Inovio Pharmaceuticals, Inc. (INO) Earnings Call Transcript & Summary

Hello, everyone, and welcome to Oppenheimer's 36th Annual Life Science Conference. I'm Jay Olson, one the biotech analysts here at Oppenheimer, and it's a pleasure to welcome you to our discussion with Inovio Pharmaceuticals. And it's an honor to introduce Jacqui Shea, the CEO; and Mike Sumner, the CMO of Inovio. With that, I'll turn it over to you, Jacqui, for a few slides to set up our discussion before we start to fireside. And thank you so much for joining us here today.

Thanks, Jay, and thanks for having us today. It's nice to be talking with you again. So I'm going to kick off with just a few slides just to give you a quick overview of Inovio, our technology, our pipeline and our lead candidate and then looking forward to the Q&A. So first of all, this is just a standard disclaimer slide that during this presentation, I'll be making forward-looking statements. And then to give you a quick overview of the company, Inovio is a clinical-stage biotech company. We're focused on developing and commercializing DNA medicines to treat and protect people from HPV-related diseases, cancer and infectious diseases. We recently had our BLA for our lead program, INO-3107 accepted for review by FDA which is a very exciting milestone for the company. And it's a potential treatment for a rare disease caused by HPV-6 and 11 called recurrent respiratory papillomatosis or RRP. So FDA accepted our BLA under the accelerated approval program and granted us a standard review, which gives us a PDUFA target date of October 30 this year. FDA has also granted us orphan drug designation and breakthrough therapy designation, and we have orphan drug designation in the EU. As part of the file acceptance letter, we did receive a note from FDA with some preliminary comments regarding our potential eligibility for the accelerated approval pathway. And we've requested a meeting with the FDA to discuss those comments. We're not currently planning to seek approval under the traditional pathway. There is a product that was approved to treat RRP last year. However, that product doesn't work for all patients and we believe that there's a significant remaining unmet need and market opportunity, and we believe that we have the potential to have the preferred product profile in this space. Regarding manufacturing, we've established commercial scale manufacturing for the DNA component of our combination plasmid at CMOs that manufacture commercial scale products for other companies. And we manufacture the delivery device that we use to deliver INO-3107 as part of our combination product in-house. Following on behind 3107 we have a deep clinical pipeline with multiple potential near- and midterm catalysts, although we are focusing most of our efforts on getting 3107 to approval. We also have some exciting earlier-stage technology which we believe is poised to further unlock the potential of DNA medicines. It's a very exciting DPROT technology that I'll talk about later on in the presentation. So to give you a quick overview of how DNA medicines work, we start off by identifying the target gene for the protein that we either want to drive an immune response against or we want to use as the therapeutic agent itself. We then use our proprietary algorithms to optimize that DNA sequence. And we insert that optimized DNA sequence into a circular molecule of DNA called a plasmid. We can manufacture these plasmids at commercial scale using typical fermentation technology. And then we deliver our DNA plasmids to either muscle or skin cells using our proprietary delivery devices called CELLECTRA. Now CELLECTRA use a process called in vivo electroporation, which are very short pulses of electrical energy to help the DNA plasmids get into the cells. And what these short pulses of electrical energy do is open up transient pores in the cell membrane that allow the plasmids to enter. Once the DNA plasmids are within the cell, the DNA is transcribed to RNA and then translated to protein. And then depending on the application, these proteins are either processed for antigen presentation to generate an immune response or we can add secretion signals and have these proteins secreted out from the cell to be the therapeutic agent themselves. So a key thing to remember about our DNA medicines platform is DNA medicines are really good at stimulating immune responses, T-cell immune responses particularly cytotoxic T-cell responses, which are important in treating chronic viral diseases and also cancer. And then we're also able to secrete these proteins out of the cell into the circulation where they can perform as a therapeutic agent. And we're able to generate monoclonal antibodies within the cell and have them secreted into the circulation as well as therapeutic proteins. So as you can see, it really is a very versatile platform, but really focused on either driving T-cell responses or driving protein production to be the therapeutic agent. So our lead candidate, INO-3107 for RRP addresses a rare disease. So RRP really results in these wart-like growths or papillomas in the airways. It's caused by infection with HPV