Last updated on April 16, 2014 at 4:54 EDT

Inovio Pharmaceuticals Reports 2012 Second Quarter Financial Results

August 9, 2012

BLUE BELL, Pa., Aug. 9, 2012 /PRNewswire/ — Inovio Pharmaceuticals, Inc. (NYSE MKT: INO) today reported financial results for the quarter ended June 30, 2012.

Total revenue was $436,000 and $2.1 million for the three and six months ended June 30, 2012, compared to $2.4 million and $5.5 million for the same periods in 2011.

Total operating expenses were $7.2 million and $13.1 million for the three and six months ended June 30, 2012, compared to $7.6 million and $15.0 million for the same periods in 2011.

The net loss attributable to common stockholders for the three and six months ended June 30, 2012, was $4.1 million, or $0.03 per share, and $12.4 million, or $0.09 per share, as compared with a net loss attributable to common stockholders of $2.8 million, or $0.02 per share, and $5.2 million, or $0.04 per share, for the three and six months ended June 30, 2011.


The decrease in revenue for the comparable periods was primarily due to timing of work performed under the company’s contract with the National Institute of Allergy and Infectious Diseases (NIAID). This contract revenue amounted to $234,000 and $1.7 million for the three and six months ended June 30, 2012, versus $1.7 million and $4.5 million for the same periods in 2011. This NIAID contract, which exceeds $23 million over five years (plus two additional option years), is facilitating Inovio’s development of a universal, preventive HIV DNA vaccine, PENNVAX(®)-GP.

Operating Expenses

Research and development expenses for the three and six months ended June 30, 2012, were $4.5 million and $8.6 million for the three and six months ended June 30, 2012 as compared to $4.5 million and $8.9 million for the same periods in 2011. General and administrative expenses for the three and six months ended June 30, 2012 were $2.7 million and $5.2 million versus $3.1 million and $6.4 million for the same periods in 2011.

Net Loss Attributable to Common Stockholders

The $1.3 million and $7.2 million increase in net loss for the three and six months ended June 30, 2012, respectively, compared with the same periods in 2011, resulted primarily from a significant (non-cash) change in fair value of common stock warrants, based on a required quarterly mark to market adjustment to reflect changes in the Company’s stock price, and a decrease in grant revenue.

Capital Resources

As of June 30, 2012, cash and cash equivalents plus short-term investments in certificates of deposit, mutual funds, and municipal bonds were $19.5 million compared with $30.3 million as of December 31, 2011.

Based on management’s projections and analysis, the Company believes that current cash and cash equivalents plus short-term investments are sufficient to meet its planned working capital requirements into the third quarter of 2013.

During the quarter, Inovio replaced a prior ATM agreement that the Company already had in place with a sales agreement with Cowen and Company, LLC, under which Inovio may from time to time offer and sell common stock with aggregate proceeds of up to $25 million. Inovio may sell its stock through Cowen by methods deemed to be an “at the market” offering (ATM), including sales made through the NYSE MKT or any other existing trading market for the common stock or to or through a market maker.

Inovio’s balance sheet and statement of operations are provided below. Form 10-Q providing the complete 2012 second quarter financial report can be found at: http://ir.inovio.com/secfilings.

Corporate Update

Clinical Development

During the second quarter, Inovio reported that its SynCon® avian influenza vaccine generated protective HAI titers against six different unmatched strains of H5N1 in a phase I clinical trial – a distinct clinical achievement on Inovio’s path to develop universal influenza vaccines.

Subsequent to the quarter, Inovio treated the first patients in a clinical trial evaluating immune responses in elderly adults immunized with Inovio’s H1N1 SynCon® universal influenza vaccine. This phase I study will evaluate the ability of Inovio’s SynCon® vaccine alone as well as in combination with the 2012 seasonal influenza vaccine to generate: protective levels of immune responses; antigen-specific antibody immune responses against unmatched influenza strains; and T-cell immune responses that may be helpful in fighting influenza. The 65+ age group represents about 90% of annual influenza deaths in the US.

