August 8, 2011
Inovio Pharmaceuticals Reports 2011 Second Quarter Financial Results
BLUE BELL, Pa., Aug. 8, 2011 /PRNewswire/ -- Inovio Pharmaceuticals, Inc. (NYSE AMEX: INO) today reported financial results for the quarter ended June 30, 2011.
Total revenue was $2.4 million and $5.5 million for the three and six months ended June 30, 2011, compared to $1.1 million and $2.5 million for the same periods in 2010.
Total operating expenses for the three and six months ended June 30, 2011, were $7.6 million and $15.0 million as compared to $6.1 million and $11.9 million for the same periods in 2010.
The net loss attributable to common stockholders for the three and six months ended June 30, 2011, was $2.8 million, or $0.02 per share, and $5.2 million, or $0.04 per share, as compared with a net loss attributable to common stockholders of $7.6 million, or $0.07 per share, and $9.9 million, or $0.10 per share, for the three and six months ended June 30, 2010.
The increase in revenue for the three and six months ended June 30, 2011 as compared with the same periods in 2010 was primarily due to an increase in revenue from the company's contract with the National Institute of Allergy and Infectious Diseases ("NIAID"). This contract revenue amounted to $1.7 million and $4.5 million for the three and six months ended June 30, 2011, as compared with $945,000 and $1.8 million for the same periods in 2010. This NIAID HIV Vaccine Design and Development Teams contract, which exceeds $25 million over five years (plus two additional option years), is facilitating Inovio's development of a universal, preventive HIV DNA vaccine, PENNVAX(TM)-GP, focused on providing coverage against a broader set of global HIV clades or sub-types.
Research and development expenses for the three and six months ended June 30, 2011, were $4.5 million and $8.9 million as compared to $3.1 million and $5.8 million for the same periods in 2010. The increase was primarily due to higher clinical trial costs related to multiple clinical studies, including the initiation of the Phase II study of Inovio's cervical dysplasia/cancer DNA vaccine, VGX-3100, as well as higher costs related to work performed for the NIAID HIV contract.
Net Loss Attributable to Common Stockholders
The $4.8 million and $4.7 million decrease in net loss attributable to common stockholders for the three and six months ended June 30, 2011, respectively, compared with the same periods in 2010, resulted primarily from the increase in grant revenue and increase in other income from the required quarterly revaluation of registered common stock warrants, offset by the increase in research and development as well as general and administrative expenses.
As of June 30, 2011, cash and cash equivalents plus short-term investments in certificates of deposit were $36.4 million, compared with $21.8 million as of December 31, 2010. This change primarily resulted from the January 2011 financing, from which the Company received net proceeds of approximately $23.0 million.
Based on management's projections and analysis, the Company believes that its cash and cash equivalents are sufficient to meet its planned working capital requirements through the third quarter of 2013.
A summary of Inovio's consolidated balance sheet and statement of operations is provided at the end of this release. The Form 10-Q providing the complete 2011 second quarter financial report can be found at: http://ir.inovio.com/secfilings.
During the first quarter of 2011, Inovio announced a three-way collaboration agreement with Transgene S.A. and ChronTech Pharma AB to evaluate a novel therapeutic prime-boost vaccination strategy against genotype 1 hepatitis C virus (HCV) in a Phase I clinical study. Inovio will contribute its electroporation delivery technology to this collaboration. Clinical study costs will be shared equally by the collaborators.
Subsequent to the quarter, Inovio announced it had expanded its existing license agreement with the University of Pennsylvania, adding exclusive worldwide licenses for technology and intellectual property for novel DNA vaccines against prostate cancer, CMV (cytomegalovirus), malaria, hepatitis B, RSV (respiratory syncytial virus), and MRSA (methicillin-resistant staphylococcus aureus). The amendment also encompasses a new optimized IL-12 cytokine gene adjuvant.
Inovio reported that 91% of evaluated patients (10 of 11) that had received three vaccinations of VGX-3100, its therapeutic SynConÃ® cervical dysplasia/cancer DNA vaccine delivered using intramuscular electroporation, displayed strong and persistent memory T-cell responses at month nine (six months after the last vaccination). Inovio subsequently reported long-term durability of T cell immune responses of up to two years (at the latest time measured) in 7 of 8 evaluated patients following a fourth vaccination of VGX-3100. This data further highlights the viability of using multiple booster vaccinations with a DNA vaccine delivered using electroporation, in contrast to other non-replicating vaccine vectors that may induce unwanted immune responses against the vector after multiple vaccinations.
Inovio is continuing to set up sites and enroll patients for its Phase II clinical trial for VGX-3100, which is assessing the vaccine in women with CIN 2/3 or CIN 3 cervical dysplasias, the stages of abnormal cells preceding cervical cancer. The company expects to enroll 148 patients in 25 study centers in the U.S., South Korea, South Africa, Australia, and Canada. Data is expected in the second half of 2013.
