PLYMOUTH MEETING, Pa., March 16, 2015 (GLOBE NEWSWIRE) -- Inovio Pharmaceuticals, Inc. (Nasdaq:INO) today reported financial results for the fourth quarter and year ended December 31, 2014.
Total revenue was $2.5 million and $10.5 million for the quarter and year ended December 31, 2014, as compared to $1.7 million and $13.5 million for the same periods in 2013.
Total operating expenses for the quarter and year ended December 31, 2014, were $13.5 million and $50.0 million as compared to $9.7 million and $33.0 million for the same periods in 2013.
The net loss attributable to common stockholders for the quarter and year ended December 31, 2014, was $7.4 million, or $0.12 per share, and $36.1 million, or $0.61 per share, as compared with a net loss attributable to common stockholders of $15.5 million or $0.30 per share, and $66.0 million, or $1.43 per share, for the quarter and year ended December 31, 2013.
The improvement of $8.1 million and $29.9 million in net loss attributable to common stockholders for the quarter and year ended December 31, 2014, compared with the same periods in 2013, resulted primarily from a reduction in non-cash accounting expense in 2014 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.
Dr. J. Joseph Kim, President and CEO, said: "The year 2014 was the most important in the company's history. It is the first time that a DNA-based active immunotherapy has achieved clinically relevant efficacy using targeted T cell activation directly in patients in a large controlled study. We completed preparations and expect to soon launch our hepatitis B human study with Roche. Furthermore, DARPA awarded a $12.2M grant to advance a new application – DNA-based monoclonal antibodies – of our core technology.
"In 2015 we look forward to our first cancer data, our complete phase II data being published in a peer-reviewed medical journal, advancing the many steps toward our phase III launch, initiating clinical studies for additional diseases, and new corporate development steps. Our phase II data was a significant validation of the ideal characteristics we are pursuing with our active immunotherapy technology; and each day we continue to take the methodical steps necessary to realize the significant commercial and medical potential of our transformative applications and products."
We are receiving ongoing payments from Roche under our collaborative research and development arrangement. The decrease in revenue was primarily due to the up-front payment associated with the partnership agreement executed with Roche in 3Q 2013, offset by an increase in recognized revenue related to research and development services performed under the agreement.
Research and development expenses for the quarter and year ended December 31, 2014, were $9.2 million and $34.1 million as compared to $6.4 million and $21.4 million for the same periods in 2013. The increase in R&D expenses is generally related to an increased investment in all our product development programs and our Roche partnership (the latter being fully offset by development fees from Roche). General and administrative expenses for the quarter and year ended December 31, 2014, were $4.2 million and $15.9 million, compared to $4.3 million and $13.6 million for the quarter and year ended December 31, 2013.
As of December 31, 2014, cash and cash equivalents and short-term investments were $93.6 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 December 31, 2014, the company had 60.7 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 are provided below. Form 10-K providing the complete 2014 annual financial report can be found at: http://ir.inovio.com/secfilings.
First ever reported data showing efficacy achieved by killer T cells generated in the body by a DNA-based active immunotherapy in a large controlled human study
In 2014 we reported top-line data from our phase II clinical trial (HPV-003) for VGX-3100, our SynCon® immunotherapy product against HPV-caused pre-cancers and cancers delivered with our CELLECTRA® electroporation device, providing critical evidence that we are on the right path to achieving the characteristics of an "ideal" immunotherapy technology to fight cancers and infectious diseases.
What is an "ideal" immunotherapy? To state the obvious: products that are effective, efficient, and safe. More specifically, we want immunotherapies that:
- Target disease-specific antigens (i.e. proteins unique to a cancer or infectious disease)
- Do not depend upon being patient-specific and personalized (why remove from, modify, and reintroduce cells to a patient if you can do the most important work in the patient?)
- Activate functional killer T cells with necessary killing tools such as granzyme and perforin
- Generate robust T cell responses (e.g. a significant number of T cells) that are persistent and durable over time (memory response)
- Do not induce unwanted immune responses
- Do not induce toxic inflammatory responses
- Are capable of "breaking tolerance" of cancer cells grown in the body.
Our phase II data shows we are achieving these ideal characteristics with our active immunotherapy approach to activating highly capable, antigen-targeted T cells in vivo (in the body) and we are advancing a growing pipeline of pre-clinical and clinical immunotherapy products.