or the human papillomavirus 6 and 11. And it's really an insufficient immune response, particularly a T-cell response within the patient that fails to prevent first of all, the infection and then fails to clear the infection. And what happens is you get these wart-like growths primarily in the respiratory tract particularly in the larynx where you can see that they can potentially obstruct the airway, cause difficulty swallowing. And because they're growing on the vocal cords, they also impact your voice. In some cases, RRP can spread throughout the respiratory tract, form pulmonary lesions and can also become malignant. So it's a really serious disease. You can catch RRP at any age. There are 3 general peaks of incidents, so around age 5 for pediatric RRP and then at around age 30 and around age 60 in adults. The most recent epidemiology estimates that there were about 14,000 active cases of RRP here in the U.S. So it's a rare disease, but not that rare. And repeated surgery, it's the standard of care. Severe RRP may require hundreds of surgeries over a lifetime. And it's the surgery itself that's part of the problem. And I'll talk about that in a bit more detail now. So every surgery comes with both a risk and a cost to patients. The risk is irreversible damage to the vocal cords as well as the pain and recovery associated with those surgeries and then a cost, of course, obviously, the impact of quality of life and financial. So we designed INO-3107 as an immunotherapy and is designed to generate antigen-specific T-cell responses against both HPV-6 and HPV-11 antigens by generating the cytotoxic T-cell response, it's able to target the HPV virus, which is the underlying cause of RRP. So every surgery matters to patients. These patients have -- many of these patients have had tens up to hundreds of surgeries and patients can have hundreds of surgeries over their lifetime and the cumulative risk of injury increases with every surgery. But ultimately, it only takes one surgery to permanently damage the vocal cords and the larynx. And so patients are really focused on reducing the number of surgeries that they require to control their disease and a reduction of even one surgery is clinically meaningful to patients. So we've -- as I mentioned, we've conducted some market research that we believe shows that INO-3107 has the preferred product profile in this space and that's across 3 main elements: efficacy, tolerability and simplicity of the treatment regimen. And this is market research that was conducted by a third party with physicians who treat RRP patients. And what these physicians told us was they really liked the improving response that we see with INO-3107 over time. So we see a good overall response rate. So that's a reduction of 50% to 100% reduction in surgeries after treatment compared to the year prior to treatment of 72% in year 1, which improves to 86% in year 2 or the second 12-month period, and we also see some patients who required no surgeries after treatment. This was 28% in year 1, improving into 50% in year 2. What this means for physicians is when they have an RRP patient treatment with 3107 gives them a really good chance that the patient is going to experience a significant reduction in surgery. And that's what they find really interesting about this profile. 3107 was also very well tolerated. The predominantly most adverse events were just transient injection site reactions, which resolved very quickly. We saw no discontinuations. And for patients who are having 4 doses over a relatively short time period as part of the treatment regimen, this tolerability profile is important because it really minimizes the amount of time people need to take off from work, and it means they can get back to work quickly. And we have a very patient-centric treatment regimen. We have office-based administration, which leaves the doctor in control. So we have no requirement for ultra-cold-chain unlike the gorilla adenoviral competitor. Our administration device is very easy to use by health care professionals and any health care professional can be trained to use it. And very importantly, unlike the competitor, we don't require any scoping or surgeries to maintain a minimal residual disease state during the treatment window. So again, physicians found this very attractive. So moving on then to upcoming milestones for the rest of the pipeline and for 3017. We have our PDUFA date coming up in October this year. We've requested a meeting with the FDA to discuss their preliminary comments in the file acceptance letter. And we believe we have the potential to be the preferred first-line treatment, if approved, based on our product profile. Following on behind 3107, we have additional clinical candidates where we're looking primarily to move those candidates forward as part of partnerships. And these include 3112, where we're looking to start a Phase III trial, 5401 where we're looking to start a randomized Phase II trial in glioblastoma, and then DPROT platform, where we're looking to advance those candidates from preclinical into Phase I. So exciting things happening across the pipeline. And I'll wrap up here. Thanks, Jay.

