Inovio Pharmaceuticals, Inc. (NASDAQ: INO) today reported financial results for the quarter ended September 30, 2014.
Total revenue was $1.8 million and $8.0 million for the three and nine months ended September 30, 2014, compared to $9.5 million and $11.7 million for the same periods in 2013.
Total operating expenses were $10.2 million and $36.5 million for the three and nine months ended September 30, 2014, compared to $8.7 million and $23.3 million for the same periods in 2013.
The net loss attributable to common stockholders for the three and nine months ended September 30, 2014, was $7.2 million, or $0.12 per share, and $28.7 million, or $0.49 per share, compared to $30.9 million, or $0.64 per share, and $50.6 million, or $1.15 per share, for the same periods in 2013.
The $23.7 million and $21.9 million decrease in net loss attributable to common stockholders for the three and nine months ended September 30, 2014, compared with the same periods in 2013 resulted primarily from a higher non-cash accounting expense in 2013 related to the 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, which increased significantly during 2013.
We are receiving ongoing revenue for payments received from Roche under our ongoing collaborative research and development arrangement. The decrease in revenue for the comparable periods was primarily due to the large up-front payment associated with the partnership agreement concluded with Roche in 3Q 2013.
Research and development expenses for the three and nine months ended September 30, 2014, were $7.0 million and $24.9 million, compared to $5.4 million and $15.0 million for the same periods in 2013. The increase for the three and nine month periods was primarily related to work conducted under our Roche partnership and expenses relating to preparations for future clinical trials. General and administrative expenses for the three and nine months ended September 30, 2014, were $3.2 million and $11.6 million versus $3.3 million and $9.3 million for the same periods in 2013. Increased non-cash stock-based compensation also contributed to the overall increase in operating expenses.
As of September 30, 2014, cash and cash equivalents and short-term investments were $100.9 million compared with $52.7 million as of December 31, 2013. This increase was primarily due to the net proceeds from our March 2014 financing and warrants and options exercised during the period.
As of September 30, 2014, the company had 60.5 million shares outstanding and 66.6 million fully diluted.
Based on management's projections and analysis, the Company believes that cash, cash equivalents and short-term investments are sufficient to meet its planned working capital requirements through the end of 2017, excluding its planned phase III clinical trial of VGX-3100. The Company expects to raise additional capital to fund this study.
Inovio's balance sheet and statement of operations is provided below. Form 10-Q providing the complete 2014 third quarter financial report can be found at: http://ir.inovio.com/secfilings.
In the third quarter, Inovio released top line efficacy data from its randomized, placebo-controlled, double-blind phase II clinical trial (HPV-003) for VGX-3100, its SynCon® immunotherapy against HPV-caused pre-cancers and cancers delivered with its CELLECTRA® electroporation device. The primary endpoint, histologic regression, was evaluated 36 weeks after the first treatment. In the per protocol analysis of this three-immunization regimen, CIN2/3 resolved to CIN1 or no disease in 53 of 107 (49.5%) women treated with VGX-3100 compared to 11 of 36 (30.6%) who received placebo. This difference was statistically significant (p<0.025). Intent to treat results were also statistically significant. There was also a high level of complete CIN 2/3 clearance.
This trial also demonstrated virological clearance of HPV 16 or 18 from the cervix in conjunction with histopathological regression of cervical dysplasia to CIN1 or no disease, a secondary endpoint of the trial, in 43 of 107 (40.2%) VGX-3100 recipients compared to 5 of 35 (14.3%) placebo recipients (p<0.025). Robust T-cell activity was detected in subjects who received VGX-3100 compared to those who received placebo.
Detailed study findings will be submitted for publication in a peer-reviewed medical journal. Inovio plans to independently advance VGX-3100 into a phase III registration study with target patient characteristics and a treatment regimen similar to the phase II study. The Company expects to complete its end-of-phase-II meeting with the FDA in 2015 and begin treating women in a phase III study in early 2016.
Inovio has broadened its therapeutic HPV franchise to include other precancers caused by HPV infection such as vulvar, vaginal, and other anogenital neoplasia as well as cancers of the cervix, head & neck, and anogenital areas. Inovio is conducting phase I/IIa clinical studies of VGX-3100 against HPV-caused cervical cancer and head and neck cancer. Both of these studies incorporate an immune activator, DNA-based IL-12, which has been shown to further boost already high levels of antigen-specific T cells generated by the immunotherapy. This combination is designated INO-3112.
Further expanding its HPV portfolio, Inovio launched a compassionate phase I clinical trial in patients with HPV-caused aerodigestive cancer. This study is testing Inovio's immunotherapy, INO-3106, alone or in combination with DNA-based IL-12 in subjects with HPV-6 associated invasive aerodigestive malignancies who have exhausted other treatment options (chemotherapy, radiation and surgery). Successful results could open a path to pursuing an FDA orphan designation (special status granted for therapies for rare diseases) for aerodigestive cancers.
