Transcript of Inovio Pharmaceuticals, Inc.

Transcription

Trading Under the Symbol: ISDR
Transcript of
Inovio Pharmaceuticals, Inc.
Fourth Quarter and Year End 2014 Financial Results
March 16, 2015
Participants
Joseph Kim – President and Chief Executive Officer
Peter Kies – Chief Financial Officer
Bernie Hertel – Vice President, Investor Relations and Communications
Analysts
Charles Duncan – Piper Jaffray & Co.
Brian Klein – Stifel, Nicolaus & Company, Inc.
Jonathan Aschoff – Brean Capital
Jason Kolbert – The Maxim Group
Yi Chen – H.C. Wainwright & Co.
Presentation
Operator
Greetings and welcome to the Inovio Pharmaceuticals Inc. Fourth Quarter and Year-End 2014 Financial Results
conference call. At this time all participants are in a listen-only mode. A question and answer session will follow
the formal presentation. (Operator instructions.) As a reminder this conference is being recorded.
It is now my pleasure to introduce your host, Bernie Hertel, VP of Investor Relations and Communications. Thank
you, sir, you may begin.
Thank you. Good morning, everyone. Today’s call may contain certain forward-looking statements relating to our
business, including our plans to develop DNA immunotherapies, electroporation-based delivery technologies as
well as our capital resources.
Please keep in mind that actual events or results may differ from the expectations discussed as a result of a
number of factors, including uncertainties inherent in preclinical studies, clinical trials and product development
programs, including but not limited to the fact that preclinical and clinical results referenced on the call may not be
indicative of results achievable in other trials, studies and trials may not achieve the results desired, and they may
not commence or be completed in the time periods anticipated. There may also be risks related to collaborative
arrangements, including the timing and receipt of payments, the availability or potential availability of alternative
therapies for the conditions targeted by the company or its collaborators, issues involving product liability, issues
involving patents, the adequacy of our capital resources, the impact of government healthcare proposals and
other factors set forth in our Annual Report on Form 10-K for the year and quarter ended December 31, 2014, and
other regulatory filings from time-to-time. Finally, there can be no assurance that any product in Inovio’s pipeline
will be successfully developed or manufactured, that final results of clinical studies will be supportive of regulatory
approvals required to market licensed products or that any of the forward-looking information provided will be
proven accurate.
Now Inovio’s President and CEO, Dr. J. Joseph Kim.
Transcript:
March 16, 2015
Thanks, Bernie. Good morning, everyone. Last year was the most important year in the company’s history.
Why? Because in July, Inovio demonstrated for the first time in the field that a DNA active immunotherapy could
achieve clinically relevant efficacy, using targeted In-vivo T cell activation in a large controlled clinical trial.
In our randomized, placebo-controlled, double-blind phase II study of over 148 women with high grade cervical
dysplasia caused by HPV 16 or 18, we used a three immunization regimen of our SynCon DNA-based
immunotherapy called VGX-3100. Evaluating these women 36 [weeks] after their first treatment, our endpoints
were to measure histologic regression of the pre-cancerous cervical lesions which is an assessment of the cells
and virological clearance.
How did we do? Treatment with VGX-3100 resulted in histologic regression of high grade cervical pre-cancer
called CIN2/3 down to CIN1, which is a low grade pre-cancer, or to no disease, meeting the study’s primary
endpoints. In addition, the trial demonstrated clearance of HPV in conjunction with the regression of cervical
lesions, meeting the secondary endpoints. Robust T cell activity was detected in subjects, which received VGX3100 compared to those who received placebo.
Why is this important for women? These results show a significant step toward providing women and their
physicians a non-surgical approach to treat pre-cancers. By stimulating their immune system to eliminate cells
that had been detrimentally altered by HPV, as well as any presence of the virus itself, women treated with this
immunotherapy can potentially avoid an invasive procedure, eliminate a small but nevertheless real risk of preterm birth, and reduce the risk of recurrence or a passing on the virus to others. The data from this proof of
concept trial is now guiding the planning of our phase III trial for VGX-3100. The success of which would then
bring this product to a vital step closer to clinical use.
What do these results mean for Inovio in its pipeline? These phase II data are vital in planning for the other HPV
indications including cervical and head and neck cancers, for which we have initiated human studies, and
anogenital pre-cancers and cancers. These are all very important targets. Equally importantly you can
extrapolate these results for all disease applications of our technology. The results of our efficacy trial validate
the potential of our SynCon products to be effective, efficient, and safe.
