Inovio Pharmaceuticals, Inc. (NASDAQ:INO) today reported financial
results for the quarter ended June 30, 2017.
Total revenue was $20.4 million for the three
months ended June 30, 2017, compared to $6.2 million for the same
period in 2016. Total operating expenses were $30.0 million for the
current year quarter compared to $24.4 million for the prior year
quarter.
The net loss attributable to common stockholders
for the quarter ended June 30, 2017 was $9.5 million, or $0.13 per
share, compared to $18.7 million, or $0.26 per share, for the
quarter ended June 30, 2016. The decrease in net loss for the
quarter resulted primarily from higher revenue recognized related
to Inovio’s license and collaboration agreement with MedImmune
entered into in 2015.
Revenue
The increase in revenue was primarily due to $13.8
million in revenue recognized from MedImmune, as the previously
deferred revenue from the up-front payment received in September
2015 for MEDI0457 (INO-3112) was recognized during the three months
ended June 30, 2017. This revenue recognition occurred upon
MedImmune’s definitive selection of a new cancer product candidate
to be tested in clinical trials against an undisclosed cancer
target from our on-going research collaboration. The successful
advancement of this new product candidate by MedImmune could also
trigger future milestone payments and sales-based royalties payable
to Inovio.
Operating Expenses
Research and development expenses for the second
quarter of 2017 were $23.9 million compared to $19.6 million for
the second quarter of 2016. The increase in R&D expenses was
related to increased investment in all of Inovio’s product
development programs, including its recently commenced phase 3
trial for VGX-3100. General and administrative expenses were $6.2
million for the second quarter of 2017 versus $5.8 million for the
second quarter of 2016. The increase in G&A expenses
primarily related to an increase in non-cash stock based
compensation.
Capital Resources
As of June 30, 2017, cash and cash equivalents and
short-term investments were $92.0 million compared with $104.8
million as of December 31, 2016. At quarter end the
company had 77.6 million shares outstanding and 87.2 million shares
outstanding on a fully diluted basis. During the three months ended
June 30, 2017, Inovio sold 2,917,725 shares of common stock under
its ATM common stock sales agreement for net proceeds of $24.1
million, with an average sale price of $8.41 per share.
On July 25, 2017, the company closed an
underwritten public offering of 12,500,000 shares of common stock
at a public offering price of $6.00 per share, for gross proceeds
of $75.0 million. The net proceeds, after deducting the
underwriters’ discounts and commissions and other estimated
offering expenses payable by Inovio, were approximately $70.2
million. Inovio has granted the underwriters an option until
August 18, 2017 to purchase up to 1,875,000 additional shares of
its common stock on the same terms and conditions.
Inovio’s balance sheet and statement of operations
are provided below. The Form 10-Q providing the complete 2017
second quarter financial report can be found at:
http://ir.inovio.com/secfilings.
Corporate Update
Clinical Developments
VGX-3100: Cervical Pre-Cancer (Phase 3)
- In June, Inovio commenced its phase 3 clinical program to
evaluate the efficacy of Inovio’s DNA-based immunotherapy,
VGX-3100, to treat cervical dysplasia caused by human
papillomavirus (HPV). Initiating Inovio’s first phase 3 program
marks a significant milestone for the company, for the next
generation of DNA-based immunotherapies, and for women’s health. In
the phase 3 trial, Inovio will assess the efficacy of VGX-3100 in
regressing cervical HSIL (high-grade squamous intraepithelial
lesions; also called CIN2 or CIN3), a direct precursor to cervical
cancer, and in eliminating the HPV infection that causes these
lesions. The pivotal data from this program, if positive, could
support the licensure of VGX-3100 as the first immunotherapy for
this disease. HPV is the most common sexually transmitted
infection, with over 14 million new infections annually.
- Inovio satisfied the FDA’s request for information relating to
its CELLECTRA® 5PSP delivery device, resulting in the FDA removing
a previously imposed clinical hold on this program. During the hold
period, Inovio prepared investigational sites for the phase 3
study, resulting in the company opening 27 sites in just over the
first month since the hold was removed. Inovio is on track to
open at least 50 sites by the end of the year.
VGX-3100: Vulvar Pre-Cancer (Phase 2)
- In April, Inovio commenced a randomized, open-label phase 2
trial to evaluate the efficacy of VGX-3100 in 36 women with
high-grade HPV-related pre-cancerous lesions of the vulva, or
vulvar intraepithelial neoplasia, a disease with a high unmet
medical need. This is a new therapeutic indication for VGX-3100.
