Inovio Pharmaceuticals, Inc. (NASDAQ:INO) today reported financial
results for the fourth quarter and year ended December 31, 2017.
Total revenue was $8.8 million and $42.2 million
for the quarter and year ended December 31, 2017, respectively, as
compared to $8.5 million and $35.4 million for the same periods in
2016.
Total operating expenses for the quarter and
year ended December 31, 2017 were $31.7 million and $125.9 million,
respectively, as compared to $30.9 million and $111.6 million for
the same periods in 2016.
The net loss attributable to common stockholders
for the quarter and year ended December 31, 2017 was $21.5 million,
or $0.24 per basic share, and $88.2 million, or $1.08 per basic
share, respectively, as compared to a net loss attributable to
common stockholders of $26.2 million, or $0.35 per basic share, and
$73.7 million, or $1.01 per basic share, for the same periods in
2016.
Revenue
The increase in revenue for 2017 compared to
2016 was primarily due to higher revenues recognized under our
collaborative research and development agreement with MedImmune.
The previously deferred portion of an up-front payment received in
September 2015, and other deferred amounts, totaling $13.8 million
in the aggregate, were recognized in June 2017 upon MedImmune’s
selection of the first cancer research collaboration product
candidate. We also received a $7.0 million milestone payment in
December 2017 for the initiation of the Phase 2 portion of an
ongoing MEDI0457 clinical trial, which amount was fully recognized
as revenue upon receipt. We also recognized an additional $1.2
million of revenue under our prior collaboration with Roche, as all
remaining deferred revenue was recognized upon termination of that
collaboration agreement in 2017. These increases in revenue under
collaborative research and development arrangements were offset in
part by lower revenues recognized from our DARPA Ebola grant and
DARPA sub-contract for the treatment of infectious diseases.
Operating Expenses
Research and development expenses for the
quarter and year ended December 31, 2017 were $24.6 million and
$98.6 million, respectively, as compared to $23.9 million and $88.7
million for the same periods in 2016. The year over year increase
in R&D expenses was primarily related to an increase in
employee headcount to support our R&D and clinical trial
activities. General and administrative expenses for the quarter and
year ended December 31, 2017 were $8.0 million and $28.3 million,
respectively, compared to $7.0 million and $23.9 million for the
same periods in 2016. The increase in G&A expenses for the year
was primarily related to an increase in employee headcount and
non-cash stock based compensation.
Capital Resources
As of December 31, 2017, cash and cash
equivalents and short-term investments were $127.4 million compared
with $104.8 million as of December 31, 2016. As of December
31, 2017, the Company had 90.4 million common shares outstanding
and 99.6 million common shares outstanding on a fully diluted
basis, after giving effect to outstanding options, warrants,
restricted stock units and convertible preferred stock.
Inovio’s balance sheet and statement of
operations are provided below. Inovio’s Annual Report on Form 10-K
providing the complete 2017 annual financial report can be found
at: http://ir.inovio.com/investors/financial-reports/default.aspx.
Corporate Update
VGX-3100: Cervical Precancer (Phase
3)
Since last June when Inovio commenced its
pivotal Phase 3 clinical program to evaluate the efficacy of
VGX-3100, Inovio’s DNA-based immunotherapy lead product candidate
designed to treat cervical dysplasia (a precancerous condition)
caused by human papillomavirus, the Company has already opened more
than 50 U.S. trial sites and initiated nearly 10 trial sites
internationally – to recruit patients.
In November 2017, Inovio provided post-hoc
analysis of data generated from its Phase 2b trial of VGX-3100 in
which the Company identified biomarker signatures which predicted
success of VGX-3100 treatment as early as two weeks after the
completion of treatment at week 14, which was a full 22 weeks prior
to the formal efficacy assessment. These biomarkers could aid
physicians in guiding patient care during treatment using
VGX-3100.
In December 2017, Inovio entered into an Amended
and Restated License and Collaboration Agreement with ApolloBio
Corporation, which is expected to become effective in the first
quarter of 2018 upon approval by ApolloBio’s stockholders and
receipt of other regulatory approvals. Under the terms of the
agreement, Inovio granted to ApolloBio the exclusive right to
develop and commercialize VGX-3100 in Greater China, including
Hong Kong, Macao and Taiwan. The territory may be expanded to
include Korea in the event that no patent
covering VGX-3100 issues in China within the three years
following the effective date of the agreement. Under the agreement,
ApolloBio will pay Inovio an upfront payment of $23.0 million.