Now let me take a step back and briefly expand on our approach to bringing a new type of medicine, DNA-based
immunotherapies, to the market. Like many sciences, we have long held the view that we should be able to
create a new era of immunotherapy technology to not just prevent, but treat challenging diseases.
We’ve also asked ourselves the question, is there such a thing as an ideal immunotherapy? What would this look
like? Our viewpoint and what we have been striving for through our years of R&D and now late phase clinical
development is to advance an immunotherapy with the following important characteristics.
• We want to help the immune system recognize and target disease-specific antigens- that is proteins
unique to a cancer or infectious disease.
•
It should not have to be patient-specific and personalized. Why remove cells from the body, modify them,
and then reintroduce them to a patient? Why take on the manufacturing quality control and cost
challenges if you can do the most important work in the patient? Keep it simple.
•
It must activate functional T cells; CD8 positive killer T cells with the tools necessary to kill the target cells.
These tools include, for example, granzyme and perforin.
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March 16, 2015
•
This immunotherapy must generate robust T cell responses, meaning a significant number of T cells, and
we want them to be persistent and durable over time, we call this a memory response.
•
We also do not want to induce any unwanted immune responses against the beneficial agent.
•
We also don’t want medicine to induce toxic inflammatory responses in the patient.
•
Furthermore, in the case of cancer, we want to help the body break its tolerance of cancer cells grown in
the body.
This is not intended to be a lecture on immunology. However, to understand and differentiate Inovio’s DNA-based
immunotherapy technology and its potential, it’s vital to appreciate these variables. The scientists driving our
technology have decades of experience and they set a high standard as to how to conduct their research and
clinical development.
We’ve published over 80 preclinical and clinical peer reviewed publications just in the last 6 years. Our view is
that an ideal immunotherapy is an active immunotherapy that achieves these various factors I just described. Our
phase II clinical data has provided significant evidence that we’re on the right path.
There are additional factors that define the power, simplicity and potential of our technology. With just three
simple injections over three months, we generated significant killer CD8 positive T cells that are measurable in the
blood, a significant accomplishment compared to most other immunotherapies. The T cells we generate are then
trafficked to the disease tissue. These are often described as tissue infiltrating T cells. And we see a direct
correlation between the CD8 T cells and actual clinical efficacy.
Finally, let me emphasize the importance of safety. We have now treated over 550 subjects with over 1,300
immunizations across various clinical studies and we have not experienced a single severe adverse event. Our
only common adverse event is the injection site redness, which is a sign that the immune system is actually at
work. We sometimes take the idea of do no harm for granted; at Inovio, it is fundamental to our approach.
Overall, we view our VGX-3100 data as the highlight of 2014 and illustrative of the power of our SynCon construct
coupled with our proprietary delivery technology. Together they drive effective T cell responses able to eliminate
lesions and, in this case, viral levels. For us at Inovio, this is but the tip of the iceberg of forthcoming data and our
burgeoning pipeline.
As a culmination of this particular study and milestone, there is a much deeper and more detailed review of our
phase II efficacy and other data coming soon in a medical journal. The next key step, as you know, is our plan to
independently advance VGX-3100 into a phase III registration study with target patient characteristics and a
treatment regimen similar to our phase II study.
Steps we must complete include scaling up commercial-level production of our immunotherapy product and
delivery devices. We expect to complete our end of phase II meeting with the FDA in 2015 and begin treating
women in a phase III study in early 2016, sooner if possible.
With this positive data in tackling HPV-related diseases, we want to play a significant role in addressing HPV
associated diseases. To this end, Inovio has broadened its therapeutic HPV franchise to include other precancers caused by HPV infection such as vulvar, vaginal, and other anogenital neoplasia as well as the cancers
of the cervix, head and neck, and anogenital areas.
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March 16, 2015
Late last year, we initiated phase I/II clinical studies of INO-3112, which consists of VGX-3100 plus our IL-12
immune activator against HPV-caused cervical cancer and head and neck cancer. Our IL-12 immune activator
has been shown to speed the onset and increase the already high levels of antigen-specific T cells generated by
the immunotherapy. We expect to report the first interim data from one of these first cancer studies in the second
half of this year.
Can our SynCon technology address other cancers not caused by HPV? That’s a resounding yes. The broad
evidence in the field is that better ways of unleashing and enhancing T cell responses are bearing results against
various cancers. As we advance our view of an ideal immunotherapy to generate functional killer T cells, we’re
well in motion in applying SynCon products to other cancers.
