Inovio Pharmaceuticals (INO) Earnings Call Transcript & Summary

Good morning, everyone. My name is Ted Tenthoff. I'm a senior biotech analyst at Piper Sandler. And before I begin, I'm required to point out certain disclosures regarding the relationship between VIPER and our next presenting company, Inovio, which are posted both at the back of the room and also at the registration desk. Inovio is awaiting BLA acceptance for INO-3107 for recurrent respiratory papillomatosis, which additionally, Inovio is developing a unique pipeline as well as in vivo protein production technology that I think is really, really interested and ultimately could dwarf even the opportunity in RRP. Here with us today is Jacqueline Shea, PhD, President and CEO; and also Michael Sumner, Chief Medical Officer. Thanks both for joining us for making the trip up.

Thanks for having us, Ted.

So Jacqui, perhaps you can start out by describing recurrent respiratory papillomatosis. What do patients experience? And what is sort of the current standard of care -- surgery and treatment?

Yes. Great. So recurrent respiratory papillomatosis or RRP is a rare disease. So you may not have heard of it. It's a serious nasty disease. And it's caused by the human papilloma virus type 6 and 11. And what the virus does is it causes the growth of work-like growth in the airways. What this means for patients is that it can be very difficult to talk because these papilloma primarily grow in the larynx and on the vocal chord. It can make it very difficult to swallow. It can inhibit breathing. So it really impacts the patient's life. There's also a risk of spread of the papilloma to the lungs about in 8% of cases, you get this pulmonary spread. And once you have pulmonary spread, it's your risk of malignancy goes up as well. So this is a really tough difficult disease for these patients to deal with. And the current standard of care is repeated surgery. So it's either laser surgery or scalpel and just removing the papilloma from the larynx and the vocal cords. And the vocal cords are really delicate tissues. They don't regenerate, they have to vibrate hundreds of times a second for you to be able to talk. So by the time you've had 8 to 10 surgeries, you've got kind of an 80% chance of having permanent damage to your vocal cords. And the recovery after the surgeries themselves is difficult for patients. You have to go on voice rest. It can be difficult to eat. They're on a liquid diet. So these patients are in a horrible cycle of constant surgery and never knowing when their next surgery is going to be as well as the risk and the fear of is my disease going to become malignant. So it's a really tough time for patients.

Yes. That's a really helpful background and very clear and compelling in terms of what these patients are experiencing. So tell us about INO-3107. Maybe first to scribe it and how it's delivered and then we can get into some of the data.

Yes, Mike?

So INO-3107 is a DNA medicine. It is delivered using a proprietary CELLECTRA device, which delivers it via electroporation so we do not use lipid nanoparticles or a viral vector. So we see a very low frequency of systemic side effects. The actual electroporation procedure and the drug administration actually can be completed in the doctor's office and takes about 10 seconds to actually deliver the drug and the electroperation. So it's a very simple administration process. And so we studied 3107 in a broad range of patients, range of 2 to 8 surgeries with a median of 4, and those 4 surgeries were in the 52 weeks prior to the day 0 dosing. And that's actually very similar to our competitors' population that they studied.

And Mike, just to get this in there, what is the actual drug? And what is the actual mechanism?

Okay. So the actual drug produces antigens to the E6 and E7 oncoproteins that are found in HPV 6 and 11 that actually drive the cellular growth. So they basically -- we basically generate cytotoxic T cells that target those infected cells and destroy them.

Yes. And it's been very effective. So walk us through some of the data that you've shown that's really gone into the BLA that you've submitted.

So there's really three key takeaways. So first of all, we saw a clinical and statistical significant drop in the number of surgeries. So as I said, there were four surgeries in the year prior to treatment. That decreased to a median of 1. The majority of patients are seeing a 50% or greater reduction in surgery. And in that first year, we actually saw 28% of the patients require no surgeries at all following that day 0 dose. And then we also looked at how these patients continue after that first year of treatment. And what we were delighted to see was actually these patients clinically continue to improve. So in that second 12-month period, we actually had 50% of patients requiring no surgeries at all. So we really are delighted with the efficacy and the safety profile that we're seeing at 3107.

And with 3107 do you redose? Have you redosed? What could that benefit extend longer term?

Yes. So one of the benefits of the DNA medicine platform is that you can redose. There's no viral -- I mean with viral vectors, you get neutralizing antibodies to that. So it limits the ability to do that. And so we have in one of our previous programs demonstrated that we're able to see a significant boost in those cytotoxic T cells from redosing. And so with 3107 following approval, we do want to run a redosing program as we think we can maintain the excellent responses we saw and actually hopefully improve upon the patients that didn't see those zero surgeries.

Especially considering the clean safety signal and the tolerability that patients are experiencing in the reduction in surgery. So what is the current status on the BLA? What are the steps to approval?

So we completed our rolling submission on October 30. So we are expecting to hear back by the end of the year from the agency with respect to acceptance of the file and a proposed PDUFA date. If we get the priority review that we requested, we're expecting a PDUFA date in the middle of next year.

