Inovio Pharmaceuticals (NASDAQ: INO) continues to take investors on a roller coaster ride. The biotech stock was up close to 25% by late May, only to give up all of those gains and then some. A dilutive stock offering in July zapped all the momentum that Inovio had. The stock is now down nearly 30% year to date.
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The company announced its third-quarter performance after the market closed on Wednesday. Was there anything in the update to give investors more confidence?
By the numbers
Inovio reported third-quarter revenue of $2.6 million. In the prior-year period, the company's revenue totaled $12.5 million. The decrease stemmed mainly from Inovio nearing completion of its grant from the U.S. Department of Defense's Defense Advanced Research Projects Agency (DARPA) to develop an Ebola vaccine.
The company posted a net loss in the third quarter of $34.1 million, or $0.39 per basic share. That's worse than the loss in the prior-year period of $20.8 million, or $0.28 per share. The lower revenue from the DARPA grant was a key factor in the deteriorating bottom line. Inovio also recorded a loss in the third quarter of $5.8 million related to an investment in an affiliated entity.
These two factors were partially offset by lower operational expenses in the third quarter. Inovio's research and development expense fell more than 5% year over year to $25.5 million, primarily as a result of lower costs related to the DARPA grant. This reduction was more than enough to make up for a 10% increase in general and administrative costs, which stemmed largely from hiring new staff.
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Inovio's most important financial metric at this point is its cash position. The company ended the third quarter with cash, cash equivalents, and short-term investments totaling $141.9 million. That should be enough to fund operations into late 2018.
Beyond the numbers
The top and bottom lines aren't nearly as critical for Inovio as the pipeline is right now. Much of the buzz for Inovio over the last couple of years has related to its development of an experimental Zika virus vaccine. Inovio was the first to advance to human clinical studies with a Zika vaccine. The company reported positive safety and immune response results from an early stage study of the vaccine in October.
Probably the biggest achievement for Inovio in the third quarter, though, was the initiation of a late-stage study of DNA-based immunotherapy VGX-3100 in treating cervical dysplasia caused by human papillomavirus (HPV). The U.S. Food and Drug Administration (FDA) placed that study on clinical hold in October 2016 due to questions about Inovio's Cellectra 5PSP immunotherapy delivery device.
Inovio said that it has now opened nearly 35 sites, and is actively recruiting and dosing patients. The company expects to open at least 50 testing sites by the end of 2017. In addition, Inovio is evaluating VGX-3100 in a phase 2 study targeting treatment of high-grade HPV-related vulvar high-grade intraepithelial lesions. The company has 10 U.S. sites recruiting patients for this study.
What's next for Inovio
The roller coaster ride for investors probably won't slow down for quite a while. Good news from Inovio's second early stage study of its experimental Zika vaccine being conducted in Puerto Rico could give the stock a boost. Other early stage study results for Inovio's immunotherapies could also provide short-term juice to Inovio's share price.
However, the main issue for Inovio is time. The late-stage study of VGX-3100 isn't scheduled to read out data for the primary outcome until 2019. All of Inovio's other products have even longer to wait. Meanwhile, the clock is ticking before the company will yet again need to raise more cash.
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