PLYMOUTH MEETING, Pa., March 12, 2019 /PRNewswire/ -- Inovio Pharmaceuticals, Inc. (NASDAQ:INO), a late-stage biotechnology company focused on the development and commercialization of DNA immunotherapies targeted against cancers and infectious diseases, today reported financial results for the fourth quarter and year ended December 31, 2018. Inovio's management will host a live conference call and webcast at 4:30 p.m. Eastern Time today to discuss financial results and provide a general business update.
Inovio Highlights
Dr. J. Joseph Kim, Inovio's President & CEO said, "Our Phase 3 program for VGX-3100 is advancing with REVEAL 1 nearing complete enrollment and the opening of sites for REVEAL 2. Moreover, Inovio continues to generate impressive efficacy data for HPV-related head and neck cancers, further validating our objective to be the global leader in treating HPV-related diseases. The announcement of the second patient achieving full cancer remission in January provides additional corroboration for Inovio's overall cancer combination strategy using a T cell activator combined with a checkpoint inhibitor against an array of cancers with big pharma partners providing various checkpoint inhibitors. With interim efficacy data expected later this year from our INO-5401 programs, we believe Inovio is well-positioned to continue to build upon its synthetic DNA immunotherapy approach, while continuing to leverage our current partnerships and seeking to form new ones."
Fourth Quarter 2018 Financial Results
Total revenue was $2.5 million and $30.5 million for the quarter and year ended December 31, 2018, respectively, compared to $8.8 million and $42.2 million for the same periods in 2017. Total operating expenses were $32.0 million and $124.6 million for the quarter and year ended December 31, 2018, respectively, compared to $31.7 million and $125.9 million for the same periods in 2017, respectively.
As a result of the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers, beginning on January 1, 2018, all contributions received from current grant agreements have been recorded as a contra-expense as opposed to revenue on the consolidated statement of operations. For the quarter and year ended December 31, 2018, $2.8 million and $9.5 million, respectively, was recorded as contra-research and development expense, which would have been classified as grant revenue in the prior year. Had this change in presentation not occurred, total revenue would have been $5.3 million and $40.0 million for the quarter and year ended December 31, 2018, respectively, compared to $8.8 million and $42.2 million for the same periods in 2017. Total operating expenses would have been $34.8 million and $134.1 million for the quarter and year ended December 31, 2018, respectively, compared to $31.7 million and $125.9 million for the same periods in 2017.
Inovio's net loss for the quarter and year ended December 31, 2018 was $33.0 million, or $0.34 per basic and diluted share, and $97.0 million, or $1.05 per basic and diluted share, respectively, as compared to $21.5 million, or $0.24 per basic and diluted share, and $88.2 million, or $1.08 per basic and $1.09 per diluted share, for the same periods in 2017.
Revenue
The year over year decrease in comparable revenue and grant agreement recognition was primarily due to $15.4 million in lower revenues recognized under Inovio's collaborative research and development agreement with AstraZeneca, as previously deferred revenue was recognized in June 2017 upon AstraZeneca's selection of the first cancer research collaboration product candidate. There was also a decrease in grant funding recognized from Inovio's DARPA Ebola grant of $8.8 million as well as no revenue recognized in 2018 from Roche compared to $6.1 million for 2017 due to the termination of the agreement in 2017. These decreases were partially offset by the recognition of the gross up-front payment from ApolloBio of $23.0 million during the year (approximately $19.4 million after payment of required taxes), as well as an increase in grant funding from the CEPI grant of $4.3 million, among other variances.
Operating Expenses
Research and development (R&D) expenses for the quarter and year ended December 31, 2018 were $26.4 million and $95.3 million, respectively, compared to $24.6 million and $98.6 million for the same periods in 2017. The year over year decrease in R&D expenses was primarily due to the $9.5 million contra-research and development expense recorded from grant agreements as discussed above, as well as a decrease in expenses related to Inovio's DARPA Ebola grant. These decreases were offset by an increase in expenses for drug manufacturing related to Inovio's collaboration with AstraZeneca, employee headcount to support clinical trials and partnerships, and expenses related to clinical trials, among other variances.
General and administrative expenses were $5.6 million and $29.3 million, respectively, for the quarter and year ended December 31, 2018 versus $8.0 million and $28.3 million, respectively, for the same periods in 2017.
Capital Resources
As of December 31, 2018, cash and cash equivalents and short-term investments were $81.2 million compared to $85.5 million as of September 30, 2018. As of December 31, 2018, the Company had 97.2 million common shares outstanding and 107.7 million common shares outstanding on a fully diluted basis, after giving effect to outstanding options, restricted stock units and convertible preferred stock.
