Q2 2023 Inovio Pharmaceuticals Inc Earnings Call
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 the link can be found on our website.
<unk> Dot <unk> dot com and a replay will be made available shortly after this call has concluded.
I will now turn the call over to <unk>, President and CEO , Dr. Jackie Shay.
Good afternoon, and thank you to everyone for joining today's call.
In the second quarter of 2023, we continue to make important progress with <unk> seven a candidate for the treatment of recurrent respiratory papillomatosis or RFP.
Positive results from our phase one two 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 first.
In the first quarter of 2024, which would move US one step closer to delivering on the promise of DNA medicines to patients suffering from this debilitating disease.
We are excited about this next chapter for an IPO and focused on making sure our company's scale to support advancing our pipeline with that in mind and in light of what we see is a particularly challenging funding environment for a pre commercial biotech companies like Nokia.
We've made some key shifts in resource allocation for our pipeline as well as the difficult decision to further reduce our head count and operational spending to better align with our strategic priorities.
As all CMI, Microsoft <unk>, and CFO <unk> will describe in more detail. Shortly we announced today our decision to stop further investment in <unk> thousand 100, <unk> in the U S market.
We will continue to support our partner Apollo bio as they advance their phase III trial for <unk> in China, and our non biomarker selected population and.
And depreciate that ongoing efforts to advance promising DNA medicines that 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 pace of development.
In the top right corner, we have <unk>, seven and advancing that candidates into phase III as our first priority.
As I mentioned previously we are targeting to begin dosing patients in the first quarter of 2024.
In addition, we intend to advance <unk> 31, hunters and annual H sale.
As well as <unk> 31, 12, and <unk> 50, 401, 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 INR 40, 201, our bowlers booster vaccine candidate.
We're also encouraged to see the next generation of infectious disease vaccine candidates based on DNA launch nanoparticles enter the clinic.
On this slide you can see the clinical trials currently being conducted with <unk> DNA medicines now suddenly 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.
<unk> is in our technology.
Also on this slide you can see we've included our planned phase III trial front, INR 30, 107, and 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 medicines for patients.
From a business standpoint, we're focused on ensuring that we have the resources to reach important catalyst.
With that in mind, we've taken further steps to rightsize our business to match our current pipeline needs.
Reducing our workforce by approximately 30% and adjusting our physical footprint by initiating relocation of one of our two R&D facilities in San Diego, California.
We estimate these cost savings will enable the company to fund operations into the third quarter of 2025.
With our current capital resources, we believe we can execute on our plans Brian notes at 107.
As I mentioned earlier are targeting the start of the phase III trial in the first quarter 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.
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.
Good.
With that I'd like to turn it over to our Chief Medical Officer, Dr. Mike <unk> to provide some important clinical highlights and details on our strategic pipeline updates Mike.
Thank you very much Jackie and greetings everyone.
I'd like to start with <unk> 30 107 as.
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.
<unk> <unk> 30, 107, and a candidate for MLP that has the potential to be our first candidate to market.
There is a high unmet need for new therapeutic treatment options for this debilitating disease, where patients currently face repeated surgeries.
As we've shared previously and our recent phase one two trial, which included patients who had two or more surgeries in the prior year, 81%. So a reduction in surgical interventions as compared to the year prior to treatment.
Patients and advocates have express 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 III trial for RFP in the first quarter of 2024 after finalizing discussions with the FDA.
In anticipation of this trial's initiation the clinical research organization with higher 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 one two trial were presented by lead investigator Dr. Ted MAU at the Eva program as part of column in Boston on May the <unk>.
As you might remember the presentation highlighted that 30, 107 was well tolerated with patients experiencing mostly low grade treatment emergent aes.
INR 30, 107 was also observed to induce cellular immune responses against both HPV six and HPV 11, with activated CD, four and CDA T cells, including cytotoxic CD eight T cells thought to be important for clearance of virally infected cells.
<unk> 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.
Also during the second quarter, we announced a 31 seven was granted orphan drug designation by the European Commission as a potential treatment for RFP.
As a reminder, 31% <unk> was granted orphan drug designation from the FDA for the same indication in July of 2020, making.
