Inovio Pharmaceuticals, Inc. (NYSE MKT: INO) today reported financial results for the quarter ended March 31, 2014.
Total revenue was $2.4 million for the three months ended March 31, 2014, compared to $1.5 million for the same period in 2013. Total operating expenses were $12.4 million compared to $8.1 million.
The loss from operations prior to other income (expenses) for the quarter ended March 31, 2014, was $10.0 million, or $0.05 per share, as compared with $6.6 million, or $0.04 per share for the quarter ended March 31, 2013.
The net loss attributable to common stockholders for the quarter ended March 31, 2014, was $10.8 million, or $0.05 per share as compared with a net loss attributable to common stockholders of $8.8 million, or $0.06 per share for the quarter ended March 31, 2013.
The $2.0 million increase in net loss attributable to common stockholders for the quarter ended March 31, 2014, compared with the same period in 2013 resulted primarily from an increase in non-cash stock-based compensation.
Revenue
The increase in revenue for the three-month period was primarily due to $1.4 million of revenue recognized from our agreement with Roche. This revenue from Roche primarily consisted of development fees paid for work conducted by Inovio in Q1.
Operating Expenses
Research and development expenses for Q1 2014 were $8.2 million compared to $5.1 million for Q1 2013. General and administrative expenses were $4.1 million versus $3.0 million, respectively.
Capital Resources
As of March 31, 2014, cash and cash equivalents plus short-term investments were $116.8 million compared with $52.6 million as of December 31, 2013.
On March 4, 2014, the Company closed an underwritten public offering of 21,810,900 shares of the Company's common stock, including 2,844,900 shares of common stock issued pursuant to the underwriter's exercise of its overallotment option, at a price of $2.90 per share. The gross proceeds of this offering were approximately $63.3 million. Net proceeds to the Company, after deducting the underwriter's discounts and commission and other estimated offering expenses payable by the Company, were approximately $59.2 million.
During the three months ended March 31, 2014, warrants and stock options to purchase 8,030,622 shares of common stock were exercised for total proceeds to the Company of $10.7 million.
As of March 31, 2014, the company had 240.1 million shares outstanding and 265.6 million fully diluted.
Based on management's projections and analysis, the Company believes that cash, cash equivalents and short-term investments are sufficient to meet its planned working capital requirements through the end of 2017.
Corporate Update
Corporate Development
Inovio appointed key individuals to newly created management roles in R&D, clinical development and clinical operations, as well as quality assurance. This expansion of the management team will enhance the Company's ability to manage its growing clinical and preclinical pipeline, appropriately fulfill its commitments in its partnership with Roche, and ensure adherence to the numerous regulatory standards under which the Company operates.
Inovio was recognized at the World Vaccine Congress with Vaccine Industry Excellence (ViE) Awards for "Best Therapeutic Vaccine" for its VGX-3100 HPV immunotherapy, "Best Licensing Deal" for its $400 million partnership with Roche for Inovio's prostate cancer and hepatitis B immunotherapies, and "Best Early Stage Vaccine Biotech" for its ability to raise funds and build its broad pipeline of DNA-based immunotherapies and vaccines.
Inovio continues to work toward partnerships with other large pharmaceutical companies interested in Inovio SynCon® immunotherapy and vaccine products.
Clinical Development
In Q3 2013 Inovio completed enrollment and treatment of patients in its double-blinded, placebo-controlled, randomized phase II clinical study (HPV-003). This study is for VGX-3100, our SynCon® immunotherapy against HPV-caused pre-cancers and cancers delivered with our CELLECTRA® electroporation device. We are approaching the primary endpoint, which is nine months from the first vaccination, when data will be unblinded and analyzed. We are on track to report data in mid-2014.
VGX-3100 previously achieved best-in-class T-cell immune responses that generated a strong killing effect against cells targeted by this therapeutic vaccine, as published in Science-Translational Medicine. In this phase II study we are assessing efficacy, HPV infection status, immunogenicity, and safety.
