Results & Analyst Call Summary

Inovio Pharmaceuticals

Conference date: March 12, 2020 @ 1:30 PM Pacific Time
for quarter ending: December 31, 2019 (Q4, fourth quarter)

Forward-looking statements

Overview: Reported strong results in a Phase 2 glioblastoma trial in collaboration with Sanofi and updated on its coronavirus vaccine program.

Basic data (GAAP):

Revenue was $0.3 million, down sequentially from $0.9 million, and down from $2.5 million in the year-earlier quarter. Revenue is from research collaborations.

Net income was negative $37.7 million, down sequentially from negative $23.1 million, and down from negative $33 million year-earlier.

EPS (earnings per share, diluted) was negative $0.38, down sequentially from negative $0.25, and down from negative $0.34 year-earlier.


Cash sufficient for multiple years.

Quarter Highlights:

Dr. J. Joseph Kim, Inovio's CEO said, "While investor attention over the past month has been on our COVID-19 vaccine development, this call allows us to reconnect investors to our core fundamentals, pipeline programs, and exciting upcoming data catalysts."

In January 2020, Inovio was awarded a grant of up to $9 million from the Coalition for Epidemic Preparedness Innovations (CEPI) to develop a vaccine against COVID-19. INO-4800 is the COVID-19 vaccine candidate in the United States. A collaboration agreement with Beijing Advaccine Biotechnology Co. to advance the development of INO-4800 in China was also announced. In March 2020, Inovio received a new $5 million grant from the Bill and Melinda Gates Foundation anticipated to fund accelerated testing and scale up the Cellectra 3PSP for the intradermal delivery of INO-4800, in order to support large scale manufacturing of INO-4800 doses by end of 2020. On January 10 Chinese researchers shared the genetic sequence of the novel coronavirus. We designed a DNA vaccine, INO-4800, in three hours, employing a proprietary algorithm. We began small scale manufacturing of hte vaccine in the second half of January and started preclinical trials, with encouraging results. The goal is to begin human clinical trials in April.

Inovio reported positive interim data from its ongoing Phase 2 trial of newly diagnosed GBM (glioblastoma multiforme), which combines Inovio's INO-5401 and INO-9012, in combination with Libtayo, a PD-1 blocking antibody produced by Regeneron Pharmaceuticals in collaboration with Sanofi (but they do not have a license for 5401). 80% (16 of 20) of MGMT gene promoter methylated patients and 75% (24 of 32) of unmethylated patients were progression-free at six months (PFS6), substantially exceeding historical standard-of-care data. The data was presented at the Society for Immunotherapy of Cancer 2019 Annual Meeting. Inovio will report 12- and 18-month overall survival data next year.

The Phase 3 study of VGX-3100 in cervical dysplasia caused by HPV continued, with enrollment on track. Enrollment of Reveal 1 completed, data to be reported Q4 2020. Reveal 2 enrolling as of March 2019. Data should be available in Q4 2020 with a BLA submission in 2021. Two phases each will enroll 198 patients. Inovio has a collaboration and license agreement providing ApolloBio Corporation with the exclusive right to develop and commercialize VGX-3100 within Greater China. A Phase 2 study of VGX-3100 for HPV related vulvar neoplasia (VIN) continued. An anal dysplasia [high-grade squamous intraepithelial lesions (HSIL)] Phase 2 continued and is cosponsored by the AIDS malignancy consortium with both HIV positive and negative patients. Data from the vulvar and anal studies will be reported later in March 2020 for ASCCP.

In February 2020, INOVIO announced the FDA accepted its Investigational New Drug application to evaluate INO-3107 in a Phase 1/2 trial for treatment of recurrent respiratory papillomatosis (RRP), a rare disease cause by PPV. Expects 63 patients in the trial, post surgery. Endpoint will be doubling time between surgical interventions. Applying for orphan disease designation.

MedImmune MEDI0457 (was INO-3112) combined with durvalumab, a PD-L1 inhibitor, for HPV-associated head and neck squamous cell carcinoma enrollment completed the Phase 2 trial early in Q3 2019. Also expanding to test for other HPV-associated cancers in a separate Phase 2 patient in Q1 2019. One head and neck patient achieved full remission. In December announced a second Phase 2 study of MEDI0457 with with durvalumab targeting a broad array of cancers associated with HPV. MedImmune has also selected MEDI0457 combined with durvalumab to treat a HPV cancer other than head and neck, with a third Phase 2 initiation milestone payment made in Q2 2019. MedImmune is a division of AstraZeneca.