You will be hearing from us about our hTERT construct in the months and years ahead. In preclinical studies, we
observed significant impact when we target this gene, human telomerase reverse transcriptase, which is found in
many cancers, but is rare in normal cells. We started a phase I trial of our hTERT immunotherapy alone or in
combination with Inovio's IL-12 immune activator in adults with breast, lung or pancreatic cancer at high risk of
relapse after surgery and other cancer treatments. Because high levels of hTERT expression are found in 85% of
all human cancers, this immunotherapy candidate holds the potential as a broad spectrum universal cancer
therapeutic.
Staying with our rich oncology pipeline, our prostate DNA immunotherapy, INO-5150, targeting prostate-specific
membrane antigen and prostate-specific antigen, has achieved regulatory clearance to start a phase I study and
we will soon begin enrolling patients. A preclinical study in monkeys showed that immunization with INO-5150
generated strong and robust T cell immune responses that were the highest generated by a PSA-targeting
immunotherapy in animal studies and were very similar to the immune responses we generated in patients with
VGX-3100, which generated best-in-class T cell immune responses.
While I’m proud of the cancer pipeline Inovio has filled, let’s not forget the value in our products targeting
challenging infectious diseases. I will tell you about four of them: hepatitis B, hepatitis C, Ebola and HIV. First,
hep B. Along with providing full funding, Roche entrusted Inovio with the responsibility of running the first study.
We have received regulatory clearance to start the INO-1800 phase I study and will soon begin enrolling patients.
The treatment of the first patient in this trial will trigger a milestone payment from Roche.
Second, hepatitis C. Inovio’s multi-antigen SynCon immunotherapy targeting hep C virus genotypes 1a and 1b,
also called INO-8000, is being studied in a phase I/IIa clinical study in Korea in collaboration with our international
affiliate GeneOne Life Sciences. Together we expect to report interim data from this clinical study later this year.
Even though there have been recent therapeutic breakthroughs for this chronic disease, we think we can bring a
safer, more long lasting product to market with our DNA-based hep C therapy.
Third is Ebola. We intend to initiate a phase I study of our Ebola immunotherapy called INO-4212 in the first half
of 2015 in collaboration with GeneOne. We will begin this trial with great expectations based on our published
preclinical data showing 100% protection of animals immunized with our Ebola DNA vaccine.
In this brief look at our infectious disease pipeline, I’ll end with HIV. Subsequent to year-end, we reported that a
12-patient phase I study of HIV therapy, PENNVAX-B, in HIV-infected patients revealed that induced T cell
immune response characteristics were similar to those observed in extremely rare HIV-infected individuals who,
without treatment, do not progress to further stages of disease. These patients are called long-term nonprogressors. Scientists believe that part of their ability to control infection may lie in their unique immune
responses, that’s why our DNA-based immunotherapy approach holds so much promise, because it drove the
expansion of activated HIV-specific CD8 T cells with functional characteristics similar to those of long-term nonprogressors.
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The knowledge from our PENNVAX-B studies in healthy and HIV-infected people has been used to create our
global, multi-clade PENNVAX-GP preventive and therapeutic HIV DNA immunotherapy candidate. Development
of this product was funded in part by a $25 million NIH contract over the last five years. We expect to initiate a
phase I study of PENNVAX-GP in the first half of this year. This study will be conducted by the HIV Vaccine
Trials Network with funding provided also from the NIH.
We are also very pleased to have announced earlier this morning that Inovio and its all-star academic
collaborators, including the University of Pennsylvania, were awarded a new 5-year $16 million grant from the
National Institute of Allergy and Infectious Disease, a part of the NIH, to further support our novel DNA-based HIV
immunotherapy developments. Under the Integrated Preclinical/ Clinical AIDS Vaccine Development Program or,
IPC AVD, this grant was awarded based in part on the clinical successes of Inovio’s PENNVAX HIV vaccine
program. The new grant will fund research to expand PENNVAX coverage of HIV strains as well as to further
enhance antibody responses generated by the vaccine. The overall goal of this project is to further build upon
this important HIV vaccine approach as well as to gain fundamental insight into new technologies to improve
vaccination.
As part of this grant consortium, Inovio will couple its expertise in constructing, developing and manufacturing HIV
vaccines with researchers from four of the world’s leading academic institutions, including UPenn, Emory
University, Duke University and the University of Massachusetts. This new award reinforces Inovio’s position as
one of the eminent global developers of novel HIV therapies to prevent and treat this disease. So on top of the
$25 million contract over the last 5 years, we will be receiving an additional $16 million over the next 5 years.