Making it the first RFP product candidate to receive orphan designations from both U S and EU regulatory bodies.
Moving on to <unk> 3100.
As announced in our press release and <unk>, we'll see further development of <unk> 3100, as a potential treatment for cervical hcl in the U S.
This decision is driven by several factors, including the previously announced FDA feedback that we would be required to conduct one or more additional well controlled trials in the biomarker selected population before being considered for registration.
In addition, the biomarker we developed with Qiagen was quite novel it is a cutting edge micro RNA based assay that was developed specifically for this trial based on data collected in a previous trials.
However, as we previously reported the biomarker did not perform as expected and reveal two.
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 pipeline timeline.
And continued pursuit of VEGF 3100 for cervical <unk> in the U S market less attractive than other opportunities in our pipeline.
That being said we remain very encouraged by the data achieved in both of our reveal 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 an access to treatment for cervical dysplasia a different.
For instance, our partner Apollo buyer continues to conduct its ongoing phase III trial of 3100 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 Apollo buyer is not utilizing the novel Biomarkers, what was part of <unk> reveal two trial.
As you may recall in reveal two we achieved the secondary endpoint of viral clearance and tissue regression in the ITT population and this is the same endpoint that is the primary endpoint in the <unk> clinical trial.
We are also discussing the development of 3100 for additional ex U S markets with other potential partners, where we believe 3100 could be a valuable treatment option.
If current and future trials can result in regulatory approval.
Let's turn now to our plans for developing 3100 as a potential treatment for <unk>.
This disease affects an estimated 210000 to over 1 million people in the U S with a similar estimate for Europe .
Interest in this target has increased slightly based on two primary factors firstly, the promising viral clearance data observed in both phase III trials conducted for the cervical indication suggests a 3100 has the potential to treat this difficult disease target.
And secondly, because the treatment paradigm has evolved for emulates film with thought leaders now, believing that a more proactive approach to patient care as warranted.
Results published in the New England Journal in June of 2022 from a multiyear study sponsored by the National Cancer Institute called the anchor study showed that treatment of anal <unk> reduce the risk of anal cancer compared to active monitoring without treatment.
The study produced results to the moving the medical community towards a more proactive approach and preventing lesions that can progress to cancer.
There's one catch in this shift however.
There are very few effective options available to treat <unk> beyond surgery.
We believe 3100 could potentially fill this critical medical need given its ability to clear both lesions and virus as we observed not only in the cervical phase III trials, but also in our open label Phase II trial in HIV negative anal <unk> patients.
In which we sold a 50% or 11 out of 22 participants had no evidence of HPV 16, 18 positive H sale at week 36 and.
And 46% or 10 out of 22 showed no evidence of HPV 16, and 18 on biopsy.
In addition, <unk> supporting an externally sponsored study run by the eighth malignancy consortium examining the potential of <unk> thousand 100, and HIV positive individuals with <unk>.
<unk> is also taking steps to advance INR 31, 12 for HPV related head and neck cancer.
INR 50, 401 for Glioblastoma and INR 40, 201 as in a bowl of 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 and future quarterly earnings calls.
I'll now turn the call over to our CFO Peter Keys for our second quarter 2023 financial summary, Peter.
Thank you Mike.
Today I'd like to provide an overview of <unk> financial conditions for the second quarter of 2023.
And some additional content around the reorganization, we announced on August one.
As Jackie a Mike discussed earlier, we made some strategic shifts in our development pipeline and aligned our head count and operational spend to.
To help ensure <unk> 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 third quarter of 2025.
This projection includes our cash burn estimate of approximately $34 million for the third quarter 2023, including an expected one time charge of approximately $2 1 million related to the head count reduction.
We expect the cash burn will decrease incrementally from there.
Without the remainder of 2023 and 2020 for these projections do not include any funds that may be raised through our existing aftermarket program or other capital raise activities.
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 second quarter of 2023, our total operating expenses were $37 3 million, which is down 64% from the second quarter in 2022 and down 15% from the first quarter of 2023.
Breaking down total operating expenses, we see that research and development expenses for the second quarter of 2023.