In our randomized, placebo-controlled, double-blind phase II study of over 148 women with high grade cervical dysplasia caused by HPV type 16 or 18, we used a three immunization regimen of our SynCon® DNA-based immunotherapy. Evaluating these women 36 weeks after their first treatment, our endpoints were to measure histologic regression of the cervical lesion (pre-cancer) and virological clearance.
High grade cervical pre-cancer regression:
- CIN2/3 to CIN1 or no disease: VGX-3100: 53 of 107 (49.5%); placebo: 11 of 36 (30.6%)
- Per protocol analysis statistically significant (p=0.017)
- CIN 2/3 regression to no disease: VGX-3100: 43 of 107 (40.2%); placebo: 6 of 36 (16.7%)
- Per protocol analysis statistically significant (p=0.006)
Clearance of HPV 16 or 18 from the cervix AND CIN2/3 regression to CIN1 or no disease:
- VGX-3100: 43 of 107 (40.2%); placebo: VGX-3100 recipients compared to 5 of 35 (14.3%)
- Per protocol analysis statistically significant (p=0.001)
- Robust and durable T-cell activity was detected in subjects who received VGX-3100 compared to those who received placebo.
- No serious adverse events. Statistically significant adverse events included only injection site redness (an indication of the desired immune response being activated).
- Intent to treat results were similar and also statistically significant.
- These outcomes were statistically significant and clinically relevant, meeting the primary and secondary endpoints.
- For the product and indication of high grade cervical dysplasia, the results show that VGX-3100 represents the potential for a non-surgical option to treat CIN2/3:
- Demonstrated efficacy and safety
- Regressed disease to normal
- Cleared virus which caused the disease
- For the product and other HPV-related indications, the results show the potential for VGX-3100 to be applied to cervical cancer, HPV-associated head & neck cancer, and anogenital pre-cancers and cancers.
- For the technology, the results validate the potential of our SynCon products to be effective, efficient, and safe, and meet various additional criteria for an ideal active immunotherapy:
- Simple: three monthly injections generate CD8 killer T cells
- T cells are measurable in the blood
- T cells are "trafficked" to diseased tissue (tissue infiltrating T cells)
- Direct correlation found between CD8 T cells and efficacy
- These results validate the broad product/disease potential of our other SynCon anti-cancer therapies (currently lung, breast, pancreas, prostate) and antiviral therapies (HBV, HCV, HIV).
Detailed study findings have been prepared for publication in a peer-reviewed medical journal. We plan 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. These steps include scaling up commercial-level production of our immunotherapy product and delivery devices. 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 pre-cancers caused by HPV infection such as vulvar, vaginal, and other anogenital neoplasia as well as cancers of the cervix, head & neck, and anogenital areas. In 2014 we initiated phase I/IIa clinical studies of INO-3112 (VGX-3100 plus our IL-12 immune activator INO-9012) against HPV-caused cervical cancer and head and neck cancer. This immune activator has been shown to speed the onset and increase the already high levels of antigen-specific T cells generated by the immunotherapy. We expect to report the first interim data from one of these first cancer studies in the second half of 2015.
With our primary focus on cancers, we initiated our second unique DNA immunotherapy into its first human study. We started a phase I trial of our hTERT immunotherapy (INO-1400) alone or in combination with Inovio's IL-12 immune activator (INO-9012) in adults with breast, lung, or pancreatic cancer at high risk of relapse after surgery and other cancer treatments. Because high levels of hTERT (human telomerase reverse transcriptase) expression are found in 85% of human cancers, this immunotherapy candidate holds the potential as a broad spectrum cancer therapeutic.
With respect to our partnership with Roche for our hepatitis B immunotherapy, INO-1800, Roche is providing full funding and entrusted Inovio with the responsibility to run the phase I study. We have received regulatory clearance to start this study and will soon begin enrolling patients. Treatment of the first patient in this trial will trigger a milestone payment from Roche.