I’ll close with the quick accounting of our other company developments. DARPA, the Defense Advanced
Research Projects Agency, awarded $12.2 million for a collaborative project to develop Inovio’s DNA-based
monoclonal antibodies or, dMAbs, using technology developed by Inovio and Penn against influenza and
antibiotic-resistant bacteria. This research is being conducted by scientists from Inovio, Penn, and MedImmune.
In previous clinical studies, our dMAbs demonstrated robust virus neutralization and protected treated animals
challenged with a lethal virus. I promise you, you will be hearing more about Inovio’s dMAbs going forward.
Remember that conventional monoclonal antibodies have become the most valuable medical product class in
recent years. In 2012, worldwide sales of monoclonal antibody products exceeded $50 billion and of the top 10
selling pharma drugs, 6 of them are monoclonal-based products. So, we are able to apply our technology to get
our large slice of this important product class.
On another note, we viewed as a non-core asset our animal health business, VGX Animal Health, Inc. We will still
profit from its development, but it is now in the hands of a company, Plumbline Life Sciences, Inc. of Korea, who
will focus on this asset and move it forward. We granted an exclusive license for animal applications of VGX
Animal Health’s growth hormone-releasing hormone or GHRH technology and animal DNA vaccines plus a nonexclusive license for Inovio’s electroporation delivery systems for these applications. Our VGX Animal Health
subsidiary will receive $2 million in cash in multiple payments, 20% of the outstanding shares of Plumbline,
milestone payments, and royalties on product sales. Inovio retains the human applications of its GHRH
technology.
Now our CFO, Peter Kies, will provide our financial highlights. Peter?
Peter Kies – Chief Financial Officer
Thank you, Joseph. Good morning, everybody.
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March 16, 2015
Total revenue was $2.5 million and $10.5 million for the quarter and year ended December 31, 2014, as
compared to $1.7 million and $13.5 million for the same periods in 2013.
Total operating expenses for the quarter and year and ended December 31, 2014, were $13.5 million and $50.0
million as compared to $9.7 million and $33.0 million for the same periods in 2013.
The net loss attributable to common stockholders for the quarter and year ended December 31, 2014, was $7.4
million, or $0.12 per share, and $36.1 million, or $0.61 per share, as compared with a net loss attributable to
common stockholders of $15.5 million or $0.30 per share, and $66.0 million, or $1.43 per share, for the quarter
and year ended December 31, 2013.
The improvement of $8.1 million and $29.9 million in net loss resulted primarily from a reduction in non-cash
accounting expense in 2014 related to the change in fair value of common stock warrants based on a required
quarterly mark to market adjustment to reflect changes in the Company’s stock price.
A look at revenue:
We are receiving ongoing payments from Roche under our collaborative research and development arrangement.
The decrease in revenue was primarily due to the up-front payment associated with the partnership agreement
executed with Roche in 3Q 2013, offset by an increase in recognized revenue related to research and
development services performed under the agreement.
Now, operating expenses:
Research and development expenses for the quarter and year ended December 31, 2014, were $9.2 million and
$34.1 million as compared to $6.4 million and $21.4 million for the same periods in 2013. The increase in R&D
expenses is generally related to an increased investment in all our product development programs and our Roche
partnership (the latter being fully offset by development fees from Roche). General and administrative expenses
for the quarter and year ended December 31, 2014, were $4.2 million and $15.9 million, compared to $4.3 million
and $13.6 million for the quarter and year ended December 31, 2013.
As of December 31, 2014, cash and cash equivalents and short-term investments were $93.6 million compared
with $52.7 million as of December 31, 2013. This increase was primarily due to the net proceeds from our March
2014 financing and warrants and options exercised during the period.
Also at the end of last year, the company had 60.7 million shares outstanding and 66.6 million fully diluted.
Based on management’s projections and analysis, the Company believes that cash, cash equivalents and shortterm investments are sufficient to meet its planned working capital requirements through the end of 2017,
excluding its planned phase III clinical trial of VGX-3100. As you might expect, the Company expects to raise
additional capital to fund this study.
More detailed information can be found in our press release issued this morning and on our website in the IR
section under SEC filings.
Joseph, back to you.
Thanks, Peter. It's very clear what are the characteristics of an ideal immunotherapy; 2014 was transformational
for Inovio and the field because we showed for the first time that an active DNA-based immunotherapy can
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March 16, 2015
generate efficacy by activating well targeted, robust killer T cell exclusively in the body. We think Inovio is closer
than any competitor to achieving such an ideal immunotherapy.