In addition to the upfront payment, Inovio is entitled to receive
up to an aggregate of $20.0 million upon the achievement of
specified milestones related to the regulatory approval
of VGX-3100 in the United States, China and Korea as well
as tiered double-digit royalties on product sales.
INO-5401: Bladder Cancer (Phase
1b/2)
INO-5401 is Inovio’s T cell activating
immunotherapy encoding for WT1, hTERT and PSMA, three of the top
cancer antigens as determined by the National Cancer Institute.
In November 2017, Inovio published the results
of preclinical studies in which researchers observed a synergistic
effect in combining our TERT (telomerase reverse transcriptase)
cancer immunotherapy with a checkpoint inhibitor. In a mouse tumor
model, the combination resulted in robust anti-tumor effects and
significant improvement in survival compared to either therapy
alone. These results were detailed in a paper published in
Molecular Therapy entitled, “Synergy of Immune Checkpoint Blockade
with a Novel Synthetic Consensus DNA Vaccine Targeting TERT”. This
published paper highlights the potential benefits of DNA
immunotherapy/immune checkpoint blockade combinations using PD-1 or
CTLA4 checkpoint inhibitors in patients that respond poorly to
immune checkpoint blockade alone, allowing for improved rational
design of potential combination therapies. These preclinical
results also suggest that the synergistic anti-tumor effect is due
to the effect of immune checkpoint blockade on expanding effector T
cells generated from the TERT therapy in the tumor
microenvironment.
In October 2017, Inovio initiated a Phase 1b/2
immuno-oncology trial to evaluate Genentech/Roche’s PD-L1
checkpoint inhibitor atezolizumab (TECENTRIQ®) in combination with
INO-5401 and another of Inovio’s product candidates, INO-9012, an
immune activator encoding IL-12. The multi-center, open-label trial
is evaluating safety, immune response and clinical efficacy in
approximately 80 patients with advanced bladder cancer,
specifically advanced unresectable or metastatic urothelial
carcinoma. The majority of the patients to be enrolled in the trial
will have previously received and failed to demonstrate meaningful
response to an anti-PD-1 or PD-L1 checkpoint inhibitor alone.
INO-5401: Glioblastoma (Phase
1b/2a)
In November 2017, Inovio initiated a Phase 1b/2a
immuno-oncology trial to evaluate Regeneron’s PD-1 checkpoint
inhibitor cemiplimab (REGN2810) in combination with INO-5401 and
INO-9012. The open-label trial is evaluating safety, immune
response and clinical efficacy in approximately 50 patients with
newly diagnosed glioblastoma multiforme (GBM), an aggressive brain
cancer.
MEDI0457: Head & Neck Cancer (Phase
1/2)
In December 2017, Inovio received a $7.0 million
milestone payment from MedImmune as MEDI0457 (formerly called
INO-3112, which MedImmune in-licensed from Inovio) in combination
with durvalumab (MEDI4736) completed the Phase 1 safety review
portion of the study and has advanced to the Phase 2 efficacy stage
of the trial. As part of a $700 million 2015 license and
collaboration agreement, MedImmune, the global biologics research
and development arm of AstraZeneca, is evaluating MEDI0457 in
combination with durvalumab, its PD-L1 checkpoint inhibitor, in
patients with recurrent/metastatic HPV-associated head and neck
squamous cancer (HNSCC) in a clinical trial with an estimated
enrollment of 50 patients.
Parker Institute for Cancer
Immunotherapy Collaboration
In January 2018, Inovio and the Parker
Institute for Cancer Immunotherapy (PICI) entered into a clinical
collaboration agreement to undertake clinical evaluation of novel
combination regimens within the field of immuno-oncology. Under the
agreement, PICI will have responsibility for clinical study
execution, working in collaboration with its established network of
clinical academic and industry cancer centers. Based on PICI’s
novel approach to accelerating studies of cancer immunotherapies,
the initial studies will also be funded by PICI. Inovio, in
turn, would provide financial contributions back to PICI if any of
Inovio's product candidates studied under the collaboration reaches
the initiation of a Phase 3 clinical trial. The collaboration with
Inovio represents PICI’s first agreement within the field of
DNA-based Immunotherapeutics.
Infectious Disease Vaccines
In January 2018, Inovio announced results from a
preclinical study in which the Company’s synthetic vaccine
approach, using a collection of synthetic DNA antigens, generated
broad protective antibody responses against all major deadly
strains of H1N1 influenza viruses from the last 100 years,
including the virus that caused “Spanish Flu” in 1918, in multiple
animal models, including mice, guinea pigs and non-human primates.