With respect to efficacy, we are measuring regression of disease from late stage cervical pre-cancer (CIN 2/3) to early stage pre-cancer (CIN 1) or elimination of disease. The study is 80% powered to achieve a 27% greater response rate of vaccinated subjects achieving this disease regression versus those treated with placebo plus electroporation. Using 25% as an estimated response rate for natural regression in the placebo group, we are aiming for a response rate in vaccinated subjects of 52% or better. We are also measuring pre- and post-vaccination levels of HPV to assess the impact of the immunotherapy on this cancer-causing virus.
Equally important, we will be comprehensively characterizing immune responses in treated patients. Strong T cell immune response characteristics from this large controlled study will help define the potential of Inovio's active immunotherapy products as stand-alone therapies and their important potential to be used in combination with complementary technologies such as immune activators and checkpoint inhibitors to further enhance potency against cancers and infectious diseases.
Inovio has been advancing preparatory activities for a potential phase III study of VGX-3100. In addition, in Q2 the Company expects to initiate two separate phase I/IIa studies of VGX-3100 against HPV-caused cervical cancer and head and neck cancer. Both of these studies will incorporate an immune activator, DNA-based IL-12, which has been shown to increase antigen-specific T cell generation relating to a targeted disease. This combination is designated INO-3112.
In partnership with Roche, we intend to launch our prostate cancer immunotherapy (INO-5150) phase I in Q3. Preclinical results indicated that this therapeutic vaccine induced potent antibody and T-cell responses in animal models, initial evidence that our concept for a DNA vaccine comprising a broader set of antigens delivered with our CELLECTRA® device may improve the breadth and effectiveness of a prostate cancer immunotherapy. This launch will trigger the first milestone payment from Roche.
Inovio expects to start a phase I study for its global, multi-clade PENNVAX®-GP, its lead preventive and therapeutic HIV DNA vaccine candidate, in the fourth quarter of 2014. Phase I data from Inovio's PENNVAX®-B preventive HIV DNA vaccine (targeting only clade B viruses) in non-infected subjects, published in the Journal of Infectious Diseases, showed best-in-class T-cell responses. Delivery with our CELLECTRA® device achieved a seven-fold increase (7% to 52%) in the response rate of subjects with robust CD8+ killer T-cells compared to delivery without CELLECTRA®. A paper is being prepared for submission to a peer-reviewed scientific journal of immune response data from a separate study in HIV-infected patients.
Inovio also plans to initiate an exploratory human study for breast, lung and pancreatic cancers in the second half of 2014 for INO-1400, its hTERT DNA immunotherapy. Since hTERT is over-expressed in 85% of cancers, this antigen has potential as the basis of a "universal" cancer therapeutic. In an animal study, INO-1400 generated robust and broad immune responses that were 18-fold higher than the previous best results of a peer's hTERT therapeutic vaccine, broke the immune system's tolerance to its self-antigens, induced T-cells with a tumor-killing function, and increased the rate of survival when delivered with Inovio's CELLECTRA® device.
Preclinical Development
Inovio continues to expand its cancer immunotherapy pipeline as its primary product focus. By year end 2014, we aim to have SynCon® constructs designed for a priority set of cancer-associated antigens that we believe are the most promising targets in the battle against cancer. These patented antigen products will in aggregate encompass a variety of different cancer types and provide Inovio with a rich cancer product portfolio to be internally developed or partnered, potentially in combination with checkpoint inhibitors or other complementary technologies.
In Q1 we also announced that a new DNA-based cytokine immune activator, interleukin -33 (IL-33), achieved a more rapid and complete regression of established tumors in the mouse model when added to a DNA immunotherapy. In previous studies the HPV 16 DNA immunotherapy alone did prevent tumor growth and delay progression or cure mice of tumors. Both agents were delivered using Inovio's CELLECTRA® device. Notably, IL-33 significantly increased the magnitude of vaccine-specific CD8 T cell responses. The results were published in a paper, "Alarmin IL-33 acts as potent immunoadjuvant enhancing antigen-specific cell-mediated immunity and inducing potent anti-tumor immunity," in Cancer Research.
Inovio is developing an expanding portfolio of patent-protected cytokine and chemokine immune activators to form combination therapies with its DNA vaccines and immunotherapies with the goal of achieving the greatest possible efficacy against targeted diseases.
Golgi apparatus plays crucial role in enhancing T-cell function against cancer