Inovio Pharmaceuticals Reports 2013 First Quarter Financial Results

BLUE BELL, Pa., May 10, 2013 /PRNewswire/ -- Inovio Pharmaceuticals, Inc. (NYSE MKT: INO) today reported financial results for the quarter ended March 31, 2013.

Total revenue was $1.5 million for the three months ended March 31, 2013, compared to $1.7 million for the same period in 2012. Total operating expenses were $8.1 million compared to $5.9 million. The net loss attributable to common stockholders was $8.8 million, or $0.06 per share, compared to $8.3 million, or $0.06 per share.

Revenue

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 $1.0 million versus $1.5 million, respectively. This NIAID contract, which provides up to $25.3 million of funding over seven years, is facilitating Inovio's development of a universal, preventive HIV DNA vaccine, PENNVAX®-GP.

Operating Expenses

Research and development expenses for Q1 2013 were $5.1 million compared to $4.0 million for Q1 2012. This increase was primarily due to $788,000 in higher clinical expenses related to our ongoing HPV-003 clinical trial. General and administrative expenses were $3.0 million versus $2.5 million, respectively.

Net Loss Attributable to Common Stockholders

The $590,000 increase in net loss for the comparable periods resulted primarily from an increase in operating expenses offset by a lower (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.

Capital Resources

As of March 31, 2013, cash and cash equivalents plus short-term investments were $28.2 million compared with $13.8 million as of December 31, 2012.

On March 7, 2013, we closed an underwritten offering of 27,377,266 shares of our common stock and warrants to purchase an aggregate of up to 13,688,633 shares of common stock. The shares and warrants were sold in units at a price of $0.55 per unit, with each unit consisting of one share of common stock and a warrant to purchase 0.50 shares of common stock at an exercise price of $0.7936 per share. The warrants have a term of five and one-half years. The net proceeds, after deducting the underwriters' discounts and other offering expenses, and assuming no exercise of the warrants, were approximately $14.0 million.

During the three months ended March 31, 2013, the Company sold 8,222,966 shares of common stock under its ATM common stock sales agreement for net proceeds of $5.6 million.

Based on management's projections and analysis, the Company believes that cash and cash equivalents are sufficient to meet its planned working capital requirements through the fourth quarter of 2014.

Inovio's balance sheet and statement of operations is provided below. Form 10-Q providing the complete 2013 first quarter financial report can be found at: http://ir.inovio.com/secfilings.

Corporate Update

Clinical Development

Inovio previously reported that its SynCon® vaccine against HPV-associated diseases (VGX-3100) achieved an industry first in its phase I clinical trial targeting cervical dysplasias when best-in-class T-cell immune responses generated a strong killing effect against cells targeted by this vaccine. Based on our advanced patient enrollment, we expect to report unblinded efficacy data from our 148-patient double-blinded, randomized phase II clinical trial in 1Q 2014.

Inovio's SynCon® universal H1N1 influenza vaccine generated positive antibody response rates in comparison to a current FDA-approved seasonal influenza vaccine tested against a currently circulating influenza strain. The seasonal influenza vaccine was matched to the tested virus strain, a requirement for "conventional" vaccines to provide adequate protection. In contrast, Inovio's vaccine is designed to broadly protect against multiple known and unknown strains within a subtype such as H1N1 – the unanswered question has been whether or not such a universal vaccine could broadly achieve protective levels of immune responses against unmatched flu strains and whether it could provide response rates (i.e. the number of subjects achieving protective immune response levels) equivalent to a conventional vaccine when tested against the virus strain matching that vaccine. This is the first demonstration of a SynCon® influenza vaccine achieving protective equivalency relative to a conventional seasonal vaccine while uniquely possessing the advantage of generating protective immune responses against diverse unmatched strains, which was also shown in this study as well as a prior study focused on H5N1.

Inovio and its partner VGX International, Inc. will move Inovio's hepatitis C (HCV) DNA vaccine into a phase I/IIa clinical trial by the end of 2013. The preclinical research, which demonstrated for the first time that a multi-antigen (NS3/4A, NS4B, and NS5A) SynCon® HCV vaccine can generate robust T-cell responses in the liver, an organ known to suppress T-cell activity, appeared in the peer-reviewed journal Plos One in an article entitled: "Induction of Intrahepatic HCV NS4B, NS5A and NS5B Specific Cellular Immune Responses following Peripheral Immunization." VGX International is funding all preclinical and clinical development.

Subsequent to the quarter, our collaborator ChronTech Pharma AB announced that preliminary results from their open label phase II clinical study of their ChronVac-C® (NS3/4A only) therapeutic HCV vaccine administered with Inovio's MedPulserTM-DDS electroporation device followed by a drug regimen (ribavirin + PEG-interferon-a) in chronic HCV positive subjects did not to date show a statistically significant difference between treatment outcomes of the vaccinated and non-vaccinated groups.

