Inovio Pharmaceuticals (INO) Q2 2024 Earnings Call Transcript

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Inovio Pharmaceuticals (INO 1.40%)
Q2 2024 Earnings Call
Aug 08, 2024, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon, ladies and gentlemen, and welcome to the Inovio’s second quarter 2021 financial results conference call. [Operator instructions] This call is being recorded on Thursday, August 8th, 2024. I would now like to turn the conference over to Thomas Hong, manager of investor relations. Please go ahead.

Thomas Hong — Manager of Investor Relations

Thank you. Good afternoon, and thank you [Technical difficulty] Inovio’s second quarter 2024 financial results conference call. Joining me on today’s call are: Dr. Jackie Shea, president; Dr.

Michael Sumner, chief medical officer; Peter Kies, chief financial officer; and Steve Egge, chief commercial officer. Today’s call will provide a general business update. Following prepared remarks, we will conduct a question-and-answer segment. During the call, we’ll be making forward-looking statements regarding future events and the future performance of the company.

These events relate to our business plans to develop Inovio’s DNA medicines platform, which include clinical and regulatory developments and timing of clinical data readouts and planned regulatory submissions, along with capital resources and strategic matters. All of these statements are based on the beliefs and expectations of management as of today. Actual events or results could differ materially. We refer you to the documents we file from time to time with the SEC, which, under their heading risk factors, identify important factors that could cause actual results to differ materially from those expressed by the company verbally, as well as statements made within this afternoon’s press release.

This call is being webcast live, and a link can be found on our website, ir.inovio.com, and a replay will be made available shortly after this call is concluded. We’ll now turn the call over to Inovio’s president and CEO, Dr. Jackie Shea.

Jackie Shea — President

Thank you, Thomas. Good afternoon, and thank you to everyone for joining today’s call. To begin with today, I’d like to discuss the progress we’ve made, thus far, for 2024 based on the goals we set out at the beginning of this year. That includes advancing our lead INO-3107 development program, advancing other promising candidates in our pipeline, and finally, strengthening our business as a whole.

Our primary focus has been working toward the potential commercialization of 3107 for the treatment of recurrent respiratory papillomatosis or RRP. We have made significant progress preparing initiate progress preparing our BLA package and expect all non-device-related elements to be completed by year-end. A positive pre-BLA meeting with the FDA last week provided us with further confidence that we remain on the right track to submission. We’ve also made important regulatory progress in both the U.K.

and Europe and have continued to advance planning for our redosing trial. However, as announced earlier today, we have identified a manufacturing issue with a single-use disposable administration component of our device during the testing process required to support our BLA filing, and that will impact the timing of our BLA submission. Every day matters to patients, and we’re working to resolve this issue as quickly as possible. Our chief medical officer and RRP program lead, Mike Sumner, will provide more details.

But I want to emphasize that we’re confident in our path forward and remain focused on the opportunity to deliver to not only what could be the first FDA-approved therapy for this devastating disease, but the first DNA medicine approved for use in the United States. What’s more, Inovio has continued making progress on other key objectives for both the near and longer term to deliver value to stakeholders. Elsewhere in our pipeline, we’ve submitted our Phase 3 trial design for INO-3112 in combination with LOQTORZI for the treatment of throat cancer to the European Medicines Agency for review. We’re also planning to submit our Phase 2 trial for our INO-4201 as an Ebola vaccine booster to the FDA later this month, and have advanced discussions with partners for the next trial for INO-5401 in glioblastoma, a deadly brain cancer.

At the same time, we continued to strengthen our business by prioritizing financial discipline and operational excellence. As Peter will discuss shortly, we closed the second quarter with $110 million in cash and short-term investments, with no debt on our balance sheet, and raised approximately $33 million through an offering of common stock and prefunded warrants this past April. We estimate that our current cash will be sufficient to fund our operations into the third quarter of 2025. We also recently welcomed Steve Egge as our new chief commercial officer, and I’m delighted to have him join our leadership team.

Steve has broad therapeutic area of experience, including an HPV-related diseases in cancer, vaccines and rare disease, and his career was spent both biotech and large pharma. Steve recently launched a new women’s health product at Myovant Sciences, which was later acquired by Sumitomo Pharma. He also spent 20 years at Merck where he held a number of senior commercial leadership roles, including leading their HPV vaccines franchise and serving as chief marketing officer for the vaccine division. Over the course of his career, he has overseen or contributed to more than a dozen commercial product launches.