Enrollment is ongoing in Inovio’s phase II clinical study of VGX-3100 for cervical dysplasia. Data is expected in the second half of 2013. Two Inovio collaborators, the University of Southampton and ChronTech Pharma AB, are expected to report interim data from their phase II studies of DNA vaccines for leukemia and hepatitis C virus, respectively, before year end.

Corporate & Business Development

During the second quarter Inovio added to its patent estate of more than 400 worldwide granted and pending patents with two newly granted U.S. patents covering its SynCon® vaccine for cervical dysplasias and cancers caused by human papillomavirus (HPV) as well as its universal vaccine related to H1N1 influenza.

Inovio was awarded a U.S. Department of Defense Small Business Innovation Research Grant to advance a low-cost, non-invasive surface electroporation delivery device and test its utility in combination with Inovio synthetic vaccines against viruses with bioterrorism potential.

Inovio appointed to its Board of Directors an international business management expert, Angel Cabrera, Ph.D., who is president of George Mason University, the largest university in Virginia and former president of the Thunderbird School of Global Management, widely regarded as the world’s leading graduate school of international business.

Inovio is advancing discussions with large pharmaceutical companies with the goal of securing new partnerships to advance the development and commercialization of its SynCon® vaccines.

About Inovio Pharmaceuticals, Inc.

Inovio is revolutionizing vaccines to prevent and treat today’s cancers and challenging infectious diseases. Its SynCon® vaccines are designed to provide universal cross-strain protection against known as well as newly emergent unmatched strains of pathogens such as influenza. These synthetic vaccines, in combination with Inovio’s proprietary electroporation delivery, have been shown in humans to generate best-in-class immune responses with a favorable safety profile. Inovio’s clinical programs include phase II studies for cervical dysplasia, leukemia and hepatitis C virus and phase I studies for influenza and HIV. Partners and collaborators include the University of Pennsylvania, Merck, ChronTech, National Cancer Institute, U.S. Military HIV Research Program, NIH, HIV Vaccines Trial Network, University of Southampton, US Dept. of Homeland Security and PATH Malaria Vaccine Initiative. More information is available at 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 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, but not limited to, the fact that pre-clinical and clinical results referenced in this release may not be indicative of results achievable in other trials or for other indications, that the studies or trials may not be successful or achieve the results desired, that pre-clinical studies and clinical trials may not commence or be completed in the time periods anticipated, that results from one study may not necessarily be reflected or supported by the results of other similar studies and that results from an animal study may not be indicative of results achievable in human studies), 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, 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, 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, our ability to secure new partnerships and collaborations, 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, 2011, our Form 10-Q for the quarter ended June 30, 2012, 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.
                                     CONDENSED CONSOLIDATED BALANCE SHEETS

                                                 June 30,                     December 31,
                                                                        2012                       2011
                                                                        ----                       ----
    Current assets:
    Cash and cash equivalents                                     $5,952,143                $17,350,116
    Short-term investments                                        13,487,062                 12,863,420
    Accounts receivable                                              432,108                    467,909
    Accounts receivable from
     affiliated entity                                                33,446                     38,406
    Prepaid expenses and other
     current assets                                                  598,482                    746,049
    Prepaid expenses and other
     current assets from
     affiliated entity                                               813,935                    441,186
                                                                     -------                    -------

    Total current assets                                          21,317,176                 31,907,086
    Restricted cash                                                  100,234                    100,059
    Fixed assets, net                                                421,519                    295,785
    Intangible assets, net                                         8,393,119                  9,310,485
    Goodwill                                                      10,113,371                 10,113,371
    Investment in affiliated
     entity                                                        7,517,596                  9,071,513
    Investment in common stock
     warrants                                                        509,800                    100,000
    Other assets                                                     223,056                    208,262
                                                                     -------                    -------

    Total assets                                                 $48,595,871                $61,106,561
                                                                 ===========                ===========

                  LIABILITIES AND
                STOCKHOLDERS' EQUITY
    Current liabilities:
    Accounts payable and accrued
     expenses                                                     $3,522,672                 $4,318,942
    Accounts payable and accrued
     expenses due to affiliated
     entity                                                           53,613                     20,344
    Accrued clinical trial
     expenses                                                      1,160,643                  1,059,372
    Common stock warrants                                          5,038,510                  5,176,319
    Deferred revenue                                                  41,864                     79,502
    Deferred revenue from
     affiliated entity                                               413,542                    388,542
                                                                     -------                    -------