Or $23 7 million compared to $56 5 million for the same period in 2022.
58.
58% reduction quarter over quarter.
The decrease in R&D expenses was primarily the result of lower drug manufacturing costs clinical trial expenses and outside services related to INR 4800.
The other co and other Covid studies actually.
As well as lower employee and consulting compensation, including stock based compensation among other variances.
G&A expenses for the second quarter of 2023 were $13 5 million compared to $48 5 million for the same period in 2022.
72% drop the decrease in G&A expenses.
Was primarily related to a significant one time costs in the second quarter of 2022 related to the settlement of the class action litigation and related legal expenses as well as severance incurred in 2022 among other variances are.
Our revenue for the second quarter of 2023.
Were 226000 compared to 784000 for.
For the same period in 2022.
These factors combined to bring our net loss for the second quarter of 2023 to $35 5 million or <unk> 13 per share basic and dilutive.
<unk> to a net loss of $108 5 million or 46 point.
<unk> 46 per share basic and dilutive for the second quarter in 2022.
This represents a 67% year over year reduction in our net loss.
We finished the second quarter of 2023 with $194 9 million in cash cash equivalents and short term investments compared to $253 million as of December 31, 2022.
As a reminder, you can find our full financial savings in this afternoon's press release as well in as in our Form 10-Q filed with the SEC and with that I'll turn it back over to Jacky.
Thanks, Peter I'd now like to open up the call to answer any questions you might have operator.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
If youre using a speakerphone please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
The first question comes from Gregory <unk> with RBC capital markets. Please go ahead.
Hi, guys its a niche on for Greg. Thanks for taking my questions. Just on the restructuring wanted to ask given the current financial and labor constraints 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 could you, perhaps give us some insight into any conversations thus far in levels of interest. Thanks, so much.
Yes. Thanks.
Important question.
First of all I'd like to say, we have great confidence in our pipeline, we have great confidence in our people.
Clearly, we're looking at a range of different opportunities to advance our.
Pipeline candidates forward, particularly at the late stage candidates.
That's all.
But we're looking to move into the next stage of clinical development and as you'll have seen from us.
Pipeline slides and our clinical slides and Nokia has always worked across a range of different business models, including out licensing strategic partnerships.
Collaborations with academic sectors, and we're going to continue to do that to advance our pipeline forward in the best way that we can.
See peds.
Great. Thanks, I really appreciate the color.
Our next question comes from Roger song with Jefferies. Please go ahead.
Great. Thanks.
Thanks for taking the question maybe the first one.
Meanwhile, ORP.
Can you give us a little color around that.
<unk> with the FDA what are the key outstanding items before you can move into the phase III.
In the recent J D.
Your competitor doing the similar.
Trial date confirmed with single arm trial or the pivotal.
Just curious what are the.
The potential outcome.
Core.
The FDA discussion and the potential changes.
The study design for <unk>.
Thank you.
Yes, nice to hear from you Rochester.
Horton questions around 31, seven so what we've talked about in today's call with a really are focused on getting the next trial started in quarter one law next year.
And we've had some very good very positive interactions with the FDA and I'll hand over to Mike to provide a bit more color Mike.
So thank you.
As we announced today we.
Obviously.
Far along in.
Discussions with respect to trial design, otherwise, we would not be in the position to open 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 are addressing some elements related to.
Devices, obviously 30 107 as a combination product.
And it's only natural that as the FDA looked at us commencing a phase III study.
They also have questions relating to add device aspect of that product.
But it really is.
I'm very happy with that discussions.
We're in a very good place to progress this asset.
To the clinic.
Okay great.
Thanks for the color.
And maybe another one courtyard.
<unk> morning.
Silviculture anal.
Just curious how much normal strong your survey coal can be applied to <unk>, particularly for the biomarker.
Do you plan to apply the biomarker strategy.
Well thank you.
Yeah no. Good question at present, we have not.
<unk> decided to use the biomarker in the <unk> program, we think.
Based on all the evidence we have seen from our reveal studies and from the phase II that we conducted there is no need to introduce the.
The biomarker element into that.
We would.
