Inovio Pharmaceuticals, Inc. (INO) Q2 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call summary and Q&A indicate strong financial performance, reduced expenses, and promising product development with INO-3107. The management's responses in the Q&A session were mostly positive, addressing concerns about competition and regulatory processes effectively. Despite some unclear responses, the overall sentiment is optimistic, with strong financial metrics and strategic plans in place, suggesting a positive stock price movement.

Key Financial Performance

Operating Expenses Operating expenses dropped from $33.3 million in Q2 2024 to $23.1 million in Q2 2025, a 31% decrease. This reduction is attributed to a strategic effort to manage resources efficiently to support the 3107 program.

Net Loss Net loss for Q2 2025 dropped 27% to $23.5 million from $32.2 million in Q2 2024. On a per share basis, the net loss dropped 49% to $0.61 per share from $1.19 per share in Q2 2024. This reflects efforts to conserve resources for the 3107 program.

Cash, Cash Equivalents, and Short-term Investments Cash, cash equivalents, and short-term investments were $47.5 million as of Q2 2025, compared to $94.1 million as of December 31, 2024. This excludes $22.5 million raised from a public offering in July 2025.

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Operating Highlights

INO-3107 BLA Submission: Inovio is on track to submit its Biologics License Application (BLA) for INO-3107 in the second half of 2025. The company has completed design verification testing for the CELLECTRA 5PSP device and is preparing for a rolling submission, with a goal to complete the process and request priority review by year-end.

Clinical Data for INO-3107: Phase I/II clinical data for INO-3107 has been published in Nature Communications and The Laryngoscope. The data shows significant long-term clinical benefits, including a reduction in surgeries for RRP patients, with 72% of patients seeing a 50%-100% reduction in surgeries in the first year, increasing to 86% in the second year.

Pipeline Expansion: Inovio is exploring the potential of its DNA-encoded monoclonal antibody (dMAb) and DNA-encoded protein replacement (DPROT) technologies, with recent presentations at the Orphan Drug Summit and ongoing efforts to seek partnerships for clinical advancement.

Market Opportunity for INO-3107: The U.S. market for RRP treatment is significant, with an estimated 14,000 active cases and 1.8 new cases per 100,000 adults annually. INO-3107 addresses unmet needs by reducing surgeries and targeting the underlying cause of RRP.

Commercial Strategy for INO-3107: Inovio has developed a distribution and channel strategy, signed a contract with a 3PL provider, and is negotiating with specialty pharmacy and distributor partners. Initial pricing strategy and physician/patient targeting have been established.

Cost Management: Operating expenses decreased by 31% year-over-year in Q2 2025, from $33.3M to $23.1M. Net loss also reduced by 27%, reflecting strategic resource management to support the INO-3107 program.

Cash Runway: Inovio ended Q2 2025 with $47.5M in cash and raised an additional $22.5M through a public offering in July 2025, extending its cash runway into Q2 2026.

Regulatory Milestones: Inovio successfully completed an FDA inspection as a clinical sponsor for the Phase I/II trial of INO-3107, an important step in the regulatory process.

Partnerships and Pipeline Development: Inovio is advancing its pipeline through partnerships, including ongoing research on INO-5401 for cancer prevention and Phase III development of VGX-3100 in China for cervical HSIL.

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Risk or Challenges

Regulatory and Clinical Development Risks: The company is heavily reliant on the successful submission and approval of its BLA for INO-3107. Any delays or issues in the regulatory process, including the rolling submission and priority review request, could significantly impact timelines and financial performance. Additionally, the confirmatory trial for INO-3107, which involves 100 patients across 20 sites, must meet FDA and European regulatory expectations, posing potential risks if results are not favorable.

Financial Sustainability: The company reported a significant reduction in cash reserves, from $94.1 million at the end of 2024 to $47.5 million by mid-2025. While a public offering raised $22.5 million, the cash runway is projected only until Q2 2026, excluding further capital raising activities. This financial constraint could limit operational flexibility and the ability to fund ongoing and future projects.

Market and Commercialization Challenges: The company faces challenges in accurately estimating the market size for INO-3107 due to potentially outdated epidemiological data. Additionally, the success of the product depends on its ability to gain traction among patients and providers, which requires effective market research, pricing strategies, and distribution partnerships. Failure in any of these areas could hinder commercial success.

Pipeline and Strategic Execution Risks: While the company is focused on INO-3107, its broader pipeline, including dMAb and DPROT technologies, is still in early stages and requires partnerships for further development. Any delays or failures in forming these partnerships could impact the company's long-term strategic goals.

Operational Risks: The company is undergoing significant operational changes, including cost reductions and resource reallocation to focus on INO-3107. While this is aimed at efficiency, it could lead to potential disruptions or gaps in other areas of the business.

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Guidance & Outlook

BLA Submission for INO-3107: The company plans to submit its Biologics License Application (BLA) for INO-3107 in the second half of 2025. They aim to complete the submission and receive file acceptance by year-end. A priority review request will be made, potentially leading to a PDUFA date around mid-2026.

Regulatory Progress: The company has completed design verification testing for the CELLECTRA 5PSP device and is finalizing device-related sections of the BLA. They are also updating their active IND to commence enrollment for a placebo-controlled randomized confirmatory trial with 100 RRP patients across 20 U.S. sites.

