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Inovio Pharmaceuticals Reports 2019 First Quarter Financial Results

PLYMOUTH MEETING, Pa., May 9, 2019 /PRNewswire/ -- Inovio Pharmaceuticals, Inc. (INO), an innovative biotechnology company focused on the discovery, development and commercialization of its synthetic nucleic technology targeted against cancers and infectious diseases, today reported financial results for the first quarter ended March 31, 2019. Inovio's management will host a live conference call and webcast at 4:30 p.m. Eastern Time today to discuss financial results and provide a general business update.

Inovio Highlights

  • VGX-3100/INO-3106; HPV-related Pre-cancers
    Inovio's Phase 3 trials for VGX-3100, REVEAL 1 and REVEAL 2, are both up and running and are executing on track. REVEAL 2 began recruitment in March while REVEAL 1 is anticipated to be fully enrolled with 198 patients by mid-2019. Additionally, Inovio expects interim data from its two Phase 2 trials with VGX-3100 in patients with vulvar and anal dysplasia later this year.

    Inovio recently announced that VGX-3100 has been granted an Advanced Therapy Medicinal Product certificate by the European Medicines Agency's (EMA) Committee for Advanced Therapies following an extensive evaluation of its chemistry, manufacturing and controls (CMC) data and nonclinical results. Since the inception of the program in 2009, only 11 ATMP Certifications have been awarded by the EMA. This certificate is an important developmental milestone for VGX-3100 as it will facilitate the preparation, filing, and review of a future European market application for VGX-3100.

    In April, VGX-3100 was selected at the World Vaccine Congress as the 2019 "Best Therapeutic Vaccine."

    Extending its portfolio into additional HPV-related diseases, Inovio announced its novel therapy, INO-3106, against the human papilloma virus type 6 (HPV 6) demonstrated clinical efficacy in a pilot clinical study of two patients with recurrent respiratory papillomatosis (RRP), a rare orphan disease. Results presented at the American Association for Cancer Research (AACR) demonstrated that following both patient's last dose of INO-3106, the patients have been surgery-free, due to lack of tumor recurrence. One patient has not needed surgery for over two years; the other has been surgery-free for over one year. A complete study report is being prepared for publication in a medical journal, and Inovio plans to further develop INO-3106 as a novel, non-invasive immunotherapy for the treatment of RRP, for both adult and pediatric populations.
  • MEDI0457 (VGX-3100 + IL-12; licensed to AstraZeneca)
    Inovio achieved a third cancer indication milestone under its collaboration with AstraZeneca, triggered by AstraZeneca dosing a patient in a Phase 2 combination trial evaluating MEDI0457 (formerly called INO-3112) in combination with durvalumab, an anti-PD-L1 immune checkpoint inhibitor, targeting cervical, anal, penile, and vulvar cancers associated with human papilloma virus (HPV). AstraZeneca continues to evaluate MEDI0457 in combination with durvalumab in multiple Phase 2 trials in patients with HPV-related cancers.

    In January, Inovio announced that two patients with HPV-related head and neck cancer, who were treated with MEDI0457 in a Phase 1 trial, achieved a sustained complete response (full remission) following subsequent treatment with a PD-1 checkpoint inhibitor.
  • INO-5401 – Cancer Combination Trials
    Inovio completed enrollment of its Phase 1/2 immuno-oncology trial in patients with newly diagnosed glioblastoma (GBM). The enrollment of 52 patients was achieved three months ahead of schedule. The trial is designed to evaluate Inovio's INO-5401 T cell activating immunotherapy encoding multiple antigens expressed by GBM and INO-9012, an immune activator encoding IL-12, in combination with cemiplimab-rwlc (also known as Libtayo® or REGN2810), a PD-1 inhibitor developed by Regeneron Pharmaceuticals in collaboration with Sanofi. Interim results evaluating safety, immunological impact, progression-free survival and overall survival from this study are expected before the end of this year.
  • DNA-Encoded Bi-specific T Cell Engagers (dBTEs)
    Inovio presented pre-clinical results at a major cancer conference (AACR) on the company's novel DNA-encoded Bi-specific T Cell Engagers (dBTE) technology. Inovio, with its collaborators at The Wistar Institute, developed a novel dBTE targeting the HER2 molecule which was tested in therapeutic models for the treatment of ovarian and breast cancers. Importantly, just a single dose of Inovio's HER2 dBTE resulted in high levels of corresponding BiTE in mice for four months, far exceeding what is typically displayed with conventional BiTE's short half-life of only a few hours. The HER2 dBTE effectively killed HER2-expressing tumor cells resulting in a near-complete tumor clearance. Also presented was Inovio's CD19 dBTE which can kill B cell cancers by targeting B cell specific marker CD19.