His broad commercial expertise will be invaluable as we work to advance 3107 and our other promising candidates. I’d like to invite Steve to share more about why he joined Inovio and the potential he sees for 3107. Steve?

Steve Egge — Chief Commercial Officer

Thank you, Jackie, and hello, everyone. I’d like to start by saying how excited I am to be here and to be leading the very talented commercial team at Inovio, working to advance a lead candidate that I believe could transform the lives of people living with RRP and potentially bring the first DNA medicine to patients in the United States. I spent my career getting innovative medicines to market for patients with significant unmet medical needs, and I believe 3107 offers a compelling product profile that could make it the preferred choice for the broadest number of RRP patients, healthcare providers, and payers. 3107 demonstrated significant impact in our Phase 1, 2 trial where over 80% of patients across the disease severity continuum had a reduction in the number of surgeries compared to the previous year.

It’s important to note that our treatment regimen does not require surgeries during the dosing window to maintain minimal residual disease. 3107 also targets and has shown efficacy against both HPV 6 and 11, which cause RRP. 3107 has demonstrated the ability to generate antigen-specific T cells in patients that we believe leads to reduction in surgery by eliminating HPV-infected cells, thus, preventing the papillomas from growing back. As DNA medicines do not generate anti-vector immunity, we believe we will have the potential to redose 3107, if needed, to maintain or enhance clinical efficacy over time, which is likely to be important for a chronic and often lifelong viral disease.

Administration with CELLECTRA, our proprietary electroporation device, was well-tolerated by patients and was considered easy to use by healthcare providers in two previous global Phase 3 trials. 3107 also offers other important attributes typical of our DNA medicines platform such as stability for up to three years at refrigerator temperature. We believe 3107 represents a significant opportunity for Inovio in the U.S., Europe, and rest of the world. As you can see here, in addition to its compelling product profile, there is significant unmet global need for a treatment like 3107.

I’m pleased to report that we’re making strong progress in key regions, including advancing our commercial preparations in the U.S. and making key regulatory progress in both Europe and the U.K. We are going to be focused going forward on keeping this momentum going over the next quarter, and look forward to sharing more in the coming months. Now I’ll turn it over to Mike for some additional insights on 3107 and a broader pipeline update.

Mike?

Mike Sumner — Chief Medical Officer and RRP Program Lead

Thanks, Steve. We are really excited to have you onboard. Before I dive in, I think it’s important to provide a brief reminder about why we are working so hard to bring 3107 to patients. This is a devastating disease.

It takes a huge toll on patients’ health, time, and emotional well-being. Repeated surgery and the repeated risk to vocal cords that comes with it is the mainstay of treatment. Patients are desperate and have said time and again that a reduction of even one surgery a year would be life-hanging. This is why we’re working so hard to deliver on the promise of DNA medicine for the RRP community.

As you’ve heard from Jackie, we have continued to make meaningful progress toward delivering 3107 to patients. We expect to complete all non-device-related elements of our BLA package by the end of the year. Last week, we held our pre-BLA meeting with the FDA, which I would characterize as being positive and supportive of our overall approach with the device, our submission strategy for the CMC sections, and the clinical components of our package. We are encouraged by the agency’s level of engagement and have confidence that our approach and content for our BLA modules are on the right track.

We also look forward to sharing important immunology data for 3107 at three conferences in the fourth quarter. The Fall Voice, a leading conference for clinicians focused on vocal disorders, the 36th International Papillomavirus conference, which is a platform designed for sharing cutting-edge international HPV research, and the International Society for Vaccines annual conference. While very pleased with this progress, we have unfortunately run into a manufacturing issue with a component of our CELLECTRA device, the single-use disposable administration component, otherwise known as the array. This is used to inject the DNA medicine and administer the electroporation.

The issue stems from one of the plastic-molded parts within this array and was identified during routine testing to support our BLA filing. This issue is not reflective of the broader safety and efficacy of our 5PSP device or the array, which was used in two global Phase 3 studies. Our device teams, with the support of our external component manufacturers, are working to rapidly address the issue and then repeat the required testing for the array. The additional time needed for completing this work and testing has extended our anticipated time line for BLA submission to mid-2025.

We will, of course, endeavor to complete this work on a faster time line, if possible, and we’ll have more updates for you at our next quarterly report. Moving on to our efforts to bring 3107 to patients around the globe. We have made important progress as shown by our recent receipt of an advanced therapy medicinal product certification from the European Medicines Agency’s Committee for Advanced Therapies. This is following a review of our CMC and non-clinical data.

