BLUE BELL, Pa., March 17, 2011 /PRNewswire/ -- Inovio Pharmaceuticals, Inc. (NYSE AMEX: INO) today reported financial results for the fourth quarter and year ended December 31, 2010.
Total revenue was $2.4 million and $6.1 million for the quarter and year ended December 31, 2010, compared to $2.6 million and $9.1 million for the quarter and year ended December 31, 2009.
Total operating expenses for the quarter and year ended December 31, 2010, were $7.6 million and $25.4 million, compared to $6.4 million and $23.1 million for the quarter and year ended December 31, 2009.
The net loss attributable to common stockholders for the quarter and year ended December 31, 2010, was $6.3 million, or $0.06 per share, and $17.6 million, or $0.17 per share, compared with a net loss attributable to common stockholders of $7.3 million, or $0.07 per share, and $24.4 million, or $0.33 per share, for the quarter and year ended December 31, 2009.
Revenue Revenue from license fees and milestone revenue was $146,000 and $527,000 for the quarter and year ended December 31, 2010, compared to $298,000 and $4.9 million for the quarter and year ended December 31, 2009. The decreases in the respective periods were mainly due to no revenue being recognized in 2010 under the terminated Wyeth collaboration and licensing agreement as a result of the cancellation of the agreement in July 2009.
During the quarter and year ended December 31, 2010, Inovio recorded grant and miscellaneous revenue of $2.2 million and $5.6 million, compared to $2.4 million and $4.0 million for the quarter and year ended December 31, 2009. The decrease for the comparable three-month periods was primarily due to lower revenue recognized from our contract with the National Institute of Allergy and Infectious Diseases (NIAID) offset by the $733,000 grant awarded in October 2010 under The Patient Protection and Affordable Care Act of 2010 ("PPACA"). The increase for the comparable annual period was primarily due to more revenue recognized from our contract with the NIAID during the first and second quarters of 2010 as well as the PPACA grant.
Operating Expenses Research and development expenses for the quarter and year ended December 31, 2010, were $4.5 million and $13.3 million, compared to $3.9 million and $9.4 million for the quarter and year ended December 31, 2009. The increases in the respective periods was primarily due to higher costs related to work performed for the NIAID contract as well as higher other outside services and contract labor expenses related to research and development projects. The increase was partially offset by a decrease in research and development expenses incurred by Inovio AS and Inovio Tec, as these entities ceased operations in 2009, as well as lower stock based compensation expense.
General and administrative expenses, which include business development expenses and amortization of intangible assets, for the quarter and year ended December 31, 2010, were $3.1 million and $12.1 million, compared to $2.6 million and $13.7 million for the quarter and year ended December 31, 2009. The increase for the three-month period was primarily due to a reversal of a deferred tax liability in the fourth quarter of 2009, which did not occur in 2010. The decrease for the annual period was primarily due to lower legal and related fees. These decreases were partially offset by an increase in recurring operating expenses, including the amortization of intangible assets acquired in the 2009 merger, due to a full year operating as a combined company in 2010.
Net Loss Attributable to Common Stockholders The $6.8 million decrease in net loss attributable to common stockholders for the year ended December 31, 2010, compared with the year ended 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 December 31, 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 December 31, 2010, cash and cash equivalents plus short-term investments in certificates of deposit were $21.8 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, offset by $3.0 million received from VGX International in connection with the March 2010 Collaboration and License Agreement.
In 2010 Inovio issued 1,994,672 shares at an average price of $1.20 per share with net proceeds to the Company of $2.3 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.
In January 2011 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.
The number of shares of common stock issued and outstanding was 127,254,031 as of February 24, 2011.
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.
Corporate UpdateCorporate DevelopmentDuring 2010, Inovio expanded its existing license agreement with the University of Pennsylvania, adding exclusive worldwide licenses for technology and intellectual property for novel DNA vaccines against pandemic influenza, Chikungunya, and foot-and-mouth disease. The amendment also encompassed new chemokine and cytokine molecular adjuvant technologies.
