Inovio Pharmaceuticals, Inc. (NASDAQ:INO) today reported financial
results for the fourth quarter and year ended December 31, 2016.
Total revenue was $8.5 million and $35.4 million
for the quarter and year ended December 31, 2016, as compared to
$5.9 million and $40.6 million for the same periods in 2015.
Total operating expenses for the quarter and
year and ended December 31, 2016, were $30.9 million and $111.6
million as compared to $20.5 million and $74.9 million for the same
periods in 2015.
The net loss attributable to common stockholders
for the quarter and year ended December 31, 2016, was $26.2
million, or $0.35 per share, and $73.7 million, or $1.01 per share,
compared to a net loss attributable to common stockholders of $18.0
million or $0.25 per share, and $29.2 million, or $0.43 per share,
for the quarter and year ended December 31, 2015.
Dr. J. Joseph Kim, President and CEO, said: “In
2016 Inovio made significant progress on all three focuses of its
Vision 2020 plan, which are HPV-related precancer, immuno-oncology,
and infectious diseases, with notable data, multiple trial
completions, progressive clinical study preparations, and multiple
valuable collaborations and funding agreements. In 2017 we expect
to report immune response data from clinical studies in six
different diseases; the initiation of our phase 3 study of cervical
dysplasia and two immuno-oncology combination studies, one by
MedImmune and one by Inovio; and additional business development
steps. We look forward to a highly productive year in advancing our
unique immunotherapy platform and products.”
Revenue
The decrease in revenue for the year was
primarily due to $15.0 million of revenue recognized in 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.
Operating Expenses
Research and development expenses for the
quarter and year ended December 31, 2016, were $23.9 million and
$88.7 million as compared to $15.6 million and $57.8 million for
the same periods in 2015. 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 3 study. General and
administrative expenses for the quarter and year ended December 31,
2016, were $7.0 million and $23.9 million, compared to $4.9 million
and $18.1 million for the quarter and year ended December 31, 2015.
The increase was primarily related to employee non-cash stock-based
compensation and employee headcount.
Capital Resources
As of December 31, 2016, cash and cash
equivalents and short-term investments were $104.8 million compared
with $163.0 million as of December 31, 2015. As of December
31, 2016, the company had 74.1 million shares outstanding and 82.0
million fully diluted.
During the year ended December 31, 2016, the
Company sold 658,748 shares of common stock under its ATM common
stock sales agreement for net proceeds of $6.3 million, with an
average price of $9.75 per share.
Subsequent to year end Inovio announced a
collaboration and license agreement providing ApolloBio
Corporation (NEEQ:430187) with the exclusive right to develop
and commercialize VGX-3100 within Greater China. In this
agreement, Inovio will receive a $3 million signing fee and
a $12 million milestone upon lifting of the VGX-3100
phase 3 pre-initiation clinical hold by the FDA. ApolloBio
will also invest in Inovio common stock subsequent to lifting of
the clinical hold at a volume weighted average price encompassing a
trading period prior to and following the lifting of the clinical
hold. The aggregate investment, expected to be completed in the
first half of 2017, will not exceed $35 million and may
be a lower amount such that ApolloBio will not be the largest
shareholder in Inovio. Further details are provided under Corporate
Update, HPV-Related Precancers below.
Inovio’s balance sheet and statement of
operations are provided below. Form 10-K providing the complete
2016 annual financial report can be found at:
http://ir.inovio.com/secfilings.
Corporate Update
HPV-Related Precancers
- In 2016 Inovio completed the scaling up of immunotherapy
manufacturing to a commercial-scale facility as well as the
commercial design and manufacturing process development for its new
CELLECTRA® 5PSP electroporation delivery device. We submitted a
regulatory package to the U.S. Food and Drug Administration (FDA)
supporting our proposed initiation of our phase 3 clinical program
for VGX-3100 for HPV-related high grade cervical dysplasia.
Included in this package was an extensive submission regarding the
new device. Prior to the initiation of this study the FDA placed
this program on clinical hold and subsequently provided Inovio with
comments and questions, including a request for certain stability
data relating to the device’s single-use disposable needle array.
Inovio is generating the necessary data to prepare a comprehensive
response. We aim to begin the phase 3 clinical program in the first
half of 2017, subject to the FDA’s review of our response and
lifting of the clinical hold. This clinical hold does not affect
other Inovio clinical programs.
- Inovio is planning to launch a phase 2 clinical study in 2017
for another HPV-related disease, vulvar intraepithelial
neoplasia.