The primary endpoint of the study is histologic clearance of
high-grade lesions and virologic clearance of the HPV virus in
vulvar tissue samples. The study will also evaluate safety and
tolerability.
MEDI0457: HPV-Related Head & Neck Cancer (Phase
1/2)
- In May, Inovio announced that MedImmune, AstraZeneca’s global
biologics research and development arm, commenced a new clinical
trial investigating the combination of MEDI0457 (formerly INO-3112)
in-licensed from Inovio, an immunotherapy designed to generate
antigen-specific killer T cell responses targeting HPV-associated
tumors, and durvalumab, MedImmune’s PD-L1 checkpoint inhibitor. The
combination trial will enroll patients with metastatic
HPV-associated squamous cell carcinoma of the head & neck
(SCCHN) with persistent or recurrent disease after chemotherapy
treatment. This study marks a significant moment for Inovio as it
transitions into a late-stage biotechnology company. MedImmune is
investigating the possibility of elevating the response rate of
checkpoint inhibitors by using durvalumab in combination with a DNA
plasmid vaccine originally licensed from Inovio, which has shown
the ability to generate killer T cells.
- Combining the company’s first phase 3 program with the
previously announced phase 2 clinical trial of VGX-3100 for
treating HPV-related vulvar neoplasia, and the MEDI0457 checkpoint
inhibitor-based combination study with MedImmune/AstraZeneca
targeting HPV-associated, metastatic head and neck cancers, Inovio
is well positioned to comprehensively treat HPV-associated diseases
across the continuum of HPV infection through to cancer in both
women and men.
Infectious Disease Studies
- Inovio reported that its HIV vaccine, PENNVAX®-GP, produced
amongst the highest overall levels of immune response rates
(cellular and humoral) ever observed in a human study by an HIV
vaccine. The vaccine candidate, PENNVAX-GP, consists of a
combination of four HIV antigens designed to cover multiple global
HIV strains and generate both an antibody (humoral) immune response
as well as a T cell (cellular) immune response to both potentially
prevent and treat HIV. These significant results are consistent
with Inovio’s recent data reported from its Ebola, Zika and MERS
clinical trials in terms of achieving nearly 100% vaccine response
rates with favorable safety profiles. Furthermore, Inovio’s newer
and more tolerable intradermal vaccine delivery device showed that
Inovio can elicit very high immune responses at a much lower
dose.
- Inovio and its academic and industry collaborators received a
multi-year $6.95 million grant in March from the NIH’s National
Institute of Allergy and Infectious Diseases to develop a single or
combination therapy using Inovio’s PENNVAX-GP, with the goal of
attaining long-term HIV remission in the absence of antiviral
drugs. Development of Inovio’s PENNVAX-GP immunotherapy, which
widely targets multiple major clades of HIV — providing global
coverage — has been funded through a $25 million NIAID contract
awarded to Inovio and its collaborators. In addition, Inovio and
its collaborators were awarded a five-year $16 million Integrated
Preclinical/Clinical AIDS Vaccine Development (IPCAVD) grant in
2015 from NIAID. PENNVAX-GP is currently being studied in a phase 1
clinical trial (HVTN-098) to evaluate its safety and immunogenicity
in 94 healthy volunteers as a preventive vaccine (see above). The
newly funded study will assess the impact of this vaccine approach
in a therapeutic setting.
- In preliminary results from the expanded stage of Inovio’s
phase 1 clinical trial, EBOV-001, 95% (170 of 179) of evaluable
subjects generated an Ebola-specific antibody immune response, with
the mean antibody titer comparable or superior to those reported
from viral vector-based Ebola vaccines, along with a more safety
profile than those vaccines. This study was funded by a $45 million
contract from DARPA.
