On August 10, 2015 Inovio Pharmaceuticals, Inc. (NASDAQ:INO) reported financial results for the quarter ended June 30, 2015 (Press release, Inovio, AUG 10, 2015, View Source [SID:1234507149]).
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Total revenue was $5.3 million and $10.5 million for the three and six months ended June 30, 2015, compared to $3.8 million and $6.2 million for the same periods in 2014.
Total operating expenses were $20.4 million and $33.9 million for the three and six months ended June 30, 2015, compared to $14.0 million and $26.3 million for the same periods in 2014.
The net loss attributable to common stockholders for the three and six months ended June 30, 2015, was $6.2 million, or $0.09 per share, and $16.8 million, or $0.26 per share, compared to $10.7 million, or $0.18 per share, and $21.5 million, or $0.37 per share, for the same periods in 2014.
Revenue
The increase in revenue was primarily due to the $3.0 million milestone payment earned in the second quarter 2015 under our partnership agreement with Roche.
Operating Expenses
Research and development expenses for the three and six months ended June 30, 2015, were $16.7 million and $26.1 million, compared to $9.6 million and $17.8 million for the same periods in 2014. The increase for the three and six-month periods was primarily related to increased investment in our product development programs. General and administrative expenses for the three and six months ended June 30, 2015, were $4.7 million and $8.8 million versus $4.3 million and $8.5 million for the same periods in 2014.
Capital Resources
As of June 30, 2015, cash and short-term investments were $154.6 million compared with $93.6 million as of December 31, 2014. At quarter end the company had 71.8 million shares outstanding and 78.9 million fully diluted.
On May 5, 2015, the Company closed an underwritten public offering of 10,925,000 shares of the Company’s common stock, including 1,425,000 shares of common stock issued pursuant to the underwriter’s exercise of its option, at the public offering price of $8.00 per share. The gross proceeds of this offering were $87.4 million. Net proceeds to the Company, after deducting the underwriter’s discounts and commission and other offering expenses, were $81.9 million.
We intend to use the net proceeds received from the sale of our common stock for general corporate purposes, including clinical trial expenses, research and development expenses, general and administrative expenses, manufacturing expenses and potential acquisitions of companies and technologies that complement our business.
Based on management’s projections and analysis, the Company believes that cash and short-term investments meet its planned working capital requirements through the end of 2018.
Inovio’s balance sheet and statement of operations are provided below. Form 10-Q providing the complete 2015 second quarter financial report can be found at: View Source
Corporate Update
Corporate Development
On August 7, 2015, Inovio entered into a strategic cancer vaccine collaboration and license agreement with MedImmune, the global biologics research and development arm of AstraZeneca. Under the agreement, MedImmune acquired exclusive rights to Inovio’s INO-3112 immunotherapy, which targets cancers caused by human papillomavirus (HPV) types 16 and 18. MedImmune intends to study INO-3112 in combination with selected immunotherapy molecules within its pipeline in HPV-driven cancers. Emerging evidence suggests that the benefits from immuno-oncology molecules, such as those in MedImmune’s portfolio, can be enhanced when they are used in combination with cancer vaccines that generate tumor-specific T-cells.
Under the terms of the agreement, MedImmune will make an upfront payment of $27.5 million to Inovio as well as potential future payments upon reaching development and commercial milestones totaling up to $700 million. MedImmune will fund all development costs. Inovio is entitled to receive up to double-digit tiered royalties on INO-3112 product sales.
Within the broader collaboration, Inovio and MedImmune will develop up to two additional DNA-based cancer vaccine products not included in Inovio’s current product pipeline, which MedImmune will have the exclusive rights to develop and commercialize. Inovio will receive development, regulatory and commercialization milestone payments and will be eligible to receive royalties on worldwide net sales for these additional cancer vaccine products.
This is Inovio’s second major partnership with a large pharmaceutical company, adding to its existing license agreement with Roche for Inovio’s INO-1800 hepatitis B immunotherapy. The initiation of a phase I trial for INO-1800 in April triggered a $3 million milestone payment from Roche.
We initiated a partnership with Europe’s largest cancer organization, the European Organization for Research and Treatment of Cancer (EORTC), to evaluate INO-3112 in combination with traditional chemo-radiotherapy for the treatment of patients with locally advanced stage cervical cancer. The primary endpoint of this phase II study is to evaluate progression free survival at 18 months. It is expected to begin in 2016 and will be part of MedImmune’s development plans.
Under an award worth potentially $45 million from the Defense Advanced Research Projects Agency (DARPA), Inovio and collaborators are advancing multiple treatment and prevention approaches against Ebola. These approaches include DNA-based monoclonal antibody technology, protein-based therapeutic monoclonal antibodies, and DNA-based vaccines.
We will advance our DNA vaccine for Middle East Respiratory Syndrome (MERS) into a phase I clinical trial in healthy volunteers in a collaboration with GeneOne Life Science Inc. GeneOne will conduct and fund the clinical study, expected to start by year end, in return for milestone-based co-ownership of this immunotherapy.
Inovio continues its corporate development efforts to secure grants, collaborations, and partnerships to help advance its SynCon immunotherapy and vaccine products.
Clinical Development
Our manuscript detailing the broad study findings of our phase II study of VGX-3100 in patients with high-grade cervical dysplasia (CIN 2/3) has been accepted by a top peer-reviewed medical journal.
We continue preparations to launch our planned phase III registration study of VGX-3100 in early 2016. Necessary steps include scaling from pilot-scale to commercial-level production of our immunotherapy product and delivery devices, significant projects with important quality assurance standards to maintain. We expect our end-of-phase-II meeting with the FDA, which will review our phase II data and proposed phase III clinical trial design, to take place by year end.
As part of our expanding franchise targeting all HPV-associated pre-cancers and cancers, we reported preliminary data from our first cancer study, a head & neck cancer trial, showing that INO-3112 (VGX-3100 plus Inovio’s IL-12 based immune activator) generated strong CD8+ T cell responses in 3 of 4 patients. This study, along with our ongoing cervical cancer phase I study of INO-3112, will now be part of MedImmune’s development plans.
Subsequent to the quarter we launched our phase I study of INO-5150, our SynCon immunotherapy targeting prostate-specific membrane antigen and prostate-specific antigen, in men with biochemically relapsed prostate cancer. This study is evaluating the safety, tolerability, and immunogenicity of INO-5150 alone or in combination with INO-9012, Inovio’s DNA-based IL-12 immune activator.
We initiated with our partner Roche a phase I trial for our hepatitis B immunotherapy, INO-1800. This randomized, open-label, active-controlled, dose escalation study is evaluating the safety, tolerability, and immunogenicity of Inovio’s hepatitis B immunotherapy alone or in combination with Inovio’s IL-12-based immune activator.
The company initiated a phase I trial to evaluate its Ebola immunotherapy and we expect the HIV Vaccine Trials Network to initiate a phase I study of PENNVAX-GP in 2H 2015.