    These results were subsequently published in a JCI Insight journal article entitled, "DNA-encoded bi-specific T cell engagers and antibodies present long-term antitumor activity."
  • DNA-Encoded Monoclonal Antibody (dMAb™)
    In February, the company dosed a subject in the first-ever human study of Inovio's DNA-encoded monoclonal antibody (dMAb™) technology evaluating the ability of our technology to express Zika virus-specific mAbs. This study is being fully funded by The Bill and Melinda Gates Foundation. While the trial's focus is on evaluating the dMAb for Zika infection, the clinical results are intended to help advance Inovio's dMAb and dBTE programs in infectious diseases and cancer.
  • Infectious Diseases
    Phase 1 data for INO-4201, the company's Ebola vaccine, was published in The Journal of Infectious Diseases, further supporting the advancement of the intradermal delivery platform for vaccines. Significantly, the study demonstrated that intradermal (skin) administration with Inovio's CELLECTRA® efficacy enhancing device resulted in 100% of evaluable subjects generating antigen-specific antibody responses that persisted for more than one year in most subjects and generated robust T cell responses. The published data further validates the safety, potency, and product stability advantages of Inovio's immunotherapy platform.
  • Geneos Therapeutics, Inc.
    In February, Inovio's personalized cancer vaccine subsidiary Geneos, secured a Series A financing round with potential proceeds of up to $10.5 million. With this funding, Geneos is fully operational as a standalone entity in its efforts to develop the next generation of neoantigen-targeting cancer immunotherapies. Geneos has an exclusive license to Inovio's immunotherapy platform in the area of personalized cancer immunotherapy; Inovio holds majority equity position in Geneos and continue to develop and commercialize all global population-based (non-personalized) cancer immunotherapies based on its proprietary SynCon® design. Geneos is now focused on initiating its first clinical study in 2019.
  • Management and Board Updates
    During the first quarter, Inovio announced the appointment of Jacqueline E. Shea, PhD, as Inovio's Chief Operating Officer (COO) and Executive Vice President. Dr. Shea will be responsible for Inovio's manufacturing, commercial, business development, and alliance management operations as well as serving as a key member of the executive team along with the CFO and CSO in formulating and implementing overall corporate strategy.

    Also in the first quarter, the Company announced that Mr. Simon X. Benito, former Merck Vaccines executive, was appointed Chairman of Inovio's Board of Directors. In addition, the Company appointed Ms. Lota Zoth, former CFO of MedImmune, and Dr. Ann C. Miller, former commercial executive with Merck, Amgen, Eisai and Sanofi, to its Board of Directors.
  • Cash Position
    As of March 31, 2019, cash and cash equivalents and short-term investments were $128.0 million compared to $81.2 million as of December 31, 2018. In the first quarter 2019, the Company completed a private placement of $78.5 million aggregate principal amount of 6.50% convertible senior notes due 2024, or the Notes. The Notes were sold in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. Net proceeds from the offering were approximately $75.7 million, after deducting the initial purchasers' discount and offering expenses payable by the Company.

Dr. J. Joseph Kim, Inovio's President & CEO said, "The last several months have been extremely productive for Inovio by validating the company's versatile technology platform. We ended the first quarter by featuring positive data from our Phase 1 Ebola study in a prestigious publication. Inovio further highlighted its capabilities in treating HPV-associated disease after presenting positive data from patients diagnosed with RRP, where we demonstrated a clinical benefit for these patients. Additionally, we initiated the first ever clinical study for our dMAb platform during the first quarter and unveiled an exciting new component within our platform involving our novel dBTE technology, which we're working towards rapidly advancing the first product into clinical testing. Inovio enters the second quarter well-financed following the February raise, placing us in a prime position to continue to deliver on our game-changing clinical programs."

First Quarter 2019 Financial Results

Total revenue was $2.8 million for the three months ended March 31, 2019, compared to $1.5 million for the same period in 2018. Total operating expenses were $31.4 million compared to $34.3 million for the same period in 2018.

Inovio's net loss for the quarter ended March 31, 2019 was $29.2 million, or $0.30 per basic and diluted share, compared to $32.4 million, or $0.36 per basic and diluted share, for the quarter ended March 31, 2018.

Revenue

The year over year increase in revenue under collaborative research and development arrangements was primarily due to the milestone payment recognized in the first quarter 2019 from AstraZeneca.