Corporate
Developments
- In May, Inovio and Regeneron entered into an immuno-oncology
clinical study agreement for glioblastoma (GBM) combination
therapy. The planned Phase 1b/2a clinical trial will combine
Regeneron’s PD-1 inhibitor REGN2810 and Inovio’s T cell activator
INO-5401 and immune activator INO-9012 for the potential treatment
of brain cancer. INO-5401 includes Inovio’s SynCon® antigens for
WT1, hTERT and PSMA and has the potential to be a powerful cancer
immunotherapy in combination with checkpoint inhibitors. The
National Cancer Institute previously highlighted WT1, hTERT and
PSMA among a list of attractive cancer antigens, designating them
as high priorities for cancer immunotherapy development, and
placing WT1 at the top of the antigen list. The hTERT antigen is
expressed in 85% of cancers; the WT1 and PSMA antigens are also
widely prevalent in many cancers. The open-label trial, which
is expected to begin later this year, is designed to evaluate the
safety and efficacy of the combination therapy in approximately 50
patients. GBM is the most aggressive form of brain cancer, and its
prognosis is extremely poor, despite a limited number of new
therapies approved over the last ten years. Under the terms
of the agreement, the trial will be solely conducted and funded by
Inovio, based upon a mutually agreed upon study design, and
Regeneron will supply REGN2810. Inovio and Regeneron will jointly
conduct immunological analyses in support of the study. Regeneron,
in collaboration with Sanofi, is developing REGN2810 both alone and
in combination with other therapies for the treatment of various
cancers.
- In June, Inovio entered into a collaboration agreement with
Genentech to commence a clinical trial to evaluate the combination
of Inovio’s T cell immunotherapy INO-5401 and Genentech’s PD-L1
checkpoint inhibitor atezolizumab in patients with advanced bladder
cancer. The phase 1b/2 immuno-oncology trial will evaluate
Genentech’s atezolizumab (TECENTRIQ®) in combination with Inovio’s
INO-5401, a T cell activating immunotherapy encoding multiple
antigens, and INO-9012, an immune activator encoding IL-12. The
planned clinical trial is anticipated to start later this year, and
is designed to evaluate the safety, immune response and clinical
efficacy of the combination therapy in approximately 80 patients
with advanced bladder cancer. Combining INO-5401/INO-9012 with
atezolizumab may provide a synergistic therapeutic effect as a
result of generating higher levels of activated T cells and
simultaneously inhibiting PD-L1.
- In July, Inovio completed an underwritten public offering of
common stock, raising net proceeds of $70.2 million after
underwriters’ discounts and commissions and estimated offering
expenses. Inovio expects that with the net proceeds of the
offering it will be able to advance its ongoing REVEAL 1 and 2
phase 3 trials and four phase 2 immuno-oncology trials and to fund
other pipeline advancements. The financing also added new
institutional investors to Inovio’s shareholder base.The recent
financing transaction will also support the following expected
near-term events:
- VGX-3100 phase 3 (cervical pre-cancer) trial – initiated
- MEDI0457 phase 1/2 combination (head & neck cancer) study –
initiated
- INO-5401 Glioblastoma multiforme (brain cancer) phase 1/2
combination study with Regeneron -- initiate 2H 2017
- INO-5401 Bladder cancer phase 1/2 combination study with
Genentech -- initiate 2H 2017
- INO-5150 Prostate cancer study (phase 1) report data – 3Q
2017
- INO-1800 Hepatitis B therapy study (phase 1) report data -- 4Q
2017
- INO-1400 (hTERT) report interim immune response and safety data
-- 4Q2017
- Vaccine clinical study publications (Zika, Ebola and MERS) – 4Q
2017As previously announced in February, Inovio entered into a
collaboration and license agreement with ApolloBio Corporation. If
the agreement receives the requisite approvals from ApolloBio’s
stock exchange, its board and its shareholders, the agreement will
become effective, at which time Inovio expects to receive up to $50
million in payments from Apollo -- $15 million in an upfront cash
payment for the license of VGX-3100 in greater China and up to $35
million in the form of an equity investment in Inovio’s common
stock.
Preclinical Developments
- Nature Communications published a paper
entitled “DNA Vaccination Protects Mice Against Zika Virus-Induced
Damage to the Testes,” reporting the results of a preclinical study
in which Inovio’s Zika vaccine prevented the persistence of virus
and damage in the male reproductive tract. This published data
suggests another avenue of potential protection against the Zika
virus. While detrimental effects on sperm and fertility have not
yet been reported in Zika-infected human males, persistence of Zika
in semen and sperm and sexual transmission by males has been
documented. This new preclinical data suggests that our Zika
vaccine may represent an opportunity to limit the potential for
sexual transmission of the virus. In addition to our ongoing
ZIKA-001 and 002 clinical studies, we are planning for a larger
phase 2 study in our efforts to bring our Zika vaccine to
patients.
