Inovio Pharmaceuticals Reports 2016 Third Quarter Financial Results
November 09 2016 - 07:30AM
Inovio Pharmaceuticals, Inc. (NASDAQ:INO) today reported financial
results for the quarter ended September 30, 2016. 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.
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:
http://ir.inovio.com/secfilings.
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.
About Inovio Pharmaceuticals,
Inc.
Inovio is taking immunotherapy to the next level
in the fight against cancer and infectious diseases. We are the
only immunotherapy company that has reported generating T cells in
vivo in high quantity that are fully functional and whose killing
capacity correlates with relevant clinical outcomes with a
favorable safety profile. With an expanding portfolio of immune
therapies, the company is advancing a growing preclinical and
clinical stage product pipeline. Partners and collaborators include
MedImmune, The Wistar Institute, University of Pennsylvania, DARPA,
GeneOne Life Science, Plumbline Life Sciences, Drexel University,
NIH, HIV Vaccines Trial Network, National Cancer Institute, U.S.
Military HIV Research Program, and Laval University. For more
information, visit www.inovio.com.
This press release contains certain
forward-looking statements relating to our business, including our
plans to develop electroporation-based drug and gene delivery
technologies and DNA vaccines, our expectations regarding our
research and development programs and our capital resources. Actual
events or results may differ from the expectations set forth herein
as a result of a number of factors, including uncertainties
inherent in pre-clinical studies, clinical trials and product
development programs, including our ability to obtain a release of
the clinical hold from the FDA for the proposed phase III clinical
program for VGX-3100, the availability of funding to support
continuing research and studies in an effort to prove safety and
efficacy of electroporation technology as a delivery mechanism or
develop viable DNA vaccines, our ability to support our broad
pipeline of SynCon® active immunotherapy and vaccine products, our
ability to advance our portfolio of immuno-oncology products
independently, the ability of our collaborators to attain
development and commercial milestones for products we license and
product sales that will enable us to receive future payments and
royalties, the adequacy of our capital resources, the availability
or potential availability of alternative therapies or treatments
for the conditions targeted by the company or its collaborators,
including alternatives that may be more efficacious or cost
effective than any therapy or treatment that the company and its
collaborators hope to develop, our ability to enter into
partnerships in conjunction with our research and development
programs, evaluation of potential opportunities, issues involving
product liability, issues involving patents and whether they or
licenses to them will provide the company with meaningful
protection from others using the covered technologies, whether such
proprietary rights are enforceable or defensible or infringe or
allegedly infringe on rights of others or can withstand claims of
invalidity and whether the company can finance or devote other
significant resources that may be necessary to prosecute, protect
or defend them, the level of corporate expenditures, assessments of
the company's technology by potential corporate or other partners
or collaborators, capital market conditions, the impact of
government healthcare proposals and other factors set forth in our
Annual Report on Form 10-K for the year ended December 31, 2015,
our Form 10-Q for the quarter ended September 30,
2016, and other regulatory filings from time to time. There
can be no assurance that any product in Inovio's pipeline will be
successfully developed or manufactured, that final results of
clinical studies will be supportive of regulatory approvals
required to market licensed products, or that any of the
forward-looking information provided herein will be proven
accurate.
Inovio Pharmaceuticals,
Inc.CONSOLIDATED BALANCE SHEETS
|
September 30, 2016 |
|
December 31, 2015 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and cash
equivalents |
$ |
23,250,762 |
|
|
$ |
57,632,693 |
|
Short-term
investments |
96,435,585 |
|
|
105,357,277 |
|
Accounts receivable |
17,455,108 |
|
|
7,333,059 |
|
Prepaid expenses and other
current assets |
1,391,252 |
|
|
917,257 |
|
Prepaid expenses and other
current assets from affiliated entity |
1,697,213 |
|
|
610,652 |
|
Total current
assets |
140,229,920 |
|
|
171,850,938 |
|
Fixed assets, net |
8,990,714 |
|
