PLYMOUTH MEETING, Pa., Aug. 10, 2015 (GLOBE NEWSWIRE) -- Inovio Pharmaceuticals, Inc. (NASDAQ:INO) today reported financial results for the quarter ended June 30, 2015.
Total revenue was $5.3 million and $10.5 million for the three and six months ended June 30, 2015, compared to $3.8 million and $6.2 million for the same periods in 2014.
Total operating expenses were $20.4 million and $33.9 million for the three and six months ended June 30, 2015, compared to $14.0 million and $26.3 million for the same periods in 2014.
The net loss attributable to common stockholders for the three and six months ended June 30, 2015, was $6.2 million, or $0.09 per share, and $16.8 million, or $0.26 per share, compared to $10.7 million, or $0.18 per share, and $21.5 million, or $0.37 per share, for the same periods in 2014.
Revenue
The increase in revenue was primarily due to the $3.0 million milestone payment earned in the second quarter 2015 under our partnership agreement with Roche.
Operating Expenses
Research and development expenses for the three and six months ended June 30, 2015, were $16.7 million and $26.1 million, compared to $9.6 million and $17.8 million for the same periods in 2014. The increase for the three and six-month periods was primarily related to increased investment in our product development programs. General and administrative expenses for the three and six months ended June 30, 2015, were $4.7 million and $8.8 million versus $4.3 million and $8.5 million for the same periods in 2014.
Capital Resources
As of June 30, 2015, cash and short-term investments were $154.6 million compared with $93.6 million as of December 31, 2014. At quarter end the company had 71.8 million shares outstanding and 78.9 million fully diluted.
On May 5, 2015, the Company closed an underwritten public offering of 10,925,000 shares of the Company's common stock, including 1,425,000 shares of common stock issued pursuant to the underwriter's exercise of its option, at the public offering price of $8.00 per share. The gross proceeds of this offering were $87.4 million. Net proceeds to the Company, after deducting the underwriter's discounts and commission and other offering expenses, were $81.9 million.
We intend to use the net proceeds received from the sale of our common stock for general corporate purposes, including clinical trial expenses, research and development expenses, general and administrative expenses, manufacturing expenses and potential acquisitions of companies and technologies that complement our business.
Based on management's projections and analysis, the Company believes that cash and short-term investments meet its planned working capital requirements through the end of 2018.
Inovio's balance sheet and statement of operations are provided below. Form 10-Q providing the complete 2015 second quarter financial report can be found at: http://ir.inovio.com/secfilings.
Corporate Update
Corporate Development
On August 7, 2015, Inovio entered into a strategic cancer vaccine collaboration and license agreement with MedImmune, the global biologics research and development arm of AstraZeneca. Under the agreement, MedImmune acquired exclusive rights to Inovio's INO-3112 immunotherapy, which targets cancers caused by human papillomavirus (HPV) types 16 and 18. MedImmune intends to study INO-3112 in combination with selected immunotherapy molecules within its pipeline in HPV-driven cancers. Emerging evidence suggests that the benefits from immuno-oncology molecules, such as those in MedImmune's portfolio, can be enhanced when they are used in combination with cancer vaccines that generate tumor-specific T-cells.
Under the terms of the agreement, MedImmune will make an upfront payment of $27.5 million to Inovio as well as potential future payments upon reaching development and commercial milestones totaling up to $700 million. MedImmune will fund all development costs. Inovio is entitled to receive up to double-digit tiered royalties on INO-3112 product sales.
Within the broader collaboration, Inovio and MedImmune will develop up to two additional DNA-based cancer vaccine products not included in Inovio's current product pipeline, which MedImmune will have the exclusive rights to develop and commercialize. Inovio will receive development, regulatory and commercialization milestone payments and will be eligible to receive royalties on worldwide net sales for these additional cancer vaccine products.
This is Inovio's second major partnership with a large pharmaceutical company, adding to its existing license agreement with Roche for Inovio's INO-1800 hepatitis B immunotherapy. The initiation of a phase I trial for INO-1800 in April triggered a $3 million milestone payment from Roche.
We initiated a partnership with Europe's largest cancer organization, the European Organization for Research and Treatment of Cancer (EORTC), to evaluate INO-3112 in combination with traditional chemo-radiotherapy for the treatment of patients with locally advanced stage cervical cancer. The primary endpoint of this phase II study is to evaluate progression free survival at 18 months. It is expected to begin in 2016 and will be part of MedImmune's development plans.
