INOVIO PHARMACEUTICALS INC

Previous wording

We use proprietary technology to design DNA plasmids which are small circular DNA molecules that work like software the body’s cells can download to produce specific proteins to target and fight disease. Our proprietary investigational CELLECTRA® delivery devices help our DNA medicines enter the body’s cells for optimal effect.

Current wording

We use proprietary technology to design DNA plasmids which are small circular DNA molecules that work like software the body’s cells can download to produce specific proteins to target and fight disease. Our proprietary investigational CELLECTRA delivery devices are designed to optimally deliver the plasmids into the body's cells.

Previous wording

In our completed Phase 1/2 clinical trial of INO-3107 for the treatment of HPV-6 and HPV-11-associated RRP, 81.3% of patients experienced a reduction in the number of surgical interventions in the year following administration of INO-3107, when compared with the year prior to treatment. In February 2023, we announced data from the second cohort of our Phase 1/2 clinical trial, which followed the announcement of the first cohort in October 2022. In the second cohort of 11 patients who were administered INO-3107 via an exploratory side port injection needle, 10 of the 11 patients (91%) saw a reduction in surgical interventions in the year following initial treatment, with the measurement beginning on Day 0, the start of trial therapy. Of these 10 patients, four did not require surgery. There was a statistically significant median decrease of three surgical interventions when comparing the year following treatment to the year prior to treatment. INO-3107 was well-tolerated and immunogenic among patients in the second cohort. The safety and efficacy results for the second cohort were consistent with results announced for the first cohort in October 2022.

Current wording

In our completed Phase 1/2 clinical trial of INO-3107 for the treatment of HPV-6 and HPV-11-associated RRP, 81.3% (26/32) of patients experienced a reduction in the number of surgical interventions in the year following administration of INO-3107, when compared with the year prior to treatment. Of these 32 patients, nine did not require surgical intervention during or after the dosing window. Patients in the trial had a median range of 4 surgeries (2-8) in the year prior to dosing. There was a statistically significant median decrease of three surgical interventions when comparing the year following treatment to the year prior to treatment. Treatment with INO-3107 generated a strong immune response in the trial, inducing activated CD4 T cells and activated CD8 T cells with lytic potential. T-cell responses were also observed at Week 52, indicating a persistent cellular memory response. INO-3107 was well tolerated by participants in the trial, resulting in mostly low-grade (Grade 1) treatment-emergent adverse effects such as injection site pain and fatigue.

Previous wording

In the fourth quarter of 2023, we received feedback from the U.S. Food and Drug Administration, or FDA, that the data from this completed trial could be used to support the submission of a Biologic License Application, or BLA, for review under the FDA’s accelerated approval program. As part of submitting our BLA under the accelerated program, which we plan to do in the second half of 2024, we will need to satisfy all FDA filing requirements and initiate a confirmatory clinical trial prior to BLA submission.

Current wording

In the fourth quarter of 2023, we received feedback from the U.S. Food and Drug Administration, or FDA, that the data from this completed trial could be used to support the submission of a Biologic License Application, or BLA, for review under the FDA’s accelerated approval program. As part of submitting our BLA under the accelerated program, we will need to satisfy all FDA filing requirements and initiate a confirmatory clinical trial prior to BLA submission. We previously expected to be able to submit our BLA by the end of 2024; however, during our device testing process we have recently identified a manufacturing issue involving the single use disposable administration component of the CELLECTRA 5PSP device that we plan to use in the confirmatory trial. We are currently working to resolve the manufacturing issue, but we now expect that the timing for submission of the BLA will likely be delayed until mid-2025.

Previous wording

We are developing INO-3112, a DNA medicine candidate targeting HPV 16/18 combined with a DNA plasmid encoding for human IL-12 as an immune activator, for the treatment of oropharyngeal squamous cell carcinoma, or OPSCC, a type of head and neck cancer commonly known as throat cancer. The incidence of HPV-related throat cancer has increased rapidly in recent years in the United States, with an estimated approximately 20,000 new cases each year. HPV-related throat cancer has surpassed cervical cancer as the most common HPV-related cancer. In the United States, men are four to five times more likely to be diagnosed with HPV-associated oropharyngeal cancers than women.

