Inovio Pharmaceuticals Reports 2018 First Quarter Financial Results

09-05-2018

PLYMOUTH MEETING, Pa., May 09, 2018 (GLOBE NEWSWIRE) -- Inovio Pharmaceuticals, Inc. (NASDAQ:INO), a late-stage biotechnology company focused on the discovery, development, and commercialization of DNA immunotherapies targeted against cancers and infectious diseases, today reported financial results for the first quarter ended March 31, 2018, along with a general business update.

Inovio Highlights

  • VGX-3100. A total of 60 sites globally are open and recruiting for REVEAL 1 (Phase 3 clinical trial for treating cervical dysplasia (CIN) caused by human papillomavirus (HPV)); recruiting patients in Phase 2 study for treating vulvar dysplasia (VIN) and associated diseases.
  • MEDI0457 in combination with durvalumab advanced to the Phase 2 efficacy stage of the trial, triggering a milestone payment to Inovio. MedImmune is evaluating MEDI0457 in combination with durvalumab, its PD-L1 checkpoint inhibitor, in patients with recurrent/metastatic HPV-associated HNSCC in a clinical trial with an estimated total enrollment of 50 patients.
  • INO-5401. Opening sites for Phase 1/2a study to evaluate the safety, immunogenicity and preliminary clinical efficacy of INO-5401 and INO-9012 in combination with Roche/Genentech’s atezolizumab in participants with locally advanced unresectable or metastatic/recurrent urothelial carcinoma (UCa); opening sites for Phase 1/2 study to evaluate safety, immunogenicity and preliminary efficacy of INO-5401 and INO-9012 in combination with Regeneron’s cemiplimab in participants with newly-diagnosed glioblastoma (GBM).
  • INO-1800. Inovio’s treatment for hepatitis B infection is being evaluated in a Phase 1 clinical study in which it has generated virus-specific T cells with a favorable safety profile to date. Inovio continues its partnering discussions and plans to report additional data from this trial at upcoming scientific conferences and in a publication in 2018.
  • Executed collaboration and partnering agreement with ApolloBio. Inovio received an upfront payment of $23 million (approximately $19.4 million after payment of required taxes) from ApolloBio, which gained the rights to develop, manufacture and commercialize VGX-3100 to treat precancers caused by HPV, within Greater China.
  • Entered into a clinical collaboration agreement with the Parker Institute for Cancer Immunotherapy. The agreement provides that Inovio and the Parker Institute will undertake clinical evaluation of novel combination regimens within the field of immuno-oncology. Under the agreement, the Parker Institute will have responsibility for funding and clinical study execution, working in collaboration with its established network. Inovio will provide financial contributions if Inovio's product(s) studied under the collaboration reaches the initiation of a Phase 3 study.
  • Established partnership with CEPI (in April). Inovio will develop vaccine candidates against Lassa fever and Middle East Respiratory Syndrome (MERS). The Coalition for Epidemic Preparedness Innovations (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.
  • GENEOS Therapeutics, Inc. Our wholly-owned subsidiary, GENEOS Therapeutics, Inc., which is developing neoantigen-based personalized cancer therapies, plans to raise capital in 2018 to fund the development of its programs.
  • Cash Position. As of March 31, 2018, cash and cash equivalents and short-term investments were $112.8 million compared to $127.4 million as of December 31, 2017.

Dr. J. Joseph Kim, Inovio’s President & CEO said, “During the first quarter of 2018, Inovio has made significant progress in its clinical trials, while continuing to secure corporate partnerships and obtain significant non-dilutive funding. These accomplishments further validate our proprietary ASPIRE™ technology targeting cancer and emerging infectious diseases in addition to positioning us as a global leader for treating a wide spectrum of HPV-related diseases. We look forward to building on our treatment capabilities, while continuing to expand on our partnering successes from the first quarter.”            

First Quarter 2018 Financial Results

Total revenue was $1.5 million for the three months ended March 31, 2018, compared to $10.4 million for the same period in 2017. Total operating expenses were $34.3 million compared to $32.3 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 March 31, 2018, $2.2 million was recorded as contra-research and development expense which would have been classified as grant revenue in the prior year. Had this change in presentation not occurred, total revenue would have been $3.7 million for the three months ended March 31, 2018, compared to $10.4 million for the same period in 2017. Total operating expenses would have been $36.5 million compared to $32.3 million for the prior year period. 

Inovio’s net loss for the quarter ended March 31, 2018 was $32.4 million, or $0.36 per basic and diluted share, compared to $23.1 million, or $0.31 per basic and diluted share, for the quarter ended March 31, 2017. 

Revenue

The decrease in comparable revenue and grant agreement recognition for the first quarter 2018 compared to 2017 was primarily due to the prior year revenue recognized from the termination payment received from Roche during the first quarter of 2017 of $4.0 million. The decrease was also due to a decrease in grant funding recognized from our Defense Advanced Research Projects Agency (DARPA) Ebola grant of $4.7 million, partially offset by an increase in grant funding recognized from our Zika virus sub-grant of $1.2 million. 

Operating Expenses

Research and development (R&D) expenses for the three months ended March 31, 2018 were $24.6 million compared to $24.5 million for the same period in 2017. The increase in R&D expenses was primarily related to our VGX-3100 clinical trials, activities under our collaboration with MedImmune and an increase in employee headcount to support our clinical trial activities and partnerships. These increases were offset by the $2.2 million contra-research and development expense recorded from grant agreements as discussed above, as well as a decrease in expenses related to the DARPA Ebola grant as it nears completion.