    Total current liabilities                                     10,230,844                 11,043,021
    Deferred revenue, net of
     current portion                                                  77,643                     80,450
    Deferred revenue from
     affiliated entity, net of
     current portion                                               1,774,194                  1,961,694
    Deferred rent                                                     75,224                     80,875
    Deferred tax liabilities                                          78,859                     78,859
                                                                      ------                     ------

    Total liabilities                                             12,236,764                 13,244,899
                                                                  ----------                 ----------

    Stockholders' equity:
    Inovio Pharmaceuticals, Inc.
     stockholders' equity:
    Common stock                                                     134,968                    134,968
    Additional paid-in capital                                   258,113,218                257,235,707
    Accumulated deficit                                         (222,479,302)              (210,091,174)
    Accumulated other
     comprehensive income                                             64,514                     35,393
                                                                      ------                     ------

    Total Inovio
     Pharmaceuticals, Inc.
     stockholders' equity                                         35,833,398                 47,314,894
    Non-controlling interest                                         525,709                    546,768
                                                                     -------                    -------

    Total stockholders' equity                                    36,359,107                 47,861,662
                                                                  ----------                 ----------

    Total liabilities and
     stockholders' equity                                        $48,595,871                $61,106,561
                                                                 ===========                ===========
                                                                        INOVIO PHARMACEUTICALS, INC.
                                                               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                               Three Months Ended                           Six Months Ended
                                   June  30,                                   June  30,
                                   ---------                                   ---------
                                                         2012                                          2011            2012         2011
                                                         ----                                          ----            ----         ----
    License fee and milestone
     revenue                                          $20,907                                       $26,456         $45,745      $52,824
    License fee and milestone
     revenue from affiliated                          106,250                                       105,208         212,500      198,958
    Grant and miscellaneous
     revenue                                          308,925                                     2,288,099       1,870,958    5,273,246
                                                      -------                                     ---------       ---------    ---------

    Total revenues                                    436,082                                     2,419,763       2,129,203    5,525,028
                                                      -------                                     ---------       ---------    ---------

    Operating expenses:
    Research and development                        4,527,086                                     4,463,978       8,569,665    8,885,777
    General and administrative                      2,696,909                                     3,092,386       5,184,997    6,411,618
    Gain on sale of assets                                  -                                             -        (651,000)    (250,000)
                                                          ---                                           ---        --------     --------

    Total operating expenses                        7,223,995                                     7,556,364      13,103,662   15,047,395
                                                    ---------                                     ---------      ----------   ----------

    Loss from operations                           (6,787,913)                                   (5,136,601)    (10,974,459)  (9,522,367)
    Other income (expense):
    Interest and other income,
     net                                               41,036                                         7,799          72,580        9,654
    Change in fair value of
     common stock warrants                          3,594,782                                     4,898,758          46,609    7,230,626
    Loss from investment in
     affiliated entity                               (992,373)                                   (2,607,227)     (1,553,917)  (2,977,238)
                                                     --------                                    ----------      ----------   ----------

    Net loss                                       (4,144,468)                                   (2,837,271)    (12,409,187)  (5,259,325)
    Net loss attributable to
     non-controlling interest                          11,289                                        15,112          21,059       24,553
                                                       ------                                        ------          ------       ------

    Net loss attributable to
     Inovio Pharmaceuticals,                      $(4,133,179)                                  $(2,822,159)   $(12,388,128) $(5,234,772)

    Loss per common share -
     basic and diluted:
    Net loss per share
     attributable to Inovio
     Pharmaceuticals, Inc.
     stockholders                                      $(0.03)                                       $(0.02)         $(0.09)      $(0.04)
                                                       ======                                        ======          ======       ======

    Weighted average number of
     common shares outstanding
     -basic and diluted                           134,968,394                                   127,256,364     134,968,394  124,124,645

    Investors:                       Bernie Hertel, Inovio Pharmaceuticals,
    Media:                           Jeff Richardson, Inovio Pharmaceuticals,

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