- Npj Vaccines published a paper entitled “DNA
Inoculation of Synthetic Cross-Reactive Antibodies Protects Against
Lethal Influenza A and B Infections,” co-authored by Inovio
scientists and collaborators from the Wistar Institute and
MedImmune. The paper reported the results of a preclinical study in
which Inovio’s DNA-based monoclonal antibody product candidate for
the treatment of influenza produced broadly cross-reactive
antibodies that provided complete protection from a lethal
challenge with multiple viruses of both influenza A and B
types. Following previously reported similar data from
Inovio’s dMAb® candidates for HIV, dengue, and Chikungunya, this
study further validates the potential for Inovio’s dMAb technology
platform to be able to use encoded DNA plasmids for in vivo
production of monoclonal antibodies and to induce protective immune
responses. The goal for this platform is to rapidly generate
therapeutic monoclonal antibodies directly in the recipients. Such
benefits are complementary to Inovio’s antigen-generating platform
in terms of immune mechanism and short response times, and
advantages that overcome conventional monoclonal antibodies’ long
development lead times and complex manufacturing processes and
costs.
About Inovio Pharmaceuticals,
Inc.
Inovio is taking immunotherapy to the next level in
the fight against cancer and infectious diseases. We are the only
immunotherapy company that has reported generating T cells in vivo
in high quantity that are fully functional and whose killing
capacity correlates with relevant clinical outcomes with a
favorable safety profile. With an expanding portfolio of immune
therapies, the company is advancing a growing preclinical and
clinical stage product pipeline. Partners and collaborators include
MedImmune, Regeneron, Genentech, The Wistar Institute, University
of Pennsylvania, DARPA, GeneOne Life Science, Plumbline Life
Sciences, ApolloBio Corporation, Drexel University, NIH, HIV
Vaccines Trial Network, National Cancer Institute, U.S. Military
HIV Research Program, and Laval University. 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 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 sufficiency of our capital resources. 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
the company or its collaborators, including alternatives that may
be more efficacious or cost effective than any therapy or treatment
that the company and its collaborators hope to develop, issues
involving product liability, issues involving patents and whether
they or licenses to them will provide the company 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 the company can finance or devote other
significant resources that may be necessary to prosecute, protect
or defend them, the level of corporate expenditures, assessments of
the company's 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, 2016,
our Form 10-Q for the period ended June 30, 2017, and other
regulatory filings we make from time to time. There can be no
assurance that any product candidate in Inovio's pipeline will be
successfully developed, manufactured or commercialized, that final
results of clinical trials will be supportive of regulatory
approvals required to market licensed 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 Inovio undertakes no obligation to update or
revise these statements, except as may be required by law.
Inovio Pharmaceuticals, Inc. |
CONSOLIDATED BALANCE SHEETS |
|
|
June 30, 2017 |
|
December 31, 2016 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and cash
equivalents |
$ |
23,860,637 |
|
|
$ |
19,136,472 |
|
Short-term
investments |
68,138,619 |
|
|
85,629,412 |
|
Accounts
receivable |
7,522,548 |
|
|
15,821,511 |
|
Accounts receivable
from affiliated entity |
1,189,300 |
|
|
748,355 |
|
Prepaid expenses and
other current assets |
4,914,764 |
|
|
1,749,059 |
|
Prepaid expenses and
other current assets from affiliated entity |
1,251,730 |
|
|
1,512,424 |
|
Total current
assets |
106,877,598 |
|
|
124,597,233 |
|
Fixed assets, net |
15,017,992 |
|
|
9,025,446 |
|
Investment in