Great. So that's very exciting. I'm going to switch gears to the competition, Precigen [indiscernible] They've gotten approval of PAPZIMEOS, which is a similar yet that there's pretty significant differences between 3107 and PAPZIMEOS. Maybe you can kind of highlight some of those differences to start with. And if you want to sort of compare data, whatever makes sense to you. But, how are 3107 and PAPZIMEOS different?

Yes. So the Precigen product is a gorilla-based adenoviral product. But its treatment regimen is actually fundamentally different from 3107. So what do I mean by that? So both products deliver 4 doses. And we all start administration of our products after the patient has had a clinically warranted surgery to remove the papilloma and that induces a state of what we call minimal residual disease. But that's really where the difference is end because Precigen have decided they need to maintain that state of minimal residual disease throughout the whole treatment administration period. So if you're receiving Precigen's product at the third and fourth dose, which is at week 6 and week 12, you have to be scoped and if there are any papilloma present, you have to have them surgically removed. So you heard from Jacqui just how devastating these surgeries are for patients. So we feel it's sort of just contradictory to what you're actually trying to achieve from a therapeutic point of view to add additional surgeries into the treatment regimen. So when you look at efficacy, they start counting their surgeries after completion of their treatment regimen, whereas we start at day 0 include any surgery that patient has. So we really don't feel you can compare because 83% of their patient population had at least one of those minimal residual disease surgeries and 40% actually had two. So it's very difficult to -- in our mind, a surgery as a surgery to a patient. And so we don't like to compare the results.

Yes. It's difficult to compare them directly. And it certainly confounds the experience. I think maybe physicians and patients are going to have a preference and we can kind of talk about that in a little bit. When you look at the safety side and the tolerability, how does 3107 compare to PAPZIMEOS, you can make maybe a little bit more of a comparison there.

Yes. So as I said for 3107, we actually see a very clean systemic side effect profile. We actually ran a placebo-controlled study with one of our previous HPV targeted products. And we really see very little difference, if any, from placebo. Whereas if the Precigen product, because it's a gorilla adenovirus, you get the very typical systemic side effects as your body reacts to the delivery platform.

Yes, absolutely. And I think higher injection site reactions, fatigue and chills and all that stuff. Now have they launched PAPZIMEOS yet? And maybe you can tell us about the price and we'll sort of get into competition.

Yes, sure. So FDA approved Precigen's product in August this year. And we understand from their website and their earnings call that PAPZIMEOS was made available to order in late October. We haven't heard any sales figures reported yet. They priced their products, their gorilla adenovirus products at $115,000 a dose. So for the 4-dose regimen, that's 460,000 and that obviously doesn't include the scoping and the minimal residual disease surgeries that are required as part of their treatment regimen.

Yes. So we -- you touched on sort of what the patients go through. Maybe you can describe the market in a little bit more detail on how you plan on competing with Precigen.

Yes. So while RRP is a rare disease, it's not that rare. The epidemiology data is a little old, but it predicted that there are about 14,000 active cases here in the U.S. From some work that we've done on claims database analysis, we think that, that's likely an underestimate. And then there are also new cases each year, new instant cases of about 1.8 per 100,000. So we -- based on other analogs in the rare disease space, we estimate that Precigen will likely have single-digit market penetration within the first year. So the majority of the prevalent pool is still going to be available to us, hopefully, when we come to market. And also, there will be the new instant cases each year as well.

Yes. Excellent. And what about overseas? Have you guys been thinking about sort of those markets? Would you consider potentially partnering? What is sort of the early -- or what is the plan for overseas?

Yes. So before I come on to that, I would just like to say we do believe we have the preferred product profile in this area. I mean, as Mike has outlined across both efficacy, tolerability in this patient-centric treatment regimen. Our market research that we've had conducted by third parties indicates that both patients and physicians prefer our product profile. And that's because we see that the broader efficacy with the majority of patients seeing a good reduction in surgeries. And that clinical benefit improves into the second year. We have a very good tolerability profile without the need for the scoping and minimal residual disease surgeries. And it's a very patient-centric treatment regimen. We don't have these additional scoping and surgeries. We don't have the side effect profile so that they can get back to work quickly. We don't have any ultra cold chain issues. So the patients can receive the product in their normal doctor's office as well. So all of this makes it much more tolerable for the patient and easier for the doctors. So obviously, RRP is everywhere, unfortunately, wherever you find HBV, find RRP, so Europe and is also an important market for us. There's a relatively high level of RRP in many European countries. We have been in contact with the European regulators. And Mike, maybe you want to recap on where we are on the regulatory side there?

Yes, certainly. So as Jacqui mentioned, we got medical device from CHMP. And they're taking a different stance to the FDA. And they told us that because RRP is not that rare, they did feel that you can still run a placebo-controlled trial, and they did want a reasonable safety database as part of your submission package. So as we said, we always felt we had to do more clinical work to meet those requirements.

Yes, so I'll just pause and see if there's any questions on 3107. So Inovio has a very rich pipeline. Are there other development programs that we should be paying attention to? And then I'll kind of ask about the in vivo protein production tecnhologies.

