On November 09, 2015 Inovio Pharmaceuticals, Inc. (NASDAQ:INO) reported financial results for the quarter ended September 30, 2015 (Press release, Inovio, NOV 9, 2015, View Source [SID:1234508123]).
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Total revenue was $24.2 million and $34.6 million for the three and nine months ended September 30, 2015, compared to $1.8 million and $8.0 million for the same periods in 2014.
Total operating expenses were $20.5 million and $54.4 million for the three and nine months ended September 30, 2015, compared to $10.2 million and $36.5 million for the same periods in 2014.
The net income (loss) attributable to common stockholders for the three and nine months ended September 30, 2015, was $5.6 million, or $0.08 per share, and $(11.2 million), or $(0.17) per share, compared to $(7.2 million), or $(0.12) per share, and $(28.7 million), or $(0.49) per share, for the same periods in 2014.
Revenue
The increase in revenue for the comparable periods was primarily due to development payments from our DARPA Ebola grant as well as $15.0 million of revenue recognized in the third quarter 2015 from the up-front payment received from our partnership agreement with MedImmune. Accounting recognition of the remainder of the $27.5 million upfront payment has been deferred and will be triggered by future events. The net income achieved during the third quarter was attributable to the increase in revenue and may not be reflective of future quarters.
Operating Expenses
Research and development expenses for the three and nine months ended September 30, 2015, were $16.1 million and $42.2 million, compared to $7.0 million and $24.9 million for the same periods in 2014. The increase for the three and nine month periods was primarily related to increased investment in our product development programs. General and administrative expenses for the three and nine months ended September 30, 2015, were $4.4 million and $13.2 million versus $3.2 million and $11.6 million for the same periods in 2014.
Capital Resources
As of September 30, 2015, cash and short-term investments were $170.8 million compared with $93.6 million as of December 31, 2014. At quarter end the company had 72.2 million shares outstanding and 78.9 million fully diluted.
Inovio’s balance sheet and statement of operations are provided below. Form 10-Q providing the complete 2015 third quarter financial report can be found at: View Source
Corporate Update
Corporate Development
On August 7, 2015, Inovio entered into a strategic cancer vaccine collaboration and license agreement with MedImmune, the global biologics research and development arm of AstraZeneca. MedImmune acquired exclusive rights to Inovio’s INO-3112 immunotherapy, which targets cancers caused by human papillomavirus (HPV) types 16 and 18. MedImmune intends to study INO-3112 in combination with selected immunotherapy molecules within its pipeline in HPV-driven cancers. Emerging evidence suggests that the benefits from immuno-oncology molecules, such as those in MedImmune’s portfolio, can be enhanced when they are used in combination with cancer vaccines that generate tumor-specific T-cells.
MedImmune paid Inovio $27.5 million in the third quarter and will make potential future payments totaling up to $700 million upon reaching development and commercial milestones. MedImmune will fund all development costs. Inovio is entitled to receive up to double-digit tiered royalties on INO-3112 product sales.
Inovio and MedImmune will also develop two additional DNA-based cancer vaccine products not included in Inovio’s current product pipeline, which MedImmune will have the exclusive rights to develop and commercialize. Inovio will be eligible to receive development, regulatory and commercialization milestone payments and royalties on net sales for these cancer vaccines.
This is the second major pharmaceutical partnership for Inovio’s DNA-based immunotherapy technology, adding to its existing license agreement with Roche for the INO-1800 hepatitis B immunotherapy.
Inovio initiated a partnership with the European Organization for Research and Treatment of Cancer to evaluate INO-3112 in combination with traditional chemo-radiotherapy for the treatment of patients with locally advanced stage cervical cancer. The primary endpoint of this phase II study is to evaluate progression free survival at 18 months. It is expected to begin in 2016 and will be part of MedImmune’s development plans.
Inovio and collaborators are advancing multiple treatment and prevention approaches against Ebola. Inovio received an initial $20 million award from the Defense Advanced Research Projects Agency (DARPA). In September, DARPA awarded Inovio an additional $25 million for the successful completion of pre-clinical and clinical development milestones. This funding supports the development of a DNA-based vaccine, a therapeutic DNA-based monoclonal antibody treatment (dMAb), and a conventional monoclonal antibody treatment. Inovio has completed enrollment of 75 healthy subjects in a phase I study of the Ebola DNA vaccine.
Clinical Development
Inovio’s manuscript detailing the broad study findings of its phase II study of VGX-3100 in patients with high-grade cervical dysplasia (CIN 2/3) was published in The Lancet, a top peer-reviewed medical journal. This publication describes that VGX-3100, a first-in-class product for treating high grade cervical neoplasia associated with HPV, is the first therapy to demonstrate that activated killer T cells induced in the body have the power to clear neoplastic lesions as well as the virus which caused the disease. These findings provide proof of principle not only for this disease indication but for the broad utility of Inovio’s technology across cancers and infectious diseases.
Results of the trial were reported in the article entitled, "Safety, efficacy, and immunogenicity of VGX-3100, a therapeutic synthetic DNA vaccine targeting human papillomavirus 16 and 18 E6 and E7 proteins for cervical intraepithelial neoplasia 2/3: a randomized, double-blind, placebo-controlled phase 2b trial."
Inovio continues to make preparations to launch a phase III registration study of VGX-3100 in 2016. Necessary steps include scaling to commercial-level production of its immunotherapy product and delivery devices. The company expects its end-of-phase-II meeting with the FDA, which will review Inovio’s phase II data and proposed phase III clinical trial design, to take place in early 2016.
Inovio launched a phase I study of INO-5150, its SynCon immunotherapy targeting prostate-specific membrane antigen and prostate-specific antigen, in men with biochemically relapsed prostate cancer. This study is evaluating the safety, tolerability, and immunogenicity of INO-5150 alone or in combination with Inovio’s DNA-based IL-12 immune activator. The company expects to report interim data from this study in 2016.
The first patient was dosed in Inovio’s phase I trial to evaluate safety and tolerability of PENNVAX-GP, the company’s "universal" DNA vaccine for HIV. The trial will measure immune responses following administration of the vaccine in four groups of healthy subjects receiving the vaccine with and without an immune activator (DNA IL-12) and delivered into muscle or skin using Inovio’s CELLECTRA delivery technology. This 94-patient study is being conducted by the HIV Vaccines Trial Network (HVTN) and funded by the National Institute of Allergy and Infectious Diseases (NIAID).
Inovio’s partner for its DNA vaccine for Middle East Respiratory Syndrome (MERS), GeneOne Life Science Inc., filed an Investigational New Drug Application (IND) for GLS-5300 with the United States Food and Drug Administration in October and intends to launch a clinical trial in healthy volunteers by the year end.