During the year ended December 31, 2018, the Company sold 5,669,025 shares of common stock under its current and prior "at-the-market" (ATM) common stock sales agreements for aggregate net proceeds of $29.2 million.
During the year ended December 31, 2018, stock options and warrants to purchase an aggregate of 756,853 shares of common stock were exercised for aggregate net proceeds of $2.4 million.
In February and March 2019, the Company completed a private placement of $78.5 million aggregate principal amount of 6.50% convertible senior notes due 2024, or the Notes. The Notes were sold in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. Net proceeds from the offering were approximately $75.8 million, after deducting the initial purchasers' discount and estimated offering expenses payable by the Company.
Inovio's balance sheet and statement of operations are provided below. Additional information is included in Inovio's annual report on Form 10-K for the year ended December 31, 2018, which can be accessed at: http://ir.inovio.com/investors/financial-reports/default.aspx.
About Inovio Pharmaceuticals, Inc.
Inovio is a late-stage biotechnology company focused on the discovery, development, and commercialization of DNA-based immunotherapies and vaccines that transform the treatment and prevention of cancer and infectious disease. Inovio's proprietary technology platform applies antigen sequencing and DNA delivery to activate potent immune responses to targeted diseases. The technology functions exclusively in vivo, and has been demonstrated to consistently activate robust and fully functional T cell and antibody responses against targeted cancers and pathogens. Inovio's most advanced clinical program, VGX-3100, is in Phase 3 for the treatment of HPV-related cervical pre-cancer. Also in development are Phase 2 immuno-oncology programs targeting HPV-related cancers, bladder cancer, and glioblastoma, as well as platform development programs in hepatitis B, Zika, Ebola, MERS, and HIV. Partners and collaborators include AstraZeneca, Regeneron, Roche/Genentech, ApolloBio Corporation, The Wistar Institute, The Bill & Melinda Gates Foundation, the University of Pennsylvania, Parker Institute for Cancer Immunotherapy, CEPI, DARPA, GeneOne Life Science, Plumbline Life Sciences, NIH, HIV Vaccines Trial Network, National Cancer Institute, Walter Reed Army Institute of Research, Drexel University, and Laval University. For more information, visit www.inovio.com.
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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, including the planned initiation and conduct of clinical trials and the availability and timing of data from those trials. 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, 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 pipeline of SynCon® active immunotherapy and vaccine products, the ability of our collaborators to attain development and commercial milestones for products we license and product sales that will enable us to receive future payments and royalties, the adequacy of our capital resources, the availability or potential availability of alternative therapies or treatments for the conditions targeted by us or our collaborators, including alternatives that may be more efficacious or cost effective than any therapy or treatment that we and our collaborators hope to develop, issues involving product liability, issues involving patents and whether they or licenses to them will provide us 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 we can finance or devote other significant resources that may be necessary to prosecute, protect or defend them, the level of corporate expenditures, assessments of our 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, 2018, our Quarterly Reports on Form 10-Q and other regulatory filings we make from time to time. There can be no assurance that any product candidate in our pipeline will be successfully developed, manufactured or commercialized, that final results of clinical trials 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. Forward-looking statements speak only as of the date of this release, and we undertake no obligation to update or revise these statements, except as may be required by law.