Inovio received financial support from multiple government and non-government agencies:
Subsequent to year end Inovio signed an agreement with OncoSec Medical Inc. for the sale to OncoSec of certain non-DNA vaccine technology and intellectual property relating to electroporation technology useful for electrochemical and cytokine based immune therapies for treating solid tumors.
Preclinical DNA Vaccine and Electroporation Device DevelopmentDuring 2010 Inovio received recognition in multiple scientific journals for various advances in its research and development programs. Examples include:
Clinical DevelopmentDuring 2010, Inovio announced it achieved best-in-class immune responses in its Phase I dose escalation study of VGX-3100, its DNA vaccine to treat pre-cancerous cervical dysplasias and cancers caused by human papillomavirus (HPV) types 16 and 18. All dose groups developed significant antibody and T-cell immune responses; notably, in the third and final dose group, five of six (83%) patients developed unprecedented T-cell responses not achieved by any other non-replicating vaccine platform in humans. VGX-3100 delivered using Inovio's proprietary CELLECTRA® intramuscular electroporation delivery device was generally safe and well tolerated at all dose levels. There were no vaccine-related serious adverse events; reported adverse events and injection site reactions were mild to moderate and required no treatment.
Subsequent to year end, Inovio initiated a Phase II clinical trial for VGX-3100. The study will assess adult females with CIN 2/3 or CIN 3, 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.
During 2010, Inovio observed in an interim analysis high vaccine-induced response rates and strong magnitude of immune responses in its Phase I clinical study of PENNVAX™-B, a DNA vaccine for the prevention of HIV infection.
A Phase I study, called RV262, began to evaluate a unique prime-boost preventive HIV vaccination strategy aimed at global coverage. The prime is Inovio's plasmid DNA vaccine, PENNVAXTM-G. The NIAID, part of the U.S. National Institutes of Health (NIH), is sponsoring the study, which is being conducted by the U.S. Military HIV Research Program (MHRP) through its clinical research network in the U.S. and east Africa.
The company launched a U.S. Phase I clinical trial to evaluate its SynCon™ H5N1 (avian) influenza DNA vaccine, VGX-3400X, using intramuscular electroporation delivery. This H5N1 vaccine study represents the first step in demonstrating Inovio's novel universal influenza vaccine approach, which aims to bypass the current requirement for annual strain and subtype-specific influenza vaccines by developing a single vaccine to potentially protect against all strains within multiple targeted subtypes, such as H5N1 and H1N1, posing risk to humans. Inovio's affiliate, VGX International, also initiated a phase I clinical study of this vaccine candidate in Korea.
Subsequent to year end, Inovio's collaborator the University of Southampton initiated a Phase 2 clinical trial (WIN Trial) to treat leukemia utilizing Inovio's new ELGEN 1000 automated vaccine delivery device. This open-label, multi-center clinical trial is evaluating a DNA vaccine to treat chronic myeloid leukemia and acute myeloid leukemia.
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 a Phase I clinical trial of ChronVac-C using Inovio's MedPulser® electroporation device the therapy 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 patients). More significantly, 83% of the participants (5 of 6 patients) who were monitored for an extended period of time 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.
