This Survey's Bad News Could Be Good News for Inovio Pharmaceuticals, Inc.

By Keith Speights Markets Fool.com

Bad news for some can be good news for others.

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That could be the case with a survey theNational Center for Health Statistics (NCHS) published last week. There was definitely some bad news about the prevalence of genital human papillomavirus (HPV) in Americans. Here's why, though, this bad news could bode well for Inovio Pharmaceuticals (NASDAQ: INO).

Image source: Getty Images.

Survey says

HPV is the most common sexually transmitted infection in the United States. The recently published NCHS survey showed just how common it is.

NCHS talked to American adults between the 18 and 59 from 2011 through 2014. Researchers conducted interviews with a cross-section of individuals in their homes and followed up withstandardized physical examinations.

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What did the survey find? More than 42% of American adults had genital HPV. Nearly 23% of the survey participants were infected with high-risk genital HPV, which is more likely to lead to cancer. According to the survey, non-Hispanic black Americans had the highest genital HPV rates, with 64% having some form of genital HPV and nearly 33% having high-risk genital HPV.

Prevalence of oral HPV was lower, but still concerning. Over 7% of the total population was found to be infected with oral HPV. Roughly 4% had high-risk oral HPV.

Potential impact for Inovio

The results from the NCHS survey underscored the importance of vaccines to prevent HPV infection. However, immunization rates for HPV remain low. Around 40% of girls and 20% of boys between 13 and 17 have received one of the approved HPV vaccines sold by Merck (NYSE: MRK) and GlaxoSmithKline (NYSE: GSK).

Going forward, only Merck's Gardasil HPV vaccines will be available in the United States. GlaxoSmithKline announced its decision to withdraw its Cervarix vaccine from the U.S. market in October, citing "very low market demand." This action highlighted the disappointing levels of HPV immunization rates.

It's possible, though, that the NCHS survey results could help educate more Americans about the risks of HPV. Merck has launched an ad campaign to encourage parents to have their children vaccinated. The high numbers of American adults with HPV found in the NCHS survey could provide a shock effect that convinces more people of the urgency of vaccination.

Those results also highlight the potential market opportunity for Inovio. The company's lead product, VGX-3100, is a DNA immunotherapy that's designed to treat pre-cancerous conditions and cancers caused by HPV.Inovio also has a cervical cancer immunotherapy, INO-3112, in early-stage testing. With a significant number of Americans infected with high-risk oral and genital HPV, Inovio's experimental drugs could be needed even more than initially thought.

Where things stand now

The problem for Inovio right now is that a planned late-stage study of VGX-3100 can't move forward. In October, the U.S. Food and Drug Administration placed a clinical hold on the phase 3 study of VGX-3100 in treating cervical dysplasia. The FDA requested additional data pertaining to the delivery device to be used in administering the drug to patients.

Inovio CEO Joseph Kim said in March that his company was still completing its response to the FDA. Kim stated that Inovio still expected to begin the phase 3 study in the first half of this year. He also indicated that a phase 2 study evaluating VGX-3100 in treating precancerous lesions at the vulvawould begin in 2017.

As for INO-3112, Inovio expects its partner, AstraZeneca (NYSE: AZN), will soon begin a phase 2 study of the experimental drug in combination with anti-PD-L1 antibody durvalumab. AstraZeneca already has several other clinical studies in progress for durvalumab as a monotherapy and in combination with other drugs.

The NCHS survey on HPV prevalence points to a potentially growing need for immunotherapies that can combat HPV-caused precancerous conditions and cancers. It remains to be seen if Inovio will be able to capitalize on this need.

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Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.