On August 7, 2018 Inovio Pharmaceuticals, Inc. (NASDAQ:INO), a late-stage biotechnology company focused on the development and commercialization of DNA immunotherapies targeted against cancers and infectious diseases,reported financial results for the second quarter ended June 30, 2018, along with a general business update (Press release, Inovio, AUG 7, 2018, View Source [SID1234528502]). 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.
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Inovio Highlights
VGX-3100 – HPV-related Precancers
REVEAL 1 Phase 3 trial enrollment on track. Opened a total of 70 sites across 16 countries and are actively recruiting for REVEAL 1, Inovio’s Phase 3 clinical trial for treating cervical dysplasia (CIN) caused by the human papillomavirus (HPV); the company anticipates opening approximately 90 sites globally by the end of August 2018. Also commenced during the quarter a Phase 2 clinical trial in its third indication to evaluate the efficacy of VGX-3100 in approximately 24 patients, adult men and women, with HPV-related anal dysplasia. This expansion increases the overall commercial value potential of our lead product, VGX-3100.
INO-5401 – Cancer
Dosed first patient in June as part of its Phase 1/2 immuno-oncology trial in patients with newly diagnosed glioblastoma (GBM); open-label, multi-center trial evaluating INO-5401 and INO-9012 in combination with cemiplimab in 50 newly diagnosed GBM patients with primary endpoint of safety and tolerability; the study will also evaluate immunological impact, progression-free survival and overall survival (see www.clinicaltrials.gov, identifier NCT03491683).
INO-5150 – Cancer
Presented prostate cancer data at ASCO (Free ASCO Whitepaper) 2018 where analyses showed clinically meaningful PSA stabilization post-administration of INO-5150 in patients with no documented disease progression during the study; of the 61 evaluable patients, 77% (47/61) demonstrated T cell immunogenicity; additional immunology data past week 27 is expected to be presented at a major oncology conference in the third quarter of 2018.
PENNVAX-GP – HIV
Presented data in May from a Phase 1 clinical trial in which Inovio’s HIV vaccine maintained durable and robust immune responses at month 12, a full 6 months after the last dose; 96% (26 of 27) of participants receiving PENNVAX-GP and IL-12 via IM delivery demonstrated a CD4+ T cell response, while the same percentage (96%, 27 of 28) of participants receiving the vaccine formulation via ID delivery also displayed anti-HIV CD4+ T cell responses; this data was presented at the 2018 HVTN Full Group Meeting in May.
INO-4700 (GLS-5300) – MERS
Reported positive Phase 1 results of Inovio’s collaborative vaccine study with INO-4700 (GLS-5300) against the MERS virus (Middle East Respiratory Syndrome); results showed that the vaccine was well-tolerated and approximately 95% of treated patients achieved overall high levels of antibody responses and approximately 90% of subjects also generated robust T cell responses. The new data was presented in June at the WHO-IVI Joint Symposium for MERS-CoV Vaccine Development.
Established partnership with CEPI
Signed a partnership agreement with the Coalition for Epidemic Preparedness Innovations (CEPI) under which CEPI will directly fund up to $56 million to support Inovio’s pre-clinical and clinical advancement through Phase 2 of INO-4500, its Lassa fever vaccine, and INO-4700, its MERS vaccine, over a five-year period. Additional revenue is possible with vaccine stockpile post-Phase 2 testing.
Recognized revenue from ApolloBio Partnership
Received an upfront payment of $23 million (approximately $19.4 million after payment of required taxes) in March 2018 from ApolloBio, which gained the rights to develop, manufacture and commercialize VGX-3100 to treat precancers caused by HPV, within Greater China. This amount was recognized in Inovio’s reported revenue for the second quarter of 2018.
Cash Position
As of June 30, 2018, cash and cash equivalents and short-term investments were $95.6 million compared to $112.8 million as of March 31, 2018.
Dr. J. Joseph Kim, Inovio’s President & CEO said, "The second quarter included important strategic accomplishments for Inovio, while also providing shareholders with much to look forward to over the next 12 months. From presenting expanded data from our HIV developmental vaccine, PENNVAX-GP, to dosing our first patient with INO-5401 in our GBM trial, Inovio continues to showcase the versatility of our technology in both immunotherapy and infectious diseases. We continue to work diligently with our newly established partners ApolloBio, CEPI and the Parker Institute, while maintaining focus on opening sites and enrolling patients globally for our lead asset, VGX-3100, for treating patients with cervical dysplasia as well as capturing the overall commercial value potential of VGX-3100 through the expansion of our immunotherapeutic solution capabilities in HPV-related vulvar and anal precancers."
Second Quarter 2018 Financial Results
Total revenue was $24.4 million for the three months ended June 30, 2018, compared to $20.4 million for the same period in 2017. Total operating expenses were $29.7 million compared to $30.0 million for the same period in 2017.
As a result of the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers, beginning on January 1, 2018, all contributions received from current grant agreements have been recorded as a contra-expense as opposed to revenue on the consolidated statement of operations. For the three months ended June 30, 2018, $1.9 million was recorded as contra-research and development expense, which amount would have been classified as grant revenue in the prior year. Had this change in presentation not occurred, total revenue would have been $26.3 million for the three months ended June 30, 2018, compared to $20.4 million for the same period in 2017. Total operating expenses would have been $31.6 million compared to $30.0 million for the same period in 2017.
Inovio’s net loss for the quarter ended June 30, 2018 was $6.6 million, or $0.07 per basic and $0.08 per diluted share, compared to $9.5 million, or $0.13 per basic and diluted share, for the quarter ended June 30, 2017.
Revenue
The increase in comparable revenue and grant agreement recognition for the second quarter of 2018 compared to 2017 was primarily due to the recognition of the gross up-front payment from ApolloBio of $23.0 million during the period (approximately $19.4 million after payment of required taxes). This increase was partially offset by $12.8 million in lower revenues recognized under Inovio’s collaborative research and development agreement with MedImmune, as previously deferred revenue totaling $13.8 million in the aggregate was recognized in June 2017 upon MedImmune’s selection of the first cancer research collaboration product candidate. Inovio also had a decrease in grant funding recognized from its DARPA Ebola grant of $2.2 million and a decrease in revenue of $2.1 million under its prior collaboration with Roche, as all remaining deferred revenue was recognized upon termination of that collaboration agreement in 2017, among other variances.
Operating Expenses
Research and development (R&D) expenses for the three months ended June 30, 2018 were $22.5 million compared to $23.9 million for the same period in 2017. The decrease in R&D expenses was primarily due to the $1.9 million contra-research and development expense recorded from grant agreements as discussed above, as well as a decrease of $2.1 million in expenses related to the DARPA Ebola grant. These decreases were slightly offset by an increase in employee headcount to support clinical trials and partnerships and an increase in expenses related to Inovio’s VGX-3100 clinical trials and its collaboration with MedImmune, among other variances.
General and administrative (G&A) expenses were $7.2 million for the three months ended June 30, 2018 versus $6.2 million for the same period in 2017.
Capital Resources
As of June 30, 2018, cash and cash equivalents and short-term investments were $95.6 million compared to $112.8 million as of March 31, 2018. As of June 30, 2018, the Company had 91.5 million common shares outstanding and 102.8 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. Form 10-Q for the quarter ended June 30, 2018 providing the complete 2018 second quarter financial report can be found at: View Source
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 View Source Telephone replay will be available approximately two hours after the call at 877-481-4010 (domestic) or 919-882-2331 (international) using replay ID 33743.