All right. Thank you, Jacqui. Appreciate the update and congrats on all the progress you're making for RRP patients. Maybe just to start off our discussion we can focus on that recent regulatory update on 3107 which I guess that's probably top of mind for many investors. Can you just share with us what was your initial reaction to the file acceptance letter from the FDA. And I guess we've seen a lot of regulatory surprises across the industry recently. But is there any regulatory precedent in this case, to your knowledge?

Yes. Great question. So we were obviously pleased that the FDA accepted the file for review under the accelerated approval program. We're excited about our upcoming PDUFA date, but we were obviously disappointed not to receive the priority review. So the 6 months shorter review period that we've requested. The majority of BLA is accepted under the accelerated approval program to receive that priority review. I would also note that the file acceptance letter was the first indication we had from FDA of a potential review issue regarding eligibility for review under the accelerated approval program. However, this is only a preliminary conclusion from FDA and a potential for review issue. And we continue to believe that 3107 provides a meaningful therapeutic benefit over existing treatments and meets the criteria for accelerated approval. In terms of the regulatory environment, generally, I would say that the full approval of Precigen's gorilla adenovirus-based product last year, came as a surprise to us. That candidate had been also filed under the accelerated approval pathway. However, we believe the statute and the guidance for rare disease product candidates really outline FDA's current thinking in this area, and we look forward to discussing the review pathway with FDA for 3107.

Okay. Understood. That's super helpful. Thanks for explaining all that. And maybe just a little more on the FDA's view that Inovio did not submit adequate information to justify eligibility for accelerated approval. Do you -- I guess what do you think is behind that? Do you think that's related to the full approval of Papzimeos?

So Jay, yes, so we do believe it's related to the full approval of Papzimeos. And, Mike, maybe you can comment on some of the detail behind this.

Yes, absolutely. So with the approval of Papzimeos, we knew that based on the accelerated approval pathway guidances, we knew we would have to demonstrate a meaningful therapeutic benefit over available therapies. And that was actually part of our initial BLA submission. When you look at the guidances, first of all, you have -- there has to be a clear unmet need. Clearly, patients are still not adequately treated with available therapies. And then when you look at the individual criteria, you have to demonstrate comparable efficacy. While trials are very different based on the different treatment regimens, we do not require those minimal residual disease surgeries during the treatment administration window. We do believe very strongly that there's comparable efficacy and then we moved to the meaningful therapeutic benefit. And we think that comes in several forms. First of all, an improved safety profile because we are not doing those surgeries during the dosing window. For the patients that were treated with Papzimeos that didn't see any therapeutic benefit they actually had more risk because they actually underwent 2 additional surgeries at both those week 6 and week 12 time point. So we do feel we have a very favorable safety profile. And then with a differentiated mechanism of action, we believe we have the ability to treat patients who are not served by existing therapy especially those with neutralizing antibodies to the gorilla adenoviral vector as well as Precigen laid out several criteria in the papilloma microenvironment where their product wasn't as successful. We looked at the same criteria and did not see that they impacted the efficacy of 3107. So we do believe we will be able to treat patients who, as I said, are not served by existing therapies.

Okay. That makes perfect sense. And recognizing that you probably have a considerable amount of supporting information, can you just talk about any additional follow-up data including feedback from KOLs or patient advocacy groups that could further strengthen the case for 3107 that you may share with FDA?

Yes. So as part of FDA agreeing to have a meeting with us to discuss this, they asked us to submit an assessment aid. So we took data from our BLA filings and predominantly, you have the same arguments that we made in the BLA submission to support our justification for review under the accelerated approval pathway. So we've submitted that assessment aid. And as Mike has outlined, we do believe we meet all of the criteria for review under the accelerated approval pathway.

