Inovio Pharmaceuticals Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 9, 2023

There are 9 speakers on the call.

Operator

Good day, and welcome to the Inovio Second Quarter 2023 Financial Results Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Thomas Hung, Manager of Investor Relations.

Operator

Please go ahead.

Speaker 1

Good afternoon, and thank you for joining the Inovio 2023 Second Quarter Conference Call. Joining me on today's call are Doctor. Jackie Hsieh, President and CEO Doctor. Michael Sumner, Chief Medical Officer and Mr. Peter Kies, Chief Financial Officer.

Speaker 1

Today's call will review our corporate and financial information for the quarter ended June 30, 2023 as well as provide a development progress update for our DNA Medicines platform. Following prepared remarks, we will conduct a question and answer segment. During the call, we will 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, along with capital resources and strategic matters. All of these statements are based on the beliefs and expectations of management as of today.

Speaker 1

Actual events or results could differ materially. We refer you to the documents we file from time to time with the SEC, which under the 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. I will now turn the call over to Innovia's President and CEO, Doctor. Jackie Hsieh.

Speaker 2

Good afternoon, and thank you to everyone for joining today's call. In the Q2 of 2023, we continue to make important progress with INO-three thousand one hundred and seven, our candidate for the treatment Recurrent Respiratory Papillomatosis or RRP. Following positive results from our Phase onetwo trial earlier this year, Our team is working to initiate a pivotal Phase III trial in adults as quickly as possible. We are targeting The first patient's first dose in the Q1 of 2024, which would move us one step closer to delivering on the promise of DNA medicines for patients suffering from this debilitating disease. We are excited about this next chapter for Inovio and focused on making sure our company is scaled to support advancing our pipeline.

Speaker 2

With that in mind and in light of what we a particularly challenging funding environment for precommercial biotech companies like Inovio. We've made some key shifts in resource allocation for our pipeline as well as the difficult decision to further reduce our headcount and operational spending to better align with our strategic priorities. As our CMO, Michael Sumner and CFO, Peter Keyes, will describe in more detail shortly, we announced today our decision to stop further investment in VGX-three thousand one hundred for cervical H Cell in the U. S. Market.

Speaker 2

We will continue to support our partner Apollo Bio as they advance their Phase III trial for cervical HCL in China in a non biomarker selected population and appreciate their ongoing efforts to advance promising DNA medicines for patients in that market. To provide a clearer picture of how these decisions fit with our larger pipeline strategy, I'd like to share an overview of our current product candidates. As you can see here, we have a diverse portfolio across therapeutic areas and phases of development. In the top right corner, we have INO-three thousand one hundred and seven, and advancing that candidate into Phase 3 is our first priority. As I mentioned previously, we are targeting to begin dosing patients in the Q1 of 2024.

Speaker 2

In addition, we intend to advance VGX-three thousand one hundred in anal HSIL as well as INO-three thousand one hundred and twelve and INO-five thousand four hundred and one, our oncology product candidates targeting HPV related head and neck cancer and glioblastoma. We're also excited about the potential for our earlier stage candidates targeting infectious diseases, particularly INO-four thousand two hundred and one, Our Ebola booster vaccine candidate. We're also encouraged to see the next generation of infectious disease vaccine candidates based on DNA launch nanoparticles and for the clinic. On this slide, you can see the clinical trials Currently being conducted with Innovia's DNA Medicines. Not only does it highlight the extent of the work that is underway on a number of the key candidates I just mentioned, but it also highlights the importance of our partnerships and collaborations and the breadth of interest among external parties in our technology.

Speaker 2

Also on this slide, you can see we've included our planned Phase 3 trial for INO-three thousand one hundred and seven in preparation for that trial to commence. We are focused on driving clinical progress across our pipeline, particularly for those candidates that we believe are closest to market and have the greatest chance of delivering on the promise of DNA medicine for patients. From a business standpoint, we're focused on ensuring that we have the resources to reach important catalysts. With that in mind, we've taken further steps to right size our business to match our current pipeline needs, reducing our workforce by 30% and adjusting our physical footprint by initiating relocation of 1 of our 2 R and D facilities in San Diego, California. We estimate these cost savings will enable the company to fund operations into the Q3 of 2025.