- Subsequent to year end Inovio announced it entered into a
collaboration and license agreement providing ApolloBio
Corporation with the exclusive right to develop and commercialize
VGX-3100 within Greater China (China, Hong
Kong, Macao, Taiwan). The agreement provides for
potential inclusion of the Republic of Korea three years
following the effective date. Apart from financial terms discussed
in Capital Resources above, ApolloBio will pay all clinical
development costs within the licensed territory, up to $20
million based upon the achievement of certain regulatory
milestones in the US, China and Korea, and double
digit royalties on net sales of VGX-3100. The agreements are
subject to People’s Republic of China (PRC) corporate and
regulatory approvals, and payments are subject to PRC currency
approvals. This collaboration encompasses treatment and/or
prevention of pre-cancerous HPV infections and HPV-driven
dysplasias, and excludes HPV-driven cancers and all combinations of
VGX-3100 with other immunostimulants.
Immuno-Oncology
- In the fourth quarter we reported interim data showing that
INO-3112 generated robust HPV16/18 specific CD8+ T cell responses
in peripheral blood in four of five subjects with HPV-related head
and neck cancer who also showed increased T cell activation in
resected tumor tissue samples. This data suggests the potential of
Inovio’s DNA immunotherapies to turn tumors from cold to hot – by
dramatically increasing the presence of killer T cells in the
tumor, this technology represents an ideal approach to enhance the
capabilities of checkpoint inhibitors. Inovio expects its partner,
MedImmune, which licensed INO-3112 in 2015, to initiate a phase 1/2
immuno-oncology combination clinical study including INO-3112 in 1H
2017.
- Subsequent to year end we reported data indicating that our
SynCon® WT1 cancer antigen was capable of breaking immune tolerance
– a major challenge to researchers striving to develop potent
cancer therapies -- and induced neo-antigen-like T cell responses
to cause tumor regression in pre-clinical studies. The results were
published in Molecular Therapy in an article entitled, “A novel DNA
vaccine platform enhances neo-antigen-like T-cell responses against
WT1 to break tolerance and induce anti-tumor immunity.” Inovio
previously reported such results for its SynCon hTERT and PSMA
cancer antigens. All three antigens are encoded in INO-5401,
Inovio’s new universal cancer vaccine. Inovio intends to advance
INO-5401 into a phase 1/2 study in combination with a checkpoint
inhibitor in 1H 2017.
- Completed enrollment of 62 subjects in the phase 1 study of our
INO-5150 prostate cancer immunotherapy. We expect to report interim
immune response and safety data in 2017.
Infectious Diseases
- Subsequent to year end Inovio completed enrollment of its phase
1 study of its hepatitis B DNA immunotherapy (INO-1800). Inovio is
independently advancing this program following Roche’s notice in
2016 that it will discontinue its INO-1800 collaboration with
Inovio. All of Roche's rights to INO-1800 have been
returned. Inovio expects to report preliminary immune response data
in 2H 2017. The study has completed interim safety reviews with a
favorable safety profile to date.
- Subsequent to year end we reported that in our emerging
epidemic infectious disease program our fully enrolled 75-subject
phase 1 study of our MERS DNA vaccine GLS-5300 generated high
levels of binding antibodies (ELISA) in 92% (57 of 62) of evaluated
subjects after three vaccinations (84% after two doses; 44% after
one dose). Similarly, in our fully enrolled 40-subject phase 1 Zika
study of GLS-5700, high levels of binding antibodies were measured
(ELISA) in 100% (39 of 39) of evaluated subjects after three
vaccinations; 82% (32 of 39) after two doses; 40% (16 of 40) after
one dose. Both vaccines were well tolerated with no significant
safety concerns to date. Both programs are being advanced through
collaborations between Inovio and GeneOne Life Science Inc. (KSE:
011000).
- We announced a collaboration and funding through our
collaborator, GeneOne Life Science, with the International Vaccine
Institute (IVI), which will provide technical, laboratory and
financial support for GLS-5300 (MERS) clinical trials
in Korea. This program is part of a grant provided to IVI by
the Samsung Foundation.
- Inovio and GeneOne initiated a phase 1 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.
- We expanded our phase 1 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 Inovio’s DNA-based IL-12 immune
activator.
- In 2016 we partnered with the National Cancer Institute and
Mayo Clinic to initiate a phase 1 trial of our immunotherapy for
hepatitis C (INO-8000). The dose escalation study will enroll
patients in the early stages of chronic HCV infection to determine
the therapy’s ability to decrease and potentially eliminate HCV
viral load, measure HCV specific immune responses and durability of
these immune responses, and evaluate safety and tolerability.
- Completed enrollment of 94 subjects in the phase 1 study of our
PENNVAX®-GP HIV immunotherapy. After completing extensive
immunogenicity analyses, we expect to report data in 2H 2017.
Other Developments
- Signed collaborative research agreements with the Wistar
Institute for preventive and therapeutic DNA-based
immunotherapy applications and products for cancers and infectious
diseases developed by David B. Weiner, Ph.D., board member and
chairman of the scientific advisory board, and his Wistar
laboratory. Inovio will have the exclusive right to in-license new
intellectual property developed in this collaboration.
