INOVIO PHARMACEUTICALS INC
For the period ended Sep 30, 2024. Filed Nov 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 14, 2024
INO$1.22-16.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001055726-24-000046
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001055726-24-000052
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 76 previous paragraphs and 91 current paragraphs.
39 unchanged; 36 reworded; 8 added; 0 removed; 1 previous and 8 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
These increases were offset by:
Current report
Impairment of goodwill. In September 2023, we concluded our goodwill was impaired due to a sustained decline in our stock price and related market capitalization, and a general decline in equity values in the biotechnology industry. Based on this analysis, we recognized a non-cash, pre-tax goodwill impairment charge of $10.5 million during the three months ended September 30, 2023.
Current report
At-The-Market Sales Agreements
Current report
On August 13, 2024, we entered into an Equity Distribution Agreement, or the 2024 Sales Agreement, with an outside sales agent, or Sales Agent, for the offer and sale of our common stock for an aggregate offering price of up to $60.0 million. The 2024 Sales Agreement provides that the Sales Agent is entitled to compensation in an amount equal to up to 3.0% of the gross sales proceeds of any common stock sold through the Sales Agent under the 2024 Sales Agreement, and we have provided the Sales Agent with certain indemnification rights.
Current report
During the three months ended September 30, 2024, we sold 86,361 shares of common stock under the 2024
Current report
$667,000. As of September 30, 2024, there was $59.3 million of remaining capacity under the 2024 Sales Agreement.
Current report
Other Issuances of Common Stock
Current report
Our ability to continue operations is dependent upon our ability to obtain additional capital in the future and achieve profitable operations. We expect to continue to rely on outside sources of financing to meet our capital needs and we may never achieve positive cash flow. In light of these factors, management believes that there is substantial doubt about our ability to continue as a going concern beyond the third quarter of 2025. The condensed consolidated financial statements as of and for the three and nine months ended September 30, 2024 do not include any adjustments that might result from the outcome of this uncertainty.
Reworded paragraphs (36)
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, 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.
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 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
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.
Current wording
Revenue. Total revenue was $0 and $101,000 for the three and nine months ended September 30, 2024, respectively, as compared to $388,000 and $729,000 for the three and nine months ended September 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 and six months ended June 30, 2024 and 2023:
Current wording
The following table summarizes our research and development expense by product candidate for the three and nine months ended September 30, 2024 and 2023:
Previous wording
The decrease in research and development expenses for the three and six-month periods year over year was primarily the result of:
Current wording
The increase in research and development expenses for the three-month period year over year was primarily the result of:
Previous wording
•$5.3 million and $8.5 million, respectively, in higher drug manufacturing related to INO-3107;
Current wording
•$2.9 million in higher drug manufacturing related to INO-3107;
Previous wording
•$1.9 million and $3.0 million, respectively in higher engineering professional and outside services related to our device development;
Current wording
•$2.2 million in higher engineering professional and outside services related to our device development; and
Previous wording
•$1.4 million and $7.2 million, respectively, in lower employee and consultant compensation, including stock-based compensation, due to lower headcount;
Current wording
•$2.3 million in lower employee and consultant compensation, including stock-based compensation, due to lower headcount;
Previous wording
•$4.7 million and $4.7 million, respectively, in lower drug manufacturing expenses for other programs;
Current wording
•$939,000 in lower drug manufacturing expenses for other programs; and
Previous wording
•$490,000 and $745,000, respectively, in lower immunology and clinical study expenses related to INO-3107.
Current wording
•$829,000 in lower immunology and clinical study expenses related to INO-3107.
Previous 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;
Current wording
•$7.3 million 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
•$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;
Current wording
•$3.3 million 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
•$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;
Current wording
•$1.3 million in lower clinical study expenses related to VGX-3100 as we discontinued development of this product candidate in the third quarter of 2023; and
Previous wording
•$183,000 and $1.5 million, respectively, in lower clinical study and subcontractor expenses related to our CEPI LASSA and MERS grants; and
Current wording
•$1.3 million in lower clinical study and subcontractor expenses related to our CEPI LASSA and MERS grants.
Previous wording
•$1.8 million and $2.9 million, respectively, of higher expensed inventory; and
Current wording
•$4.6 million of higher expensed inventory; and
Previous wording
•$1.8 million and $4.7 million, respectively, of lower contra-research and development expense recorded from grant agreements.
Current wording
•$4.4 million 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 $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.
Current wording
Contributions received from current grant agreements and recorded as contra-research and development expense were $1.8 million and $1.9 million for the three and nine months ended September 30, 2024, respectively, as compared to $1.4 million and $6.4 million for the three and nine months ended September 30, 2023, respectively. The decrease for the nine- month period year over year was primarily due to decreases of $3.6 million and $403,000, respectively, in reimbursements from Advaccine and expenses earned under the sub-grants through Wistar, among other variances.