Operating Expenses

Research and development (R&D) expenses for the three months ended March 31, 2019 were $24.4 million compared to $24.6 million for the same period in 2018. The decrease in R&D expenses was primarily related to a sub-license expense of $1.9 million recorded in 2018 related to the ApolloBio collaboration, partially offset by an increase of $1.2 million related to Inovio's VGX-3100 Phase 3 clinical trials, among other variances.

General and administrative (G&A) expenses were $7.0 million for the three months ended March 31, 2019 versus $9.7 million for the same period in 2018. The decrease in G&A expenses was primarily related to the foreign non-income taxes and advisory fees incurred in connection with the ApolloBio upfront payment Inovio received in 2018.

Capital Resources

As of March 31, 2019, cash and cash equivalents and short-term investments were $128.0 million compared to $81.2 million as of December 31, 2018. As of March 31, 2019, the Company had 97.9 million common shares outstanding and 125.3 million common shares outstanding on a fully diluted basis, after giving effect to outstanding options, restricted stock units, convertible preferred stock and convertible notes.

In the first quarter 2019, the Company completed a private placement of $78.5 million aggregate principal amount of 6.50% convertible senior notes due 2024. Net proceeds from the offering were approximately $75.7 million.

Inovio's condensed consolidated balance sheet and statement of operations are provided below. Additional information is included in Inovio's quarterly report on Form 10-Q for the quarter ended March 31, 2019, which can be accessed at: http://ir.inovio.com/investors/financial-reports/default.aspx.

Conference Call / Webcast Information

Inovio's management will host a live conference call and webcast at 4:30 p.m. Eastern Time today to discuss Inovio's financial results and provide a general business update.

The live webcast and a replay may be accessed by visiting the Company's website at http://ir.inovio.com/investors/events/default.aspx. Telephone replay will be available approximately one hour after the call at 877-344-7529 (US toll free) or 412-317-0088 (international toll) using replay access code 10131163.

About Inovio Pharmaceuticals, Inc.

Inovio is an innovative biotechnology company focused on the discovery, development, and commercialization of its synthetic nucleic technology targeted against cancers and infectious diseases. Inovio's proprietary technology platform applies antigen sequencing and delivery to activate potent immune responses to targeted diseases. The technology functions exclusively in vivo, and has been demonstrated to consistently activate robust and fully functional T cell and antibody responses against targeted cancers and pathogens. Inovio's most advanced clinical program, VGX-3100, is in Phase 3 for the treatment of HPV-related cervical pre-cancer. Also in development are Phase 2 immuno-oncology programs targeting HPV-related cancers, bladder cancer, and glioblastoma, as well as platform development programs in hepatitis B, Zika, Ebola, MERS, and HIV. Partners and collaborators include AstraZeneca, Regeneron, Roche/Genentech, ApolloBio Corporation, GeneOne Life Science, The Bill & Melinda Gates Foundation, Coalition for Epidemic Preparedness Innovations, Parker Institute for Cancer Immunotherapy, Defense Advanced Research Projects Agency, National Institutes of Health, National Institute of Allergy and Infectious Diseases, National Cancer Institute, HIV Vaccines Trial Network, Walter Reed Army Institute of Research, The Wistar Institute, and the University of Pennsylvania. For more information, visit www.inovio.com.

This press release contains certain forward-looking statements relating to our business, including our plans to develop electroporation-based drug and gene delivery technologies, dMAB and dBTE platforms and DNA vaccines, our expectations regarding our research and development programs, including the planned initiation and conduct of clinical trials and the availability and timing of data from those trials and the expectation that VGX-3100's Advanced Therapy Medicinal Product certificate will facilitate the preparation, filing, and review of a future European market application. Actual events or results may differ from the expectations set forth herein as a result of a number of factors, including uncertainties inherent in pre-clinical studies, clinical trials and product development programs, the availability of funding to support continuing research and studies in an effort to prove safety and efficacy of electroporation technology as a delivery mechanism or develop viable DNA vaccines, our ability to support our pipeline of SynCon® active immunotherapy and vaccine products, the ability of our collaborators to attain development and commercial milestones for products we license and product sales that will enable us to receive future payments and royalties, the adequacy of our capital resources, the availability or potential availability of alternative therapies or treatments for the conditions targeted by us or our collaborators, including alternatives that may be more efficacious or cost effective than any therapy or treatment that we and our collaborators hope to develop, issues involving product liability, issues involving patents and whether they or licenses to them will provide us with meaningful protection from others using the covered technologies, whether such proprietary rights are enforceable or defensible or infringe or allegedly infringe on rights of others or can withstand claims of invalidity and whether we can finance or devote other significant resources that may be necessary to prosecute, protect or defend them, the level of corporate expenditures, assessments of our technology by potential corporate or other partners or collaborators, capital market conditions, the impact of government healthcare proposals and other factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2018, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 and other filings we make from time to time with the Securities and Exchange Commission. There can be no assurance that any product candidate in our pipeline will be successfully developed, manufactured or commercialized, that final results of clinical trials will be supportive of regulatory approvals required to market products, or that any of the forward-looking information provided herein will be proven accurate. Forward-looking statements speak only as of the date of this release, and we undertake no obligation to update or revise these statements, except as may be required by law.

