioned the encouraging results we announced in early 2023 from our Phase 1b clinical trial of 4201 as Ebola vaccine booster candidate. More recently, we've received feedback from the FDA and identified a potential development pathway and are now in discussions with collaborators and potential partners to define next steps.
INO-5401 has two current disease targets. For glioblastoma, we're in discussions with our partner Regeneron and investigators about next steps and our goal is to have a finalized plan in the first half of 2024. The second target is to prevent cancer or reoccurrence of cancer in adult cancer or non-cancer patients with BRCA1 or BRCA2 mutations. A Phase 1b study is being conducted by the University of Pennsylvania and we look forward to updates as they become available. Our partner ApolloBio is also conducting a Phase 3 trial of VGX-3100 as a therapeutic treatment in cervical HSIL caused by HPV-16 and HPV-18. A Phase 2 trial sponsored by the AIDS Malignancy Consortium is also underway evaluating VGX-3100 in HIV-positive participants with anal HSIL caused by HPV-16 and HPV-18.
And there is also exciting work advancing next generation DNA medicine technology including a trial with our collaborators at the Wistar Institute evaluating DNA-launched Nanoparticles or dLNPs. dLNPs are designed to provide high and maintain levels of antibody responses including neutralizing antibodies while continuing to generate T cell responses. The first dLNPs to enter clinical trials INO-6172 is a preventative HIV vaccine candidate in a Phase 1 trial sponsored and funded by NIAID. And finally, we're still on partners from AstraZeneca, the University of Pennsylvania and Indiana University leading Phase 1 trial using our DNA encoded monoclonal antibody or dMAb technology to develop dMAb as both therapeutic and preventative treatments for COVID-19.
We're excited about what the future holds for these innovative technologies and look forward to sharing more in the year ahead. I'll now turn the call over to our CFO, Peter Kies, for our fourth quarter and full-year 2023 financial summary. Peter?
Peter Kies: Thank you, Jacque. Today I'd like to provide an overview of INOVIO'S operational highlights and financial condition for the fourth quarter and full-year of 2023. As Jacque, Mike and Mark have noted, we have made significant progress across our pipeline over the past year, advancing key candidates while working successfully to reduce our operational spend after our pipeline reprioritization. As you can see from this slide, we have again reduced our total operating spend dropping from $56.1 million in the fourth quarter of 2022 to $27.5 million in the fourth quarter of 2023, a 51% decrease. Our full-year operating expenses were also nearly cut in half from $277.8 million for 2022 to $144.8 million for 2023. Breaking down operating expenses a bit more, our R&D expenses in the fourth quarter of 2023 totaled $17.3 million compared to $42.1 million for the same period in 2022.
Our full-year R&D expenses for 2023 were $86.7 million compared to $187.7 million for the same period in 2022. The year-over- year decrease in R&D expenses was primarily the result of lower drug manufacturing, clinical trial expenses, outside services and expensed inventory related to INO-4800 and other COVID-19 studies and lower employee and consultant compensation including stock-based compensation among other variances. G&A expenses for the fourth quarter 2023 were $10.2 million compared to $14 million for the same period in 2022. G&A expenses for the full-year of 2023 were $47.6 million compared to $90.2 million for the same period in 2022. Revenues for the fourth quarter of 2023 were $103,000 compared to $125,000 for the same period in 2022.
Revenues for the full-year of 2023 were $832,000 compared to $10.3 million for the same period in 2022. Note that revenues reported for 2022 was associated with the procurement contract with the U.S. Department of Defense for INOVIO's devices and accessories to be used for the delivery of INO-4800, our COVID vaccine candidate, which we have since discontinued. These factors combined to bring our net loss for the fourth quarter of 2023 to $25 million or $1.10 per share basic and dilutive and our net loss for the full-year 2023 to $135.1 million or $6.09 per share basic and dilutive. We finished the fourth quarter of 2023 with $145.3 million in cash, cash equivalents and short-term investments compared to $253 million as of December 31, 2022.
INOVIO estimates its cash runway to extend into the second quarter of 2025. This projection includes an operational net cash burn estimate of approximately $26 million for the first quarter of 2024. This amount excludes repayment of $17 million in remaining principal and accrued interest on convertible senior notes that matured on March 1, 2024. Including the repayment, the total net cash burn for the first quarter of 2024 is expected to be approximately $43 million. These cash runway projections do not include any funds that may be raised through and at-the-market program or other capital raise activities. As a reminder, you can find our full financial statements in this afternoon's press release as well as in our Form 10-K filed with the SEC.
And with that, I'll turn it back over to Jacque.
Jacqueline Shea: Thanks, Peter. I'd now like to open up the call to answer any questions you might have. Operator?
Operator: Thank you. [Operator Instructions] Your first question comes from the line of Hartaj Singh with Oppenheimer Company. Please go ahead.
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