Under an award worth potentially $45 million from the Defense Advanced Research Projects Agency (DARPA), Inovio and collaborators are advancing multiple treatment and prevention approaches against Ebola. These approaches include DNA-based monoclonal antibody technology, protein-based therapeutic monoclonal antibodies, and DNA-based vaccines.
We will advance our DNA vaccine for Middle East Respiratory Syndrome (MERS) into a phase I clinical trial in healthy volunteers in a collaboration with GeneOne Life Science Inc. GeneOne will conduct and fund the clinical study, expected to start by year end, in return for milestone-based co-ownership of this immunotherapy.
Inovio continues its corporate development efforts to secure grants, collaborations, and partnerships to help advance its SynCon® immunotherapy and vaccine products.
Clinical Development
Our manuscript detailing the broad study findings of our phase II study of VGX-3100 in patients with high-grade cervical dysplasia (CIN 2/3) has been accepted by a top peer-reviewed medical journal.
We continue preparations to launch our planned phase III registration study of VGX-3100 in early 2016. Necessary steps include scaling from pilot-scale to commercial-level production of our immunotherapy product and delivery devices, significant projects with important quality assurance standards to maintain. We expect our end-of-phase-II meeting with the FDA, which will review our phase II data and proposed phase III clinical trial design, to take place by year end.
As part of our expanding franchise targeting all HPV-associated pre-cancers and cancers, we reported preliminary data from our first cancer study, a head & neck cancer trial, showing that INO-3112 (VGX-3100 plus Inovio's IL-12 based immune activator) generated strong CD8+ T cell responses in 3 of 4 patients. This study, along with our ongoing cervical cancer phase I study of INO-3112, will now be part of MedImmune's development plans.
Subsequent to the quarter we launched our phase I study of INO-5150, our SynCon® immunotherapy targeting prostate-specific membrane antigen and prostate-specific antigen, in men with biochemically relapsed prostate cancer. This study is evaluating the safety, tolerability, and immunogenicity of INO-5150 alone or in combination with INO-9012, Inovio's DNA-based IL-12 immune activator.
We initiated with our partner Roche a phase I trial for our hepatitis B immunotherapy, INO-1800. This randomized, open-label, active-controlled, dose escalation study is evaluating the safety, tolerability, and immunogenicity of Inovio's hepatitis B immunotherapy alone or in combination with Inovio's IL-12-based immune activator.
The company initiated a phase I trial to evaluate its Ebola immunotherapy and we expect the HIV Vaccine Trials Network to initiate a phase I study of PENNVAX®-GP in 2H 2015.
About Inovio Pharmaceuticals, Inc.
Inovio is revolutionizing the fight against cancer and infectious diseases. Our immunotherapies uniquely activate best-in-class immune responses to prevent and treat disease, and have shown clinically significant efficacy with a favorable safety profile. With an expanding portfolio of immune therapies, the company is advancing a growing preclinical and clinical stage product pipeline. Partners and collaborators include MedImmune, Roche, University of Pennsylvania, DARPA, Drexel University, NIH, HIV Vaccines Trial Network, National Cancer Institute, EORTC, U.S. Military HIV Research Program, and University of Manitoba. For more information, visit 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, our expectations regarding our research and development programs 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, including safety and efficacy for VGX-3100 and INO-3112, 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, our ability to support our broad pipeline of SynCon® active immune therapy and vaccine products, our ability to advance our portfolio of immune-oncology products independently, the ability of our collaborators to attain development and commercial milestones for products we license and product sales that will enable us to receive future payments and royalties, 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, our ability to enter into partnerships in conjunction with our research and development programs, 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, 2014, our Form 10-Q for the quarter ended June 30, 2015, 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. | ||