Current wording

We are developing INO-3112, a DNA medicine candidate targeting HPV 16/18 combined with a DNA plasmid encoding for human IL-12 as an immune activator, for the treatment of oropharyngeal squamous cell carcinoma, or OPSCC, a type of head and neck cancer commonly known as throat cancer. The incidence of HPV-related throat cancer has increased rapidly in recent years in the United States, with an estimated 20,000 new cases each year. HPV-related throat cancer has surpassed cervical cancer as the most common HPV-related cancer. In the United States, men are four to five times more likely to be diagnosed with HPV-associated oropharyngeal cancers than women.

Previous wording

In January 2024, we announced a clinical collaboration and supply agreement with Coherus BioSciences, Inc. to evaluate the combination of INO-3112 and LOQTORZI (toripalimab-tpzi) in a clinical trial for patients with locoregionally advanced, high-risk, HPV16/18 positive OPSCC. Under the terms of the supply agreement, Coherus will provide LOQTORZI for a planned Phase 3 clinical trial.

Current wording

In January 2024, we announced a clinical collaboration and supply agreement with Coherus BioSciences, Inc. to evaluate the combination of INO-3112 and LOQTORZI (toripalimab-tpzi) in a clinical trial for patients with locoregionally advanced, high-risk, HPV16/18 positive OPSCC. Under the terms of the supply agreement, Coherus will provide LOQTORZI for a planned Phase 3 clinical trial. The manufacturing issue with the single use disposable administration component of the CELLECTRA 5PSP device that is impacting INO-3107 will also need be resolved before we can commence the Phase 3 trial with INO-3112.

Previous wording

Our partners and collaborators include Advaccine Biopharmaceuticals Suzhou Co, ApolloBio Corporation, AstraZeneca, The Bill & Melinda Gates Foundation (Gates), Coalition for Epidemic Preparedness Innovations (CEPI), Coherus Biosciences, Defense Advanced Research Projects Agency (DARPA), The U.S. Department of Defense (DoD), HIV Vaccines Trial Network, International Vaccine Institute (IVI), Kaneka Eurogentec, National Cancer Institute (NCI), National Institutes of Health (NIH), National Institute of Allergy and Infectious Diseases (NIAID), Plumbline Life Sciences, Regeneron Pharmaceuticals, Richter-Helm BioLogics, Thermo Fisher Scientific, the University of Pennsylvania, the Walter Reed Army Institute of Research, and The Wistar Institute.

Current wording

Our partners and collaborators include Advaccine Biopharmaceuticals Suzhou Co, ApolloBio Corporation, AstraZeneca, The Bill & Melinda Gates Foundation (Gates), Coalition for Epidemic Preparedness Innovations (CEPI), Coherus Biosciences, Defense Advanced Research Projects Agency (DARPA), The U.S. Department of Defense (DoD), HIV Vaccines Trial Network, International Vaccine Institute (IVI), Kaneka Eurogentec, National Cancer Institute (NCI), National Institutes of Health (NIH), National Institute of Allergy and Infectious Diseases (NIAID), Plumbline Life Sciences, Regeneron

Previous wording

Revenue. Total revenue was $0 for the three months ended March 31, 2024 as compared to $115,000 for the three months ended March 31, 2023, all of which was derived under collaborative arrangements and other contracts.

Current wording

Revenue. Total revenue was $101,000 for both the three and six months ended June 30, 2024, respectively, as compared to $226,000 and $341,000 for the three and six months ended June 30, 2023, respectively, all of which was derived under collaborative arrangements and other contracts.