Speaker 2

With our current capital resources, we believe we can execute on our plans for INO-three thousand one hundred and seven and, as I mentioned earlier, are targeting the start of the Phase III trial in the Q1 of next year. We're also taking steps to advance other promising candidates, but the next stage of clinical development will most likely require additional funding or partnerships, and we're actively pursuing those opportunities. The decision to reduce the size of our organization was not taken lightly, And I would like to take this moment to extend my deepest gratitude to all of our talented and committed employees, past and present for their efforts on behalf of the company and contributions to the important progress we're making on our DNA Medicines technology that has the potential to treat and protect patients worldwide. With that, I'd like to turn it over to our Chief Medical Officer, Doctor. Mike Sumner, to provide some important clinical highlights and details on our strategic pipeline updates.

Speaker 2

Mike?

Speaker 3

Thank you very much, And greetings, everyone. I'd like to start with INO-three thousand one hundred and seven. As Jackie mentioned, we've made some key strategic shifts in an effort to further drive progress across our pipeline. Our immediate focus is on our late stage clinical candidates with the greatest chances of success, including INO-three thousand one hundred and seven, our candidate for RRP that has the potential to be our 1st candidate to market. There is a high unmet need for new therapeutic treatment options for this debilitating disease where patients currently face repeated surgeries.

Speaker 3

As we've shared previously in our recent Phase onetwo trial, which included patients who had 2 or more surgeries in the prior year, 81% saw a reduction in surgical interventions as compared to the year prior to treatment. Patients and advocates have expressed time and again that a reduction in even one surgery would have a Profound impact. We announced today that we are targeting to initiate patient dosing in a Phase 3 trial for RRP in the Q1 of 2024 after finalizing discussions with the FDA. In anticipation of this trial's initiation, The clinical research organization we've hired to assist us in conducting this multinational trial is working on the plan to begin opening clinical sites. As we shared during our last quarterly call, data from the completed Phase onetwo trial We're presented by lead investigator, Doctor.

Speaker 3

Ted Mao at the ABA program as part of COSM in Boston on May 5. As you might remember, the presentation highlighted that 3,107 was well tolerated with patients experiencing mostly low grade Treatment emergent AEs. INO-three thousand one hundred and seven was also observed to induce cellular immune responses against both HPV-six and HPV-eleven with activated CD4 and CD8 T cells, including cytotoxic CD8 T cells thought to be important for clearance of virally infected cells. Inovio's 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.

Speaker 3

Also during the Q2, we announced that 3,107 was granted orphan drug designation by the European Commission as a potential treatment for RRP. As a reminder, 3,107 was granted orphan drug designation from the FDA for the same indication in July of 2020, making it the 1st RRP product candidate to receive orphan designations from both U. S. And EU regulatory bodies. Moving on to VGX-three thousand one hundred.

Speaker 3

As announced in our press release, Inovio will cease further development of VGX-three thousand one hundred as a potential This decision is driven by several factors, including the previously announced FDA feedback That we would be required to conduct 1 or more additional well controlled trials in the biomarker selected It is a cutting edge microRNA based assay that was developed specifically for this trial based on data collected in our previous trials. However, as we previously reported, the biomarker did not perform as expected in REVEAL 2. And our analysis of why this occurred indicates that a Significant amount of additional work would need to be done to further develop the biomarker before it could be used prospectively in any new Phase III trials. These challenges, which would require significant investments and lead to a very long development timeline, Make our continued pursuit of VGX-three thousand one hundred for cervical HCL in the U. S.

Speaker 3

Market less attractive than other opportunities in our pipeline. That being said, we remain very encouraged by the data achieved in both of our AAVIEL studies, particularly the viral clearance and lesion regression data, which we believe will be supportive evidence for partners focused on other global markets where both the options for and access to treatment for cervical dysplasia are different. For instance, our partner Apollo Bio Continues to conduct its ongoing Phase 3 trial of 3,100 in cervical HCL patients in China, a market where we continue to see potential for a treatment to be developed for this indication. Of note, APOLLOBIO is not utilizing the novel biomarker That was part of Inovio's REVEAL 2 trial. As you may recall, in REVEAL 2, we achieved the secondary endpoint of viral clearance and tissue regression in the ITT population.

Speaker 3

And this is the same endpoint that is the primary endpoint in APOLLOBIA's clinical trial. We are also discussing the development of 3,100 for additional ex U. S. Markets with other potential partners where we believe 3,100 could via valuable treatment option, if current and future trials can result in regulatory approval. Let's turn now to our plans for developing 3,100 as a potential treatment for Analasell.