The University of Southampton, an Inovio collaborator, is enrolling patients in its Phase II clinical trial of its DNA vaccine to treat chronic myeloid leukemia and acute myeloid leukemia using Inovio's electroporation delivery system. Interim data is expected in 2012.
Another partner, ChronTech Pharma AB, is enrolling patients in its Phase IIb clinical study of its ChronVac-CÃ® DNA vaccine for hepatitis C virus (HCV) delivered with Inovio's proprietary electroporation DNA vaccine delivery technology in combination with standard of care. Interim data is expected in 2012.
Inovio recently reported that significant T cell and antibody responses were generated in its proof-of-principle Phase I clinical study of VGX-3400X, its preventive H5N1 (avian) influenza SynConÃ® DNA vaccine delivered using intramuscular (IM) electroporation (EP). VGX-3400X/EP was found to be generally safe and well tolerated at all dose levels, with no vaccine-related serious adverse events. Reported adverse events and injection site reactions were mild to moderate and required no treatment. Three of 27 subjects (11%) showed HI titers (an indicator of protection in humans) greater than 1:40 against the Vietnam (A/H5N1/1203/04) strain. Two of these three subjects also demonstrated greater than 1:40 titers against the Indonesia (A/H5N1/5/2005) strain, demonstrating cross-reactive responses.
A subset of these Phase I participants have since been given a booster vaccination delivered with Inovio's new intradermal (ID) electroporation delivery technology. In previously published preclinical studies for flu and smallpox in monkeys, ID electroporation delivery of SynConÃ® DNA vaccines generated greater neutralizing antibody titers than IM electroporation and protected monkeys in influenza and smallpox challenge models. Data are expected in 4Q 2011.
Inovio also launched a second Phase I clinical study as part of its universal influenza vaccine program. This trial will assess INO-3510 SynConÃ® vaccine for H1N1 and H5N1 influenza using its skin-targeted ID delivery device. This Phase I trial is funded in part by a recent grant from the National Institutes of Health. All 90 subjects are currently being screened and randomized. Preliminary safety and immune response data are expected in the first quarter of 2012.
Inovio expects final data from two Phase I clinical studies of its PENNVAX(TM)-B DNA vaccine against HIV in developed countries before the end of this year. Inovio previously reported best-in-class T cell immune responses in interim results announced last November.
During the quarter, Inovio announced compelling immune responses in a study of its multi-subtype DNA vaccine for foot-and-mouth (FMD) disease administered with electroporation in sheep. Strong protective neutralizing antibodies were also previously observed in pigs vaccinated with the same Inovio FMD vaccine. Inovio's synthetic DNA vaccine cannot cause the disease, unlike today's FMD vaccines, providing a safe approach to potentially protect against FMD and reduce its serious impact on global food supply and commerce.
Inovio reported that its INO-5150 SynConÃ® therapeutic DNA vaccine for prostate cancer showed remarkably strong, antigen-specific and sustainable T cell responses in monkeys. The level of T cell responses was similar to those observed in a previous monkey study of Inovio's VGX-3100 cervical dysplasia/cancer vaccine, which is now in Phase II. The multi-antigen INO-5150 was designed with the intent to help the body's immune system overcome its "self-tolerance" of cancerous cells. Inovio plans to start a Phase I clinical trial mid-year 2012.
Inovio's subsidiary, VGX Animal Health, Inc., a developer of DNA-based vaccines and therapies for companion and food animals, reported strong T cell responses from VAH-5000D, its DNA vaccine encoding telomerase reverse transcriptase (TERT) for the treatment of dogs with cancer. Human TERT (hTERT) is also associated with human cancers.
Inovio received recognition in multiple scientific journals. Vaccine published a paper entitled "Immunogenicity of a novel engineered HIV-1 clade C synthetic consensus-based envelope DNA vaccine"; PLoS One published the paper "Long-term programming of antigen-specific immunity from gene expression signatures in the PBMC of rhesus macaques immunized with an SIV DNA vaccine." The papers were co-authored by researchers from Inovio and its academic collaborators. The data demonstrated in vaccinated animals unique immune system responses, significant antigen-specific T-cell responses, and protection from the virus.
About Inovio Pharmaceuticals, Inc.