We are striving every day to turn this ideal into reality with a growing pipeline of preclinical and clinical
immunotherapies targeting a range of cancers and challenging infectious diseases. Our aim is to make a big
impact on the lives of people suffering from these diseases. Showing that we’re moving in the right direction, we
have validating data; we have validation in the form of third-party non-dilutive grants now amounting to roughly
$85 million over the last 6 years; we have notable collaborations; and our partnership with Roche is focused on
one of the most widely prevalent diseases in the world. As you can see from today’s HIV award announcement,
we continue our efforts to secure further grants, collaborations and partnerships to advance our technology, and
the many products we’re building and developing with our novel technology.
Finally, we have an outstanding team of experts, and continue to add to our strength and bandwidth throughout
our organization. I’ll end by simply saying, we’re pleased with our progress and our potential. Over the next few
months, watch this space and watch Inovio.
Now, I’m ready for your questions.
Operator
(Operator instructions.) Our first question is coming from the line of Charles Duncan with Piper Jaffray. Please
proceed with your question.
<Q>: Good morning, Joe, and thanks for the detailed review of last year, as well as congrats on that HIV grant,
additional HIV grant. My question is regarding VGX-3100 in terms of the visibility and timelines; I understand that
you’re doing some more manufacturing work to prepare for a phase III but I’m wondering if you can tell us if
you’ve actually requested an end of phase II meeting with the FDA? And if so, approximately when that might
take place as well as can you provide some color on the sizing and cost estimates for that phase III?
Good morning, Charles, thank you. So, VGX-3100 product manufacturing as you already know, where you
manufacture your phase III product is where you manufacture your commercially launched product as well. So,
we’ve been scaling up and are conducting manufacturing activities to launch our phase III studies from a newly
selected larger contract manufacturer. Along with that is our delivery devices. We have designed and scaled up
commercially manufacturable and distributable electroporation devices that are simple to use and robust devices
that can go out into mass production and into mass distribution; and these have been taking some time to
prepare. And along with that is the preparation to have the end of phase II meeting with our full phase III clinical
protocol, as well as the endpoints where we will seek to get the FDA’s concurrence.
We expect the FDA end of phase II meeting to occur sometime in the midyear this year and that will allow us to
move into our phase III initiation by early 2016, if not sooner. So, obviously we all want to start this important trial
as soon as possible. As for the phase III study size and characteristics, as I’ve stated before, we expect this trial
size to be somewhat larger than the phase II, but because of the low overall P values of our efficacy parameters,
we don’t expect it to be a huge size. So, we’re currently estimating somewhere between 300 to 400 patients total
to get to the endpoints that we want. And as we discussed before, we’re looking for a full clearance of the lesions
potentially as our phase III endpoints. Clearly that will diminish the placebo effect that you may see in an easier
target. So, I think what we’ve shown in phase II studies is extremely compelling from our ability to generate just
with the three simple injections into the arm in the first three months of treatment for these women, we can clear
the CIN2/3 lesions down to normal and also eliminate the virus that caused the disease in the first place. No other
treatment option can claim those two things currently or in development.
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<Q>: Yes, we saw that data and it was impressive. When do you anticipate the full phase II data to be published
and in what type of journal could you characterize that? And finally can you ballpark the cost of that 300 to 400
patient trial?
Yes, the whole trial should be around $80 million to $100 million ballpark. We’ve submitted the manuscripts to
one of the top medical journals and we expect to publish this very impressive efficacy, immunogenicity and safety
data in one of the top journals. It’s currently undergoing a reviewing process at a journal right now.
<Q>: That’s helpful. Then one additional question for you, please. If you could compare and contrast, there’s
been some other movement in the market with regards to DNA vaccine platform such as those using Listeria. I’m
wondering if you could point out some of the key differences in your mind, if you would, just briefly.
Yes, one of the—I guess, the biggest key difference is safety. Our DNA-based immunotherapy sounds as such.
It’s pure DNA; it’s pure naked DNA in water and delivered with electrical energy. In theory it should be as safe as
any other drug regimen out there, and in reality, as I stated, we’ve treated over 550 patients with over 1,300
different administrations and we haven’t had any SAEs. The only thing you see is the redness at the site of
injection, which just shows that immune responses are getting generated by the therapy. The other difference will
be in the immune responses. Any efficacy without measurable immune responses in immune-oncology is
rubbish. Otherwise you’re just waving your hands and I think the difference in our field is, if you want to invest
into where there are clear mechanisms of actions being demonstrated in randomized, controled, double-blinded
clinical studies like Inovio’s or some other more nebulous approach.