Previous 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:
Current wording
General and administrative expenses. General and administrative expenses, which include business development expenses and patent expenses, were $8.6 million and $29.4 million for the three and nine months ended September 30, 2024, respectively, as compared to $9.9 million and $37.3 million for the three and nine months ended September 30, 2023, respectively. Decreases for the three- and nine-month periods year over year included:
Previous wording
•$1.9 million and $3.9 million, respectively, in employee compensation, including employee and consultant stock-based compensation, due to lower headcount; and
Current wording
•$955,000 and $4.8 million, respectively, in employee compensation, including employee and consultant stock-based compensation, due to lower headcount and lower weighted average grant date fair value for the awards granted during 2024; and
Previous 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.
Current wording
•$465,000 and $2.8 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 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.
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 nine months ended September 30, 2024 was $1.2 million and $5.1 million, of which $581,000 and $2.2 million was included in research and development expenses and $619,000 and $2.9 million was included in general and administrative expenses, respectively. Total employee and director stock-based compensation expense for the three and nine months ended September 30, 2023 was $1.9 million and $8.3 million, respectively. Of these amounts, $846,000 and $3.5 million, respectively, was included in research and development expenses, and $1.1 million and $4.8 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 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.
Current wording
Interest income. Interest income for the three and nine months ended September 30, 2024 was $1.1 million and $3.9 million, respectively, as compared to $1.9 million and $6.3 million for the three and nine months ended September 30, 2023, respectively. The decrease for the three- and nine-month periods year over year was primarily due to a lower short-term investment balance.
Previous 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.
Current wording
Interest expense. Interest expense for the three and nine months ended September 30, 2024 was $0 and $178,000, respectively, as compared to $313,000 and $940,000 for the three and nine months ended September 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 $(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.
Current wording
Gain (loss) on investment in affiliated entity. The gain (loss) resulted from the change in the fair market value of our investment in PLS of $324,000 and $(136,000) for the three and nine months ended September 30, 2024, respectively, as compared to $214,000 and $988,000 for the three and nine months ended September 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 (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.
Current wording
Net unrealized gain (loss) on available-for-sale equity securities. The net unrealized gain (loss) on available-for-sale equity securities for the three and nine months ended September 30, 2024 of $1.3 million and $1.8 million, respectively, as compared to $(219,000) and $3.9 million for the three and nine months ended September 30, 2023, respectively, resulted from a change in the fair market value of the investments.
Previous 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.
Current wording
Other (expense) income, net. Other (expense) income, net, for the three and nine months ended September 30, 2024 of $(580,000) and $(1.3) million, respectively, as compared to $3,000 and $(3.9) million for the three and nine months ended September 30, 2023, respectively, related primarily to the realized loss on short-term investments sold during the periods.
Previous 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.
Current wording
As of September 30, 2024, we had cash, cash equivalents and short-term investments of $84.8 million and working capital of $67.8 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 $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.
Current wording
Net cash used in operating activities was $84.4 million and $98.1 million for the nine months ended September 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 $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.
Current wording
Net cash provided by investing activities was $69.4 million and $67.4 million for the nine months ended September 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 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.
Current wording
Net cash provided by financing activities was $22.3 million and $3.2 million for the nine months ended September 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 $5.9 million from the sale of common stock under the 2021 and 2024 Sales Agreements (defined below), offset by the repayment of our convertible senior notes of $16.4 million.
Previous wording
Issuances of Common Stock and Pre-Funded Warrants
Current wording
Offering of Common Stock and Pre-Funded Warrants
Previous 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.
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, under which we were able to offer and sell shares of our common stock with aggregate gross proceeds of up to $300.0 million.
Previous 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.
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. We terminated the 2021 Sales Agreement in August 2024 in connection with the entry into the 2024 Sales Agreement described above.
Previous 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.
Current wording
During the nine months ended September 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 $421,000. During thenine months ended September 30, 2023, no stock options were exercised and tax payments of $467,000 were made related to net share settlement of RSU awards.
Previous 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.
Current wording
As of September 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 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 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.
Current wording
We have existing supply agreements with contract manufacturers to manufacture drug substance. At September 30, 2024, we had approximately $2.0 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 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.
Current wording
During the nine months ended September 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.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
•$1.7 million of higher expensed inventory.
Current report — wording carried from elsewhere
The decrease in research and development expenses for the nine-month period year over year was primarily the result of:
Current report — wording carried from elsewhere
•$9.4 million in lower employee and consultant compensation, including stock-based compensation, due to lower headcount;
Current report — wording carried from elsewhere
•$5.6 million in lower drug manufacturing expenses for other programs;
Current report — wording carried from elsewhere
•$1.6 million in lower immunology and clinical study expenses related to INO-3107;
Current report — wording carried from elsewhere
•$11.0 million in higher drug manufacturing related to INO-3107;
Current report — wording carried from elsewhere
•$5.2 million in higher engineering professional and outside services related to our device development;
Current report — wording carried from elsewhere
Sales Agreement. The sales were made at a weighted average price of $7.84 per share, resulting in aggregate net proceeds of
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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.