Results & Analyst Call Summary

Inovio Pharmaceuticals

Conference date: March 14, 2018 @ 1:30 PM Pacific Time
for quarter ending: December 31, 2017 (Q4, fourth quarter)

Forward-looking statements


Basic data (GAAP):

Revenue was $8.8 million, up sequentially from $2.6 million, and up from $8.5 million in the year-earlier quarter.

Net income was negative $21.5 million, up sequentially from negative $34.1 million, and up from negative $26.2 million year-earlier.

EPS (earnings per share, diluted) was negative $0.24, down sequentially from negative $0.39, and down from negative $0.35 year-earlier.



Quarter Highlights:

CEO Dr. Joseph Kim recapped recent and 2017 developments. "Inovio is well-positioned to bring forth continuous inovation." Expects additional external funding for activities in 2018.

On March 14 the Phase 1 trial for INO-1800 for Hepatitis B reported positive top-line results. Could be a crucial component of a combination therapy. In discussions with potential partners.

In June 2017 the Phase 3 study of VGX-3100 in cervical dysplasia caused by HPV started. More than 60 trial sites have been opened to date; enrollment is on track. Data should be available in 2020. Inovio has a collaboration and license agreement providing ApolloBio Corporation with the exclusive right to develop and commercialize VGX-3100 within Greater China. Waiting approval by ApolloBio shareholders & Chinese regulators now expected in Q1. A Phase 2 study of VGX-3100 for HPV related vulvar neoplasia (VIN) began in April 2017. An anal dysplasia Phase 2 start could begin in Q2.

MedImmune MEDI0457 (was INO-3112) clinical trial, combined with durvalumab, a PD-L1 inhibitor was started in May 2017 for HPV-associated head and neck squamous cell carcinoma. In December 2017 Inovio received a $7 million milestone payment, and will go to Phase 2 now.

MedImmune has also selected an Inovio product to treat a specific cancer, with a milestone payment expect in 2H 2018.

Inovio has a subsidiary, Geneos Therapeutics, to develop cancer therapies based on personalized neo-antigens.

Regeneron and Inovio started a Phase 1/2 combination therapy study for glioblastoma in November 2017. It combinse INO-5401, INO-9012, and Regeneron's REGN2810, a PD-1 inhibitor. Inovio will fund the study.

INO-5401 with Tecentriq (Genentech) started a Phase 1b/2 trial for advanced bladder cancer, or urothelial carcinoma in October. Patients may have failed prior checkpoint inhibitors.

INO-5150 interim Phase 1b data showed activity and a dampened rise of PSA in recurrent prostate cancer.

dMAb PSMA construct shrank prostate tumors in a preclinical study. dMAb antibiotic construct protected mice from lethal doses of pseudomonas.

Inovio is developing Ebola vaccines, including a dMAb (DNA-based monoclonal antibody) version.

Inovio initiated a Phase 1 trial for its Zika vaccine, GLS-5700, in July 2017.

Inovio’s phase I trial to evaluate safety and tolerability of PENNVAX®-GP, the company’s "universal" DNA vaccine for HIV had positive results.

Inovio’s partner for its DNA vaccine (GLS-5300) for Middle East Respiratory Syndrome (MERS), GeneOne Life Science Inc., Phase I/2 trial started in Korea. MERS has no current treatment.

Ongoing studies include INO-1400 in HTERT breast, lung and pancreatic cancer has now been extended to more tumor types: head & neck squamous cell, ovarian, colorectal, gastric and esophageal cancers. Enlarging to 5 trial sites with 54 subjects. The final readout will be in 2018, but could start later stage studies based on earlier cohort data. Believes it will be combined with other vaccines and checkpoint inhibitors.

Completed enrollment of 62 subjects in the phase I study of our INO-5150 prostate cancer immunotherapy.

Initiated a Phase 1 trial for INO-8000 for hepatitis C partnered with the NCI and Mayo Clinic. Will measure safety, tolerability, and immune response.

Inovio also has a variety of other vaccines in clinical or preclinical study. See the Inovio Pipeline for an overview.

R&D expense was $24.6 million. General and administrative expense was $8.0 million. Total operating expenses were $32.6 million. Operating profit negative $ million. Interest and other income $ million. Loss in change in value of stock warrants was $0. million. Loss on investment in an affiliated entity was $ million.

Cash and equivalents balance (including short-term investments) ended at $127.4 million, down sequentially from $141.9 million.

Full year 2017 revenue was $42.2 million. net loss was $82.2 million, EPS negative $1.08 per share.


Competitor's hold on cervical trial? We do not seem to be at risk. We have a favorable safety profile in 1500 patients. Our product is pure DNA, a superior design.

VGX-3100 site starts vs. patient enrollment? We are on track, will not give a play by play, just completion of trial enrollment. But it is true, an open site does not mean a patient has been enrolled at that site yet. Interest in the trial by investigators is high.

Companion diagnostic with biomarker? Published data from Phase 2 study had biomarker, so Phase 3 has it as a secondary endpoint, to predict early responses of patients.

Market opportunity for your HPV franchise? Precancers currently treated surgically, with related side-effects, including damage to the cervix. Also perhaps one-quarter of patients have HPV even after surgery. Vulvar and anal surgery has high recurrence rates. 3100 should be first in class immunotherapy solution.

IO checkpoint enrollment? INO5401 study IND was approved late last year, we are working to open sites. MEDI04457 controlled by Medimmune, now moved to Phase 2.

Parker Institure products? INO5401. Contemplating muscle invasive bladder cancer, in combination with other agents.

Our focus is on the HPV program. We are typically looking for partners for other programs.

HIV next steps? 098 full data sets are being prepared, topline was released last year. Was funded with NIH grant and trials conducted by their group. We had the best T cell response of anything they had ever tested. We expect PennVax to be additional studies in a preventive setting. Will also be testing to see if a vaccine can be combined with a checkpoint inhibitor to cure the infection, funded by NIH.

Milestones this year? $23 million this quarter from ApolloBio. Could be others, not sharing at this point. Expect burn for 2018 and 2019 to be $70 million, so we should have a solid cash runway. Looking for additional non-dilutive partner funding.

Zika trial was enrolled before the hurricane. 80 active, 80 control, data will be compiled later this year. To some extent the data will be driven by infection rates in Puerto Rico. If successful hope to proceed with external funding.

Flu vaccine timeline? We are looking at funders.

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Copyright 2018 William P. Meyers