Speaking to what you had asked earlier, part of our manuscript will include an actual correlate of clinical efficacy,
meaning as early as week 6 or week 14. So, this is after the second or third injection with our 3100, we can
correlate and predict which patients are going to clear the lesions and clear the virus versus those who are not.
So, this level of immune response data collected from a large double-blinded trial does not exist anywhere outside
of Inovio currently. And we can apply this dataset and what we learned from our phase II studies to other cancer
product development programs we have ongoing, including pancreas, breast, lung and a soon to start prostate
cancer program. So, we’re really pushing the envelope in our immuno-oncology field by our ability to measure
and correlate the T cell immune responses both from the blood where the T cells are circulating, but also we can
track them to the sites of interest, the tissues of interest, whether be it in the cervical tissues, prostrate or
elsewhere.
Operator
Our next question is coming from the line of Brian Klein with Stifel. Please proceed with your question.
<Q>: Thank you for taking my questions. So, first on 3100. Just want to get a better sense of your proposed
Phase III program. Will you be treating and evaluating patients for the same amount of time or do you think you
will extend the evaluation period? And then secondly, can you give us a sense of what the endpoint might be and
if it’s going to be the same as the phase II endpoint or if you’re looking at potentially some other endpoints?
Thank you, Brian. So, in terms of the regimen, we expect it to be very similar. So, just to recap, it’s three
injections—one each at month 0, 1 and 3--and the clearance of the lesions and the virus are evaluated at month
nine. There is also in phase II a one-year additional follow-up post month nine. So, that’s to measure the safety
as well as the durability of these responses and efficacy. So, our phase III study, we expect it to target a similar
timeline, but perhaps with additional follow-up to build up how long and how persistent our efficacy and
immunogenicity of these programs is.
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As far as the endpoints, we haven’t finalized, but also it’s never final until you get the concurrence with the FDA.
But by looking at our phase II data, most of our drug treatment effects in the patients who cleared, they cleared
down to normal clearance. And if you use that parameter the P values, which were very good, even goes down
further, down to 0.006. So, likely that will help in reducing the trial size, and likely that’s one of the ways that we
will be able to accelerate the completion of this important phase III study.
The other portion of the trial that I don’t want to lose sight of, because it has a huge implication not just for HPVbased products, but also to other chronic infection targets, that’s our ability to eliminate HPV virus from the
cervical tissue by treating women with VGX-3100. So, we’ll also be measuring likely in our phase III study, and
this characteristic is going to be a huge factor in our market penetration and our ability to establish our VGX-3100
potentially as a first line treatment for women who are diagnosed with the CIN2/3 indication. So, we’re very
excited about that and there hasn’t been any other therapy today on the market or in development that has shown
such an impressive level of viral clearance using immunotherapy. And it has other additional implications to our
hepatitis B therapy, hep C and HIV therapies as well because, we’ve already demonstrated that we can
powerfully impact the elimination of the virus using a targeted immunotherapy as we have done with 3100 phase
II results.
<Q>: Great, thank you. And then just two quick questions on your prostate cancer vaccine. First, can you tell us
what the target population you’ll be going after there will be and then secondly, do you still plan to re-partner that
program?
Well last question first. As we have with all of our rich pipeline of products in our portfolio, all of these products
are up for a partnership with the right partner and for the right price. So, we have very active and busy corporate
development programs to bring about additional partners, not just for 5150 or 3100, but for other products in our
rich pipeline.
But to prostate cancer, we’re going to be looking at earlier stage patients likely away from the castrate-resistant.
In the first study, we’re looking to see if we can generate the high levels of T cells that we were able to do in
cervical pre-cancer patients with 3100 and therefore we can use our correlations to predict our clinical efficacy.
But we feel that where it’s most high potential for these immunotherapies to bring about the highest level of
significant impact is in slightly earlier stage than the castrate-resistant end stage patients; but more data to come.
We expect to initiate the studies soon and more information will come.
Operator
Our next question is coming from the line of Jonathan Aschoff with Brean Capital. Please proceed with your
question.
<Q>: Thanks. Good morning, Joe. I was wondering, what could go wrong to either delay the start of the phase
III early next year or even result in the request for more phase II work? I was wondering specifically what bearing
does—do follow-ups beyond nine months have on the sufficiency of phase II?
