Earnings call transcript: Inovio’s Q1 2025 sees narrowed losses, stock rises

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Overview

Inovio's earnings call presents a mixed picture. Financial performance shows improvement in operating expenses and net loss, but the absence of a share repurchase program and a cash runway only until Q1 2026 raises concerns. The strategic focus on INO-3107 is positive, but regulatory and manufacturing risks remain. Q&A insights reveal cautious optimism but lack concrete data updates. Adjusting for these factors, the sentiment remains neutral, with no significant catalysts to drive a strong stock price movement in either direction over the next two weeks.

Key Financial Performance

Operating Expenses $25,100,000 (20% decrease from $31,500,000 in Q1 2024) due to cost reduction efforts.

Net Loss $19,700,000 or $0.51 per share (compared to $30,500,000 or $1.31 per share in Q1 2024) reflecting improved cost management.

Cash Position $68,400,000 in cash, cash equivalents, and short-term investments (down from $94,100,000 as of 12/31/2024) indicating cash burn and operational expenses.

Estimated Cash Burn Approximately $22,000,000 for Q2 2025, contributing to the cash runway extending into Q1 2026.

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Operating Highlights

BLA Submission for INO-3107: Inovio is on track to submit its Biologics License Application (BLA) for INO-3107, targeting recurrent respiratory papillomatosis (RRP), with a rolling submission planned for mid-2025 and completion in the second half of the year.

Clinical Data Publication: Clinical and immunology data from the phase one-two trial of INO-3107 was published in Nature Communications in February, with further data on long-term effects submitted to a peer-reviewed journal.

dMAb Technology: Inovio announced promising interim results from a phase one proof of concept trial evaluating DNA encoded monoclonal antibodies (dMAbs), showcasing potential for next-generation DNA medicines.

Market Opportunity for INO-3107: RRP affects approximately 14,000 people in the US, with no approved therapeutic options currently available. INO-3107 is positioned as a potential preferred treatment option, addressing the underlying cause of the disease.

Market Research Insights: Ongoing market research indicates that 80% of patients could achieve a 50-100% reduction in surgeries with INO-3107, making it a compelling alternative to current surgical treatments.

Manufacturing Issue Resolution: Inovio resolved a manufacturing issue related to the Selectra device and has initiated device design verification testing required for BLA submissions.

Cost Reduction: Operating expenses decreased from $31.5 million in Q1 2024 to $25.1 million in Q1 2025, a 20% reduction.

Commercial Readiness: Inovio is refining its go-to-market model and planning to build out its commercial organization in preparation for the potential launch of INO-3107.

Partnership Strategy: Inovio plans to market INO-3107 in the US independently while remaining open to partnerships for international markets.

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Risk or Challenges

Regulatory Risks: The company is focused on submitting a Biologics License Application (BLA) for INO-3107, with potential risks related to the acceptance of the submission and the timeline for receiving priority review from the FDA.

Manufacturing Challenges: There was a previous manufacturing issue with the Selectra device's single-use array component, which has been resolved, but any future manufacturing issues could impact timelines.

Market Competition: The potential for competitors to introduce alternative treatments for recurrent respiratory papillomatosis (RRP) could affect the market positioning of INO-3107.

Financial Risks: The company reported a net loss of $19.7 million for Q1 2025 and has a cash runway estimated to last until Q1 2026, which raises concerns about funding future operations and clinical trials.

Economic Factors: The evolving tariff policies and pricing strategies could impact the overall market environment and the company's ability to launch products successfully.

Clinical Trial Risks: The confirmatory trial for INO-3107 is crucial, and any setbacks in patient recruitment or trial outcomes could delay the approval process.

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Guidance & Outlook

BLA Submission for INO-3107: Inovio is on track to submit its Biologics License Application (BLA) for INO-3107, targeting recurrent respiratory papillomatosis (RRP), with a rolling submission beginning in mid-2025 and completion in the second half of the year.

Market Research Insights: Ongoing market research indicates that INO-3107 has the potential to be the preferred treatment for patients and physicians if approved, with significant clinical benefits observed in trials.

dMAb Technology Development: Inovio is advancing its DNA encoded monoclonal antibodies (dMAbs) technology, which has shown promising interim results in a Phase 1 trial for COVID-19, indicating potential for broader applications in other diseases.

Financial Projections: Inovio expects a net cash burn of approximately $22 million for Q2 2025, with a cash runway projected into Q1 2026.

Operating Expenses: Operating expenses decreased from $31.5 million in Q1 2024 to $25.1 million in Q1 2025, a 20% reduction.

Net Loss: Inovio reported a net loss of $19.7 million for Q1 2025, compared to a net loss of $30.5 million in Q1 2024.

Cash Position: As of Q1 2025, Inovio has $68.4 million in cash, cash equivalents, and short-term investments.

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Shareholder Return Plan

Share Repurchase Program: None

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Key Q&A

Q:Can you just give any additional detail on the COSM presentation coming up in a few days? Are you going to have any data beyond year three and what else are you going to present other than surgery counts?

A:We’ll obviously be focusing on the surgery counts as obviously every surgery matters to these patients because of the risk and the cost. But we will be able to show a little bit more color around that. Also as part of having an oral presentation at COSM, you also get to submit the data to laryngoscope. So we will hopefully be having that peer reviewed publication available soon also, which will again provide additional color.

Q:Can you remind me how many MSLs you plan to onboard?

A:We haven’t specifically guided yet as to the size of the MSL team. But, you know, as you’ve heard Steve mention before, I mean, the actual number of physicians treating RRP is not that large.

Q:Are you coming up with your own number for the epidemiology of RRP?

A:The fourteen thousand of active cases here in The US is relatively old data. It’s the most commonly cited data by most experts in the field. And we have been conducting our own research to try and get a better handle on that number.

Q:Do you expect to have a surgery sparing claim in the label for 03/2007?

A:It’s too early to predict how the FDA will approach that terminology, but I think it will lead to a reduction in surgeries.

Q:Is there any update on your registrational strategy geographies outside The US?

A:We’ve had some good discussions with European regulators, and we think we’re well aligned with them in terms of the design of any trials required there.

Q:What are you thinking of in terms of your initial indication for the dMAb technology?

A:We haven’t disclosed the indications we’re currently working on, but we can apply this to monoclonal antibodies and proteins that are missing or defective in certain indications.

Q:Could receiving priority review status be in any jeopardy with the potential of another RRP treatment on the market?

A:We’ve always felt that there is a population that can only be uniquely treated with 03/2007.

Q:Is there any plans to add any more data to the actual filing or is it already all pencils down?

A:From a clinical perspective, it really is pencils down and they’re ready to go.

Q:Does the current tariff policy affect your pricing strategy?

A:We’re very much focused on our first approval in The US.

Q:Are you planning on disclosing baseline characteristics for the patients in the confirmatory trial?

A:We’re going to try and recruit a patient population that’s very representative of the normal RRP patient population.

Q:Review of Unclear Management Responses

A:Management avoided giving a direct answer regarding the exact number of MSLs to onboard, stating they haven't specifically guided on that yet. Additionally, while they acknowledged the 14,000 active cases of RRP is old data, they did not provide a specific updated number or timeline for when that might be available.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

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