Obviously had a good look at what our biomarker taught us from the reveal two data and clearly we learnt a lot from that and we would be in the position.
To use that information in other programs, but suddenly for Ana late so that is not our plan at present.
That's great. Thank you that's helpful.
Online.
Okay.
The next question comes from hard Taj Singh with Oppenheimer. Please go ahead.
Okay.
Great. Thank you for the two questions and thanks for the update.
Again, just going back to $31 seven maybe just if you could 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 will be constrained.
And then with your patient population will be different in the phase III the inclusion exclusion criteria relative to the phase <unk>. That's the first question and the second is just on INR 54, one.
What's your update there are.
At hobby.
The discussions on the on the joint committee with that with Regeneron ago. Thank you for the question.
Okay. So I'll touch maybe I'll take the second question first 50 <unk> one.
That study is still rocking up we still have patients on that study is still getting dosed.
And we are in discussions with Regeneron is as follows.
Propensity presently Ti on that program about the right next steps for that program.
So we will be providing updates on our next steps that that candidate in due course.
We've wrapped up that study.
Mike do you want to talk about 31% and perhaps it would be helpful to just kind of recap the phase two data in a patient population and talk about how we see moving forward.
So.
As Youll recall with a phase one two study the patient population that we recruited needed to have.
Mhm are two surgeries in the preceding year.
And the efficacy we saw in the entire population, which did range I think up to.
Eight surgeries was was relatively consistent across the breadth of previous surgeries.
So we've really got no reason to reexamine that aspect of it.
Patient population.
As you recall we saw.
We were very pleased with the efficacy signal that we saw in our phase one two study with an 81% reduction in surgeries.
With respect to the number of patients and how long to recruit we haven't provided that level of detail just yet.
I would say no.
We have talked to the fact that this is going to be a global trial.
And so as we've looked at.
Dumbass Si devaluations in.
We're seeing the same.
Same clinical need that we have seen in the United States.
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 one two data with them.
And the encouraging results from that that we would we will hope that we can recruit the 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 disease state where there is a significant pent up clinical need.
And if I can just add to that Mike <unk> and the phase one two study we saw a very good tolerability profile. Some of the key attributes of our platform the ability to re dose without any.
Anti infection 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 works in a large number of countries and I think that experience of working globally as came to servicing its debt here.
Yes.
That helps a lot and I think the two orphan drug designations also.
Something with two different areas just a quick follow up which is then.
Is the standard of care in terms of surgery in different countries pretty consistent like theres not going to be any consistency right. If you go from country to country.
And just any feedback there. Thank you for all the questions.
Yes.
Really a clinical question ask Mike to comment on that.
Excellent question.
We obviously did take this into account and it was it was one of their quest.
Questions as we looked at other countries.
And as we also mentioned in our last quarterly earnings call New surgery criteria was one of the elements that we were discussing with the FDA and we know we think we've come to a a good way of standardizing those to make sure that the patients as they.
Coming to the coming to the study and actually have surgical interventions. During this study that there'll be fairly standardized from site to site.
Great. Thank you so much that helps a lot.
The next question comes from.
<unk> Patel with HC Wainwright. Please go ahead.
Hi, guys. This is detached standing in for E. Chen just one question for me today.
As you are aware back in April you had presented data from the phase <unk> trial of <unk>.
<unk> zero one.
When can we expect further updates on this program.
That's a great question.
Just to remind people so I know 42, or one is salary apparel packaging.
Vaccine candidates and we reported data.
Which basically shows that we were able to be responsive and 100% or 36 36 people.
Previously received the Mcafee both vaccine.
Currently going through the process of discussing our plans with.
But the next stage studies with regulators and with our collaborators and we're providing will be providing updates on that program in due course, so stay tuned for that.
Great. Thank you very much for the update.
This concludes our question and answer session I would like to turn the conference over to Jacky <unk>, President and CEO for any closing remarks.
Thank you for your questions and for joining us today.
Over the past year, we've engaged in in our central strategic hopeful focusing our efforts on those pipeline candidates that are closest to market with the greatest likelihood of success and scaling our business appropriately.
These assets have been critical to ensuring that <unk> 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 and INR 31, 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.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.