Based on the success of preclinical studies, the PATH Malaria Vaccine Initiative (MVI) and Inovio announced a follow-on collaboration to advance Inovio's malaria DNA vaccine and electroporation technology into a phase I/IIa clinical trial in 2014. Established at PATH through an initial grant from the Bill & Melinda Gates Foundation, MVI's mission is to accelerate the development of malaria vaccines and ensure their availability and accessibility in the developing world. 

Corporate Development

Inovio continues to advance discussions with large pharmaceutical companies with the goal of securing strategic partnerships to advance the development of SynCon® vaccines.

Subsequent to the quarter, Inovio and the U.S. Army Medical Research Institute of Infectious Diseases (USAMRIID) received a $3.5 million grant from the National Institute of Allergy and Infectious Diseases (NIAID) to advance the development of Inovio's next generation DNA vaccine delivery device capable of simultaneously administering multiple synthetic vaccines via skin surface electroporation.

Inovio was recognized with Vaccine Industry Excellence (ViE) Awards for "Best Therapeutic Vaccine" and "Best Early Stage Biotech" at the World Vaccine Congress. The ViE Awards recognize outstanding vaccine advancements and achievements of vaccine developers across the global industry as judged by a panel of global biotech industry stakeholders.

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, 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, 2012, our Form 10-Q for the quarter ended March 31, 2013, 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



March 31,

2013


December 31,
2012


(Unaudited)



ASSETS




Current assets:




Cash and cash equivalents

$

20,086,799


$

5,646,021

Short-term investments

7,978,345


8,034,001

Accounts receivable

1,029,158


830,433

Accounts receivable from affiliated entity

43,537


36,234

Prepaid expenses and other current assets

283,044


471,328

Prepaid expenses and other current assets from affiliated entity

832,494


887,167

Deferred tax asset

62,728


62,728

Total current assets

30,316,105


15,967,912

Restricted cash

100,497


100,410

Fixed assets, net

362,889


363,021

Investment in affiliated entity

9,867,248


10,703,332

Intangible assets, net

7,041,388


7,489,315

Goodwill

10,113,371


10,113,371

Common stock warrants

266,400


267,200

Other assets

133,543


134,193

Total assets

$

58,201,441


$

45,138,754

LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable and accrued expenses

$

2,567,631


$

3,181,574

Accounts payable and accrued expenses due to affiliated entity

377,732


187,275

Accrued clinical trial expenses

2,199,880


1,405,896

Common stock warrants

10,254,959


2,859,899

Deferred revenue

201,964


353,391

Deferred revenue from affiliated entity

376,042


388,542

Total current liabilities

15,978,208


8,376,577

Deferred revenue, net of current portion

86,948


88,609

Deferred revenue from affiliated entity, net of current portion

1,492,944


1,586,694

Deferred rent

58,349


65,076

Deferred tax liabilities

164,393


164,393

Total liabilities

17,780,842


10,281,349

Inovio Pharmaceuticals, Inc. stockholders' equity:




Common stock

179,941


144,313

Additional paid-in capital

278,289,806


263,897,116

Accumulated deficit

(238,604,249)


(229,760,129)

Accumulated other comprehensive income

66,518


73,362

Total Inovio Pharmaceuticals, Inc. stockholders' equity

39,932,016


34,354,662

Non-controlling interest

488,583


502,743

Total stockholders' equity

40,420,599


34,857,405

Total liabilities and stockholders' equity

$

58,201,441


$

45,138,754

 

 

 

INOVIO PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



Three Months Ended
March 31,


2013


2012

Revenues:




License fee and milestone revenue

$

14,259


$

24,838

License fee and milestone revenue from affiliated entity

106,250


106,250

Grants and miscellaneous revenue

1,334,716


1,562,033

Total revenues

1,455,225


1,693,121

Operating expenses:




Research and development

5,115,112


4,042,579

General and administrative

2,974,153


2,488,088

Gain on sale of assets


(651,000)

Total operating expenses

8,089,265


5,879,667

Loss from operations

(6,634,040)


(4,186,546)

Other income (expense):




Interest and other income, net

39,460


31,544

Change in fair value of common stock warrants

(1,427,616)


(3,548,173)

Loss on investment in affiliated entity

(836,084)


(561,544)

Net loss

(8,858,280)


(8,264,719)

Net loss attributable to non-controlling interest

14,160


9,770

Net loss attributable to Inovio Pharmaceuticals, Inc.

$

(8,844,120)


$

(8,254,949)

Loss per common share—basic and diluted:




Net loss per share attributable to Inovio Pharmaceuticals, Inc. stockholders

$

(0.06)


$

(0.06)

Weighted average number of common shares outstanding—basic and diluted

156,155,532


134,968,394




CONTACTS:
Investors: Bernie Hertel, Inovio Pharmaceuticals, 858-410-3101, bhertel@inovio.com
Media: Jeff Richardson, Inovio Pharmaceuticals, 267-440-4211, jrichardson@inovio.com

(Logo: http://photos.prnewswire.com/prnh/20120131/LA44118LOGO)

SOURCE Inovio Pharmaceuticals, Inc.



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