Yes. Great. So following on behind 3107, we have two other later-stage candidates that I'd like to highlight. The first one is INO-3112, where we're going after HPV-positive head and neck cancers, so HPV-16 and 18 positive head and neck cancer. We've had some encouraging Phase II data, and we're now looking to start a Phase III trial there in combination with Loqtorzi, which is a PD-1 inhibitor developed by Coherus BioSciences and which is approved for nasopharyngeal carcinoma here in the U.S. So very similar mechanism of action to 3107 going after HPV and really driving the production of antigen-specific cytotoxic T cells. And then the other candidates I'd like to highlight is I know 5401, where we saw some very promising data in newly-diagnosed glioblastoma, both methylated and unmethylated. Here, we're also driving T cell responses but this time going after tumor antigens. And the next step for that candidate will be a randomized controlled trial in combination with a PD-1 inhibitor. So very excited about both of those candidates, both really focused on driving those T cell responses. And that's one of the things our DNA medicines platform does really, really well is drive those cytotoxic T cell responses and also build a memory T cell response, so you get sustained T cell responses, which is really important.

And another thing that your technology can do is endogenously produce proteins or antibodies really anything that you decide to encode in the plasmid. So walk us through -- I think this is actually some of the most interesting work that you guys are doing. Walk us through your in vivo protein production technologies. I know you kind of call them different things depending on what you're producing. But maybe you can tell us about some of the early data that you've reported and how you envision developing these technologies?

Yes. So I'll start off by telling you a bit about the technology. And then Mike, maybe I'll ask you to talk about some of the development work we're doing. So with our 3107 candidate, we are producing antigens, viral antigens within the cell, and we're using that to drive an immune response. But our technology is also really good at just producing high level of protein within the cell, which you can then engineer to be secreted out of the cell and into the circulation. And that's what we've done with our dMAb program, where a few weeks ago, we reported our first data for clinical data there for this program in Nature Medicine. And this was a clinical proof of concept where we were producing two different monoclonal antibodies against SARS-CoV-2. And we were able to show that we could get both of those antibodies produced at potentially therapeutic levels the level of production and secretion into the circulation remain constant. Those antibodies were fully functional. Very, very importantly, we didn't generate any antidrug antibodies. So we're really very excited, very encouraged by this data. And if you compare that data to what you see with in vivo protein production from mRNA. With mRNA, you see a very rapid peak and then a decade with DNA in contrast because we're delivering the DNA to these long-lived muscle cells. We see a very sustained level of protein production, which we -- which in the paper we published, we showed went out to 72 weeks, and we're continuing to collect data on that. Now obviously, monoclonal antibodies just a form of complex protein. That means we can produce other kinds of protein. So I'll hand over to Mike to talk about some of our preclinical work that we're doing in that space. Mike?

Yes. So I mean, as you can imagine, we're focusing on that long-term in vivo protein production. And we've actually got several preclinical candidates now in development. And we actually presented the first one at the World Federation of Hemophilia meeting last month. And we're now seeing that we're capable of producing those therapeutic proteins. And I think the reason the platform is important. I mean if you look specifically at hemophilia, they had an AAV-based gene therapy come to market. It wasn't successful, and the reason behind it not being successful was the variability in the response and the fact that the response waned over time, and you couldn't redose with DNA, we're going to be able to hopefully titrate to clinical response. And then as that wanes or as the patient grows and they require more of the enzyme or the protein, we'll be able to give further doses so that the therapeutic effect can be maintained for the patient. We are looking for co-development partners. As you can imagine, this has numerous potential. So we're in conversations with several companies. And what that will really give us is the ability to develop these products faster over a broader range and also bring in other companies' expertise to the development program. So it really is an exciting time for us at the [indiscernible]

Yes. Makes a lot of sense. I'm looking forward to updates there. So I'm just going to finish with a question on sort of the balance sheet. You guys ended third quarter with cash of around $51 million. And subsequently tacked on another 29%, 28%, 29%, something like that. So pro forma cash is in the mid-70s range. Additionally, you have some Series A warrants that are exercisable within 30 days of the BLA acceptance. So that could be coming up sort of in the first quarter of next year, depending on news from the FDA, and that could bring in an additional $24 million. So somewhere around $100 million in capital back of the envelope math, how long does this fund Inovio and what does it enable you to accomplish?

Yes. So following the recent fundraising, that gives us a cash runway into the third quarter next year. And assuming that we get a priority review, that should give us a PDUFA date about middle of next year. So our current funds should take us through to our PDUFA date. And then if these short-term warrants are exercised after pilot acceptance, that will extend our cash runway into the fourth quarter. And what our recent additional fundraising really allowed us to do, was to invest more into our launch preparation, making sure that we can have people out in the field earlier. FDA allows us to interact with payers about 6 months ahead of approval. So we're really spending those additional funds on being prepared for a quick and efficient launch if we're approved.

Great. Well, very exciting time for Inovio. Next year, we'll be sitting here and knock wood will be talking about the launch of 3107. So thank you, everybody. Jacqui, Mike, thank you so much, and good luck with everything through year-end and into 2026.

Thank you, Ted.