Results & Analyst Call Summary

Conference date: May 11, 2015 @ 5:30 AM Pacific Time
for quarter ending: March 31, 2015 (Q1, first quarter 2015)

Forward-looking statements

Overview: Continues to make progress on developing its pipeline.

Basic data (GAAP):

Revenue was $5.2 million, up sequentially from $2.5 million, and up from $2.4 million in the year-earlier quarter.

Net income was negative $10.6 million, down sequentially from negative $7.4 million, and about flat from negative $10.8 million year-earlier.

EPS (earnings per share, diluted) was negative $0.18, down sequentially from negative $0.12, and up from negative $0.20 year-earlier.

Guidance:

None.

Quarter Highlights:

Revenue included $4.25 million collaboration revenue, $0.1 million from collaboration with an affiliated entity, and $0.8 million in grants.

The increase in revenue was mainly from partnership payments from Roche.

While it is two early to make an announcement of specifics, Inovio is testing its immunotherapies in possible combinations with complementary therapies [WPM: CPMs, see Q&A below]. It also continues to evaluate which therapies to advance with partners and which to do alone.

Inovio plans to initiate a Phase 3 trial of VGX-3100 for HPV caused cervical dysplasia in 2016.

INO-3112 (which is VGX-3100 + IL-12) generated strong T cell responses in 3 of 4 patients. The Phase1/2 study is ongoing.

INO-5150 for prostate cancer will begin a Phase 1 trial this quarter.

Roche initiated a Phase 1 trial of INO-1800 for hepatitis B, triggering a $3 million milestone payment.

In a collaboration funded by DARPA, a Phase 1 study of INO-4212 will begin this quarter.

Based on results from a 12 patient Phase 1 study of PENNVAX-B, Inovio will receive $25 million from an NIH contract a Phase 1 study of PENNVAX-GP HIV vaccine in Q2.

Ongoing studies include INO-1400 in breast, lung and pancreatic cancer and INO-8000 for hepatitis C.

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

R&D expense was $9.4 million. General and administrative expense was $4.1 million. Total operating expenses were $13.5 million. Inovio reported a a negative $8.4 million operating profit.

Cash and equivalents balance (including short-term investments) ended at $81.0 million, down sequentially from $93.6 million. Liability in common stock warrants $2.2 million. On May 5 the company raised $82.1 million by selling common stock.

Q&A:

VX-3100 trial design, timing, cost? We should finalize those details in the early fall after meeting with the FDA. But probably approximately 350 patients with one-to-one randomization and endpoints similar to our Phase 2 trial. Launch in 2016 with total study length of 2 and 1/2 years.

Head & Neck HPV data? We were pleased with the analysis of the first 4 patients. It hints we can translate the data from pre-cancer patients to cancer patients. Safety data has been excellent. After we study the T-cell data from the 20 patient pilot study we will make decisions about going forward.

Vaccine and checkpoint inhibitors? We have ongoing pre-clinical evaluation of these programs. I don't want to scoop our own publication we are planning. We are able to generate much higher immune and anti-tumor responses in animals. There are already 3 CPMs approved, with another half-dozen in line in the next few years. Our preference is to do licensed deals where we get immediate and long term financial benefits.

Type of prostate cancer patients? They would have already had chemo, surgery, or radiation, and would have rising PSA scores. The first trial would be for safety and T-cell responses, followed by one for survival.

Cervical dysplasia caused by HPV is sometimes cleared by the woman's immune system. Our vaccine improves the immune response to get a much higher level of clearing. The need for a non-surgical therapy for these pre-cancers is high. For manufacturing we have to make the Phase III product in the same facility it will be used for commercial production. We will use a a different contract manufacturer than we used for the early trials. We are also using an improved, mass-produced DNA electroporation device.

Result timeline for solid cancers? The INO 1400 study continues to enroll . 18 patients in each type of cancer. Main endpoint is safety, but we are also looking for T-cell responses. We should have some early data by year end, with full data around mid-2016.

Adaptive resistance of cancers problem? There are multiple ways Inovio can approach this. We are doing CPM studies in animals, looking for an additive effect. Since we can generate our own monoclonal antibodies we could make our own CPM using our DNA based MAB approach.

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