Inovio Pharmaceuticals, Inc. (NYSE AMEX: INO) today reported financial results for the quarter ended March 31, 2011.
Total revenue for the quarter ended March 31, 2011, was $3.1 million, compared with $1.4 million for the same period in 2010. Total operating expenses for the quarter ended March 31, 2011, were $7.7 million, compared with $5.8 million for the same period in 2010. The net loss attributable to common stockholders for the quarter ended March 31, 2011, was $2.4 million, or $0.02 per share, compared with a net loss attributable to common stockholders of $2.3 million, or $0.02 per share for the same period in 2010.
The increase in revenue was primarily due to an increase in revenue from the company's contract with the National Institute of Allergy and Infectious Diseases ("NIAID") of $2.7 million for the quarter compared with $835,000 for the same period in 2010.
Research and development expenses for the quarter were $4.4 million, compared with $2.7 million for the same period in 2010. The increase was primarily due to higher clinical trial costs related to the initiation of the HPV Phase II study as well as higher costs related to work performed for the NIAID contract.
Net Loss Attributable to Common Stockholders
The $119,000 increase in net loss attributable to common stockholders for the quarter compared with the same period in 2010 resulted primarily from the increase in research and development as well as general and administrative expenses and the loss from the change in fair market value of our investment in VGX International as of March 31, 2011, offset by an increase in other income from the revaluation of registered common stock warrants.
As of March 31, 2011, cash and cash equivalents plus short-term investments in certificates of deposit were $40.8 million, compared with $21.8 million as of December 31, 2010. This change primarily resulted from the January 2011 financing: the Company entered into an investor purchase agreement with a single investor relating to the issuance and sale of (a) 21,130,400 shares of common stock and (b) warrants to purchase a total of 10,565,200 shares of common stock with an exercise price of $1.40 per share, for an aggregate purchase price of approximately $24.3 million. The shares of common stock and warrants were sold in units consisting of one share of common stock and a warrant to purchase 0.50 of a share of common stock. The purchase price for the share and warrant was $1.15 per unit. The Company received net proceeds from the transaction of approximately $23.0 million after deducting the placement agent's fee and estimated offering expenses payable by the Company. This increase was offset by the use of cash for research and development as well as general and administrative expenses.
During the three months ended March 31, 2011, Inovio issued an additional 1,028,905 shares at an average price of $1.35 per share with net proceeds to the Company of $1.4 million. These shares were sold under an At-the-Market Equity Offering, the details of which were filed with the SEC under Form 8-K on August 27, 2010. This Offering allows the company to sell shares from time to time at its discretion through an agent into the market.
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 end of 2013.
Inovio had a successful quarter, with important research and clinical advancements in multiple disease areas. Significantly, the company launched a Phase II clinical study for its proprietary cervical dysplasia DNA vaccine and is participating in two Phase II clinical studies initiated by partners. Raising new capital in the amount of $25.7M (gross) has provided the company with the resources to fund the company's business plan through 2013.
During the first quarter of 2011, Inovio announced the sale to OncoSec Medical Inc. of certain non-DNA vaccine technology and intellectual property relating to electroporation delivery of electrochemical and cytokine immune therapies for treating solid tumors. The terms of the agreement require OncoSec to make an upfront payment of $250,000 (paid) and additional payments amounting to $2.75M by March 24, 2013, and to pay a royalty based on commercial product sales.
Subsequent to the quarter, 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.
Inovio received a U.S. Department of Defense Small Business Innovation Research Grant to test the feasibility of delivering DNA vaccines by intradermal electroporation simultaneously to two or more spatially distinct sites on the body.
