Results & Analyst Call Summary

Inovio Pharmaceuticals

Conference date: May 9, 2018 @ 1:30 PM Pacific Time
for quarter ending: March 31, 2018 (Q1, first quarter)

Forward-looking statements

Overview: Continues to develop vaccines for cancers and infections, led by VGS-3100 for cervical dysplasia, which is in Phase 3.

Basic data (GAAP):

Revenue was $1.5 million, down sequentially from $8.8 million, and down from $10.4 million in the year-earlier quarter.

Net income was negative $32.4 million, down sequentially from negative $21.5 million, and down from negative $23.1 million year-earlier.

EPS (earnings per share, diluted) was negative $0.36, down sequentially from negative $0.24, and down from negative $0.31 year-earlier.



Quarter Highlights:

Due to an accounting standards change, grants are no longer recorded as revenue, but as a contra-expense, resulting in the Q1 reported revenue decline. $2.2 million was moved to contra-revenue in Q1.

On March 14 the Phase 1 trial for INO-1800 for Hepatitis B reported positive top-line results. Will report full results at a science conference. Could be a crucial component of a combination therapy. In discussions with potential partners.

The Phase 3 study of VGX-3100 in cervical dysplasia caused by HPV continued. Data should be available in 2020. Inovio has a collaboration and license agreement providing ApolloBio Corporation with the exclusive right to develop and commercialize VGX-3100 within Greater China. Received a $23 million upfront payment after receiving approval by ApolloBio shareholders & Chinese regulators. A Phase 2 study of VGX-3100 for HPV related vulvar neoplasia (VIN) continued. An anal dysplasia Phase 2 started.

MedImmune MEDI0457 (was INO-3112) combined with durvalumab, a PD-L1 inhibitor, for HPV-associated head and neck squamous cell carcinoma advanced to Phase 2, triggering a milestone payment. Also expanding to test for other HPV-associated cancers.

MedImmune has also selected an Inovio product to treat a specific cancer, with a milestone payment expect in 2H 2018.

Inovio has a subsidiary, Geneos Therapeutics, to develop cancer therapies based on personalized neo-antigens. Geneos plans a capital raise in 2018.

Regeneron and Inovio started a Phase 1/2 combination therapy study for glioblastoma in November 2017. It combines INO-5401, INO-9012, and Regeneron's REGN2810, a PD-1 inhibitor. Inovio is funding the study.

INO-5401 with Tecentriq (Roche/Genentech) started a Phase 1b/2 trial for advanced bladder cancer, or urothelial carcinoma in October. Patients may have failed prior checkpoint inhibitors.

INO-5150 interim Phase 1b data showed activity and a dampened rise of PSA in recurrent prostate cancer. Should have updated data at ASCO. Plans to partner to advance.

dMAb PSMA construct shrank prostate tumors in a preclinical study. dMAb antibiotic construct protected mice from lethal doses of pseudomonas.

Inovio is developing Ebola vaccines, including a dMAb (DNA-based monoclonal antibody) version.

Inovio initiated a Phase 1 trial for its Zika vaccine, GLS-5700, in July 2017. Should complete study in Q3 with data in Q4.

Inovio’s phase I trial to evaluate safety and tolerability of PENNVAX®-GP, the company’s "universal" DNA vaccine for HIV had positive results.

Inovio’s partner for its DNA vaccine (GLS-5300) for Middle East Respiratory Syndrome (MERS), GeneOne Life Science Inc., Phase I/2 trial started in Korea. MERS has no current treatment.

CEPI (Coalition for Epidemic Preparedness Innovations) will provide up to $56 million to support development of INO-4500 for Lassa fever and INO-4700 for MERS.

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 5 trial sites with 54 subjects. The final readout will be in 2018, but could start later stage studies based on earlier cohort data. Believes it will be combined with other vaccines and checkpoint inhibitors.

Completed enrollment of 62 subjects in the phase I study of our INO-5150 prostate cancer immunotherapy.

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

Cash and equivalents balance (including short-term investments) ended at $112.8 million, down sequentially from $127.4 million. Received the net Apollo Bio cash, but did not report as revenue.

R&D expense was $24.6 million. General and administrative expense was $9.7 million. Total operating expenses were $34.3 million. Operating profit negative $32.7 million. Interest and other income $0.3 million. Loss in change in value of stock warrants was $0.1 million. Gain on investment in an affiliated entity was $2.4 million.

Headcount increased in Q1.


ASCO 5150 presentations? 2 posters along with MedImmune. First shows safety and immune response. Second is Phase 2 trial design. Third is 5150 data. There is an embargo until ASCO, we will talk about it afterward.

Geneos details? Personalized medicine. Our platform may one of the few that can address that model. In process of raising separate investor capital. Expects to close the series A funding in 2018.

Phase 2 anal neoplasia trial design, endpoint at 36 weeks? It is an open-label trial we can track in real time. We will have an early look analysis. So early data in 2019. It is a high unmet medical need, especially since surgery has to be repeated more often than not. KOLs are very interested in this trial.

We are hoping China will contribute sites to our Phase 3 study, but we do not want to slow down, they can be independent. We are working closely with Apollo Bio.

Bladder and brain cancer, plans if trial success? We could partner those indications. It depends on the data. INO-5401 would only be effective against GBM and bladder if it is also effective against other cancer types. Studies positioned to give us upsides and possibilities.

VGX-3100 as a combination therapy? We see this as a monotherapy that helps patients avoid surgery.

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Copyright 2018 William P. Meyers