We intend to initiate a phase I study in 1H 2015 of our prostate DNA immunotherapy (INO-5150) targeting prostate-specific membrane antigen (PSMA) and prostate-specific antigen (PSA). A study in monkeys showed that immunization with INO-5150 generated strong and robust T-cell immune responses that were the highest generated by a PSA-targeting immunotherapy in animal studies. These results were also similar to the immune responses generated by VGX-3100, Inovio's phase II-completed HPV immunotherapy that generated best-in-class T-cell responses. We have also received regulatory clearance to start the INO-5150 phase I study and will soon begin enrolling patients.
We intend to launch a phase I study of our Ebola immunotherapy (INO-4212) in the first half of 2015 in collaboration with GeneOne Life Sciences, Inc. (Inovio owns a minority share interest in GeneOne). Inovio published data in 2013 showing 100% protection of animals immunized with our Ebola DNA immunotherapy.
Inovio's multi-antigen SynCon® immunotherapy targeting hepatitis C virus genotypes 1a and 1b, INO-8000, is being studied in a phase I/IIa clinical trial in Korea in collaboration with GeneOne Life Sciences, Inc. The companies expect to report interim data from this clinical trial in 2015. A paper reporting the killing effect of antigen-specific T cells stimulated by INO-8000 in non-human primates was published in Human Vaccines & Immunotherapeutics: "Strong HCV NS3/4a, NS4b, NS5a, NS5b-specific cellular immune responses induced in rhesus macaques by a novel HCV genotype 1a/1b consensus DNA vaccine."
Subsequent to year end, we reported that a 12-patient phase I study of Inovio's HIV immunotherapy, PENNVAX®-B, in HIV-infected patients revealed that induced immune response characteristics were similar to those observed in extremely rare HIV-infected individuals who without treatment do not progress to further stages of the disease ("long-term non-progressors"). It is believed that part of their ability to control infection may lie in their unique immune responses. PENNVAX®-B drove the expansion of activated HIV-specific CD8+ T cells with functional characteristics similar to those of long-term non-progressors. ("Synthetic consensus HIV-1 DNA induces potent cellular immune responses and synthesis of granzyme B, perforin in HIV infected individuals," Molecular Therapy.) The knowledge from our PENNVAX®-B studies in healthy and HIV-infected people has been used to create our global, multi-clade PENNVAX®-GP preventive and therapeutic HIV DNA immunotherapy candidate. Development of this product was funded in part by a $25 million NIH contract. We expect to initiate a phase I study of PENNVAX®-GP in 1H. This study will be conducted by the HVTN with funding provided from the NIH.
R&D and Preclinical Development
In 2014, we reported clinically and commercially important advancements of emerging new applications and products based on our core DNA plasmid and electroporation delivery technology.
A new DNA-based cytokine immune activator, interleukin-33 (IL-33), achieved a more rapid and complete regression of established tumors in mice when added to a DNA immunotherapy. Notably, IL-33 significantly increased the magnitude of vaccine-specific CD8 T cell responses. ("Alarmin IL-33 acts as potent immunoadjuvant enhancing antigen-specific cell-mediated immunity and inducing potent anti-tumor immunity," Cancer Research.) We are developing an expanding portfolio of patent-protected cytokine and chemokine immune activators such as IL-12, IL-28, and IL-33 to form combination therapies with our immunotherapies with the goal of achieving the greatest possible efficacy against targeted diseases.
At the 17th Annual Meeting of the American Society of Gene & Cell Therapy in Washington, DC, we presented preclinical study data for our emerging DNA-based monoclonal antibody (dMAb™) application. Targeting Chikungunya virus (CHIKV), we reported our plasmid CHIKV dMAb protected 100% of treated animals from a lethal injection of CHIKV virus while 100% of the control animals died. The treated animals were spared of virus-related morbidity, as measured by weight loss and lethargy. (We are taking further steps on this application, as discussed under Corporate Development below.)
Monoclonal antibodies (mAbs) have become an important treatment for many diseases, but remain expensive and time consuming to produce and administer. They are manufactured outside the body, typically requiring costly large-scale laboratory development and production. They require frequent repeat administrations and have a limited duration of potency in the body. dMAbs have the potential to overcome these limitations by virtue of their simplified design, product stability, manufacturing, dosing frequency, and cost effectiveness, thereby providing potential new avenues for treatment of disease.