During the quarter, Inovio initiated a Phase II clinical trial for VGX-3100. The study will assess adult females with CIN 2/3 or CIN 3 cervical dysplasias, the pre-cancerous stages of abnormal cells that precede cervical cancer, and biopsy-proven HPV 16 or 18, which are responsible for 70% of CIN 2/3 and cervical cancer incidences. The randomized, placebo-controlled, double-blind study will evaluate cervical tissue changes after three 6 mg doses of VGX-3100 are administered by injection in combination with Inovio's CELLECTRA® electroporation delivery device. The company expects that a total of 148 patients will be enrolled in 25 study centers in the U.S., South Korea, South Africa, Australia, and Canada. Inovio achieved best-in-class T cell immune responses in terms of strength and duration (measured to nine months).
Inovio's collaborator the University of Southampton initiated an open-label, multi-center Phase 2 clinical trial (WIN Trial) to treat chronic myeloid leukemia and acute myeloid leukemia with a DNA vaccine coded for Wilms' tumor gene 1 (WT1) delivered using Inovio's new ELGEN 1000 automated vaccine delivery device. Prior clinical studies in humans using parts of the WT1 gene, notably as peptide vaccine candidates, demonstrated the production of modest levels of CD8+ T-cell responses and measurable clinical responses, although both effects were transient. This will be the first study to combine DNA vaccination with electroporation delivery of WT1 antigens with the goal of stimulating high and durable levels of immune responses, critical for improving clinical outcomes.
Another partner, ChronTech Pharma AB, initiated a Phase IIb clinical study of its ChronVac-C® DNA vaccine for hepatitis C virus (HCV) delivered by Inovio's proprietary electroporation DNA vaccine delivery technology in combination with standard of care. In Phase I, ChronVac-C delivered using Inovio's MedPulser® electroporation device resulted in a robust increase in T-cell immune responses against HCV and was safe and well-tolerated. Post-study observation of subjects who completed the protocol and then entered into standard of care (SOC) treatment using interferon and ribavirin showed a complete and rapid viral response (four weeks) in 70% of those participants (5 of 7). 83% of the participants (5 of 6) monitored for an extended period continued to show undetectable virus levels six months after they completed SOC. SOC treatment alone usually results in about 40-50% of patients reaching undetectable virus levels after six months of treatment.
Preclinical DNA Vaccine and Electroporation Technology Development
During the first quarter, Inovio received recognition in multiple scientific journals for various advances in its research and development programs. Examples include:
- Vaccine highlighted positive results from Inovio's novel DNA vaccine targeting HIV clade C viruses. Clade C is the predominant HIV-1 strain infecting people in sub-Saharan Africa, India, and China.
- PLoS Neglected Tropical Diseases highlighted positive results from Inovio's multi-antigen Chikungunya virus DNA vaccine, which induced robust antibody and T-cell immune responses and provided 100% protection of mice against a challenge with this tropical infectious disease. Studies in rhesus macaques demonstrated generation of strong neutralizing antibody responses which mimicked those observed in CHIKV-infected human patients who subsequently recovered from this disease.
- Human Vaccines detailed potent immune responses in a preclinical study of Inovio's SynCon™ DNA vaccine for prostate cancer targeting two antigens. While current prostate cancer therapies target single antigens, in this study Inovio tested the hypothesis in mice that a broader collection of antigens, administered with Inovio's electroporation-based delivery technology, would improve the breadth and effectiveness of a prostate cancer immunotherapy.
- Human Vaccines highlighted Inovio's new generation of DNA vaccine electroporation delivery technology. Based on piezoelectricity, this new contactless delivery method is non-invasive and amenable to the design of devices that are low-cost, portable, and extremely easy to use, i.e. optimal for mass vaccinations.
- Subsequent to the quarter, Current Opinion in Immunology published an article called "Electroporation Delivery of DNA Vaccines: Prospects for Success." The article, co-authored by Dr. Niranjan Sardesai, Inovio's Senior Vice President, Research & Development, and Dr. David Weiner, Chairman, Scientific Advisory Board, Inovio Pharmaceuticals, and Professor, Department of Pathology & Laboratory Medicine at the University of Pennsylvania, affirmed that DNA vaccines are nearing the threshold of a medical leap far beyond the power of traditional vaccines, which employ 60-year-old development concepts.
Inovio Pharmaceuticals, Inc.