Results & Analyst Call Summary

Conference date: August 8, 2016 @ 5:30 AM Pacific Time
for quarter ending: June 30, 2016 (Q2, second quarter)

Forward-looking statements

Overview: Revenue in the quarter came from grants and collaboration as Inovio continues to move therapies towards FDA approval.

Basic data (GAAP):

Revenue was $6.2 million, down sequentially from $8.1 million, and up from $5.9 million in the year-earlier quarter.

Net income was negative $18.7 million, down sequentially from negative $8.0 million, and down from negative $6.2 million year-earlier.

EPS (earnings per share, diluted) was negative $0.26,down sequentially from negative $0.11, and down from negative $0.09 year-earlier.

Guidance:

Gave estimates of when data would be released from various trials.

Quarter Highlights:

CEO Dr. Joseph Kim detailed the overall vision of DNA vaccine technology. Plans to have 3 products either approved by the FDA or in Phase 3 by 2020. INO-3112 could be the lead product by 2020.

A pivotal Phase III study of VGX-3100 is planned for initiation in Q4 2016 by Inovio, which completed its post Phase 2 meetings with the FDA and EMA about the trial. The Phase 2 trial will have an extension for one year to further establish safety. This will treat HPV caused pre-cancers, or cervical dysplasia, that affect 500,000 new patients in the U.S. each year. Inovio has upgraded its production capacity to meet trial needs. Clinical sites are being pre-qualified internationally. Commercial scale manufacturing of the vaccine and the delivery device has begun.

Inovio completed enrollment of 22 subjects in the phase I study of our HPV-driven cancer immunotherapy, INO-3112, in head & neck cancer patients. We expect to report additional immune response and safety data in 4Q 2016.

Inovio is developing Ebola vaccines, including a dMAb (DNA-based monoclonal antibody) version. Interim INO-4212 Phase 1 data on 75 healthy volunteers showed it was safe and generated strong immune responses. The increase in revenue was largely due to the DARPA grant for this. Ebola is on the priority voucher list.

Inovio initiated a Phase 1 trial for its Zika vaccine, GLS-5700, in July. That is in partnership with GeneOne Life Science. Interim immune response and safety data may be available in Q4 2016. May also look for a larger company to partner with. Zika is on the priority voucher list.

Inovio’s phase I trial to evaluate safety and tolerability of PENNVAX®-GP, the company’s "universal" DNA vaccine for HIV completed enrollment. 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). 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)." Data should be available in the first half of 2017.

Inovio’s partner for its DNA vaccine for Middle East Respiratory Syndrome (MERS), GeneOne Life Science Inc., Phase I trial is not fully enrolled. MERS has no current treatment. Data should be reported in Q4 2016.

Ongoing studies include INO-1400 in HTERT breast, lung and pancreatic cancer has now been extended to more tumor types: head & neck squamous cell, ovarian, colorectal, gastric and esophageal cancers. Enlarging to 6 trial sites. Interim immune response data from first indications by year end. Believes it will be combined with other vaccines and checkpoint inhibitors.

A Phase 1 trial for INO-1800 for Hepatitis B is ongoing, but Roche dropped out. Believes it is a shift in Roche's focus, not on the product itself. Inovio still believes in its Hepatitis B vaccine. Interim safety data is favorable. Inovio was the lead manager of the trial and funding from Roche will fund through the end of Phase 1.

Completed enrollment of 62 subjects in the phase I study of our INO-5150 prostate cancer immunotherapy. We expect to report interim immune response and safety data in 4Q 2016.

Initiated a Phase 1 trial for INO-8000 for hepatitis C partnered with the NCI and Mayo Clinic. Will measure safety, tolerability, and immune response.

Inovio is developing a set of DNA-based vaccines that allow cells to create monoclonal antibodies (dMAb technology). During the quarter Inovio announced it has positive pre-clinical results from a dMAb vaccine for Dengue fever. Inovio's Chikungunya dMAB vaccine showed good preclinical results.

A new product, INO-5400, will be added to the pipeline in 2016, in combination with a checkpoint inhibitor, targeting an as yet unannounced type of cancer.

MedImmune continues to work towards getting its INO-3112 for cancers caused by HPV, in combination with other immunotherapy molecules, into a Phase 2 trial.

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

R&D expense was $19.6 million. General and administrative expense was $5.8 million. Gain on sale of assets of $1 million. Total operating expenses were $24.4 million. Operating profit negative $18.2 million. Loss on investment $0.7 million. Interest and other income $0.34 million. Loss from fair value of stock warrants $0.1 million

Cash and equivalents balance (including short-term investments) ended at $134.5 million, down sequentially from $146.7 million. Liability in common stock warrants $1.8 million. The company raised $1.3 million from sale of its common stock under an ATM.

Cash is adequate to fund all key initiatives.

Q&A:

Patient numbers VGX-3100? About 350. Endpoint similar to Phase 2. Details will be provided on launch. 3 injections will be given over the first three months.

Additional color on Roche decision? We have had interest in the program by other parties since the Roche cancellation, mostly the same as were interested before Roche picked it up. We feel very strong about the potential of INO-1800.

Discussed the idea of having 3 approved or advanced therapies by 2020, clarifying that there are more than three possibilities to advance to that stage by 2020, even including INO-5400, which is still preclinical.

INO-5400, can it be a monotherapy, or just in combination with a checkpoint inhibitor? We think the combination of an inhibitor plus our cancer vaccine is the best path. 5400 is a combination of 3 antigens. The first indication will be unveiled later this year. It might have potential as a monotherapy.

What would Phase 2 trials look like, in terms of number of patients and expense, would be like for Ebola and Zika? In Ebola the FDA is allowing animals to be used for Phase 2. We should be ready to talk to the FDA about a Phase 3 study by 2017. Our antibody responses were very strong. In Zika we are in a Phase 1 study with 40 healthy volunteers. Phase 2 Zika could be in an area where infections are prevalent. It could start by year end. We are looking for funders and partners so we can advance this rapidly; we are in discussion.

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