Market Opportunity for INO-3107: The company sees significant market potential for INO-3107, targeting unmet needs in reducing surgeries for RRP patients. They anticipate steady prevalence due to plateauing HPV vaccination rates and are exploring continuation therapy options for chronic disease management.

Commercial Strategy for INO-3107: Preparations for a potential launch include building distribution and channel strategies, signing contracts with a 3PL provider, negotiating with specialty pharmacy and distributor partners, and developing pricing and product positioning strategies.

Pipeline Development: The company is actively seeking partnerships to advance its DNA-encoded monoclonal antibody (dMAb) and DNA-encoded protein replacement (DPROT) technologies into clinical trials. They believe these platforms could target multiple diseases and conditions.

Financial Outlook: The company estimates its cash runway to extend into Q2 2026, supported by a recent public offering that raised $22.5 million. Operational net cash burn for Q3 2025 is projected at approximately $22 million.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:Are you anticipating having an advisory committee meeting for the filing?

A:Based on interactions with the agency, there has been no indication that this will go to an Advisory Committee (AdCom). The chance of it is considered relatively low.

Q:What are your thoughts on the upcoming regulatory decision for your competitor and how it might impact your launch?

A:There are significant differences between the competitor's program and ours, including trial design, technology, and confirmatory trial approach. For example, the competitor uses a viral vector, while we use DNA medicines technology. Our confirmatory trial is placebo-controlled, targeting patients with 2 or more surgeries in the prior year, whereas the competitor's trial is single-arm, targeting patients with 3 or more surgeries.

Q:Was there any delay in completing the DV testing?

A:The DV testing was completed as planned, and the overall timeline remains on track for submitting the BLA in the second half of this year. The process involved multiple external vendors, which added complexity, but the company is now focused on the rolling submission of the BLA.

Q:What is your latest thinking around a redosing strategy for 3107 based on the new data?

A:The company is considering a redosing strategy, likely annual dosing, to maintain and potentially enhance the clinical effect. This approach aligns with the chronic nature of RRP and aims to sustain the reduction in surgeries.

Q:Will the redosing strategy be part of the filing?

A:The redosing strategy will be discussed with the agency after the BLA submission.

Q:What was the median number of prior surgeries for patients enrolled in the trial?

A:The median number of prior surgeries was 4. The mean number of surgeries dropped from 4.1 to 1.7 in the first 12 months and further reduced to 0.9 in the second year.

Q:Do you anticipate any headwinds in enrolling 100 patients for the confirmatory trial if a competitor's asset is approved?

A:The company does not anticipate significant headwinds. The trial involves 20 sites across the U.S., and there is usually a lag in insurance coverage for new treatments. Additionally, the trial size is relatively small, making it achievable even if the competitor's asset is approved.

Q:What is the commercial infrastructure needed for a meaningful launch?

A:The company estimates that 300-400 laryngologists treat the majority of RRP patients, concentrated in academic medical centers and community-based practices. A small, cost-efficient commercial organization will be sufficient to target these specialists.

Q:Do you have data from the initial trial for patients with fewer surgeries to extrapolate for the confirmatory trial?

A:Yes, the initial trial included patients with 2 to 8 surgeries, showing clinical benefit regardless of the number of surgeries. This supports the design of the confirmatory trial.

Q:What fraction of current RRP patients meet the clinical criteria for the confirmatory trial?

A:The company believes the published estimate of 14,000 RRP patients in the U.S. is an underestimate. The trial focuses on patients with 2 or more surgeries in the prior year, which aligns with the general RRP population.

Q:Can you provide greater detail on the timelines for the next major events?

A:The company expects to hear back from the FDA on the rolling submission in August. The BLA submission is planned for the second half of this year, with file acceptance expected by year-end. Updates will be communicated through normal channels.

Q:Have there been any impacts on FDA interactions due to external factors?

A:Interactions with the FDA have continued as normal, and the company remains focused on its submission work.

Q:Will you present additional year 3 data for the 3107 trial?

A:The company does not plan to present additional year 3 data due to variability in data length for different patients. The focus remains on the complete year 2 data for scientific accuracy.

Q:Is there any change to the pricing outlook for 3107?

A:No changes are expected. The company anticipates rare disease pricing, similar to Ogsiveo, which is priced at $360,000 per year.

Q:What is the ex-U.S. strategy for the confirmatory study?

A:The confirmatory trial design aligns with the requirements of European and U.K. regulators. European surgeries are often conducted in operating theaters, leading to slightly lower surgery numbers, but the inclusion criteria of 2 surgeries ensures broad applicability.

Q:Are there differences in the current practice of treating RRP ex-U.S.?

A:Yes, European surgeries are mostly conducted in operating theaters, which can result in fewer surgeries due to longer wait times for operating room access.

Q:Review of Unclear Management Responses

A:Management avoided providing specific details on the pricing outlook beyond referencing rare disease pricing and the Ogsiveo analog. Additionally, they did not commit to presenting additional year 3 data for the 3107 trial, citing variability in data length as a reason.

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Earnings Word Cloud

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