So, as you know in this area, anything can go wrong that can delay, but we don’t expect any delays. We do have
a lot of balls in the air in terms of scaling up and manufacturing the plasmids as well as the devices. And when it
comes to the regulatory interactions, I think we have one of the best track records out there especially with such a
novel therapy. But it’s not done until the FDA blesses with the concurrence at the end of phase II. In terms of the
year-long follow-up from our primary readout from week 36, we do have a week 88 follow-up. But safety from
week 36 was very typical of our other trials. We didn’t see any SAEs related to the treatment of the drugs. There
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weren’t any significant problems compared to the placebo groups. So, we don’t expect real surprises from week
88 and I think the efficacy and immune responses that correlate to efficacy speak for themselves. So, we’re
pretty confident, but I just want to stress that you never know when you’re dealing with the FDA. But our track
record and our credibility have been extremely good with the FDA.
<Q>: I mean it’s hard to imagine a safety complication, but I was just wondering are they holding you to a
maintenance of efficacy or some sort of efficacy at that last endpoint.
No, we haven’t had those discussions with the FDA yet. We’ll have the end of phase II meeting with the FDA.
Being it’s an immune-based therapy with clear efficacy readouts; we’re pretty optimistic that we’ll get a straight
path into our phase III study.
<Q>: I was just actually curious about the grant that you got. What were the specific successes that inclined
them to give you another $16 million?
Total successes as you know are based on our two published clinical studies using PENNVAX vaccine,
PENNVAX-B. So, what we’ve shown was in a preventive setting. Just three injections at months 0, 1 and 3. We
were able to generate the highest CD8 T cell response levels using this HIV vaccine compared to any other HIV
vaccine candidates that were tested in the last 20 years;
Similarly, the same product being studied in HIV infected patients in a treatment setting in a virally suppressed
patient population, we’re able to generate the T cell signature in these patients that were pretty much identical to
what you read out from a long-term non-progressor patient, which means these patients can be off drugs and still
not progress. They’re just genetically blessed with their ability to control. And we can turn, at least in these 12
subjects who volunteered, these HIV infected patients, we were able to generate these important long-term nonprogressor T cell traits just with administration of our HIV vaccine.
So, we’re optimistic certainly with the progress of those programs. Those two studies and advancements prior to
the publication led to a $25 million contract from the NIH in the last five years. That’s turned into the development
of global clade PENNVAX-GP; and then this new grant of $60 million to us and our academic collaborators really
will also further expand our knowledge and development of this important HIV vaccine platform. So, I can't stress
any more. I think our technology, our science, and our research has been validated. It’s $40 million across the
last five years and the next five years. It is one of the largest in the whole HIV research field. So, I think dollars
speak for themselves.
I think the results and the publications speak for themselves. We do have these measurable cellular levels of T
cells we can generate using our immunotherapy. As I stated before, I challenge other platforms or products in our
field to generate even similar levels of immune responses. So, I think that’s where our strength comes from. Our
technology is grounded in phenomenal science, and not to mention over 600 issued and pending patents globally
protecting our assets. So, we’re very confident of where we’re going to take this platform and our rich pipeline of
products.
Operator
Our next question is coming from the line of Jason Kolbert with The Maxim Group. Please proceed with your
questions.
<Q>: This is actually Jason McCarthy for Jason Kolbert. I just have a comment on cancer immunotherapy. And
it sounds like everything is going great, but for cancer immunotherapy in general there’s just not a lot of data in
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Transcript:
March 16, 2015
humans, and I think your group is fortunate enough or doing so well with the cervical dysplasia that you do have
data and you could show that vaccination does work in cancer. But I think a lot of vaccination is driven by that
DNA backbone that you’re using. And seeing what happened with Bavarian Nordic and Bristol-Myers, are you
turning more attention to prostate cancer in 5150? Bavarian Nordic is kind of showing that you can vaccinate
against prostate cancer and maybe getting 5150 back from Roche might kind of be a blessing in disguise for the
company.
Yes. Thank you, Jason. Getting a product returned from a license from a large pharma is never pleasant. But in
the long run I do think we can develop 5150 and their components even more expansively in this important
immuno-oncology field; and we’re very glad to see the entrance of BMS back into the cancer vaccine field
because it really stresses the importance of doing this in products—cancer areas like prostate cancer. Obviously
it raises the profile of 5150. That’s why we’re pleased to have announced this morning that all of the regulatory
clearance has been given and we should be initiating our study for 5150 in the next few weeks. So we’re very
excited about that. Beyond that, I have full confidence that we can generate, as you said, similar levels of T cell
immune responses from our prostate cancer patients with 5150 as we’ve seen with 3100 in cervical pre-cancer.