Our melanoma immunotherapy encoding the tyrosinase gene (highly expressed in nearly 80% of melanoma tumor cells) induced robust and broad immune responses in animals and directed cancer-killing T cells against tumors. T cells induced by the immunotherapy were very effective in infiltrating the tumor site, where they prevented tumors, controlled tumor growth, and changed the tumor micro-environment by "turning off" cells that suppress T-cell activity. Inovio's therapy increased survival in melanoma-challenged mice versus a control group. ("Novel and enhanced anti-melanoma DNA vaccine targeting the tyrosinase protein inhibits myeloid derived suppressor cells (MDSC) and tumor growth in a syngeneic prophylactic and therapeutic murine model," Cancer Gene Therapy.)
In November, Roche and Inovio terminated the 2013 collaboration, option, and license agreement to co-develop INO-5150, our DNA immunotherapy targeting prostate cancer, as well as the research collaboration in prostate cancer. All of Roche's rights to INO-5150 will be returned to Inovio. We plan to independently advance INO-5150 into a phase I clinical trial in the first half of 2015. The Roche/Inovio partnership remains focused on the other major component of the 2013 agreement, Inovio's DNA immunotherapy against hepatitis B virus (INO-1800). The first global clinical study of INO-1800 will be initiated in 1H 2015.
The Defense Advanced Research Projects Agency (DARPA) awarded $12.2 million for a collaborative project to develop DNA-based monoclonal antibodies, using technology developed by Penn and licensed by Inovio, against influenza and antibiotic-resistant bacteria (Pseudomonas aeruginosa and Staphylococcus aureus). The research is being conducted by scientists from the Perelman School of Medicine at the University of Pennsylvania; Inovio Pharmaceuticals; and MedImmune (AstraZeneca). In previous preclinical studies our dMAbs demonstrated robust virus neutralization and protected treated animals challenged with a lethal virus. The focus of this project is to provide a platform to rapidly protect people against emerging infections through the development of novel synthetic monoclonal antibodies produced by patients themselves.
We expanded our existing license agreement with the University of Pennsylvania, adding exclusive worldwide rights to technology and intellectual property for novel synthetic therapies against cancer, infectious diseases and new immune activators. This amendment broadens and strengthens the Company's patent protection covering candidate products for dengue fever, H7N9 influenza, additional HPV serotypes, and additional cancer antigens. The amended agreement provides Inovio global rights to numerous dMAbs, immune activators (IL-21, IL-23 & IL-33), and immune therapies for Middle East Respiratory Syndrome (MERS) and tuberculosis.
Inovio's 91%-owned subsidiary, VGX Animal Health, Inc. (VAH), concluded an agreement providing Plumbline Life Sciences, Inc. (PLS) of Korea an exclusive license for animal applications of its growth hormone-releasing hormone (GHRH) technology and animal DNA vaccines plus a non-exclusive license to Inovio electroporation delivery systems for these applications. VGX Animal Health will receive $2 million in cash in multiple payments, 20% of the outstanding shares of PLS, milestone payments, and royalties on product sales. Inovio retains the human applications of its GHRH technology.
On June 5, 2014, Inovio implemented a 1-for-4 reverse split of the Company's common stock. The reverse split was implemented to bring our share structure and price more in line with our peers.
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. Inovio was subsequently added to the Russell Global, Russell 2000®, Russell Microcap® and NASDAQ Biotechnology Indexes.
With our growing product portfolio and advancing clinical development, we made strategic additions to our management team to expand our expertise and capacity to implement our plans:
- Ms. Jennifer Laux was appointed Vice President, Commercial Development to formulate our commercialization strategy for our immunotherapy portfolio. Ms. Laux has over 20 years of experience in life sciences marketing and commercialization and served in senior cardiovascular marketing roles for Boehringer Ingelheim and Merck.
- Zane Yang, M.D. was appointed Vice President, Clinical Development, Oncology to advance the clinical development of our oncology portfolio (excluding cervical cancer and dysplasia). He was most recently Director, Oncology Medical Affairs in the U.S. for Janssen Pharmaceuticals, a unit of Johnson & Johnson, where he led the prostate cancer and solid tumor therapeutic area.
- Subsequent to the year, Mark Stephen Gelder, M.D., an experienced gynecologic oncologist, was appointed Vice President, Clinical Development to lead Inovio's clinical development of its immunotherapies against HPV-caused cervical cancer and dysplasia, including our planned phase III study for VGX-3100. Prior to joining Inovio he was Chief Medical Officer at Heron Therapeutics and previously led therapeutic oncology programs at Pfizer, Wyeth and Bayer.
