Results & Analyst Call Summary

Inovio Pharmaceuticals

Conference date: November 9, 2020 @ 1:30 PM Pacific Time
for quarter ending: September 30, 2020 (Q3, third quarter)

Forward-looking statements

Overview: Still focusing too much on the Covid vaccine. Should focus on the clearer winners: HPV and glioblastoma treatments. Still waiting on the FDA for permission to launch a Phase 2/3 Covid vaccine trial.

Basic data (GAAP):

Revenue was $0.24 million, down sequentially from $0.267 million, and down from $0.9 million in the year-earlier quarter. Revenue is from research collaborations and grants.

Net income was negative $19 million, up sequentially from negative $128 million, and up from negative $23 million year-earlier.

EPS (earnings per share, diluted) was negative $0.11, up sequentially from negative $0.83, and up from negative $0.25 year-earlier.


Cash sufficient for multiple years.

Quarter Highlights:

Dr. J. Joseph Kim, Inovio's CEO said, "Inovio continues to focus on the development of our COVID-19 vaccine, INO-4800, as well as advancing our other core DNA medicine programs. We are committed to following the science on a critically important mission to safely and diligently develop medicines to address the impact of COVID-19 and other infectious diseases, as well as unmet medical needs in GBM and HPV. While the partial clinical hold for INO-4800 has resulted in delays to our originally anticipated development timeline, the company remains well-capitalized and focused as both clinical trials and manufacturing efforts continue."

Still waiting on the FDA for permission to start its Phase 2/3 trial of INO-4800 for Covid-19. In September, signed a letter of intent with Thermo Fisher Scientific to manufacture INO-4800. In Q2 Inovio released topline Phase 1 data for INO-4800. Full data will be published, is currently undergoing peer review. 100% of patients demonstrated overall immune response, 95% antibody response, 90% T cell response. Collaborating with Advaccine to advance the development of INO-4800 in China. Also, in Q4 continues the Phase 1 expanded study in the US. Also in a trial in Korea.

Abstract, "INO-5401 and INO-9012 delivered intramuscularly (IM) with electroporation (EP) in combination with cemiplimab (REGN2810) in newly diagnosed glioblastoma" was accepted as a late-breaking presentation at the 24th Annual Scientific Meeting the Society for Neuro-Oncology. The virtual presentation is scheduled for November 20. In Q2 2020 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.

The Phase 3 study of VGX-3100 in cervical dysplasia caused by HPV continued, with enrollment falling behind due to the pandemic. Enrollment of Reveal 1 completed, data to be delayed until 1H 2021. Reveal 2 enrolling as of March 2019. BLA submission still possible 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. Plans to report the data from AIN and VIN Phase 2 clinical trials in the fourth quarter of 2020. Plans to apply for Orphan Drug status.

In July received Orphan Drug designation. 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 2019 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.

Inovio plans to initiate the next clinical trial of INO-3107 targeting RRP (recurrent respiratory papillomatosis) in 2020. Surgery is the current standard of care, and RRP almost always recurs after surgery.

Inovio has no holdings, anymore, in GeneOne.

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 $338 million, down sequentially from $372 million. $50 million in debt in senior notes.

R&D expense was $26 million. General and administrative expense was $10 million. Total operating expenses were $37 million. Operating profit negative $36 million. Interest and other expense $2 million.

Q&A summary:

Pfizer news? It is great for the global vaccine field and the fight against Covid-19. It show the spike protein is the right target. 4800 is part of the collective effort to have multiple vaccines for the 7 billion people in the world. The key differentiators for 4800 are safety and tolerability; T-cell response in addition to antibodies; thermal stability; scalable manufacturing; ability to be readministered safely.

Cost of 4800 Phase 2/3 trial? Phase 2 several hundred people. Phase 3 will be case-driven. Working on an external funder. Could cost several hundred million dollars. Believes when clinical hold is lifted should be able to complete the agreement with the external funder.

Phase 1 data publication? Peer review not moving as fast as we had hoped, but hope is for publication in the coming weeks. It is not tied to the clinical hold.

Reveal 1 trial? We do not expect the pandemic to affect the statistical powering or data collection. We are more than 90% done by the end of the year. Delays vary by country and site. Very confident will not lose any patient data. Reveal 2 has been impacted more than Reveal 1.

Time for Phase 2? Dose confirmation should start right away with FDA approval. Will take a couple of months, then final dose selection.

Glioblastoma OS18 standard of care? 40 to 50% range unmethylated. Somewthat higher in methylated. Excited to prevent the OS data and median overall survival. Will also show T-cell responses.

Does the Pfizer 90% set a bar? Could it be lower given easier distribution? Complex. If it really is 90% at later time points, that would be extraordinary for any vaccine. So it is a high bar. FDA set the bar at just 50%. Also need to see durability. Efficacy is the priority, but then safety and availability.

We don't expect a problem with 4800 recruitment. If infection rates are high, that shortens the time to get full data. We do not think a small challenge study is useful or ethical.

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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