Previous wording

The following table summarizes our research and development expense by product candidate for the three months ended March 31, 2024 and 2023:

Current wording

The following table summarizes our research and development expense by product candidate for the three and six months ended June 30, 2024 and 2023:

Previous wording

The $9.3 million decrease in research and development expenses for the three-month period year over year was primarily the result of:

Current wording

The decrease in research and development expenses for the three and six-month periods year over year was primarily the result of:

Previous wording

•$7.8 million in lower drug manufacturing related to INO-4800 after we discontinued this program in the fourth quarter of 2022;

Current wording

•$733,000 and $7.4 million, respectively, in lower drug manufacturing and clinical study expenses related to INO-4800 after we discontinued this program in the fourth quarter of 2022;

Previous wording

•$5.6 million in lower employee and consultant compensation, including stock-based compensation;

Current wording

•$1.4 million and $7.2 million, respectively, in lower employee and consultant compensation, including stock-based compensation, due to lower headcount;

Previous wording

•$1.6 million in lower drug manufacturing related to other COVID-19 studies that we ceased after we discontinued development of INO-4800; and

Current wording

•$1.1 million and $3.2 million, respectively, in lower drug manufacturing and engineering services related to other COVID-19 studies that we ceased after we discontinued development of INO-4800;

Previous wording

•1.0 million in lower clinical study expenses related to VGX-3100 as we discontinued development of this product candidate in the third quarter of 2023.

Current wording

•$712,000 and $1.7 million, respectively, in lower clinical study expenses related to VGX-3100 as we discontinued development of this product candidate in the third quarter of 2023;

Previous wording

These decreases were partially offset by $2.9 million of lower contra-research and development expense recorded from grant agreements, $2.9 million of higher drug manufacturing expenses related to INO-3107, and $1.1 million of higher expensed inventory, among other variances.

Current wording

•$1.8 million and $4.7 million, respectively, of lower contra-research and development expense recorded from grant agreements.

Previous wording

Contributions received from current grant agreements and recorded as contra-research and development expense were $179,000 for the three months ended March 31, 2024 as compared to $3.1 million for the three months ended March 31, 2023. The decrease for the three-month period year over year was primarily due to a decrease of $1.6 million earned under the CEPI LASSA and MERS grants and $1.2 million in reimbursements from Advaccine.

Current wording

Contributions received from current grant agreements and recorded as contra-research and development expense were $9,000 and $188,000 for the three and six months ended June 30, 2024, respectively, as compared to $1.8 million and $4.9 million for the three and six months ended June 30, 2023, respectively. The decrease for the three- and six-month periods year over year was primarily due to a decrease of $303,000 and $1.9 million, respectively, earned under the CEPI LASSA and MERS grants and $1.2 million and $2.4 million, respectively, in reimbursements from Advaccine.

Previous wording

General and administrative expenses. General and administrative expenses, which include business development expenses and patent expenses, were $10.6 million for the three months ended March 31, 2024, as compared to $13.9 million for the three months ended March 31, 2023. Decreases for the three-month period year over year included:

Current wording

General and administrative expenses. General and administrative expenses, which include business development expenses and patent expenses, were $10.2 million and $20.8 million for the three and six months ended June 30, 2024, respectively, as compared to $13.5 million and $27.4 million for the three and six months ended June 30, 2023, respectively. Decreases for the three- and six-month periods year over year included:

Previous wording

•$2.0 million in employee compensation, including employee and consultant stock-based compensation; and

Current wording

•$1.9 million and $3.9 million, respectively, in employee compensation, including employee and consultant stock-based compensation, due to lower headcount; and

Previous wording

•$1.1 million in legal expenses related to litigation matters settled in 2023 that did not recur in 2024.

Current wording

•$1.2 million and $2.3 million, respectively, in legal expenses related to litigation matters settled in 2023 that did not recur in 2024.

Previous wording

Stock-based compensation. Stock-based compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite vesting period. Total employee and director stock-based compensation expense for the three months ended March 31, 2024 and 2023 was $2.4 million and $3.6 million, of which $1.0 million and $1.5 million was included in research and development expenses and $1.4 million and $2.1 million was included in general and administrative expenses, respectively. The decrease was due to a lower weighted average grant date fair value for the awards granted during 2024.