This certification confirms that the data reviewed complies with the standards that would be used to evaluate a European marketing authorization application and indicates that our work to advance 3107 in Europe, thus far, is on the right track. 3107 was also recently designated an innovative medicine as part of the U.K.’s innovative licensing and access pathway. The designation called an Innovation Passport is the first step on a development pathway that offers enhanced access to regulators and development tools that could accelerate the time line for achieving U.K. regulatory approval.

This regulatory process builds on 3107 receiving orphan drug designation in Europe in 2023. We will continue our conversations with regulators in ex-U.S. markets to frame the next steps for development of 3107. European regulators have previously indicated that a placebo-controlled study design such as the one we will conduct for our U.S.

confirmatory trial was their recommended pathway for potential licensure in the EU. This recommendation was one of the many reasons we selected a randomized placebo-controlled design for our confirmatory study in the U.S. The use of a placebo-controlled design enables us to include patients with only two surgeries in the prior year and does not require a year-long observation period to establish a surgical baseline prior to commencement of treatment. We believe this clinical design strategy is highly representative of the broad spectrum of RRP disease and will likely be critical to support expansion into global markets.

On a related note, we also successfully completed an unscheduled external quality system audit at our Mesa Ridge manufacturing site, which is required to maintain the company’s ISO certification and CE Mark for our CELLECTRA device in the EU. The audit, which occurred without prior warning or preparation time, indicated that Inovio has a well-established, high-functioning quality system. And the results provide further confidence that Inovio is on the right track in our preparations for global commercialization efforts. Turning now to one of our other promising late-stage candidates, INO-3112.

Last quarter, we received feedback from the FDA on our Phase 3 trial to investigate 3112 as a potential treatment for HPV 16- and 18-related locoregionally advanced high-risk throat cancer when used in combination with LOQTORZI, an anti-PD-1 monoclonal antibody, recently approved for the treatment of nasopharyngeal carcinoma. We have continued to make progress with our plans to conduct a multi-center study in North America and Europe and have submitted the Phase 3 study package to European regulators. We believe this novel combination therapy has unique potential to meet the high unmet need within this rapidly growing patient group. The incidence of HPV-positive throat cancer is on the rise in high-income countries and has surpassed cervical cancer as the most common HPV-related cancer diagnosed in the United States.

Moving on to INO-4201, which is being studied as a heterologous boost to the FDA-licensed Ebola vaccine, ERVEBO. We plan to submit our Phase 2, an animal-bridging study designs to the FDA for review later this month and are preparing to submit our Phase 1b trial data, along with our collaborators, to a peer review journal. As I highlighted last quarter, we recently generated some encouraging new antibody response data from that trial by utilizing the FANG assay, which is the commonly utilized assay, and indicated that 4201 elicits a strong antibody response, comparable to the ERVEBO primary series vaccination. With that, I’ll turn it over to Peter for a financial update for the quarter.

Peter D. Kies — Chief Financial Officer

Thank you, mike. Today, I’d like to provide an overview of Inovio’s operational highlights and financial condition for the second quarter of 2024. As Jackie noted at the start of the call, strengthening our financial position and business as a whole has been a critical part of our strategy to enable us to focus on our internal resources and our late-stage pipelines. I am pleased to report that we have, again, reduced our total operating spend, dropping from $37.3 million in the second quarter of 2023 to $33.3 million in the second quarter of 2024, an almost 11% decrease.

As noted last quarter, we paid the remaining balance of our convertible notes of $16.9 million and have no debt on the balance sheet. Inovio’s net loss for the quarter was $32.2 million or $1.19 per share, basic and dilutive, compared to a net loss of $35.5 million or $1.61 per share, basic and dilutive, for the second quarter of 2023. We finished the second quarter of 2024 with $110.4 million in cash, cash equivalents, and short-term investments, compared to $145.3 million as of December 31st, 2023. We estimate our cash runway to extend into the third quarter of 2025.

This projection includes an operational net cash burn estimate of approximately $28 million for the third quarter of 2024. These cash runway projections do not include any further capital raise activities that Inovio may undertake. As a reminder, you can find our full financial statements in this afternoon’s press release, as well as in our Form 10-Q filed with the SEC. And with that, I’ll turn it back to Jackie.

Jackie Shea — President

Thanks, Peter. I’d now like to open up the call to answer any questions you might have. Operator?