Speaker 3

This disease affects an estimated 210,000 to over 1,000,000 people in the U. S. With a similar estimate for Europe. Our interest in this has increased lately based on 2 primary factors. Firstly, the promising viral clearance data observed in both Phase 3 trials conducted for the cervical indication suggests that 3,100 has the potential to treat this difficult disease target.

Speaker 3

And secondly, because the treatment paradigm has evolved for Enel HIL, with thought leaders now believing that a more proactive approach Results published in the New England Journal in June of 2022 from a multiyear study sponsored by the National Cancer Institute called the ANCA study showed that treatment of anal HIL Reduce the risk of anal cancer compared to active monitoring without treatment. The study produced results that are moving the medical community There's one catch in this shift, however. There are very few effective options available to treat anal HIL beyond surgery. We believe 3,100 could potentially fill this critical medical need given its ability to clear both lesions and virus as we observe not only in the Cervcor Phase 3 trials, but also in our open label Phase II trial in HIV negative anal H Cell patients, In which we saw the 50% or 11 out of 22 participants had no evidence of HPV-sixteen eighteen positive H Cell at week 36 and 46% or 10 out of 22 showed no evidence of HBV-sixteen eighteen on biopsy. In addition, Inovio is supporting an externally sponsored study run by the AIDS Malignancy Consortium examining the potential of VGX-three thousand one hundred in HIV positive individuals with Analasell.

Speaker 3

Inovio is also taking steps to advance INO-three thousand one hundred and twelve for HPV related head and neck cancer, INO-five thousand four hundred and one for glioblastoma and INO-four thousand two hundred and one as an Ebola vaccine booster. We believe there is significant potential for each of these candidates as Jackie noted. We're working to identify strategic partnerships and focused funding opportunities to continue their late stage development. We expect to have additional updates on our development plans for these candidates in future quarterly earnings calls. With that, I'll now turn the call over to our CFO, Peter Keyes, for our Q2 2023 financial summary.

Speaker 3

Peter?

Speaker 4

Thank you, Mike. Today I'd like to provide an overview of Inovio's financial condition for the Q2 of 2023 and some additional content around the reorganization we announced on August 1. As Jackie and Mike discussed earlier, We made some strategic shifts in our development pipeline and aligned our headcount and operational spend to help ensure Inovio is well positioned to advance our late stage candidates to important catalysts. We estimate the cost savings we announced today will allow us to fund operations into Q3 of 2025. This projection includes a cash burn estimate of approximately $34,000,000 for the Q3 2023, including an expected one time charge of approximately $2,100,000 related to the headcount reduction.

Speaker 4

We expect the cash burn will decrease incrementally from there throughout the remainder of 2023 2024. These projections do not include any funds that may be raised through our At the market program or other capital raise activities. Taking a look at our operating expenses, As you can see on the slide, I've highlighted the reduction in our operating expenses over the last year. In the Q2 of 2023, our total operating expenses were $37,300,000 which is down 64% from the Q2 in 2022 and down 15% from the Q1 of 2023. Breaking down total operating expenses, we see that research and development expenses for the Q2 of 2023 were $23,700,000 compared to $56,500,000 for the same period in 2022, A 58% reduction quarter over quarter.

Speaker 4

The decrease in R and D expenses was Primarily the result of lower drug manufacturing costs, clinical trial expenses and outside services related to INO-four thousand eight hundred. The other and other COVID studies actually as well as lower employee and consulting compensation including stock based compensation among other variances. G and A expenses for the Q2 of 2023 were $13,500,000 compared to $48,500,000 for the same period in 2022, A 72% drop. The decrease in G and A expenses was primarily related to Significant one time cost in the Q2 of 2022 related to the settlement of the Class Exton litigation and related legal expenses, as well as severance incurred in 2022 among other variances. Our revenue for the Q2 of 2023 were $226,000 compared to $784,000 for the same period in 2022.

Speaker 4

These factors combined to bring our net loss for the Q2 of 2023 to 35,500,000 or $0.13 per share basic and dilutive compared to a net loss of $108,500,000 or 0 point $0.46 per share basic and dilutive for the Q2 in 2022. This represents a 67 percent year over year reduction in our net loss. We finished the Q2 of 2023 with $194,900,000 in cash, cash equivalents and short term investments compared to $253,000,000 as of December 31, 2022. 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 over to Jackie.