Current wording

Stock-based compensation. Stock-based compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite vesting period. Total employee and director stock-based compensation expense for the three and six months ended June 30, 2024 was $1.5 million and $3.9 million, of which $581,000 and $1.6 million was included in research and development expenses and $890,000 and $2.3 million was included in general and administrative expenses, respectively. Total employee and director stock-based compensation expense for the three and six months ended June 30, 2023 was $2.8 million and $6.4 million, respectively. Of these amounts, $1.3 million and $2.7 million, respectively, was included in research and development expenses, and $1.5 million and $3.7 million, respectively, was included in general and administrative expenses. The decrease was due to a lower weighted average grant date fair value for the awards granted during 2024.

Previous wording

Interest income. Interest income for the three months ended March 31, 2024 and 2023 was $1.5 million and $2.2 million, respectively. The decrease for the three-month period year over year was primarily due to a lower short-term investment balance.

Current wording

Interest income. Interest income for the three and six months ended June 30, 2024 was $1.3 million and $2.8 million, respectively, as compared to $2.2 million and $4.4 million for the three and six months ended June 30, 2023, respectively. The decrease for the three- and six-month periods year over year was primarily due to a lower short-term investment balance.

Previous wording

Interest expense. Interest expense for the three months ended March 31, 2024 and 2023 was $178,000 and $313,000, respectively. The decrease was primarily due to lower interest expense on our senior convertible promissory notes that were repaid in full on March 1, 2024.

Current wording

Interest expense. Interest expense for the three and six months ended June 30, 2024 was $0 and $178,000, respectively, as compared to $313,000 and $627,000 for the three and six months ended June 30, 2023, respectively. The decrease was primarily due to lower interest expense on our senior convertible promissory notes that were repaid in full on March 1, 2024.

Previous wording

(Loss) gain on investment in affiliated entities. The (loss) gain resulted from the change in the fair market value of our investment in PLS of $(126,000) and $617,000 for the three months ended March 31, 2024 and 2023, respectively. We record our investment in PLS at its market value based on the closing price of the shares on the Korea New Exchange Market at each balance sheet date, with changes in fair value reflected in the condensed consolidated statements of operations.

Current wording

(Loss) gain on investment in affiliated entities. The (loss) gain resulted from the change in the fair market value of our investment in PLS of $(334,000) and $(460,000) for the three and six months ended June 30, 2024, respectively, as compared to $157,000 and $773,000 for the three and six months ended June 30, 2023, respectively. We record our investment in PLS at its market value based on the closing price of the shares on the Korea New Exchange Market at each balance sheet date, with changes in fair value reflected in the condensed consolidated statements of operations.

Previous wording

Net unrealized gain on available-for-sale equity securities. The net unrealized gain on available-for-sale equity securities for the three months ended March 31, 2024 and 2023 of $501,000 and $3.2 million, respectively, resulted from a change in the fair market value of the investments.

Current wording

Net unrealized (loss) gain on available-for-sale equity securities. The net unrealized (loss) gain on available-for-sale equity securities for the three and six months ended June 30, 2024 of $(21,000) and $480,000, respectively, as compared to $923,000 and $4.1 million for the three and six months ended June 30, 2023, respectively, resulted from a change in the fair market value of the investments.

Previous wording

Other expense, net. Other expense, net, for the three months ended March 31, 2024 and 2023 of $(682,000) and $(2.4) million, respectively, related primarily to the realized loss on short-term investments sold during the periods.

Current wording

Other income (expense), net. Other income (expense), net, for the three and six months ended June 30, 2024 of $8,000 and $(675,000), respectively, as compared to $(1.4) million and $(3.9) million for the three and six months ended June 30, 2023, respectively, related primarily to the realized loss on short-term investments sold during the periods.

Previous wording

As of March 31, 2024, we had cash, cash equivalents and short-term investments of $105.6 million and working capital of $88.3 million, as compared to $145.3 million and $110.5 million, respectively, as of December 31, 2023.

Current wording

As of June 30, 2024, we had cash, cash equivalents and short-term investments of $110.4 million and working capital of $91.2 million, as compared to $145.3 million and $110.5 million, respectively, as of December 31, 2023.