So, as the owner of this largest dataset of immune responses in patients, we’ll be able to build out this important
big data [set] of information, and we can apply to develop these cancer indications much quicker and more
intelligibly than other competitors in the field. And I think that’s going to be an important draw to some of these big
pharma folks, and we expect to bring important interest back to this field. And I’m very excited to do our prostate
cancer study. We think this is an area where we can really leverage what we have and make a huge impact in
the field.
Operator
(Operator instructions.) Our next question is coming from the line of Yi Chen with H.C. Wainwright. Please
proceed with your question.
<Q>: Thank you for taking my questions. My first question is, could you give us some color on the age
distribution of patients in the completed phase II trial of VGX-3100, and also if you have such information, the age
distribution of people who currently are receiving preventive vaccines for HPV infection? Thanks.
Yes. Well, a preventive vaccine is an easier thing because that’s published and those are mostly in pre-teen girls
and boys. The highest impacted and most marketed target groups are in those age groups. Our 3100 is a
therapy and it’s in women who’ve been fully diagnosed with either CIN2 or CIN3 pre-cancer histologically. And our
phase II studies require them to have an active viral transcript from measurable at entry by TCR. So, for age
distribution, we allowed women I believe 18 to 55, typically an adult age group, and we’ve stratified these women
between placebo and the treatment group. So, that was stratified pretty much identically.
In terms of the age distribution, obviously the 3100 group has been older than what the Gardasil and other
preventive vaccines have been targeting, but that’s because of the indications more than the age distribution.
And that stratification will be published in the manuscript that we expect to come out. But let me just stress,
there’s no age impact between the placebo and the treated group. They were equally stratified and randomized in
a blind fashion.
<Q>: Thanks. My second question is, in the press release regarding the new funding—additional funding for the
HIV program, it says you may consider, start, a separate phase I study for it. So, what kind of difference in design
can we expect in this new program as compared to PENNVAX-GP?
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Transcript:
March 16, 2015
Yes, so $25 million over the last 5 years resulted in PENNVAX-GP, a global clade coverage vaccine, that can be
used as a preventive or as a treatment. And the PENNVAX-GP studies in the US, the phase I study, we expect to
start with NIH funding in the first half of this year. So, that’s from the last $25 million of funding. For the next five
years this new grant will fund additional research and development of our HIV vaccine program, and it would likely
culminate in a trial by the end of that granting period, so five years from now. So, I can't really predict what kind of
research finding and development findings it will have because that’s into the future, but likely we’ll have better
durability and higher immune responses. We think it’s not going to be much higher in terms of T cell response
magnitudes that we have already been generating, but it is also possible with different combination of immuno
activators that we have in development.
The other focus is also getting antibody-based responses to HIV, which we’re looking into this next five years of
research funded with this grant to improve. So, these are broadly neutralizing antibody responses. This is the
other arm of the immune system that can be very important for the preventive vaccine indication. So, we have
some room to improve even for PENNVAX in that regard. We look forward to really advancing this important
vaccine. So, we feel very good about achieving the validation of getting this new award. We’re looking forward to
doing a lot more significant research using this significant funding.
<Q>: Thank you. My final question is, considering that you will be initiating a few clinical trials in the near-term or
within this year. Could you give us some color on the projected operating expenses for 2015 as compared to
2014?
So, let me just summarize. We expect to be at an annual net burn of about $30 million. That’s our current
projection. Obviously that can change. A lot of our trials are funded, like the hep B, HIV, HCV with other people’s
money. The prostate cancer study will only add $1 - $1.5 million to our burn, because most of the heavy lifting
has been done with Roche’s money for 2015. So, I think we’re very good with our cash. Obviously we stated
explicitly that we’ll raise additional capital for phase III if we’re going to take this on our self, and even if we’re
partnering this we may raise the money just to increase our leverage in this partnership discussion. So, I think
we’re very strong financially and we hope to be even stronger with a lot of the activities we have ongoing in the
clinical development program.
Operator
We have reached the end of our question and answer session. I would like to turn the floor back over to Mr.
Hertel for any additional concluding comments.
Thank you. To all of you who have listened today or will listen to this call or read the transcript afterwards, thank
you for your attention and thank you to all our shareholders and other supporters. Have a good day.
Page | 12

Transcript of Inovio Pharmaceuticals, Inc.

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