Okay. Understood. And then, I guess, is there anything that you can share with us about the time line for that FDA meeting? And do you expect it to occur before the PDUFA?

So obviously, that's up to FDA. We're currently waiting for them to schedule that meeting. But we would expect that meeting to be held in a timely fashion.

Okay. All right. That makes sense. And then just going back to the pivotal trial for 3107. I think the original plan was to initiate that in the first half of this year. Is that still something that you're planning? And I guess what additional FDA feedback or discussions do you need to start that trial? And I guess, latest thinking on timing of initiation.

Yes. Mike, do you want to take that one?

Yes, happy to. So obviously, you'll remember our original confirmatory study design was going to be a placebo-controlled study. I think with the approval of our competitor, we saw that the FDA have shifted more that a single arm study is now adequate to support registration in RRP. And so as we've worked with them, we have submitted an update to our IND for a revised confirmatory trial design, and we would expect to be hearing back from them fairly soon.

Okay. Makes sense. And then any thoughts you could share with us on additional features of the Phase III confirmatory study design?

Yes. I think we really need to hear back from FDA as to their thoughts around our accelerated approval pathway. And then I think we'll understand a bit more around what they're really looking for as part of the confirmatory trial.

Okay. All right. Understood. And then just, I guess, looking beyond the U.S. regulatory process and considering that, I guess, Precigen has indicated that the EMA validated their MAA for Papzimeos, would you think that the Phase III study is required to support ex U.S. filing for 3107?

Mike?

Yes. So we obtained clinical advice from both the CHMP in Europe and the U.K. regulators. And they both informed us that a successful approval would require data from 2 placebo-controlled trials to demonstrate both efficacy and also to meet their expectations around the size of the safety database. While we fully recognize there is the same clinical need in Europe, there does seem to be a disconnect between the feedback that we have received in the past and with Precigen's decision to file an MAA based on a single-arm study data. So I mean, we can obviously only share with you what our interactions have produced, and we can't comment on their interactions, but there definitely seems to be a disconnect.

Okay. All right. Now I guess coming back to the opportunity in the U.S. and since Papzimeos has been approved for a while now, can you just talk about any feedback you're hearing from the RRP community and physicians on the uptake and interest level in Papzimeos. And I guess, I know, Jacqui, you touched upon this earlier, but in terms of the points of differentiation between 3107 and Papzimeos and some of the remaining unmet needs there, what do you think the RP community expects 3107 to bring to the table, especially in terms of potential advantages over Papzimeos.

Yes. Great question. So first of all, I would say there seems to be a growing awareness and excitement within the RRP community about the availability of new therapeutic options. So there's certainly good awareness based on the research we've been conducting. We continue to believe that 3107 offers additional advantages over available therapy based on the improved safety profile and the different mechanism of action, which means it may work better in different patient populations to approve therapy. So it's really about 3107 meeting the needs of -- meeting these unmet needs within the existing patient population. So I think what we're hearing from the community is they're very supportive of 3107 and they're looking -- they're following our regulatory progress with interest.

Okay. Understood. And maybe just to follow up a little bit. One of the things we wanted to specifically touch upon is the issue of immunogenicity. Can you compare the adenovirus approach to DNA plasmid-based therapy? And how should we think about a potential redosing strategy for RRP patients?