Previous wording

Net cash used in operating activities was $28.8 million and $36.7 million for the three months ended March 31, 2024 and 2023, respectively. The variance was primarily due to the timing and changes in working capital balances, offset by decreased operating expenses.

Current wording

Net cash used in operating activities was $57.0 million and $69.0 million for the six months ended June 30, 2024 and 2023, respectively. The variance was primarily due to the timing and changes in working capital balances, offset by decreased operating expenses.

Previous wording

Net cash provided by investing activities was $45.4 million and $19.0 million for the three months ended March 31, 2024 and 2023, respectively. The variance was primarily the result of timing differences in short-term investment purchases, sales and maturities.

Current wording

Net cash provided by investing activities was $55.3 million and $72.9 million for the six months ended June 30, 2024 and 2023, respectively. The variance was primarily the result of timing differences in short-term investment purchases, sales and maturities.

Previous wording

Net cash used in financing activities was $11.4 million and $425,000 for the three months ended March 31, 2024 and 2023, respectively. The variance was primarily due to the repayment of our convertible senior notes of $16.4 million, offset by net proceeds of $5.2 million from the sale of common stock under the Sales Agreement (defined below) during the three months ended March 31, 2024, compared to no proceeds received during the three months ended March 31, 2023.

Current wording

Net cash provided by financing activities was $21.7 million and $2.5 million for the six months ended June 30, 2024 and 2023, respectively. The variance was primarily due to the net proceeds from the April 2024 Offering (defined below) of $33.2 million and net proceeds of $5.2 million from the sale of common stock under the 2021 Sales Agreement (defined below), offset by the repayment of our convertible senior notes of $16.4 million.

Previous wording

On April 18, 2024, we closed an underwritten registered direct offering (the “Offering”) relating to the issuance and sale of 2,536,258 shares (the “Shares”) of our common stock, par value $0.001 per share, at a price of $7.693 per share and pre-funded warrants to purchase up to 2,135,477 shares of common stock (the “Pre-Funded Warrants”) at a price of $7.692 per Pre-Funded Warrant, which represents the per share price for the Shares less the $0.001 per share exercise price for each Pre-Funded Warrant. The net proceeds from the Offering were approximately $33.2 million, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

Current wording

On April 18, 2024, we closed an underwritten registered direct offering, or the Offering, relating to the issuance and sale of 2,536,258 shares at a price of $7.693 per share and pre-funded warrants to purchase up to 2,135,477 shares of common stock, or the Pre-Funded Warrants, at a price of $7.692 per Pre-Funded Warrant, which represents the per share price for the shares less the $0.001 per share exercise price for each Pre-Funded Warrant. The net proceeds from the Offering were $33.2 million, after deducting the underwriting discounts and commissions and offering expenses paid by us.

Previous wording

On November 9, 2021, we entered into an ATM Equity Offering SM Sales Agreement, or the Sales Agreement, with outside sales agents, or collectively, the Sales Agents, under which we were able to offer and sell shares of our common stock with aggregate gross proceeds of up to $300.0 million, through the Sales Agents.

Current wording

On November 9, 2021, we entered into an ATM Equity Offering SM Sales Agreement, or the 2021 Sales Agreement, with outside sales agents, or collectively, the Sales Agents, under which we were able to offer and sell shares of our common stock with aggregate gross proceeds of up to $300.0 million, through the Sales Agents.

Previous wording

During thethree months ended March 31, 2024, we sold 543,620 shares of our common stock under the Sales Agreement at a weighted average price of $9.76 per share, resulting in aggregate net proceeds of $5.2 million. During theyear ended December 31, 2023, we sold 875,305 shares of our common stock under the Sales Agreement at a weighted average price of $6.33 per share, resulting in aggregate net proceeds of $5.5 million. As of March 31, 2024, the registration statement relating to the shares of common stock issuable under the Sales Agreement has expired, and therefore as of the date of this report we may not sell any additional shares under the Sales Agreement.

