Results & Analyst Call Summary

Inovio Pharmaceuticals

Conference date: November 10, 2014 @ 5:00 AM Pacific Time
for quarter ending: September 30, 2014 (Q3, third quarter 2014)

Forward-looking statements

Overview: Inovio is a development stage company with a broad pipeline of DNA-based vaccine candidates.

Basic data (GAAP):

Revenue was $1.8 million, down 53% sequentially from $3.8 million, and down 81% from $9.5 million in the year-earlier quarter.

Net income was negative $7.2 million , improved sequentially from negative $10.7 million, and well up from negative $30.9 million year-earlier.

EPS (earnings per share, diluted) was negative $0.12, improved sequentially from negative $0.19, and way up from negative $0.64 year-earlier.



Quarter Highlights:

The quarter was marked by data and new plans, mostly related to the pipeline. Most revenue is from the Roche collaboration.

Top-line, statistically significant positive results were released for the Phase II trial HPV-003 for VGX-3100 vaccine for HPV-caused cancers, showing regression in 49.5% of patients, as opposed to 30.6% of patients receiving a placebo. Detailed results will be released in a medical journal. A Phase III study could begin in early 2016. Inovio is also trying an enhanced therapies, INO-3112 and INO-3106, against other HPV-caused cancers.

The first human study for INO-1400 DNA immunotherapy targeting hTERT in solid cancers (breast, lung, and pancreas) should start before the end of 2014.

The Roche collaboration for prostate cancer will try INO-5150 in Phase I trials in combination with various other therapies including checkpoint inhibitors starting in 2015. A milestone payment will be due from Roche when the trial starts. There is a also a Roche collaboration on Hepatitis B scheduled to commence and generate a milestone payment in early 2015.

Funded in part by an NIH contract, PENNVAX-GP vaccine for HIV will start a Phase I study in the first quarter of 2015.

A Phase I trial of INO-4200 for Ebola will start likely in Q2 2015. Animal data from the vaccine had been positive.

Preclinical data showing that Inovio's DNA therapy could prevent death from C. Difficile infections was published, the work of Dr. Michele Kutzler.

DARPA awarded $12.2 million to a group including Inovio to develop DNA based monoclonal antibodies for influenza and antibiotic-resistant bacteria.

Inovio also has a variety of other vaccines in clinical or preclinical study. See the Inovio Pipeline for an overview.

R&D expense was $7.0 million. General and administrative expense was $3.2 million. Total operating expenses were $10.2 million. Inovio reported a a negative $8.3 million operating profit.

Cash and equivalents balance (including short-term investments) ended at $100.9 million, down sequentially from $108.8 million. Liability in common stock warrants $2.2 million.

During the quarter Inovio changed its listing from the New York Stock Exchange to the NASDAQ Global Select Market and was added to the Russell indexes.

Management believes cash is sufficient to operate the company through the end of 2017. Payments from Roche from have gone up, but will need to raise capital to fund the VGX-3100 program.


Magnitude of Roche milestones? We have not disclosed that, but it will be in the mid-single digit millions for both Hepatitis B and HIV, and it will likely be recognized all at once. Roche will control the data, and they do not plan to release data until Phase II is completed.

Cervical dysplasia timeline? It would be a registrational study, data would be released two to three years after the study is initiatied.

Ebola? Animal tests showed 100% protection from a single dose. We are doing primate studies and planning to do Phase I human trials. It will be INO-4200. It should be a rapid study, we are working to get it started as soon as possible.

On 3100, are you still tracking patients? We do have a week 88 time point for follow up. The current data is for week 36.

Phase III, any change in endpoints? We expect something similar, but we will meet with the FDA for the end of Phase II.

We are in discussions with multiple potential partners for the HPV vaccine. All options are on the table and depend on the finances offered. We could do Phase III on our own and then partner after results come in.

Whether we could start the Phase III trial in 2015 would depend on the FDA.

Prostate cancer vaccine, efficacy measures used? In published preclinical studies there are suitable animal models of efficacy, T-cell response, PSA and PSMA target antigens. We are working with Roche to complete the trial design. Endpoints will be multi-faceted, but the greatest interest is in survival benefit.


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Copyright 2014 William P. Meyers