affiliated entity - GeneOne |
14,612,344 |
|
|
16,052,065 |
|
Investment in
affiliated entity - PLS |
3,339,802 |
|
|
3,777,510 |
|
Intangible assets,
net |
6,817,855 |
|
|
7,628,394 |
|
Goodwill |
10,513,371 |
|
|
10,513,371 |
|
Other assets |
1,674,251 |
|
|
2,113,147 |
|
Total
assets |
$ |
158,853,213 |
|
|
$ |
173,707,166 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable and
accrued expenses |
$ |
16,477,761 |
|
|
$ |
19,597,787 |
|
Accounts payable and
accrued expenses due to affiliated entity |
847,421 |
|
|
1,072,579 |
|
Accrued clinical trial
expenses |
7,188,751 |
|
|
6,368,389 |
|
Common stock
warrants |
1,363,637 |
|
|
1,167,614 |
|
Deferred revenue |
548,690 |
|
|
14,762,720 |
|
Deferred revenue from
affiliated entity |
274,194 |
|
|
407,292 |
|
Deferred rent |
681,544 |
|
|
446,646 |
|
Total current
liabilities |
27,381,998 |
|
|
43,823,027 |
|
Deferred revenue, net
of current portion |
205,938 |
|
|
317,808 |
|
Deferred revenue from
affiliated entity, net of current portion |
— |
|
|
86,694 |
|
Deferred rent, net of
current portion |
7,560,867 |
|
|
5,926,424 |
|
Deferred tax
liabilities |
174,793 |
|
|
174,793 |
|
Total
liabilities |
35,323,596 |
|
|
50,328,746 |
|
Inovio
Pharmaceuticals, Inc. stockholders’ equity: |
|
|
|
Preferred stock |
— |
|
|
— |
|
Common stock |
77,634 |
|
|
74,062 |
|
Additional paid-in
capital |
589,890,620 |
|
|
556,718,356 |
|
Accumulated
deficit |
(467,715,568 |
) |
|
(434,838,235 |
) |
Accumulated other
comprehensive income |
1,180,662 |
|
|
1,327,968 |
|
Total Inovio
Pharmaceuticals, Inc. stockholders’ equity |
123,433,348 |
|
|
123,282,151 |
|
Non-controlling
interest |
96,269 |
|
|
96,269 |
|
Total stockholders’
equity |
123,529,617 |
|
|
123,378,420 |
|
Total
liabilities and stockholders’ equity |
$ |
158,853,213 |
|
|
$ |
173,707,166 |
|
Inovio Pharmaceuticals, Inc. |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited) |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenues: |
|
|
|
|
|
|
|
Revenue under
collaborative research and development arrangements |
$ |
16,358,316 |
|
|
$ |
1,889,988 |
|
|
$ |
20,646,902 |
|
|
$ |
3,686,845 |
|
Revenue under
collaborative research and development arrangements with affiliated
entity |
176,879 |
|
|
499,720 |
|
|
410,209 |
|
|
636,720 |
|
Grants and
miscellaneous revenue |
2,797,647 |
|
|
3,814,083 |
|
|
8,037,880 |
|
|
9,990,381 |
|
Grants and
miscellaneous revenue from affiliated entity |
1,079,282 |
|
|
— |
|
|
1,693,318 |
|
|
— |
|
Total
revenues |
20,412,124 |
|
|
6,203,791 |
|
|
30,788,309 |
|
|
14,313,946 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Research and
development |
23,878,751 |
|
|
19,630,801 |
|
|
48,421,255 |
|
|
37,819,961 |
|
General and
administrative |
6,169,106 |
|
|
5,799,530 |
|
|
13,936,695 |
|
|
11,171,143 |
|
Gain on sale of
assets |
— |
|
|
(1,000,000 |
) |
|
— |
|
|
(1,000,000 |
) |
Total operating
expenses |
30,047,857 |
|
|
24,430,331 |
|
|
62,357,950 |
|
|
47,991,104 |
|
Loss from
operations |
(9,635,733 |
) |
|
(18,226,540 |
) |
|
(31,569,641 |
) |
|
(33,677,158 |
) |
Other income
(expense): |
|
|
|
|
|
|
|
Interest and other
income, net |
300,021 |
|
|
341,131 |
|
|
640,362 |
|
|
674,201 |
|
Change in fair value of
common stock warrants, net |
(312,500 |
) |
|
(113,775 |
) |
|
(196,023 |
) |
|
(520,024 |
) |
Gain (loss) on
investment in affiliated entity |
169,096 |
|
|
(705,527 |
) |
|
(1,439,721 |
) |
|
6,775,450 |
|
Net loss
attributable to Inovio Pharmaceuticals, Inc. |
$ |
(9,479,116 |
) |
|
$ |
(18,704,711 |
) |
|
$ |
(32,565,023 |
) |
|
$ |
(26,747,531 |
) |
Loss per common
share—basic and diluted: |
|
|
|
|
|
|
|
Net loss per
share attributable to Inovio Pharmaceuticals, Inc.
stockholders |
$ |
(0.13 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.44 |
) |
|
$ |
(0.37 |
) |
Weighted
average number of common shares outstanding—basic and
diluted |
75,409,702 |
|
|
72,957,159 |
|
|
74,783,791 |
|
|
72,591,986 |
|
CONTACTS:
Investors/Media: Jeff Richardson, Inovio Pharmaceuticals, 267-440-4211, jrichardson@inovio.com
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