Inovio Pharmaceuticals, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
December 31, | |||||||
2018 | 2017 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 23,693,633 | $ | 23,786,579 | |||
Short-term investments | 57,538,852 | 103,638,844 | |||||
Accounts receivable | 3,316,361 | 6,003,205 | |||||
Accounts receivable from affiliated entities | 738,583 | 486,619 | |||||
Prepaid expenses and other current assets | 1,406,590 | 2,600,906 | |||||
Prepaid expenses and other current assets from affiliated entities | 1,120,805 | 1,846,007 | |||||
Total current assets | 87,814,824 | 138,362,160 | |||||
Fixed assets, net | 15,949,014 | 18,320,176 | |||||
Investment in affiliated entity - GeneOne | 6,381,926 | 9,069,401 | |||||
Investment in affiliated entity - PLS | 3,023,987 | 2,325,079 | |||||
Intangible assets, net | 4,760,145 | 6,009,729 | |||||
Goodwill | 10,513,371 | 10,513,371 | |||||
Other assets | 2,669,998 | 2,639,354 | |||||
Total assets | $ | 131,113,265 | $ | 187,239,270 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 23,134,733 | $ | 23,278,798 | |||
Accounts payable and accrued expenses due to affiliated entities | 977,792 | 926,943 | |||||
Accrued clinical trial expenses | 5,671,764 | 8,611,892 | |||||
Common stock warrants | ? | 360,795 | |||||
Deferred revenue | 223,577 | 1,175,353 | |||||
Deferred revenue from affiliated entities | 33,575 | 174,110 | |||||
Deferred rent | 1,065,387 | 877,535 | |||||
Deferred grant funding | 4,165,848 | ? | |||||
Deferred grant funding from affiliated entities | 27,083 | ? | |||||
Total current liabilities | 35,299,759 | 35,405,426 | |||||
Deferred revenue, net of current portion | 150,793 | 215,853 | |||||
Deferred rent, net of current portion | 8,518,207 | 9,104,416 | |||||
Deferred tax liabilities | 24,766 | 24,766 | |||||
Other liabilities | 87,333 | ? | |||||
Total liabilities | 44,080,858 | 44,750,461 | |||||
Commitments and contingencies | |||||||
Inovio Pharmaceuticals, Inc. stockholders' equity: | |||||||
Preferred stock?par value $0.001; Authorized shares: 10,000,000, issued and outstanding shares: 23 | ? | ? | |||||
Common stock?par value $0.001; Authorized shares: 600,000,000 at December 31, 2018 and | 97,226 | 90,358 | |||||
Additional paid-in capital | 707,794,215 | 665,775,504 | |||||
Accumulated deficit | (620,426,436) | (523,356,317) | |||||
Accumulated other comprehensive loss | (528,867) | (117,005) | |||||
Total Inovio Pharmaceuticals, Inc. stockholders' equity | 86,936,138 | 142,392,540 | |||||
Non-controlling interest | 96,269 | 96,269 | |||||
Total stockholders' equity | 87,032,407 | 142,488,809 | |||||
Total liabilities and stockholders' equity | $ | 131,113,265 | $ | 187,239,270 |
Inovio Pharmaceuticals, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | |||||||||||
For the Year ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Revenues: | |||||||||||
Revenue under collaborative research and development arrangements | $ | 29,860,785 | $ | 28,407,388 | $ | 6,490,747 | |||||
Revenue under collaborative research and development arrangements with affiliated | 449,524 | 765,828 | 1,400,594 | ||||||||
Grants and miscellaneous revenue | 171,588 | 10,474,539 | 27,136,457 | ||||||||
Grants and miscellaneous revenue from affiliated entity | ? | 2,572,331 | 340,563 | ||||||||
Total revenues | 30,481,897 | 42,220,086 | 35,368,361 | ||||||||
Operating expenses: | |||||||||||
Research and development | 95,257,876 | 98,572,618 | 88,712,035 | ||||||||
General and administrative | 29,315,159 | 28,290,369 | 23,892,263 | ||||||||
Gain on sale of assets | ? | (1,000,000) | (1,000,000) | ||||||||
Total operating expenses | 124,573,035 | 125,862,987 | 111,604,298 | ||||||||
Loss from operations | (94,091,138) | (83,642,901) | (76,235,937) | ||||||||
Other income (expense): | |||||||||||
Interest and other income, net | 920,891 | 1,612,974 | 1,257,257 | ||||||||
Change in fair value of common stock warrants | 360,795 | 806,819 | 127,554 | ||||||||
Gain (loss) on investment in affiliated entity | (1,988,567) | (6,982,664) | 1,110,787 | ||||||||
Net loss before provision for income tax | (94,798,019) | (88,205,772) | (73,740,339) | ||||||||
Provision for income taxes | (2,169,811) | ? | ? | ||||||||
Net loss | (96,967,830) | (88,205,772) | (73,740,339) | ||||||||
Net loss per share | |||||||||||
Basic | $ | (1.05) | $ | (1.08) | $ | (1.01) | |||||
Diluted | $ | (1.05) | $ | (1.09) | $ | (1.01) | |||||
Weighted average number of common shares outstanding | |||||||||||
Basic | 92,539,997 | 81,777,493 | 73,214,766 | ||||||||
Diluted | 92,539,997 | 81,918,022 | 73,214,766 |
CONTACTS: | |
Investors: | Ben Matone, Inovio, 484-362-0076, [email protected] |
Media: | Jeff Richardson, Inovio, 267-440-4211, [email protected] |
SOURCE Inovio Pharmaceuticals, Inc.
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