These preclinical study results were detailed in a paper published
in the journal Vaccine entitled, “Broad cross-protective
anti-hemagglutination responses elicited by influenza
microconsensus DNA vaccine”. In addition to the universal H1N1 flu
vaccine program, Inovio is also developing similar universal flu
vaccine approaches to cover all H3N2 and Type B flu viruses.
In early 2018, Inovio announced it will
collaborate with The Wistar Institute to advance two novel SynCon®
vaccine programs against tuberculosis (TB) and malaria, fully
funded by more than $4.6 million in total grants from the Bill
& Melinda Gates Foundation and the National Institutes of
Health (NIH). Grants from the Gates Foundation (for malaria) and
from the National Institute of Allergy & Infectious Diseases
(for TB) will support Inovio’s efforts to develop new DNA vaccines
employing its novel and versatile ASPIRE (Antigen SPecific Immune
REsponses) platform that is leading the way forward for activation
immunotherapy. The ASPIRE platform delivers optimized synthetic
antigenic genes into cells, where they are translated into protein
antigens that activate an individual's immune system to generate
robust targeted T cell and antibody responses.
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. Please connect
to the Company's website at least 15 minutes prior to the live
webcast to ensure adequate time for any software download that may
be needed to access the webcast. Telephone replay will be available
approximately two hours after the call at 877-481-4010 (domestic)
or 919-882-2331 (international) using replay ID 26416.
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
immunotherapies, 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, National
Microbiology Laboratory of the Public Health Agency of Canada, NIH,
HIV Vaccines Trial Network, NIAID, U.S. Army Medical Research
Institute of Infectious Diseases and U.S. Military HIV Research
Program. 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, our expectations regarding the closing of
the agreement with ApolloBio 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 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, 2017, and other
regulatory filings we make from time to time. 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 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 we undertake no obligation to update or revise
these statements, except as may be required by law.
Inovio Pharmaceuticals,
Inc.CONSOLIDATED BALANCE SHEETS |
|
|
December 31, |
|
2017 |
|
2016 |
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and cash
equivalents |
$ |
23,786,579 |
|
|
$ |
19,136,472 |
|
Short-term
investments |
103,638,844 |
|
|
85,629,412 |
|
Accounts
receivable |
6,003,205 |
|
|
15,821,511 |
|
Accounts receivable
from affiliated entities |
486,619 |
|
|
748,355 |
|
Prepaid expenses and
other current assets |
2,600,906 |
|
|
1,749,059 |
|
Prepaid expenses and
other current assets from affiliated entities |
1,846,007 |
|
|
1,512,424 |
|
Total current
assets |
138,362,160 |
|
|
124,597,233 |
|
Fixed assets, net |
18,320,176 |
|
|
9,025,446 |
|
Investment in
affiliated entity - GeneOne |
9,069,401 |
|
|
16,052,065 |
|
Investment in
affiliated entity - PLS |
2,325,079 |
|
|
3,777,510 |
|
Intangible assets,
net |
6,009,729 |
|
|
7,628,394 |
|
Goodwill |
10,513,371 |
|
|
10,513,371 |
|
Other assets |
2,639,354 |
|
|
2,113,147 |
|
Total
assets |
$ |
187,239,270 |
|
|
$ |
173,707,166 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable and
accrued expenses |
$ |
23,278,798 |
|
|
$ |
19,597,787 |
|
Accounts payable and
accrued expenses due to affiliated entities |
926,943 |
|
|
1,072,579 |
|
Accrued clinical trial
expenses |
8,611,892 |
|
|
6,368,389 |
|
Common stock
warrants |
360,795 |
|
|
1,167,614 |
|
Deferred revenue |
1,175,353 |
|
|
14,762,720 |
|
Deferred revenue from
affiliated entities |