Inovio is developing a new generation of vaccines, called DNA vaccines, to treat and prevent cancers and infectious diseases. These SynConÃ® vaccines are designed to provide broad cross-strain protection against known as well as newly emergent strains of pathogens such as influenza. These vaccines, in combination with Inovio's proprietary electroporation delivery devices, have been shown to be safe and generate significant immune responses. Inovio's clinical programs include three separate programs in Phase II clinical studies, including VGX-3100 for treating cervical dysplasia and cancer. Other Inovio clinical programs include those for avian flu (preventive) and HIV vaccines (both preventive and therapeutic). Inovio is developing universal influenza and other vaccines in collaboration with scientists from the University of Pennsylvania. Other partners and collaborators include Merck, ChronTech, National Cancer Institute, U.S. Military HIV Research Program, NIH, HIV Vaccines Trial Network, University of Southampton, 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 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, capital market conditions, our ability to successfully integrate Inovio and VGX Pharmaceuticals, 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, 2010, our Form 10-Q for the three months ended March 31, 2011, 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.
CONTACTS: Bernie Hertel, Inovio Pharmaceuticals, Investors: 858-410-3101 Jeff Richardson, Richardson & Associates, Media: 805-491-8313
Inovio Pharmaceuticals, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31, 2011 2010 ---- ---- (Unaudited) ASSETS Current assets: Cash and cash equivalents $30,594,293 $19,998,489 Short-term investments - certificates of deposit 5,759,716 1,846,271 Accounts receivable 347,819 32,887 Accounts receivable from affiliated entity 90,421 72,149 Prepaid expenses and other current assets 822,227 273,975 Prepaid expenses and other current assets from affiliated entity 992,245 653,436 ------- ------- Total current assets 38,606,721 22,877,207 Fixed assets, net 306,113 276,795 Intangible assets, net 10,239,436 11,180,002 Goodwill 10,113,371 10,113,371 Investment in affiliated entity 8,383,650 11,360,888 Other assets 208,262 259,128 ----- ----- Total assets $67,857,553 $56,067,391 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $3,242,943 $3,410,610 Accounts payable and accrued expenses due to affiliated entity 757,489 1,680,947 Accrued clinical trial expenses 426,471 178,328 Common stock warrants 4,867,672 370,926 Deferred revenue 233,161 420,897 Deferred revenue from affiliated entity 413,542 375,000 ----- ----- Total current liabilities 9,941,278 6,436,708 Deferred revenue, net of current portion 66,644 72,780 Deferred revenue from affiliated entity, net of current portion 2,149,194 2,336,694 Deferred rent, net of current portion 66,154 67,112 Deferred tax liabilities 53,186 53,186 ---- ---- Total liabilities 12,276,456 8,966,480 -------- ------- Stockholders' equity: Inovio Pharmaceuticals, Inc. stockholders' equity: Common stock 127,257 105,038 Additional paid-in capital 254,956,417 241,233,334 Accumulated deficit (200,073,001) (194,838,229) Accumulated other comprehensive income (2,941) 2,850 ------ --- Total Inovio Pharmaceuticals, Inc. stockholders' equity 55,007,732 46,502,993 Non-controlling interest 573,365 597,918 ----- ----- Total stockholders' equity 55,581,097 47,100,911 -------- -------- Total liabilities and stockholders' equity $67,857,553 $56,067,391 =========== ===========
INOVIO PHARMACEUTICALS, INC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, -------- -------- 2011 2010 2011 2010 ---- ---- ---- ---- Revenue: License fee and milestone revenue $26,456 $55,941 $52,824 $122,495 License fee and milestone revenue from affiliated entity 105,208 118,750 198,958 125,806 Grant and miscellaneous revenue 2,288,099 960,168 5,273,246 2,259,947 Total revenue 2,419,763 1,134,859 5,525,028 2,508,248 Operating expenses: Research and development 4,463,978 3,083,229 8,885,777 5,813,824 General and administrative 3,092,386 3,027,593 6,411,618 6,077,751 Gain on sale of assets - - (250,000) - --- --- -------- --- Total operating expenses 7,556,364 6,110,822 15,047,395 11,891,575 --------- --------- ---------- ---------- Loss from operations (5,136,601) (4,975,963) (9,522,367) (9,383,327) Other income (expense): Interest income, net 7,799 13,594 20,574 48,155 Other income, net 4,898,758 676,179 7,219,706 1,704,172 Loss from investment in affiliated entity (2,607,227) (3,327,758) (2,977,238) (2,283,584) ---------- ---------- ---------- ---------- Net loss (2,837,271) (7,613,948) (5,259,325) (9,914,584) Net loss/ (gain) attributable to non- controlling interest 15,112 (2,490) 24,553 4,460 ------ ------ ------ ----- Net loss attributable to Inovio Pharmaceuticals, Inc. $(2,822,159) $(7,616,438) $(5,234,772) $(9,910,124) =========== =========== =========== =========== Loss per common share - basic and diluted: Net loss per share attributable to Inovio Pharmaceuticals, Inc. stockholders $(0.02) $(0.07) $(0.04) $(0.10) ====== ====== ====== ====== Weighted average number of common shares 127,256,364 102,811,417 124,124,645 102,784,297 outstanding - basic and diluted
SOURCE Inovio Pharmaceuticals, Inc.