Inovio Pharmaceuticals, Inc. (NYSE AMEX: INO) today reported financial results for the quarter ended June 30, 2010.
Total revenue was $1.1 million and $2.5 million for the three and six months ended June 30, 2010, compared to $2.5 million and $2.9 million for the three and six months ended June 30, 2009, respectively.
Total operating expenses for the three and six months ended June 30, 2010, were $6.1 million and $11.9 million as compared to $5.5 million and $9.4 million for the three and six months ended June 30, 2009.
The net loss attributable to common stockholders for the three and six months ended June 30, 2010, was $7.6 million, or $0.07 per share, and $9.9 million, or $0.10 per share, as compared with a net loss attributable to common stockholders of $10.7 million, or $0.19 per share, and $14.1 million, or $0.28 per share, for the three and six months ended June 30, 2009.
Revenue
Revenue from license fees and milestone revenue was $175,000 and $248,000 for the three and six months ended June 30, 2010, as compared to $2.3 million and $2.5 million for the three and six months ended June 30, 2009. The decrease in revenue under license fees and milestone revenue for the three and six month periods ended June 30, 2010, compared to the comparable periods in 2009, was mainly due to no revenue being recognized under the Wyeth collaboration and licensing agreement as a result of the cancellation of the agreement in July 2009.
During the three and six months ended June 30, 2010, Inovio recorded grant and miscellaneous revenue of $960,000 and $2.3 million, respectively, as compared to $114,000 and $216,000 for the three and six months ended June 30, 2009. The increase in grant and miscellaneous revenue was primarily due to revenue recognized from our contract with the National Institute of Allergy and Infectious Diseases ("NIAID") of $945,000 and $1.8 million for the three and six months ended June 30, 2010, compared to $68,000 for both the three and six months ended June 30, 2009.
Operating Expenses
Research and development expenses for the three and six months ended June 30, 2010, were $3.1 million and $5.8 million as compared to $1.2 million and $2.1 million for the three and six months ended June 30, 2009. The increase in research and development expenses for the three and six months ended June 30, 2010, compared to the comparable periods in 2009, was primarily due to higher costs related to work performed for the NIAID and PATH Malaria Vaccine Initiative contracts, higher outside services and contract labor expenses related to research and development projects, higher outside engineering professional services related to CELLECTRA® development, higher clinical trial costs and higher personnel costs due to greater employee headcount on average throughout the respective periods.
General and administrative expenses, which include business development expenses and the amortization of intangible assets, for the three and six months ended June 30, 2010, were $3.0 million and $6.1 million as compared to $4.3 million and $7.3 million for the three and six months ended June 30, 2009. The decrease in general and administrative expenses for the three and six months ended June 30, 2010, compared to the comparable periods in 2009, was primarily due to a decrease in legal and other expenses associated with the merger and other corporate matters. The decrease was partially offset by higher amortization expense as a result of the intangible assets that were acquired from VGX Pharmaceuticals and higher personnel costs due to greater employee headcount on average throughout the respective periods.
Net Loss Attributable to Common Stockholders
The $4.2 million decrease in net loss attributable to common stockholders for the six months ended June 30, 2010, compared with the same period in 2009, resulted primarily from a decrease in the loss related to the change in fair market value of our investment in VGX International as of June 30, 2010, increase in other income from the revaluation of registered common stock warrants, increase in grant and miscellaneous revenue and a decrease in general and administrative expenses.
Capital Resources
As of June 30, 2010, cash and cash equivalents plus short term investments in certificates of deposit were $22.2 million, compared to $30.3 million in cash and cash equivalents as of December 31, 2009. This change primarily resulted from the use of cash for research and development as well as general and administrative expenses. Based on management's projections and analysis, the company believes that its cash and cash equivalents are sufficient to meet our planned working capital requirements through the end of 2011.
Corporate Update
Corporate Development
During the quarter, Inovio and its collaborators from Drexel University, Cheyney University, and the University of Pennsylvania received a $2.8 million grant to develop a DNA vaccine to treat hepatitis C virus (HCV). The grant will fund pre-clinical studies to test the safety and effect on the immune system of Inovio's novel vaccines designed to treat persons who are chronically infected with hepatitis C virus and have not responded to currently available therapies. People with chronic HCV infection face an increased risk of developing hepatocellular cancer, a difficult-to-treat cancer with a poor prognosis.
The company was awarded "Best Early Stage Biotech" Vaccine Industry Excellence Award at the World Vaccine Congress.
The company changed its name from Inovio Biomedical to Inovio Pharmaceuticals, Inc. to better reflect its business focus.
Preclinical Development
During the quarter, the peer-reviewed journal Molecular Therapy published a paper highlighting that in a head-to-head comparison with a Merck adenovirus serotype 5 (Ad5) vaccine, considered to be the most immunogenic among viral vectors, an Inovio optimized SynConTM DNA vaccine delivered using its proprietary electroporation technology demonstrated numerous advantages in both magnitude and breadth of immune responses produced in non-human primates.
Clinical Development
During the quarter, Inovio announced it had completed enrollment of all subjects for its phase I trial of its therapeutic cervical cancer vaccine (VGX-3100) targeting the E6 and E7 proteins of human papillomavirus (HPV) types 16 and 18. In the first two dose cohorts, six of 12 vaccinated subjects (50%) developed significant antigen-specific CTL (killer T-cell) responses, with average CTL responses increasing in a dose-related fashion. Ten of the 12 patients (83%) developed strong antibody responses. The vaccine has been well tolerated with an acceptable safety profile in all subjects tested. Interim immunology and safety results from the third and final dose group are expected to be reported in September.
Inovio immunized the first subject in its U.S. Phase I clinical trial to evaluate its SynCon™ H5N1 (avian) influenza DNA vaccine, VGX-3400X. This study represents the first step in demonstrating Inovio's novel universal influenza vaccine approach, which aims to overcome the constraints of current annual strain and subtype-specific influenza vaccines by developing a single vaccine to potentially protect against existing and newly emergent strains within multiple targeted subtypes, such as H5N1 and H1N1, posing risk to humans.
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