Speaker 2

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

Operator

We will now begin the question and answer session. The first question comes from Gregory Renza with RBC Capital Markets. Please go ahead.

Speaker 5

Hi, guys. It's Anish on for Greg. Thanks for taking my questions. Just on the restructuring, I wanted to ask, given the current financial and labor Drains that are associated with the restructuring, would you consider any strategic partnership decisions to potentially offload Resource requirements for clinical development of pipeline assets, external BD or sale of any of these developmental assets? And could you perhaps give us some insight into Any conversations thus far and levels of interest?

Speaker 5

Thanks so much.

Speaker 2

Yes, thanks. That's an important question. So first of all, I'd like to say we have great confidence in our pipeline. We have great confidence in our people. And clearly, we're looking at a range of different opportunities to advance our pipeline candidates forward, particularly the late Stage candidates that are that we're looking to move into the next stage of clinical development.

Speaker 2

And as you'll have seen from Our pipeline slides and our clinical slides, Inovio has always worked across a range of different Business models, including out licensing, strategic partnerships, collaborations with the academic sectors. And we're going to continue to do that to advance our pipeline forward in the best ways that we can see fit.

Speaker 5

Great. Thanks. I really appreciate the color.

Operator

Our next question comes from Roger Song with Jefferies. Please go ahead.

Speaker 6

Great. Thanks for taking the question. Maybe the first one is the 3,007 For RRP, can you give us a little bit color around the discussion with the FDA? What are the key outstanding items before you Moving to the Phase 3, in the recent way, one of your competitor doing the similar Trial, they confirmed it can be a single arm trial for the pivotal. I'm just curious what are the potential outcome for your FDA discussion and the potential Phase 3 study design for your RRP program.

Speaker 6

Thank you.

Speaker 2

Yes. Nice to hear from you, Roger. So an important question is around 3,107. So what we talked In today's call was really our focus on getting the next trial started in quarter 1 last next year. And we've had some very good, very positive interactions with the FDA.

Speaker 2

And I'll hand over to Mike to provide a bit more color here. Mike?

Speaker 3

Yes. So thank you. I mean, as we announced today, we are obviously Far along in our discussions with respect to trial design, otherwise we would not be in the position to open up clinical trial sites. We haven't provided too much additional detail with respect to the other conversations, but we did say on our last quarterly call that we We're addressing some elements related to devices, obviously 3,107 as a combination product. And it's only natural that as the FDA looked at us commencing a Phase 3 study, that they'd also have Questions relating to our device aspect of that product.

Speaker 3

But really, we've been very happy with our discussions I think we're in a very good place to progress this asset into the clinic.

Speaker 6

Okay, great. Thanks for the color. And maybe another one for your 3,100 moving From cervical to ANO, just curious how much learning from your cervical can be applied to ANO, particularly for the biomarker? Do you plan to apply the biomarker strategy to AMOLED as well? Thank you.

Speaker 3

Yes. Good question. At present, we have not Decided to use the biomarker in the AMOL HIL program. We think that Based on all the evidence we've seen from ARAVIL studies and from the Phase 2 that we There's no need to introduce the biomarker element into that. I think we Obviously, had a good look at what our biomarker taught us from the REVEAL 2 data.

Speaker 3

And clearly, we learned a lot from that and we would be in a position To use that information in other programs, but certainly for ANALH Cell, that is not our plan at present.

Operator

The next question comes from Hartaj Singh with Oppenheimer. Please go ahead.

Speaker 7

Great. Thank you for the two questions and thanks for the update. Again, just going back to 3,107, maybe just you can talk a little bit about, just roughly speaking, the number of patients, how long will it take you to recruit patients, what will be the evaluation period? Can you just give us some General commentary there. I know you're a little bit constrained.

Speaker 7

And then, would your patient population be different In the Phase 3, the inclusion, exclusion criteria relative to the Phase onetwo. That's the first question. And the second is just on INO-five thousand four hundred and one, What's your updates there are and that how the discussions on the joint committee with Regeneron are gone? Thank you for the questions.

Speaker 2

Okay. So Hartaj, maybe I'll take the second question first, 5,401. So that study It's still wrapping up. We still have patients on that study who are still getting dosed. And we are in discussions with Regeneron as As well as, Professor Dave Briton, the lead PI on that program about the right next steps for that program.