174,110 |
|
|
407,292 |
|
Deferred rent |
877,535 |
|
|
446,646 |
|
Total current
liabilities |
35,405,426 |
|
|
43,823,027 |
|
Deferred revenue, net
of current portion |
215,853 |
|
|
317,808 |
|
Deferred revenue from
affiliated entities, net of current portion |
— |
|
|
86,694 |
|
Deferred rent, net of
current portion |
9,104,416 |
|
|
5,926,424 |
|
Deferred tax
liabilities |
24,766 |
|
|
174,793 |
|
Total
liabilities |
44,750,461 |
|
|
50,328,746 |
|
Commitments and
contingencies |
|
|
|
Inovio
Pharmaceuticals, Inc. stockholders’ equity: |
|
|
|
Preferred stock—par
value $0.001; Authorized shares: 10,000,000, issued and outstanding
shares: 23 at December 31, 2017 and December 31,
2016 |
— |
|
|
— |
|
Common stock—par value
$0.001; Authorized shares: 600,000,000 at December 31, 2017 and
December 31, 2016, issued and outstanding: 90,357,644 at
December 31, 2017 and 74,062,370 at December 31,
2016 |
90,358 |
|
|
74,062 |
|
Additional paid-in
capital |
665,775,504 |
|
|
556,718,356 |
|
Accumulated
deficit |
(523,356,317 |
) |
|
(434,838,235 |
) |
Accumulated other
comprehensive income (loss) |
(117,005 |
) |
|
1,327,968 |
|
Total Inovio
Pharmaceuticals, Inc. stockholders’ equity |
142,392,540 |
|
|
123,282,151 |
|
Non-controlling
interest |
96,269 |
|
|
96,269 |
|
Total stockholders’
equity |
142,488,809 |
|
|
123,378,420 |
|
Total
liabilities and stockholders’ equity |
$ |
187,239,270 |
|
|
$ |
173,707,166 |
|
Inovio Pharmaceuticals,
Inc.CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
For the Year ended
December 31, |
|
2017 |
|
2016 |
|
2015 |
Revenues: |
|
|
|
|
|
Revenue under
collaborative research and development arrangements |
$ |
28,407,388 |
|
|
$ |
6,490,747 |
|
|
$ |
26,876,533 |
|
Revenue under
collaborative research and development arrangements with affiliated
entities |
765,828 |
|
|
1,400,594 |
|
|
779,167 |
|
Grants and
miscellaneous revenue |
10,474,539 |
|
|
27,136,457 |
|
|
12,916,411 |
|
Grants and
miscellaneous revenue from affiliated entity |
2,572,331 |
|
|
340,563 |
|
|
— |
|
Total
revenues |
42,220,086 |
|
|
35,368,361 |
|
|
40,572,111 |
|
Operating
expenses: |
|
|
|
|
|
Research and
development |
98,572,618 |
|
|
88,712,035 |
|
|
57,791,923 |
|
General and
administrative |
28,290,369 |
|
|
23,892,263 |
|
|
18,063,890 |
|
Gain on sale of
assets |
(1,000,000 |
) |
|
(1,000,000 |
) |
|
(1,000,000 |
) |
Total operating
expenses |
125,862,987 |
|
|
111,604,298 |
|
|
74,855,813 |
|
Loss from
operations |
(83,642,901 |
) |
|
(76,235,937 |
) |
|
(34,283,702 |
) |
Other income
(expense): |
|
|
|
|
|
Interest and other
income, net |
1,612,974 |
|
|
1,257,257 |
|
|
305,071 |
|
Change in fair value of
common stock warrants |
806,819 |
|
|
127,554 |
|
|
177,561 |
|
Gain (loss) on
investment in affiliated entity |
(6,982,664 |
) |
|
1,110,787 |
|
|
2,600,467 |
|
Net loss before
income tax benefit |
(88,205,772 |
) |
|
(73,740,339 |
) |
|
(31,200,603 |
) |
Income tax benefit |
— |
|
|
— |
|
|
2,097,766 |
|
Net
loss |
(88,205,772 |
) |
|
(73,740,339 |
) |
|
(29,102,837 |
) |
Net income attributable
to non-controlling interest |
— |
|
|
— |
|
|
(84,769 |
) |
Net loss
attributable to Inovio Pharmaceuticals, Inc. |
$ |
(88,205,772 |
) |
|
$ |
(73,740,339 |
) |
|
$ |
(29,187,606 |
) |
Net loss per
common share attributable to Inovio Pharmaceuticals, Inc.
stockholders |
|
|
|
|
|
Basic |
$ |
(1.08 |
) |
|
$ |
(1.01 |
) |
|
$ |
(0.43 |
) |
Diluted |
$ |
(1.09 |
) |
|
$ |
(1.01 |
) |
|
$ |
(0.44 |
) |
Weighted
average number of common shares outstanding used in per share
calculations: |
|
|
|
|
|
Basic |
81,777,493 |
|
|
73,214,766 |
|
|
68,198,142 |
|
Diluted |
81,918,022 |
|
|
73,214,766 |
|
|
68,365,265 |
|
CONTACTS:
Investors: Ben
Matone, Inovio, 484-362-0076, ben.matone@inovio.comMedia:
Jeff Richardson, Inovio, 267-440-4211, jrichardson@inovio.com
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