- Inovio announced the award of a $6.1
million sub-grant through The Wistar Institute to
develop a DNA-based monoclonal antibody designed to provide a
fast-acting treatment against Zika infection. This program (a total
of $8.8 million) is funded by the Bill & Melinda Gates
Foundation.
- Inovio’s DNA-based monoclonal antibody technology will be used
to develop new immunotherapy approaches to treat HIV. This work
will be funded by a $23 million grant, called BEAT-HIV:
Delaney Collaboratory to Cure HIV-1 Infection by Combination
Immunotherapy, from the National Institutes of
Health to The Wistar Institute, an Inovio collaborator,
and more than 30 of the nation's leading HIV investigators.
- Inovio incorporated a 100%-owned subsidiary, GENEOS
Therapeutics, Inc., to develop and commercialize neo-antigen based
personalized cancer therapies. GENEOS will exclusively focus on
leveraging Inovio’s potent DNA immunotherapy technology platform to
advance the emerging field of patient-specific neo-antigen
therapies. 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.
- Received $500,000 grant from the U.S. Army’s Small
Business Innovation Research program to advance Inovio’s next
generation delivery device capable of administering vaccines via
skin-surface, needle-free electroporation.
- Inovio completed the acquisition of all of Bioject Medical
Technologies Inc.’s assets, including pioneering needle-free jet
injection technology, devices, and intellectual property, for $5.5
million in cash and stock. Our goal is to design an integrated
needle-free immunotherapy delivery and electroporation device.
- 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.
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. The company is advancing a growing
clinical and preclinical stage product pipeline. Partners and
collaborators include MedImmune, the Wistar Institute, University
of Pennsylvania, DARPA, GeneOne Life Science, Plumbline Life
Sciences, ApolloBio Corporation, Drexel University, NIH, HIV
Vaccines Trial Network, National Cancer Institute and U.S. Military
HIV Research Program. 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 3 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, 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 |
|
|
December 31, |
|
|
2016 |
|
2015 |
ASSETS |
|
|
|
|
Current
assets: |
|
|
|
|
Cash and cash
equivalents |
|
$ |
19,136,472 |
|
|
$ |
57,632,693 |
|
Short-term
investments |
|
85,629,412 |
|
|
105,357,277 |
|
Accounts
receivable |
|
15,821,511 |
|
|
7,299,612 |
|
Accounts receivable
from affiliated entity |
|
748,355 |
|
|
33,447 |
|
Prepaid expenses and
other current assets |
|
1,749,059 |
|
|
917,257 |
|
Prepaid expenses and
other current assets from affiliated entity |
|
1,512,424 |
|
|
610,652 |
|
Total current
assets |
|
124,597,233 |
|
|
171,850,938 |
|
Fixed assets, net |
|
9,025,446 |
|
|
7,306,695 |
|
Investment in
affiliated entity - GeneOne |
|
16,052,065 |
|
|
14,941,277 |
|
Investment in
affiliated entity - PLS |
|
3,777,510 |
|
|
5,045,915 |
|
Intangible assets,
net |
|
7,628,394 |
|
|
3,905,860 |
|
Goodwill |
|
10,513,371 |
|
|
10,113,371 |
|
Common stock
warrants |
|
— |
|
|
5,970 |
|
Other assets |
|
2,113,147 |
|
|
670,833 |
|
Total
assets |
|
$ |
173,707,166 |
|
|
$ |
213,840,859 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable and
accrued expenses |
|
$ |
19,597,787 |
|
|
$ |
13,064,899 |
|
Accounts payable and
accrued expenses due to affiliated entity |
|
1,072,579 |
|
|
165,047 |
|
Accrued clinical trial
expenses |
|
6,368,389 |
|
|
2,600,483 |
|
Common stock
warrants |
|
1,167,614 |
|
|
1,301,138 |
|
Deferred revenue |
|
14,762,720 |
|
|
13,449,768 |
|
Deferred revenue from
affiliated entity |
|
407,292 |
|
|
504,442 |
|
Deferred rent |
|
446,646 |
|
|
380,629 |
|
Total current
liabilities |