General and administrative (G&A) expenses were $9.7 million for the three months ended March 31, 2018 versus $7.8 million for the same period in 2017. The increase in G&A expenses was primarily related to the Chinese taxes and advisory fees incurred in connection with the ApolloBio upfront payment we received, offset by a decrease in non-cash stock based compensation.

Capital Resources

As of March 31, 2018, cash and cash equivalents and short-term investments were $112.8 million compared to $127.4 million as of December 31, 2017. As of March 31, 2018, the Company had 90.7 million common shares outstanding and 102.3 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 providing the complete 2018 first quarter financial report can be found 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. 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 29009.

About Inovio Pharmaceuticals, Inc.

Inovio is a late-stage biotechnology company focused on the discovery, development, and commercialization of DNA immunotherapies that transform the treatment of cancer and infectious diseases. The ASPIRE (Antigen Specific Immune Responses) technology platform is designed to activate an individual’s immune system to generate a robust, targeted T cell and antibody response against targeted diseases. We are the only immunotherapy company that has reported generating T cells entirely in vivo in high quantity that are fully functional and whose killing capacity correlates with relevant clinical outcomes with a favorable safety profile. Inovio’s most advanced clinical program, VGX-3100, is in Phase 3 for the treatment of HPV-related cervical precancer. Also in development are Phase 2 immuno-oncology programs targeting head and neck cancer, bladder cancer, and glioblastoma, as well as platform development programs in hepatitis B, Zika, Ebola, MERS, and HIV. Partners and collaborators include MedImmune, Regeneron, Roche/Genentech, ApolloBio Corporation, The Wistar Institute, University of Pennsylvania, the Parker Institute for Cancer Immunotherapy, DARPA, GeneOne Life Science, Plumbline Life Sciences, 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, our plans and expectations regarding partnerships and the plans of GENEOS Therapeutics, Inc. to raise capital. 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, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 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

 
  March 31,
 2018
  December 31,
 2017
  (Unaudited)    
ASSETS      
Current assets:      
Cash and cash equivalents $ 37,508,863     $ 23,786,579  
Short-term investments 75,259,889     103,638,844  
Accounts receivable 5,147,851     6,003,205  
Accounts receivable from affiliated entities 2,242,569     486,619  
Prepaid expenses and other current assets 2,002,015     2,600,906  
Prepaid expenses and other current assets from affiliated entities 1,674,981     1,846,007  
Total current assets 123,836,168     138,362,160  
Fixed assets, net 17,486,103     18,320,176  
Investment in affiliated entity – GeneOne 10,467,711     9,069,401  
Investment in affiliated entity – PLS 3,307,192     2,325,079  
Intangible assets, net 5,605,667     6,009,729  
Goodwill 10,513,371     10,513,371  
Other assets 2,448,628     2,639,354  
Total assets $ 173,664,840     $ 187,239,270  
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable and accrued expenses $ 15,825,207     $ 23,278,798  
Accounts payable and accrued expenses due to affiliated entities 1,298,741     926,943  
Accrued clinical trial expenses 8,428,881     8,611,892  
Common stock warrants 488,636     360,795  
Deferred revenue 24,088,288     1,175,353  
Deferred revenue from affiliated entities 56,167     174,110  
Deferred rent 928,098     877,535  
Other liabilities 261,325      
Total current liabilities 51,375,343     35,405,426  
Deferred revenue, net of current portion 203,322     215,853  
Deferred rent, net of current portion 8,966,846     9,104,416  
Deferred tax liabilities 24,766     24,766  
Total liabilities 60,570,277     44,750,461  
Stockholders’ equity:      
Preferred stock      
Common stock 90,705     90,358  
Additional paid-in capital 668,844,504     665,775,504  
Accumulated deficit (555,475,779 )   (523,356,317 )
Accumulated other comprehensive loss (461,136 )   (117,005 )
Total Inovio Pharmaceuticals, Inc. stockholders’ equity 112,998,294     142,392,540  
Non-controlling interest 96,269     96,269  
Total stockholders’ equity 113,094,563     142,488,809  
Total liabilities and stockholders’ equity $ 173,664,840     $ 187,239,270  
 

Inovio Pharmaceuticals, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS

   
  Three Months Ended
March 31,
  2018
  2017
Revenues:      
Revenue under collaborative research and development arrangements $ 1,289,046     $ 4,288,586  
Revenue under collaborative research and development arrangements with affiliated entities   148,008       233,330  
Grants and miscellaneous revenue   92,590       5,240,233  
Grants and miscellaneous revenue from affiliated entity         614,036  
Total revenues   1,529,644       10,376,185  
Operating expenses:      
Research and development   24,577,751       24,542,504  
General and administrative   9,698,015       7,767,589  
Total operating expenses   34,275,766       32,310,093  
Loss from operations   (32,746,122 )     (21,933,908 )
Other income (expense):      
Interest and other income, net   312,523       340,341  
Change in fair value of common stock warrants   (127,841 )     116,477  
Gain (loss) on investment in affiliated entities   2,380,423       (1,608,817 )
Net loss before provision for income taxes   (30,181,017 )     (23,085,907 )
Provision for income taxes   (2,169,811 )      
Net loss $   (32,350,828 )   $ (23,085,907 )
Net loss per share      
  Basic $ (0.36 )   $ (0.31 )
  Diluted $ (0.36 )   $ (0.31 )
Weighted average number of common shares outstanding      
  Basic   90,451,791       74,152,609  
  Diluted   90,451,791       74,300,884  
 


CONTACTS:
Investors:          Ben Matone, Inovio, 484-362-0076, ben.matone@inovio.com
Media:              Jeff Richardson, Inovio, 267-440-4211, jrichardson@inovio.com

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