Speaker 2

So we will be providing updates on our next steps for that candidate in due course once we've wrapped up that study. Mike, do you want to talk about 3,107? Perhaps it would be helpful to just kind of recap the Phase III data in our patient population and talk about how we see moving forward. Absolutely. So as you'll recall with our Phase

Speaker 3

III The patient population that we recruited needed to have a minimum of 2 surgeries in the preceding year. And the efficacy we saw in the entire population, which did range, I think, up to 8 surgeries was relatively Distant across the breadth of previous surgeries. So we've really got no reason to reexamine that aspect of Our patient population, as you recall, we saw what we were very pleased with the efficacy signal that we saw in our With respect to the number of patients and how long to recruit, We haven't provided that level of detail just yet. But what I would say, we have talked to the fact that this is Going to be a global trial. And so as we've looked at done our side evaluations and We're seeing the same clinical need that we've seen in the United States.

Speaker 3

These patients do not have Good treatment options beyond surgery. And so we are hoping based on the fact that we can share our Phase onetwo data with them and the encouraging results from that that we would we will hope that we can recruit this study in a relatively timely manner. I always hesitate to say that because I'm always on the hook for recruiting those patients, but this is certainly a To see state where there is a significant pent up clinical need.

Speaker 2

And if I can just add to that, Mike. In the Phase III We saw a very good tolerability profile. Some of the key attributes of our platform are the ability to Redose without any, antibacterial immunity and DNA medicines have now been in, a large number of patients across various Different therapeutic areas and candidates, and we've been very pleased with the safety and tolerability data that we've generated to date. So I think we've also worked in a large number of countries, and I think that experience of working globally has gained us servicing good stead here.

Speaker 7

Yes. No, no, that helps a lot. And I think the 2 orphan drug designations also mean something with 2 different areas. Just a quick follow-up, Jackie, which is then, is the standard of care in terms of surgery in different countries pretty consistent? Like there's not going to be any consistency, right, if you go from country to country.

Speaker 7

And just any feedback there. Thank you for all the questions.

Speaker 2

Yes. This is really a clinical question. I'll ask Mike to comment on that.

Speaker 3

Yes. Actually, excellent question. We obviously did take this into account and it was one of our questions as we looked at other countries. And as we also mentioned in our last quarterly earnings call, surgery criteria Was one of the elements that we were discussing with the FDA and we now we think we've come to a good way of Standardizing those to make sure that the patients as they come into the study and actually have surgical interventions during the study that they'll be fairly standardized from site to site.

Speaker 7

Great. Thank you so much. That helps a lot.

Operator

The next question comes from Deepesh Patel with H. C. Wainwright, please go ahead.

Speaker 8

Hi, guys. This is Dipesh standing in for Yi Chen. Just one question for me today. As you're aware, back in April, you had presented data from the Phase 1b trial of INO-four

Speaker 1

thousand two hundred and one.

Speaker 8

When can we expect further updates on this program?

Speaker 2

That's a great question, Dipesh. So Just to remind people, so INO-four thousand two hundred and one is our Ebola booster vaccine candidate, and we reported data, which basically shows that we were able to boost responses in 100% or 36 out of 36 people that have previously received the Merck evo vaccine. So we're currently going through the process of discussing our plans with for the next stage of those studies with regulators and with our collaborators, and we'll be providing updates On that program in due course, so stay tuned for that.

Speaker 8

Great. Thank you very much for the update.

Operator

This concludes our question and answer session. I would like to turn the conference over to Jackie Hsieh, President and CEO for any closing remarks.

Speaker 2

Thank you for your questions and for joining us today. Over the past year, we've engaged in an essential strategic overhaul, focusing our efforts on those pipeline candidates that are closest to market with the greatest likelihood of success and scaling our business appropriately. These efforts have been critical to ensuring that Inovio has the resources needed to continue to make important clinical progress to innovate and ultimately deliver on the promise of DNA Medicine for patients and shareholders alike. I look forward to sharing updates on INO-three thousand one hundred and seven and our other DNA medicine candidates as our team continues to focus on advancing the next phases of development. With that, thank you again for your attention, and have a good evening, everyone.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Powered by Quartr
Earnings Conference Call
Inovio Pharmaceuticals Q2 2023
00:00 / 00:00