Current wording

During thethree months ended March 31, 2024, we sold 543,620 shares of our common stock under the 2021 Sales Agreement at a weighted average price of $9.76 per share, resulting in aggregate net proceeds of $5.2 million. During theyear ended December 31, 2023, we sold 875,305 shares of our common stock under the 2021 Sales Agreement at a weighted average price of $6.33 per share, resulting in aggregate net proceeds of $5.5 million. The registration statement relating to the shares of common stock issuable under the 2021 Sales Agreement has expired, and in August 2024 we terminated the 2021 Sales Agreement.

Previous wording

During the three months ended March 31, 2024, no stock options were exercised and tax payments of $174,000 were made related to the net share settlement of RSU awards. During thethree months ended March 31, 2023, no stock options were exercised and tax payments of $425,000 were made related to net share settlement of RSU awards.

Current wording

During the six months ended June 30, 2024, stock options to purchase 8,159 shares of common stock were exercised for aggregate net proceeds to us of $68,000, which proceeds were offset by tax payments made related to net share settlement of RSU awards of $414,000. During thesix months ended June 30, 2023, no stock options were exercised and tax payments of $457,000 were made related to net share settlement of RSU awards.

Previous wording

As of March 31, 2024, we had an accumulated deficit of $1.7 billion, and we expect to continue to operate at a loss for the near term. The amount of our accumulated deficit will continue to increase, as it will be expensive to continue research and development efforts. Our current cash resources, including the net proceeds of our April 2024 public offering of common stock, will not be sufficient to complete the clinical development of our product candidates beyond INO-3107, and we anticipate that additional financing will be required in order to complete the development of and to commercialize and generate revenues from the sale of INO-3107 or any other product candidates that may receive regulatory approval. If these activities are successful and if we receive approval from the FDA to market our DNA medicine candidates, then we will need to raise additional funding to market and sell the approved products and equipment. In addition to the potential issuance of equity or debt securities in order to raise capital, we are also evaluating potential collaborations as an additional way to fund our operations. We believe that our current cash and short-term investments are sufficient to meet our planned working capital requirements for at least the next twelve months from the date of this report.

Current wording

As of June 30, 2024, we had an accumulated deficit of $1.7 billion, and we expect to continue to operate at a loss for the near term. The amount of our accumulated deficit will continue to increase, as it will be expensive to continue research and development efforts. Our current cash resources will not be sufficient to complete the clinical development of our product candidates beyond INO-3107, and we anticipate that additional financing will be required in order to complete the development of and to commercialize and generate revenues from the sale of INO-3107 or any other product candidates that may receive regulatory approval. If these activities are successful and if we receive approval from the FDA to market our DNA medicine candidates, then we will need to raise additional funding to market and sell the approved products and equipment. In addition to the potential issuance of equity or debt securities in order to raise capital, we are also evaluating potential collaborations as an additional way to fund our operations. We believe that our current cash and short-term investments are sufficient to meet our planned working capital requirements for at least the next twelve months from the date of this report.

Previous wording

We expect our cash runway, including the net proceeds of the April 2024 offering, to extend into the third quarter of 2025, without giving effect to any further capital raising activities that we may undertake.

Current wording

We expect our cash runway to extend into the third quarter of 2025, without giving effect to any further capital raising activities that we may undertake.

Previous wording

We have existing supply agreements with contract manufacturers to manufacture drug substance. At March 31, 2024, we had approximately $5.3 million in minimum purchase obligations in connection with these agreements. We expect to satisfy these obligations from existing cash over the next twelve months.

Current wording

We have existing supply agreements with contract manufacturers to manufacture drug substance. At June 30, 2024, we had approximately $5.1 million in minimum purchase obligations in connection with these agreements. We expect to satisfy these obligations from existing cash over the next twelve months.

Previous wording

During the three months ended March 31, 2024, except for the repayment in full of our convertible senior notes as described above, there have been no other significant changes to our contractual obligations and commitments described under Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Annual Report.

Current wording

During the six months ended June 30, 2024, except for the repayment in full of our convertible senior notes as described above, there have been no other significant changes to our contractual obligations and commitments described under Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Annual Report.