|
43,823,027 |
|
|
31,466,406 |
|
Deferred revenue, net
of current portion |
|
317,808 |
|
|
103,074 |
|
Deferred revenue from
affiliated entity, net of current portion |
|
86,694 |
|
|
677,371 |
|
Deferred rent, net of
current portion |
|
5,926,424 |
|
|
5,485,313 |
|
Deferred tax
liabilities |
|
174,793 |
|
|
175,642 |
|
Total
liabilities |
|
50,328,746 |
|
|
37,907,806 |
|
Commitments and
contingencies |
|
|
|
|
Inovio
Pharmaceuticals, Inc. stockholders’ equity: |
|
|
|
|
Preferred stock—par
value $0.001; Authorized shares: 10,000,000, issued and outstanding
shares: 23 at December 31, 2016 and December 31,
2015 |
|
— |
|
|
— |
|
Common stock—par value
$0.001; Authorized shares: 600,000,000 at December 31, 2016 and
December 31, 2015, issued and outstanding: 74,062,370 at
December 31, 2016 and 72,217,965 at December 31,
2015 |
|
74,062 |
|
|
72,218 |
|
Additional paid-in
capital |
|
556,718,356 |
|
|
534,004,564 |
|
Accumulated
deficit |
|
(434,838,235 |
) |
|
(361,097,896 |
) |
Accumulated other
comprehensive income |
|
1,327,968 |
|
|
2,708,339 |
|
Total Inovio
Pharmaceuticals, Inc. stockholders’ equity |
|
123,282,151 |
|
|
175,687,225 |
|
Non-controlling
interest |
|
96,269 |
|
|
245,828 |
|
Total stockholders’
equity |
|
123,378,420 |
|
|
175,933,053 |
|
Total
liabilities and stockholders’ equity |
|
$ |
173,707,166 |
|
|
$ |
213,840,859 |
|
|
|
|
|
|
|
|
|
|
Inovio Pharmaceuticals, Inc. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
|
|
|
|
For the Year ended
December 31, |
|
|
2016 |
|
2015 |
|
2014 |
Revenues: |
|
|
|
|
|
|
Revenue under
collaborative research and development arrangements |
|
$ |
6,490,747 |
|
|
$ |
26,876,533 |
|
|
$ |
7,416,568 |
|
Revenue under
collaborative research and development arrangements with affiliated
entity |
|
1,400,594 |
|
|
779,167 |
|
|
479,464 |
|
Grants and
miscellaneous revenue |
|
27,136,457 |
|
|
12,916,411 |
|
|
2,560,734 |
|
Grants and
miscellaneous revenue from affiliated entity |
|
340,563 |
|
|
— |
|
|
— |
|
Total
revenues |
|
35,368,361 |
|
|
40,572,111 |
|
|
10,456,766 |
|
Operating
expenses: |
|
|
|
|
|
|
Research and
development |
|
88,712,035 |
|
|
57,791,923 |
|
|
34,095,039 |
|
General and
administrative |
|
23,892,263 |
|
|
18,063,890 |
|
|
15,857,688 |
|
Gain on sale of
assets |
|
(1,000,000 |
) |
|
(1,000,000 |
) |
|
— |
|
Total operating
expenses |
|
111,604,298 |
|
|
74,855,813 |
|
|
49,952,727 |
|
Loss from
operations |
|
(76,235,937 |
) |
|
(34,283,702 |
) |
|
(39,495,961 |
) |
Other income
(expense): |
|
|
|
|
|
|
Interest and other
income, net |
|
1,257,257 |
|
|
305,071 |
|
|
331,461 |
|
Change in fair value of
common stock warrants |
|
127,554 |
|
|
177,561 |
|
|
348,143 |
|
Gain (Loss) on
investment in affiliated entity |
|
1,110,787 |
|
|
2,600,467 |
|
|
2,676,224 |
|
Net loss before
income tax benefit |
|
(73,740,339 |
) |
|
(31,200,603 |
) |
|
(36,140,133 |
) |
Income tax benefit |
|
— |
|
|
2,097,766 |
|
|
— |
|
Net
loss |
|
(73,740,339 |
) |
|
(29,102,837 |
) |
|
(36,140,133 |
) |
Net (income) loss
attributable to non-controlling interest |
|
— |
|
|
(84,769 |
) |
|
18,420 |
|
Net loss
attributable to Inovio Pharmaceuticals, Inc. |
|
$ |
(73,740,339 |
) |
|
$ |
(29,187,606 |
) |
|
$ |
(36,121,713 |
) |
Net loss per
common share attributable to Inovio Pharmaceuticals, Inc.
stockholders |
|
|
|
|
|
|
Basic |
|
$ |
(1.01 |
) |
|
$ |
(0.43 |
) |
|
$ |
(0.61 |
) |
Diluted |
|
$ |
(1.01 |
) |
|
$ |
(0.44 |
) |
|
$ |
(0.64 |
) |
Weighted
average number of common shares outstanding used in per share
calculations: |
|
|
|
|
|
|
Basic |
|
73,214,766 |
|
|
68,198,142 |
|
|
59,127,349 |
|
Diluted |
|
73,214,766 |
|
|
68,365,265 |
|
|
59,408,252 |
|
|
|
|
|
|
|
|
|
|
|
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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