 

Inovio Pharmaceuticals, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS






March 31,
 2019


December 31,
 2018


(Unaudited)



ASSETS




Current assets:




Cash and cash equivalents

$

20,779,152



$

23,693,633


Short-term investments

107,216,498



57,538,852


Accounts receivable

2,783,264



3,316,361


Accounts receivable from affiliated entities

1,295,737



738,583


Prepaid expenses and other current assets

1,386,801



1,406,590


Prepaid expenses and other current assets from affiliated entities

1,441,546



1,120,805


Total current assets

134,902,998



87,814,824


Fixed assets, net

15,185,998



15,949,014


Investment in affiliated entity - GeneOne

6,430,383



6,381,926


Investment in affiliated entity - PLS

2,225,427



3,023,987


Intangible assets, net

4,493,582



4,760,145


Goodwill

10,513,371



10,513,371


Operating lease right-of-use assets

14,432,479




Other assets

2,981,270



2,669,998


Total assets

$

191,165,508



$

131,113,265


LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable and accrued expenses

$

15,644,783



$

23,134,733


Accounts payable and accrued expenses due to affiliated entities

1,315,610



977,792


Accrued clinical trial expenses

7,159,243



5,671,764


Deferred revenue

110,694



223,577


Deferred revenue from affiliated entities

2,325



33,575


Deferred rent



1,065,387


Operating lease liability

1,888,804




Deferred grant funding

1,279,005



4,165,848


Deferred grant funding from affiliated entities

14,583



27,083


Total current liabilities

27,415,047



35,299,759


Deferred revenue, net of current portion

141,803



150,793


Convertible senior notes

60,562,503




Deferred rent, net of current portion



8,518,207


Operating lease liability, net of current portion

21,990,881




Deferred tax liabilities

24,766



24,766


Other liabilities

64,257



87,333


Total liabilities

110,199,257



44,080,858


Stockholders' equity:




Preferred stock




Common stock

97,934



97,226


Additional paid-in capital

727,166,934



707,794,215


Accumulated deficit

(649,645,698)



(620,426,436)


Accumulated other comprehensive income (loss)

290,310



(528,867)


Total Inovio Pharmaceuticals, Inc. stockholders' equity

77,909,480



86,936,138


Non-controlling interest

3,056,771



96,269


Total stockholders' equity

80,966,251



87,032,407


Total liabilities and stockholders' equity

$

191,165,508



$

131,113,265


 

 

Inovio Pharmaceuticals, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)




Three Months Ended

March 31,


2019


2018

Revenues:




Revenue under collaborative research and development arrangements

$

2,770,712



$

1,289,046


Revenue under collaborative research and development arrangements with affiliated entities

55,579



148,008


Miscellaneous revenue

3,614



92,590


Total revenues

2,829,905



1,529,644


Operating expenses:




Research and development

24,389,888



24,577,751


General and administrative

6,975,029



9,698,015


Total operating expenses

31,364,917



34,275,766


Loss from operations

(28,535,012)



(32,746,122)


Other income (expense):




Interest and other income (expense), net

(66,552)



312,523


Change in fair value of common stock warrants



(127,841)


Gain (loss) on investment in affiliated entities

(750,103)



2,380,423


Net loss before income tax benefit/(provision for income tax)

(29,351,667)



(30,181,017)


Income tax benefit/(provision for income taxes)

62,800



(2,169,811)


Net loss

(29,288,867)



(32,350,828)


Net loss attributable to non-controlling interest

69,605




Net loss attributable to Inovio Pharmaceuticals, Inc.

$

(29,219,262)



$

(32,350,828)


Net loss per share attributable to Inovio Pharmaceuticals, Inc. stockholders




          Basic and diluted

$

(0.30)



$

(0.36)


Weighted average number of common shares outstanding




          Basic and diluted

97,494,968



90,451,791


 

 

CONTACTS:

Investors:

Ben Matone, 484-362-0076, ben.matone@inovio.com

Media:

Jeff Richardson, 267-440-4211, jrichardson@inovio.com

Cision

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