That's a great question. So I'll talk -- maybe I'll talk about the immunology, Mike, and then maybe you can talk about the redosing strategy. So when we start off with 3107. As I mentioned during the presentation, 3107 is a combination product. It contains DNA plasmid encoding HPV antigens and it's delivered to the cells using the CELLECTRA device. So what this means is there's nothing to generate an immune response. We don't have any viral vector. So the immune system is really just focused on generating immune responses against the antigens that we're providing by the DNA sequences. In contrast with adenoviral based approaches, they're using a virus to take the antigen DNA into the cell. And when that happens, you have the potential of generating antibodies against the virus itself. And you can also have preexisting antibodies that are cross-reactive against the adenovirus you used because adenoviruses are very common viruses. They cause the common cold. So it's quite common to often have cross-reactive antibodies against adenovirus in the general population. So for those patients who already have neutralizing antibodies against the virus that means that products that are using an adenoviral vector may be less efficacious. And for a DNA platform, we don't have that issue. And that's one of the key advantages of the DNA technology versus the adenoviral vector platforms. So what that means for redosing is that with 3107 we believe we can go in and redose multiple times, continue to boost and stimulate an immune response, which may be very important for a chronic lifelong disease. And we don't have to worry about generating neutralizing antibodies which either prevent the therapy from working in the first place or which can make redosing difficult. So Mike, do you want to explain how we're thinking about redosing?

Yes, absolutely. So I mean as you saw from our Phase I/II data, we're seeing significant clinical efficacy and we're seeing durability of that clinical efficacy, but this is a chronic viral disease. We know based on longitudinal data that these patients can grow papilloma after a significant period of time. And so we want to keep generating that cytotoxic T-cell response that we know we can generate because we've seen it with other HPV targeted plasmids. And so what we are thinking at the moment is hopefully following approval, we will submit a protocol so that we can start redosing these patients on an annual basis to see if we could continue to drive that cytotoxic T cell response and further improve the clinical efficacy that we have seen to date.

Okay. Makes sense. Thank you for that thorough explanation. And then I guess, looking ahead to the launch of 3107. You've got a lot of market research to support your launch strategy. What's your latest view on the market size for RRP and the key unmet needs?

Yes. So the epidemiology estimates that there are about 14,000 to 15,000 active cases of RRP here in the U.S. Based on some claims database analysis that we've done, we believe that, that's a significant underestimate of the market opportunity. So we think there's actually a really significant market opportunity here particularly given that the competitor priced their treatment regimen at about $115,000 per dose, so $460,000 per treatment -- for a treatment regimen as part of rare disease pricing. So it's a rare disease, but not that rare and attractive rare disease pricing in terms of a commercial opportunity.

Okay. Excellent. That's super helpful. And we don't want to neglect your early-stage pipeline. So looking beyond 3107, you gave some interesting updates on some of your earlier programs. Maybe you could share with us your latest thinking on anything you'd like investors to pay attention to this year in your earlier programs.

Yes, so our later stage clinical pipeline, we -- clearly, we're putting the majority of our resources into moving 3107 forward, but we will look to move forward some of those candidates as part of partnerships. We think we can, through the power of partnerships, we think we can do a lot to move those candidates forward. And then we are also very excited about our DPROT platform. We presented the first preclinical data for our -- for DPROT candidate at the World Federation of Hemophilia Global Forum late last year. This was producing Factor VIII. And we have some further preclinical programs that we hope to be presenting data on later on this year and obviously, looking to partner those programs to try and move that technology forward quickly. So a lot going on in the pipeline. Really excited though with our first BLA and proof-of-concept for the technology with RRP and our BLA, but lots following on behind as well.

All right. Well, we look forward to those updates. Maybe just wrapping things up here. Any other key catalysts or milestones for Inovio in the next few months ahead of your PDUFA? I know a lot of investors are focused on that. But anything in the near term we should be watching out for?

I think we're really focused on that PDUFA date. The file is under active review. We're getting the normal requests from information that you would expect. And as soon as we have any news that we can share following discussions with the FDA on the regulatory pathway, obviously, we'll be talking about that.

Excellent. We'll wrap things up there. Congrats again on all the progress on behalf of RRP patients. Thank you both so much for sharing your time with us here today and bringing us up to speed on the work you're doing at Inovio.

Thank you so much, Jay. Have a great day.

Our pleasure. You, too. Thanks, everyone.

Thank you.