Inovio plans to initiate an exploratory human study for INO-1400, its hTERT DNA immunotherapy, for breast, lung and pancreatic cancers by the end of 2014. hTERT is over-expressed in 85% of cancers. As a result, this immunotherapy has the potential to serve as a "universal" immune therapeutic agent for cancer. INO-1400 represents the first of several new broadly applicable cancer-specific antigens in Inovio's growing oncology product development pipeline that we intend to advance into human studies.
In collaboration with Roche, Inovio expects to advance its prostate cancer immunotherapy, INO-5150, into a phase Ia/Ib clinical trial in 2015 in patients with castrate resistant prostate cancer. The study will assess a comprehensive set of parameters and combinations of (i) INO-5150, (ii) additional new prostate cancer antigens that the team has been developing under the Roche/Inovio research collaboration, and (iii) Roche's portfolio of immunomodulatory drugs including checkpoint inhibitors. The initiation of this trial will trigger a milestone payment from Roche.
Also in collaboration with Roche, Inovio intends to launch a phase I/IIa clinical trial for its hepatitis B immunotherapy, INO-1800, in early 2015. The initiation of this trial will also trigger a milestone payment from Roche.
Inovio's multi-antigen SynCon® immunotherapy targeting hepatitis C virus, INO-8000 (a.k.a. VGX-6500) is being studied in a phase I/IIa clinical trial in Korea in collaboration with GeneOne Life Sciences, Inc. The companies expect to report phase I data from this clinical trial in 2015. Inovio intends to launch a related multi-site study with INO-8000 in the US.
Inovio expects to initiate a phase I study for its global, multi-clade PENNVAX®-GP preventive and therapeutic HIV DNA vaccine candidate. Development of this product was funded in part by a $25 million NIH contract. Initiation of this study may be delayed from the 4Q 2014 to 1Q 2015.
Inovio published positive animal data from its Ebola DNA immunotherapy in 2013. In 3Q 2014 we announced our intent to advance this immunotherapy (INO-4200), which is designed to target multiple strains of Ebola, in a phase I clinical trial in the first half of 2015 in collaboration with GeneOne Life Sciences, Inc. (Inovio owns a minority share interest in GeneOne). Upon successful completion of the phase I trial, the companies will jointly seek additional third party support and resources to further develop and commercialize this product.
In the third quarter, data was published from a study of Inovio's DNA immunotherapy for C. difficile, a bacterial infection that causes severe intestinal distress and symptoms such as diarrhea, nausea, colitis, sepsis, and even death. This immune therapy, delivered with electroporation, produced high levels of neutralizing antibodies that protected 100% of mice and non-human primates from a lethal dose of C. difficile toxin. The data was published in Infection and Immunity in a paper titled, "An Optimized, Synthetic DNA Vaccine Encoding the Toxin A and Toxin B Receptor Binding Domains of Clostridium difficile Induces Protective Antibody Responses In Vivo." This vaccine is being tested in collaboration with Dr. Michele Kutzler at Drexel University. Clostridium difficile infection is a major source of morbidity and mortality in the US, with half a million cases and approximately 30,000 deaths annually and a significant related healthcare cost.
Subsequent to the quarter, the Defense Advanced Research Projects Agency (DARPA) awarded $12.2 million for a collaborative study that will be conducted by scientists from the Perelman School of Medicine at the University of Pennsylvania; Inovio Pharmaceuticals; and MedImmune, the global biologics research and development arm of AstraZeneca. Together, the group will develop and assess DNA-based monoclonal antibodies (mAbs) for influenza and antibiotic resistant bacteria. This collaboration aims to demonstrate that the DNA plasmids containing optimized DNA sequences encoded to generate disease-specific mAbs can activate sufficient quantities of specific antibodies in the body to be protective against a pathogen challenge. Successful completion of the initial preclinical activities under the DARPA grant will lead to clinical studies on selected product candidates to be funded under a future increment to the award.
Inovio transferred its U.S. stock exchange listing from the NYSE MKT to the NASDAQ Global Select Market on September 15, 2014, retaining the trading symbol INO. During the quarter, Inovio was added to the Russell Global, Russell 2000® and Russell Microcap® Indexes.
Adding to the breadth of Inovio's management team, Ms. Jennifer Laux was appointed Vice President, Commercial Development. She is responsible for developing Inovio's commercialization strategy for its growing portfolio of oncology and infectious disease DNA immunotherapies. Ms. Laux has over 20 years of experience in life sciences marketing and served in senior cardiovascular marketing roles for Boehringer Ingelheim and Merck. She holds an MBA in Marketing from the Wharton School, an MA in International Studies from the University of Pennsylvania, and a BA in International Relations from Georgetown University.
Inovio continues to work toward partnerships with other large pharmaceutical companies interested in Inovio SynCon® immunotherapy and vaccine products.