Inovio continues its corporate development activities to secure grants, collaborations, and partnerships to help advance its SynCon® immunotherapy and vaccine products.
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 Roche, MedImmune, University of Pennsylvania, DARPA, Drexel University, NIH, HIV Vaccines Trial Network, National Cancer Institute, 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, 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, including INO-5150, and to commence a phase I clinical trial for INO-5150 in the first half of 2015, 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, 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 |
|Cash and cash equivalents||$ 40,543,982||$ 33,719,796|
|Prepaid expenses and other current assets||797,973||637,433|
|Prepaid expenses from affiliated entity||1,382,375||2,057,350|
|Deferred tax asset||342,573||61,839|
|Total current assets||98,947,084||58,683,589|
|Fixed assets, net||4,583,204||2,886,545|
|Investment in affiliated entity||12,340,811||9,664,587|
|Intangible assets, net||4,776,059||5,718,778|
|Common stock warrants||550,000||717,500|
|Total assets||$ 131,785,097||$ 88,287,207|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Accounts payable and accrued expenses||$ 6,383,170||$ 5,444,508|
|Accounts payable and accrued expenses due to affiliated entity||28,407||522,255|
|Accrued clinical trial expenses||2,007,432||1,446,180|
|Common stock warrants||2,022,729||19,540,583|
|Deferred revenue from affiliated entity||394,791||388,542|
|Total current liabilities||14,023,752||28,966,456|
|Deferred revenue, net of current portion||173,779||1,997,333|
|Deferred revenue from affiliated entity, net of current portion||836,694||1,211,694|
|Deferred tax liabilities||504,049||195,778|
|Commitments and contingencies|
|Inovio Pharmaceuticals, Inc. stockholders' equity:|
|Preferred stock—par value $0.001; Authorized shares: 10,000,000, issued and outstanding shares: 23 at December 31, 2014 and 26 at December 31, 2013||—||—|
|Common stock—par value $0.001; Authorized shares: 600,000,000 at December 31, 2014 and December 31, 2013, issued and outstanding: 60,741,082 at December 31, 2014 and 52,576,390 at December 31, 2013||60,741||52,577|
|Additional paid-in capital||443,327,915||348,267,389|
|Accumulated other comprehensive loss||(251,390)||(76,365)|
|Total Inovio Pharmaceuticals, Inc. stockholders' equity||111,226,976||52,455,024|
|Total stockholders' equity||111,537,594||52,902,683|
|Total liabilities and stockholders' equity||$ 131,785,097||$ 88,287,207|
|Inovio Pharmaceuticals, Inc.|
| CONSOLIDATED STATEMENTS OF OPERATIONS |
|For the Year ended December 31,|
|Revenue under collaborative research and development arrangements||$ 7,416,568||$ 9,239,547||$ 82,536|
|Revenue under collaborative research and development arrangements with affiliated entity||479,464||425,000||577,467|
|Grants and miscellaneous revenue||2,560,734||3,802,799||3,458,649|
|Research and development||34,095,039||21,368,604||17,984,825|
|General and administrative||15,857,688||13,643,074||10,778,359|
|Gain on sale of assets||—||(2,000,000)||(1,151,000)|
|Total operating expenses||49,952,727||33,011,678||27,612,184|
|Loss from operations||(39,495,961)||(19,544,332)||(23,493,532)|
|Other income (expense):|
|Interest and other income, net||331,461||132,214||166,113|
|Change in fair value of common stock warrants||348,143||(45,632,669)||1,982,620|
|Gain (Loss) on investment in affiliated entity||2,676,224||(1,038,745)||1,631,819|
|Net loss attributable to non-controlling interest||18,420||55,084||44,025|
|Net loss attributable to Inovio Pharmaceuticals, Inc.||$ (36,121,713)||$ (66,028,448)||$ (19,668,955)|
|Net loss per common share attributable to Inovio Pharmaceuticals, Inc. stockholders|
|Basic||$ (0.61)||$ (1.43)||$ (0.58)|
|Diluted||$ (0.64)||$ (1.43)||$ (0.58)|
|Weighted average number of common shares outstanding used in per share calculations:|