Inovio Pharmaceuticals (INO) 8-KINOVIO Announces Second Quarter 2023 Financial Results and Provides Strategic Update

INOVIO has announced today that it is further reprioritizing its pipeline to focus on its highest potential, closest to market programs, specifically its late-stage clinical program for INO-3107 as a treatment for RRP. In a Phase 1/2 trial involving RRP patients, treatment with INO-3107 resulted in a statistically significant reduction in the number of surgical interventions required to manage the disease. INOVIO is targeting to commence its pivotal Phase 3 trial in adult patients with RRP, subject to clearance by regulators, in the first quarter of 2024.

On May 5, 2023, data from the Phase 1/2 trial of INO-3107 were presented by lead investigator Dr. Ted Mau at the scientific program of the American Broncho-Esophagological Association (ABEA) at the Combined Otolaryngology Spring Meetings (COSM) in Boston, Massachusetts. The presentation highlighted the safety profile of INO-3107, which was well tolerated by participants in the trial and resulted in mostly low-grade (Grade 1) treatment-emergent adverse effects (TEAEs) such as injection site pain and fatigue. There were no high-grade TEAEs deemed related to treatment and no TEAEs leading to treatment discontinuation. Treatment with INO-3107 induced cellular immune responses against both HPV-6 and HPV-11, with activated CD4 and CD8 T cells, including cytotoxic CD8 T cells thought to be important for clearance of virally infected cells. Preliminary analysis indicates a potential correlation between T-cell responses and reduction of surgeries. T-cell responses were also observed at Week 52, indicating a persistent cellular memory response.

Also in May 2023, INO-3107 was granted orphan drug designation by the European Commission (EU) as a potential treatment for RRP. INO-3107 was granted orphan drug designation from the FDA in July 2020, making it the first RRP product candidate to receive designations from both U.S. and EU regulatory bodies.

INOVIO has decided to cease all further development of VGX-3100 as a potential treatment for cervical HSIL in the United States. This decision is driven by a number of factors, including the recent analysis of biomarker data from REVEAL2 indicating that substantial work would be needed to refine this novel biomarker before it could be used in any further Phase 3 trials. Previously, the U.S. FDA indicated that at least one or more additional well-controlled trials would need to be conducted in the biomarker-positive population before being considered for registration. Given these factors, INOVIO has determined that its resources are best invested in other pipeline candidates with a faster potential path to market. INOVIO remains encouraged by the data collected in both of its completed Phase 3 trials for VGX-3100 in cervical HSIL (REVEAL1 and REVEAL2). In these trials, the data showed that VGX-3100 could clear both virus and lesions, which INOVIO believes could be supportive evidence for pursuing regulatory approval in other global markets.

For non-U.S. markets, where the access to and options for treatment differs, INOVIO believes that VGX-3100 could be a valuable treatment option for cervical HSIL should current and future trials continue to show potential efficacy and achieve regulatory approvals. For the Chinese market, INOVIO’s partner ApolloBio continues to advance the development of VGX-3100 for cervical HSIL in a Phase 3 trial. This trial is designed to use a similar protocol to that of REVEAL1 and does not utilize the novel biomarker used in INOVIO’s REVEAL2 trial. INOVIO also continues to discuss the clinical development of VGX-3100 with potential partners in other global markets.

Pending discussions with regulators, INOVIO plans to investigate opportunities to advance VGX-3100 as a potential treatment for anal HSIL, an indication that continues to have significant unmet need. Results published in the New England Journal of Medicine in June 2022 from a multi-year study sponsored by the National Cancer Institute, called the ANCHOR study, showed “for the first time that treating anal HSIL is effective at reducing the incidence of anal cancer in a very high-risk group of people – people living with HIV” (NCI press release, June 15, 2022). INOVIO has observed that this study produced results that are moving the medical community away from the historical practice of actively monitoring anal HSIL and toward a more proactive approach in treating lesions that can progress to cancer. The challenge for patients and their healthcare providers in taking a more proactive approach is that there are few effective options available to treat anal HSIL. VGX-3100 has the ability to clear HPV-16/18 lesions and virus, which was not only observed in the cervical HSIL Phase 3 trials, but also in an open-label Phase 2 anal HSIL trial in HIV negative people. VGX-3100 is currently being investigated in an ongoing Phase 2 trial in HIV-positive anal HSIL patients being conducted by the AIDS Malignancy Consortium.

INOVIO is also working to advance its oncology product candidates, specifically INO-5401 and INO-3112, which target glioblastoma (GBM) and HPV-related cancers, respectively, as well as other candidates in its early-stage clinical pipeline targeting infectious diseases, in particular the company’s Ebola vaccine candidate, INO-4201. Progress for these candidates has continued in the areas of manufacturing, regulatory submissions, and partnership discussions. The next stage of clinical development will most likely require additional funding or partnerships.

As a result of the decision to focus its resources on its late-stage candidates with the greatest likelihood of success, including stopping the development of VGX-3100 in cervical HSIL for the U.S. market, INOVIO has taken steps to further conserve its capital resources. The company recently announced plans to further reduce its workforce by 58 employees, or 30%. The company estimates the cost savings from the headcount reduction will provide annual savings of approximately $9.9 million, which alongside other reductions in spending would allow the company to extend its cash runway into the third quarter of 2025.

Cash, Cash Equivalents and Short-term Investments: As of June 30, 2023, cash, cash equivalents and short-term investments were $194.9 million compared to $253.0 million as of December 31, 2022.

Revenues: Total revenues for the three months ended June 30, 2023 were $226,000, compared to $784,000 for the same period in 2022.

Research and Development (R&D) Expenses: R&D expenses for the three months ended June 30, 2023 were $23.7 million compared to $56.5 million for the same period in 2022. The decrease in R&D expenses was primarily the result of lower drug manufacturing, clinical trial expenses and outside services related to INO-4800 and other COVID-19 studies and lower employee and consultant compensation, including stock-based compensation, among other variances.

General and Administrative (G&A) Expenses: G&A expenses for the 2023 second quarter were $13.5 million compared to $48.5 million for the same period in 2022. The decrease in G&A expenses was primarily related to significant one-time costs in the second quarter of 2022 related to the settlement of the class action litigation and related legal expenses, as well as severance expenses incurred in 2022 in connection with the separation of the company’s former president and chief executive officer, among other variances.

Total Operating Expenses: Total operating expenses were $37.3 million compared to $104.9 million for the same period in 2022.

Net Loss: INOVIO’s net loss for the quarter ended June 30, 2023 was $35.5 million, or $0.13 per basic and diluted share, compared to net loss of $108.5 million, or $0.46 per basic and diluted share, for the second quarter of 2022.

Shares Outstanding: As of June 30, 2023, INOVIO had 268.1 million common shares outstanding and 290.0 million common shares outstanding on a fully diluted basis, after giving effect to the exercise, vesting and conversion, as applicable, of its outstanding options, restricted stock units, convertible preferred stock, and convertible debt.

INOVIO’s balance sheet and statement of operations are provided below. Additional information is included in INOVIO’s quarterly report on Form 10-Q for the quarter ended June 30, 2023, which can be accessed at: http://ir.inovio.com/financials/default.aspx.