HPV related cancers have spiked 44% since 1999. There were 570,000 HPV associated cervical cancer cases worldwide in 2018. Treatment unmet need is high.

Inovio plans to initiate the next clinical trial of INO-3107 targeting RRP by mid 2020. Surgery is the current standard of care, and RRP almost always recurs after surgery.

Inovio has a subsidiary, Geneos Therapeutics, to develop cancer therapies based on personalized neo-antigens. Geneos raised $10.5 million in capital in February 2019.

INO-5401 with INO-9012 is in a Phase 1/2 trial combined with Regeneron's cemiplimab for newly diagnosed glioblastoma completed enrollment. Phase 2 interim data was reported in Q4 2019. 80% of of biomarked patients were progression free at 6 months, versus 60% for historical control. Will report 12 month OS in June 2020, 18 months in Q4.

INO-5150 interim Phase 1 data showed activity and a dampened rise of PSA in recurrent prostate cancer. Data presentation was made at ESMO showed 86% of patients progression free at week 72. Plans to partner remain on track.

In February 2019, the company dosed the first subject in the first-ever human study of Inovio's DNA-encoded monoclonal antibody (dMAb) technology evaluating the dMAb's (INO-A002) ability to prevent or treat Zika virus infection. This study is being fully funded by The Bill and Melinda Gates Foundation.

Inovio Phase 1 trial for its Zika vaccine, GLS-5700, continues.

Inovio plans to initiate a Phase 2 MERS vaccine field trial in the Middle East with full CEPI funding in 2019. Reported positive Phase 1 MERS results in July 2019. A Phase 1/2 MERS study in Korea should report results in 2019.

INO-4500 vaccine for combatting Lassa fever advanced into the first human trial in Q2 2019 and enrollment is complete. Partner CEPI will fund the Phase 1b trial, enrollment to begin in 2020.

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. Believes it will be combined with other vaccines and checkpoint inhibitors.

With the Parker institute for cancer immunotherapy, started a trial in Q3 2019 with one arm combining INO-5151 with Celldex Therapeutics FLIT3 ligand (CDX-301) and Bristol-Myers CPI nivolumab (Opdivo) for metastatic castration-resistant prostate cancer.

A Phase 1 trial for INO-8000 for Hepatitis C continued, 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 ended at $89 million, down sequentially from $94 million. $61 million in debt in senior notes. In Q4 2019 raised $9.1 million with the ATM facility. In Q1 2020 $208 million was raised under the common stock ATM agreement at an average price of $4.92 per share. Cash sufficient for multiple years.

R&D expense was $22 million. General and administrative expense was $9 million. Total operating expenses were $31 million. Operating profit negative $ million. Interest and other expense $ million.

Q&A summary:

COVID 19, spike protein variability? As a family coronaviruses do not vary as much as things like flu or HIV. To date we have not seen much mutation, but some reports are coming in. We use full length antigenic proteins so we should be able to address minor gene drifts in the virus.

3100 cervical dysplasia trial timing? There could be disruption of clinical trials across the industry. So far we have seen no major impact on the ongoing trials.

Cancelled clinical meetings, presentation of data? Some conferences will be held virtually, abstracts will be published, maybe even poster sessions. Sciene will go on.

Are institutional investors part of ATM demand? Retail and institutional combination.

Corona pathway for INO4800, timeline? Still uncertainties. Working to get it into the Phase 1 trial, so far progressing towards an April start. Also planning a Phase 1 trial with partner in China that may include efficacy, and another in Korea. Once we have early safety and immunogenicity, may be able to go quickly to efficacy. We can provide up to 1 million doses by end of year, assuming the need continues and funders support.

Device funding, testing needed? Selectra 5psp is being tested in current VGX-3100 trials, working well. The 3psp is for delivering vaccines, we are scaling up and testing, the Gates funding accelerates the program. To got to tens of millions of doses we need a massively manufacturable device.

Vulvar and anal hsil are rare. So low numbers of patients in each trial. We are looking for regression of hsil and impact on viral infections.

Dosing schedule with COVID? From MERS and other studies, we know 3 shots are better than 2, and 2 are better than 1. But sometimes 1 or 2 are sufficient, at least in non-human primates. Not likely to do a 3 visit regimen for a pandemic setting. Will release protocol in another month or so.

Cash runway about 3 years? Yes.

4700 Mers data timeline? This year.

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Disclaimer: My analyst summaries may include both our condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. This is journalism, not financial advice.

Copyright 2020 William P. Meyers