| CONSOLIDATED BALANCE SHEETS | ||
| June 30, | December 31, | |
| 2015 | 2014 | |
| (Unaudited) | ||
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 70,297,574 | $ 40,543,982 |
| Short-term investments | 84,295,821 | 53,075,974 |
| Accounts receivable | 5,608,845 | 2,804,207 |
| Prepaid expenses and other current assets | 551,298 | 797,973 |
| Prepaid expenses and other current assets from affiliated entity | 1,045,370 | 1,382,375 |
| Deferred tax asset | 342,573 | 342,573 |
| Total current assets | 162,141,481 | 98,947,084 |
| Fixed assets, net | 5,497,203 | 4,583,204 |
| Investment in affiliated entity | 18,849,647 | 12,340,811 |
| Intangible assets, net | 4,333,444 | 4,776,059 |
| Goodwill | 10,113,371 | 10,113,371 |
| Common stock warrants | 186,500 | 550,000 |
| Other assets | 581,342 | 474,568 |
| Total assets | $ 201,702,988 | $ 131,785,097 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable and accrued expenses | $ 6,068,232 | $ 6,383,170 |
| Accounts payable and accrued expenses due to affiliated entity | 3,417,017 | 28,407 |
| Accrued clinical trial expenses | 2,546,487 | 2,007,432 |
| Common stock warrants | 1,710,229 | 2,022,729 |
| Deferred revenue | 152,108 | 3,187,223 |
| Deferred revenue from affiliated entity | 432,291 | 394,791 |
| Deferred rent | 193,442 | — |
| Total current liabilities | 14,519,806 | 14,023,752 |
| Deferred revenue, net of current portion | 313,667 | 173,779 |
| Deferred revenue from affiliated entity, net of current portion | 649,194 | 836,694 |
| Deferred rent, net of current portion | 4,758,564 | 4,709,229 |
| Deferred tax liabilities | 504,049 | 504,049 |
| Total liabilities | 20,745,280 | 20,247,503 |
| Inovio Pharmaceuticals, Inc. stockholders' equity: | ||
| Common stock | 71,810 | 60,741 |
| Additional paid-in capital | 529,555,022 | 443,327,915 |
| Accumulated deficit | (348,740,319) | (331,910,290) |
| Accumulated other comprehensive loss | (324,192) | (251,390) |
| Total Inovio Pharmaceuticals, Inc. stockholders' equity | 180,562,321 | 111,226,976 |
| Non-controlling interest | 395,387 | 310,618 |
| Total stockholders' equity | 180,957,708 | 111,537,594 |
| Total liabilities and stockholders' equity | $ 201,702,988 | $ 131,785,097 |
| Inovio Pharmaceuticals, Inc. | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (Unaudited) | ||||
| Three Months Ended | Six Months Ended | |||
| June 30, | June 30, | |||
| 2015 | 2014 | 2015 | 2014 | |
| Revenues: | ||||
| Revenue under collaborative research and development arrangements | $ 4,335,236 | $ 3,107,781 | $ 8,580,807 | $ 4,543,508 |
| Revenue under collaborative research and development arrangements with affiliated entity | 166,667 | 137,500 | 279,167 | 254,464 |
| Grants and miscellaneous revenue | 784,775 | 556,381 | 1,593,341 | 1,361,333 |
| Total revenues | 5,286,678 | 3,801,662 | 10,453,315 | 6,159,305 |
| Operating expenses: | ||||
| Research and development | 16,688,511 | 9,607,281 | 26,114,831 | 17,832,761 |
| General and administrative | 4,718,260 | 4,347,327 | 8,826,188 | 8,479,545 |
| Gain on sale of assets | (1,000,000) | — | (1,000,000) | — |
| Total operating expenses | 20,406,771 | 13,954,608 | 33,941,019 | 26,312,306 |
| Loss from operations | (15,120,093) | (10,152,946) | (23,487,704) | (20,153,001) |
| Other income (expense): | ||||
| Interest and other income, net | 146,332 | 68,999 | 284,608 | 121,075 |
| Change in fair value of common stock warrants | (49,773) | 824,390 | (51,000) | 318,464 |
| Gain (loss) on investment in affiliated entity | 8,861,145 | (1,458,160) | 6,508,836 | (1,835,123) |
| Net loss | (6,162,389) | (10,717,717) | (16,745,260) | (21,548,585) |
| Net (gain) loss attributable to non-controlling interest | (85,861) | 6,443 | (84,769) | 15,851 |
| Net loss attributable to Inovio Pharmaceuticals, Inc. | $ (6,248,250) | $ (10,711,274) | $ (16,830,029) | $ (21,532,734) |
| Net loss per common share attributable to Inovio Pharmaceuticals, Inc. stockholders: | ||||
| Basic | $ (0.09) | $ (0.18) | $ (0.26) | $ (0.37) |
| Diluted | $ (0.09) | $ (0.19) | $ (0.27) | $ (0.38) |
| Weighted average number of common shares outstanding used in per share calculations: | ||||
| Basic | 67,655,975 | 60,232,498 | 64,198,528 | 57,722,938 |
| Diluted | 67,838,738 | 60,474,859 | 64,376,523 | 57,976,455 |