On November 9, 2016 Inovio Pharmaceuticals, Inc. (NASDAQ:INO) reported financial results for the quarter ended September 30, 2016 (Press release, Inovio, NOV 9, 2016, View Source [SID1234516542]). The following financial results provide a year-over-year comparison of the third quarter in 2016 and 2015. Total revenue was $12.5 million compared to $24.2 million. Total operating expenses were $32.7 million compared to $20.5 million. The net loss attributable to common stockholders was $20.8 million, or $0.28 per share for the third quarter 2016, compared to net income of $5.6 million, or $0.08 per share in the third quarter of 2015.

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Revenue

The decrease in revenue for the comparable periods was primarily due to $15.0 million of revenue recognized in the third quarter 2015 from the up-front payment received from our partnership agreement with MedImmune. Accounting recognition of the remainder of the $27.5 million upfront payment was deferred and will be triggered by future events. The net income achieved during the third quarter 2015 was attributable to the increase in revenue and may not repeat in future quarters.

Operating Expenses

Research and development expenses were $27.0 million compared to $16.1 million for the third quarter ending 2016 and 2015 respectively. The increase was primarily related to increased investment in our product development programs – notably the DARPA funded Ebola program and clinical trial preparations for the initiation of the VGX-3100 phase III study. General and administrative expenses were $5.8 million compared to $4.4 million.

Capital Resources

As of September 30, 2016, cash and cash equivalents and short-term investments were $119.7 million compared with $163.0 million as of December 31, 2015. There were 74.0 million shares outstanding and 81.8 million fully diluted.

During the three months ended September 30, 2016, the Company sold 448,848 shares of common stock under its ATM common stock sales agreement for net proceeds of $4.2 million, with an average price of $9.45 per share.

Inovio’s balance sheet and statement of operations are provided below. Form 10-Q providing the complete 2016 Third quarter financial report can be found at: View Source

Corporate Update

Clinical Development

The U.S. Food and Drug Administration (FDA) requested additional information regarding Inovio’s submission for its proposed phase III clinical program for VGX-3100, placing the program on clinical hold. The study had not yet been initiated and has not enrolled or dosed subjects. In its initial communication the FDA requested additional data to support Inovio’s shelf-life claim for the single-use disposable array of the newly designed and manufactured CELLECTRA 5PSP immunotherapy delivery device. Inovio expects to receive a formal letter in November, which may request other information, and estimates the start of the phase III clinical program will be delayed until the first half of 2017, pending resolution of the FDA’s request. This clinical hold does not affect other Inovio clinical programs.
Initiated a phase I Zika DNA vaccine trial in Puerto Rico to test for safety, immune responses and initial evidence of efficacy. The placebo-controlled double-blind trial will assess differences in Zika infection rates in 160 healthy participants given either placebo or vaccine as part of an exploratory endpoint. This is the second human Zika vaccine trial initiated by Inovio. All 40 subjects for the first clinical study have been fully enrolled and dosed.
Expanded phase I Ebola vaccine trial by fully enrolling an additional 125 subjects in a second stage after generating positive initial safety and immune response data in the first set of 75 healthy volunteers. The study will assess immune response characteristics generated with fewer intradermal administrations, lower doses, and with and without its DNA-based IL-12 immune activator.
Corporate Development

Inovio incorporated a 100%-owned subsidiary, GENEOS Therapeutics, Inc., to develop and commercialize neo-antigen based personalized cancer therapies. While Inovio pursues the unique potential of its SynCon immunotherapy design to break tolerance and create cancer products targeting universal tumor specific antigens, GENEOS will exclusively focus on leveraging Inovio’s potent DNA immunotherapy technology platform to advance the emerging field of patient-specific neo-antigen therapies. Inovio’s clinically validated DNA based platform is well suited for advancing individualized therapies due to its rapid product design and manufacturing benefits, ability to combine multiple neo-antigens into formulations, and generation of potent killer T cell responses that are needed to drive clinical efficacy. GENEOS plans to independently raise capital and build a team to execute this complementary business model. Inovio will continue its focus on advancing its universal antigen-specific cancer immunotherapy portfolio, including INO-3112 (with Medimmune), INO-5150, INO-1400, and INO-5401, as well as its pre-cancer (VGX-3100) and infectious disease products.
Licensed a veterinary vaccine for foot and mouth disease (FMD) to Plumbline Life Sciences, an animal health company headquartered in South Korea. Plumbline will fund all development activities for this FMD vaccine and pay Inovio milestone payments as well as royalties on potential product sales.
Inovio expanded its leadership team with the appointment of multiple individuals to lead the functions of business development, biologic and device manufacturing, regulatory, and oncology clinical development.