Inovio Pharmaceuticals narrows 2011 net loss, revenues rise 61%

Inovio Pharmaceuticals (AMEX:INO) said late Friday that its 2011 net loss narrowed as its revenue increased and the company forged ahead with its vaccine development programs.

The company's SynCon vaccines are designed to provide universal cross-strain protection against known as well as newly emergent unmatched strains of pathogens such as influenza. These vaccines, in combination with Inovio's proprietary electroporation delivery, have shown to generate strong immune responses in humans, with a favorable safety profile.

The company has clinical programs, including phase two studies for cervical dysplasia, leukemia and hepatitis C virus, and phase one studies for influenza and HIV.

For the year that ended December 31, 2011, the company reported a net loss of $15.3 million, or 12 cents per share, down from a loss of $17.6 million, or 17 cents per share, a year ago.

Revenue for the year climbed to $9.8 million from $6.1 million in 2010, as sales from license fees and milestone revenue was $568,000 in 2011, up from $527,000 in the prior year.

Grant and miscellaneous revenue was $9.2 million, up from $5.6 million in 2010, due to more revenue recognized from its contract with the National Institute of Allergy and Infectious Diseases (NIAID).

This NIAID HIV Vaccine design and development contract, which exceeds $23.0 million over five years, plus two additional option years, is facilitating Inovio’s development of a universal, preventive HIV synthetic vaccine called Pennvax-GP, focused on providing coverage against a broad range of global HIV sub-types.

Total operating expenses for the year were higher at $31.4 million, versus $25.4 million in the prior year on higher clinical trial costs in 2011, including the start of the phase two study of Inovio's cervical dysplasia/cancer vaccine, called VGX-3100.

In 2011, the company reported a number of significant results from its synthetic vaccine platform, including strong T-cell immune responses in its phase one study of VGX-3100, with 91 percent in the highest dose group developing strong responses. Inovio also reported long-term durability of up to two years.
The company is enrolling patients for its phase two clinical trial assessing the vaccine in women with CIN 2/3 or CIN 3 cervical dysplasias, or the stages of abnormal cells preceding cervical cancer. It expects to enroll 148 patients in 25 study centres in the U.S., South Korea, South Africa, Australia, and Canada.
Data is expected in the second half of 2013, the company said.
Inovio also saw strong T-cell immune responses in a phase one study of the Pennvax-B vaccine for the prevention of the HIV-subtype prevelant in the US and Europe. The investigators in this study concluded that the vaccine led to "frequencies and magnitudes of cellular immune responses equal to or greater than those reported from current vector-based HIV vaccines".
In its phase one study of VGX-3400X, its vaccine candidate against avian flu, the vaccine generated high levels of antigen-specific binding antibodies in 27 of 28 evaluated subjects.
Additional data from this study is expected around the end of the first quarter, and interim data from Inovio’s second phase one influenza study, for INO-3510, a SynCon vaccine for H1N1 and H5N1 influenza, is expected in the second quarter, the company said.
In terms of pre-clinical development, Inovio reported that its INO-5150 SynCon therapeutic vaccine for prostate cancer showed sustained, strong, antigen-specific T-cell responses in monkeys. Inovio plans to start a phase one clinical trial in mid-year 2012.
The company also saw positive pre-clinical results for vaccines for foot-and-mouth disease, and other strains of the flu.
Also last year, the company expanded its existing license agreement with the University of Pennsylvania for synthetic vaccines and entered into a research and development agreement with the United States Department of Homeland Security Science and Technology Directorate to evaluate the efficacy of its synthetic vaccines for foot and mouth disease in animal models.
Inovio also established a product development agreement with its affiliate, VGX International, to co-develop Inovio's SynCon therapeutic vaccines for hepatitis B and C infections. VGX will receive marketing rights for these vaccines in Asia, excluding Japan, and in return will fully fund IND-enabling and initial phase one and two clinical studies.

As at year end, Inovio had cash and equivalents and short investments of $30.3 million, compared with $21.8 million a year earlier.

In December, the company completed an underwritten public offering, generating net proceeds  of approximately $3.7 million after deducting for expenses.

Based on management’s projections and analysis, Inovio said it believes that it has enough cash to meet its planned working capital requirements into the third quarter of 2013.
The company's stock was up nearly three percent Monday afternoon, changing hands at around 59.2 cents, while its shares have rallied 37.7 percent so far in 2012.