|
7,306,695 |
|
Investment in affiliated
entity- GeneOne |
20,758,587 |
|
|
14,941,277 |
|
Investment in affiliated
entity - PLS |
4,537,761 |
|
|
5,045,915 |
|
Intangible assets,
net |
8,036,874 |
|
|
3,905,860 |
|
Goodwill |
10,513,371 |
|
|
10,113,371 |
|
Other assets |
1,482,066 |
|
|
676,803 |
|
Total
assets |
$ |
194,549,293 |
|
|
$ |
213,840,859 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable and
accrued expenses |
$ |
16,183,976 |
|
|
$ |
13,064,899 |
|
Accounts payable and
accrued expenses due to affiliated entity |
493,420 |
|
|
165,047 |
|
Accrued clinical trial
expenses |
7,216,266 |
|
|
2,600,483 |
|
Common stock warrants |
1,812,502 |
|
|
1,301,138 |
|
Deferred revenue |
14,829,634 |
|
|
13,449,768 |
|
Deferred revenue from
affiliated entity |
438,542 |
|
|
504,442 |
|
Deferred rent |
400,200 |
|
|
380,629 |
|
Total current
liabilities |
41,374,540 |
|
|
31,466,406 |
|
Deferred revenue, net of
current portion |
365,687 |
|
|
103,074 |
|
Deferred revenue from
affiliated entity, net of current portion |
180,444 |
|
|
677,371 |
|
Deferred rent, net of
current portion |
5,474,834 |
|
|
5,485,313 |
|
Deferred tax
liabilities |
175,642 |
|
|
175,642 |
|
Total
liabilities |
47,571,147 |
|
|
37,907,806 |
|
Inovio
Pharmaceuticals, Inc. stockholders’ equity: |
|
|
|
Common stock |
73,967 |
|
|
72,218 |
|
Additional paid-in
capital |
552,753,321 |
|
|
534,004,564 |
|
Accumulated deficit |
(408,604,765 |
) |
|
(361,097,896 |
) |
Accumulated other
comprehensive income |
2,659,354 |
|
|
2,708,339 |
|
Total Inovio
Pharmaceuticals, Inc. stockholders’ equity |
146,881,877 |
|
|
175,687,225 |
|
Non-controlling
interest |
96,269 |
|
|
245,828 |
|
Total stockholders’
equity |
146,978,146 |
|
|
175,933,053 |
|
Total liabilities
and stockholders’ equity |
$ |
194,549,293 |
|
|
$ |
213,840,859 |
|
|
|
|
|
|
|
|
|
Inovio Pharmaceuticals, Inc.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
Revenues: |
|
|
|
|
|
|
|
Revenue under
collaborative research and development arrangements |
$ |
2,327,316 |
|
|
$ |
16,475,083 |
|
|
$ |
6,014,161 |
|
|
$ |
25,055,890 |
|
Revenue under
collaborative research and development arrangements with affiliated
entity |
574,596 |
|
|
125,000 |
|
|
1,211,316 |
|
|
404,167 |
|
Grants and miscellaneous
revenue |
9,410,648 |
|
|
7,583,151 |
|
|
19,401,029 |
|
|
9,176,492 |
|
Grants and miscellaneous
revenue from affiliated entity |
227,903 |
|
|
— |
|
|
227,903 |
|
|
— |
|
Total
revenues |
12,540,463 |
|
|
24,183,234 |
|
|
26,854,409 |
|
|
34,636,549 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Research and
development |
26,980,343 |
|
|
16,075,201 |
|
|
64,800,304 |
|
|
42,190,032 |
|
General and
administrative |
5,755,603 |
|
|
4,377,616 |
|
|
16,926,746 |
|
|
13,203,804 |
|
Gain on sale of
assets |
— |
|
|
— |
|
|
(1,000,000 |
) |
|
(1,000,000 |
) |
Total operating
expenses |
32,735,946 |
|
|
20,452,817 |
|
|
80,727,050 |
|
|
54,393,836 |
|
Income (Loss) from
operations |
(20,195,483 |
) |
|
3,730,417 |
|
|
(53,872,641 |
) |
|
(19,757,287 |
) |
Other income
(expense): |
|
|
|
|
|
|
|
Interest and other income,
net |
391,596 |
|
|
214,982 |
|
|
1,065,797 |
|
|
499,590 |
|
Change in fair value of
common stock warrants, net |
2,690 |
|
|
518,877 |
|
|
(517,334 |
) |
|
467,877 |
|
Gain (loss) on investment
in affiliated entity |
(958,141 |
) |
|
(659,054 |
) |
|
5,817,309 |
|
|
5,849,782 |
|
Net income (loss)
before income tax benefit |
(20,759,338 |
) |
|
3,805,222 |
|
|
(47,506,869 |
) |
|
(12,940,038 |
) |
Income tax benefit |
— |
|
|
1,789,246 |
|
|
— |
|
|
1,789,246 |
|
Net income
(loss) |
(20,759,338 |
) |
|
5,594,468 |
|
|
(47,506,869 |
) |
|
(11,150,792 |
) |
Net (income) loss
attributable to non-controlling interest |
— |
|
|
— |
|
|
— |
|
|
(84,769 |
) |
Net income (loss)
attributable to Inovio Pharmaceuticals, Inc. |
$ |
(20,759,338 |
) |
|
$ |
5,594,468 |
|
|
$ |
(47,506,869 |
) |
|
$ |
(11,235,561 |
) |
Net income
(loss) per common share attributable to Inovio Pharmaceuticals,
Inc. stockholders: |
|
|
|
|
|
|
|
Basic |
$ |
(0.28 |
) |
|
$ |
0.08 |
|
|
$ |
(0.65 |
) |
|
$ |
(0.17 |
) |
Diluted |
$ |
(0.28 |
) |
|
$ |
0.07 |
|
|
$ |
(0.65 |
) |
|
$ |
(0.18 |
) |
Weighted
average number of common shares outstanding used in per share
calculations: |
|
|
|
|
|
|
|
Basic |
73,602,834 |
|
|
72,029,644 |
|
|
72,932,199 |
|
|
66,846,481 |
|
Diluted |
73,789,008 |
|
|
73,961,237 |
|
|
72,932,199 |
|
|
67,018,961 |
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTACTS:
Investors: Bernie Hertel, Inovio Pharmaceuticals, 858-410-3101, bhertel@inovio.com
Media: Jeff Richardson, Inovio Pharmaceuticals, 267-440-4211, jrichardson@inovio.com
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