About Inovio Pharmaceuticals, Inc. Inovio is developing a new generation of vaccines, called DNA vaccines, to treat and prevent cancers and infectious diseases. These SynCon™ vaccines are designed to provide broad cross-strain protection against known as well as newly emergent strains of pathogens such as influenza. These vaccines, in combination with Inovio's proprietary electroporation delivery devices, have been shown to be safe and generate significant immune responses. Inovio's clinical programs include three separate programs in Phase II clinical studies, including VGX-3100 for treating cervical dysplasia and cancer. Other Inovio clinical programs include those for avian flu (preventive) and HIV vaccines (both preventive and therapeutic). Inovio is developing universal influenza and other vaccines in collaboration with scientists from the University of Pennsylvania. Other partners and collaborators include Merck, ChronTech, National Cancer Institute, U.S. Military HIV Research Program, NIH, HIV Vaccines Trial Network, University of Southampton, and PATH Malaria Vaccine Initiative. More information is available at 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 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 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, 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, evaluation of potential opportunities, 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, our ability to successfully integrate Inovio and VGX Pharmaceuticals, 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, 2010 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.CONTACTS:Investors:
Bernie Hertel, Inovio Pharmaceuticals, 858-410-3101Media:
Jeff Richardson, Richardson & Associates, 805-491-8313Inovio Pharmaceuticals, Inc.CONSOLIDATED BALANCE SHEETSDecember 31,20102009ASSETSCurrent assets:Cash and cash equivalents$19,998,489
$30,296,215Short-term investments- certificates of deposit1,846,271
—Short-term investments- auction rate securities—
10,397,530Auction rate security rights—
259,207Accounts receivable from affiliated entity72,149
58,853Prepaid expenses and other current assets273,975
409,845Prepaid expenses and other current assets from affiliated entity653,436
—Total current assets22,877,207
44,566,806Fixed assets, net276,795
343,457Intangible assets, net11,180,002
10,113,371Investment in affiliated entity11,360,888
$80,628,917LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable and accrued expenses$3,410,610
$3,445,750Accounts payable and accrued expenses due to affiliated entity1,680,947
445,091Accrued clinical trial expenses178,328
299,261Line of credit—
12,114,760Common stock warrants370,926
270,326Deferred revenue from affiliated entity375,000
—Total current liabilities6,436,708
19,350,038Deferred revenue, net of current portion72,780
82,594Deferred revenue from affiliated entity, net of current portion2,336,694
—Deferred rent, net of current portion67,112
11,338Deferred tax liabilities53,186
19,443,970Commitments and contingenciesInovio Pharmaceuticals, Inc. stockholders' equity:Preferred stock—par value $0.001; Authorized shares: 10,000,000, issued and
outstanding: 26 and 26 at December 31, 2010 and December 31, 2009, respectively
—Common stock—par value $0.001; Authorized shares: 300,000,000, issued and
outstanding: 105,038,192 at December 31, 2010 and 102,746,058 at December 31, 2009
102,746Additional paid-in capital241,233,334
(177,224,433)Accumulated other comprehensive income2,850
105,796Total Inovio Pharmaceuticals, Inc. stockholders' equity46,502,993
622,868Total stockholders' equity47,100,911
61,184,947Total liabilities and stockholders' equity$56,067,391
$80,628,917Inovio Pharmaceuticals, Inc.CONSOLIDATED STATEMENTS OF OPERATIONSFor the Years ended December 31,201020092008Revenues:License fee and milestone revenue$213,916
$791,401License fee and milestone revenue from affiliated entity313,306
—Revenue under collaborative research and development arrangements—
1,077,967Grants and miscellaneous revenue5,549,583
228,264Miscellaneous revenue from affiliated entity67,900
2,097,632Operating expenses:Research and development13,256,606
5,750,494General and administrative12,108,261
10,005,602Total operating expenses25,364,867
15,756,096Loss from operations(19,220,162)
(13,658,464)Other income (expense):Other income/(expense), net2,476,816
49,006Interest income, net74,514
643,836Loss from investment in affiliated entity(969,914)
(12,965,622)Net loss attributable to non-controlling interest24,950
—Net loss attributable to Inovio Pharmaceuticals, Inc.$(17,613,796)
$(12,965,622)Loss per common share—basic and diluted:Net loss per share attributable to Inovio Pharmaceuticals, Inc. stockholders$(0.17)
$(0.30)Weighted average number of common shares outstanding—basic and diluted103,201,880
|SOURCE Inovio Pharmaceuticals, Inc.|
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