Inovio Pharmaceuticals Reports 2012 First Quarter Financial Results

News provided by

May 09, 2012, 06:46 ET

BLUE BELL, Pa., May 9, 2012 /PRNewswire/ -- Inovio Pharmaceuticals, Inc. (NYSEAMEX: INO) today reported financial results for the quarter ended March 31, 2012.

Total revenue was $1.7 million for the three months ended March 31, 2012, compared to $3.1 million for the same period in 2011. Total operating expenses were $5.9 million compared to $7.5 million. The net loss attributable to common stockholders was $8.3 million, or $0.06 per share, compared to $2.4 million, or $0.02 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 $1.5 million versus $2.7 million, respectively. 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 Q1 2012 were $4.0 million compared to $4.4 million for Q1 2011. General and administrative expenses were $2.5 million versus $3.3 million, respectively.

Net Loss Attributable to Common Stockholders

The $5.9 million increase in net loss for the comparable periods 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 decrease in grant revenue.

Capital Resources

As of March 31, 2012, cash and cash equivalents plus short-term investments in certificates of deposit, mutual funds, and municipal bonds were $25.0 million compared with $30.3 million as of December 31, 2011.

Based on management's projections and analysis, the Company believes that cash and cash equivalents are sufficient to meet its planned working capital requirements into the third quarter of 2013.

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

Corporate Update

Clinical Development

During the first quarter Inovio reported significant vaccine-specific T-cell responses from its HIV-001 open label, phase I study, which enrolled 12 adult HIV-positive volunteers to assess safety and levels of immune responses generated by Inovio's PENNVAX®-B vaccine delivered with its CELLECTRA® electroporation device. The results affirmed best-in-class immune responses reported last year from Inovio's HVTN-080 phase I study of PENNVAX-B in healthy volunteers.

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. The company's collaborators, the University of Southampton and ChronTech Pharma AB, continue their enrollment of patients in phase II studies of DNA vaccines for leukemia and hepatitis C virus, respectively, with interim data anticipated in the second half of 2012.

We expect to report data from two phase I influenza studies, one for our synthetic vaccine focused on H5N1 influenza, the other for our synthetic universal vaccine targeting H5N1 and H1N1, in the second quarter.

Preclinical Development

During the quarter we announced data from multiple research and preclinical programs.

Synthetic vaccines for influenza Type A H3N2 and Type B achieved protective antibody responses in immunized animals against multiple unmatched strains from the years 2000 through 2012, progressing our universal influenza vaccine strategy.

Inovio's new skin electroporation technology significantly enhanced delivery of small interfering RNA (siRNA) molecules to skin and also demonstrated gene knockdown (silencing) in animal studies.

Inovio's SynCon® therapeutic vaccine for human papillomavirus (HPV) types 6 and 11, associated with head & neck cancers and genital warts, induced strong antigen-specific CD8+ T cells in mice, mirroring robust T-cell responses induced by VGX-3100 in earlier mice studies.

Corporate & Business Development

Inovio received a patent covering its synthetic consensus influenza H1 antigen, which relates to our H1N1 influenza constructs and INO-3510 universal influenza vaccine.

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.

Niranjan Y. Sardesai, Ph.D., was promoted to Chief Operating Officer and is now responsible for corporate and business development in addition to overseeing research and development.

Dr. Anthony Ford-Hutchinson, recently retired from his role as Senior Vice President, Vaccines Research and Development at Merck, joined Inovio's Scientific Advisory Board.

Dr. Adel Mahmoud was appointed to Inovio's Board of Directors. He is a professor at Princeton University, was President, Merck Vaccines, from 1999 to 2005, and also served as Merck's Chief Medical Advisor for Vaccines and Infectious Diseases.

Inovio has an expanding dialog with vaccine and biotechnology companies as well as non-governmental and government agencies with the goal of securing non-dilutive funding for its vaccine programs and potentially new collaborations and partnerships to advance the development and commercialization of its SynCon® vaccine platform and specific 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, 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 March 31, 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

	March 31, 2012	December 31, 2011
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$ 11,128,895	$ 17,350,116
Short-term investments	13,730,072	12,863,420
Accounts receivable	876,730	467,909
Accounts receivable from affiliated entity	39,066	38,406
Prepaid expenses and other current assets	760,733	746,049
Prepaid expenses and other current assets from affiliated entity	400,890	441,186

Total current assets	26,936,386	31,907,086
Restricted cash	100,146	100,059
Fixed assets, net	355,302	295,785
Intangible assets, net	8,849,869	9,310,485
Goodwill	10,113,371	10,113,371
Investment in affiliated entity	8,509,969	9,071,513
Investment in common stock warrants	294,000	100,000
Other assets	191,913	208,262

Total assets	$ 55,350,956	$ 61,106,561

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses	$ 3,316,787	$ 4,318,942
Accounts payable and accrued expenses due to affiliated entity	82,158	20,344
Accrued clinical trial expenses	773,769	1,059,372
Common stock warrants	8,417,492	5,176,319
Deferred revenue	48,739	79,502
Deferred revenue from affiliated entity	376,042	388,542

Total current liabilities	13,014,987	11,043,021
Deferred revenue, net of current portion	79,046	80,450
Deferred revenue from affiliated entity, net of current portion	1,867,944	1,961,694
Deferred rent	80,660	80,875
Deferred tax liabilities	78,859	78,859

Total liabilities	15,121,496	13,244,899
Stockholders' equity:
Inovio Pharmaceuticals, Inc. stockholders' equity:
Common stock	134,968	134,968
Additional paid-in capital	257,838,611	257,235,707
Accumulated deficit	(218,346,123)	(210,091,174)
Accumulated other comprehensive income	65,006	35,393

Total Inovio Pharmaceuticals, Inc. stockholders' equity	39,692,462	47,314,894
Non-controlling interest	536,998	546,768

Total stockholders' equity	40,229,460	47,861,662

Total liabilities and stockholders' equity	$ 55,350,956	$ 61,106,561

INOVIO PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	Three Months Ended March 31,
	2012	2011
Revenues:
License fee and milestone revenue	$ 24,838	$ 26,368
License fee and milestone revenue from affiliated entity	106,250	93,750
Grants and miscellaneous revenue	1,562,033	2,985,147

Total revenues	1,693,121	3,105,265
Operating expenses:
Research and development	4,042,579	4,421,799
General and administrative	2,488,088	3,319,232
Gain on sale of assets	(651,000)	(250,000)

Total operating expenses	5,879,667	7,491,031

Loss from operations	(4,186,546)	(4,385,766)
Other income (expense):
Interest and other income, net	31,544	1,855
Change in fair value of common stock warrants	(3,548,173)	2,331,868
Loss on investment in affiliated entity	(561,544 )	(370,011)
Net loss	(8,264,719)	(2,422,054)
Net loss attributable to non-controlling interest	9,770	9,441
Net loss attributable to Inovio Pharmaceuticals, Inc.	$ (8,254,949)	$ (2,412,613)

Loss per common share — basic and diluted:
Net loss per share attributable to Inovio Pharmaceuticals, Inc. stockholders	$ (0.06)	$ (0.02)

Weighted average number of common shares outstanding — basic and diluted	134,968,394	120,922,577