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Inovio's (INO) Q4 Loss Narrower than Expected, Revenues Beat

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Inovio Pharmaceuticals, Inc. (INO - Free Report) reported a loss of 24 cents in the fourth quarter of 2017, narrower than both the Zacks Consensus Estimate of a loss of 32 cents and the year-ago loss of 35 cents.

Inovio reported revenues of $8.8 million in the fourth quarter, slightly beating the Zacks Consensus Estimate of $8 million. The top line also increased 3.5% from the year-ago period. Note that, fourth-quarter revenues include a receipt of $7 million milestone payment in December 2017 from AstraZeneca’s (AZN - Free Report) subsidiary, MedImmune. The milestone payment was related to the initiation of a phase II study on Inovio’s MEDI0457 (previously known as INO-3112), in combination with the latter’s PD-L1 checkpoint inhibitor, Imfinzi (durvalumab), for head and neck squamous cell cancer.

Moreover, the company also received additional $1.2 million revenues under Inovio’s prior collaboration with Roche (RHHBY - Free Report) for the development of Inovio’s DNA immunotherapy, INO-180. However, upside in revenues was partially offset by lower grants received from Defense Advanced Research Projects Agency (DARPA) for the development of Ebola vaccine, which is nearing completion.

We remind the investors that Inovio has collaboration agreements with several companies and institutes, including Regeneron (REGN - Free Report) , University of Pennsylvania and GeneOne Life Science among others for developing its pipeline. These partners not only lend expertise to Inovio but also provide required funding for developing its candidates.

Shares of Inovio outperformed the industry so far this year. It has gained 8.2% against the industry’s growth of 2.9% during the period.


Research and development expenses increased 2.9% to $24.6 million, owing to higher headcount to support developmental activities related to the company’s pipeline.

General and administrative expenses rose 14.3% to $8 million, primarily due to an increase in employee headcount and non-cash stock-based compensation.

2017 Results

Full-year sales stood at $42.2 million, beating the Zacks Consensus Estimate of $40.4 million. Moreover, the top line also increased 19.2% compared with the year-ago figure of $35.4 million.

The full-year loss of $1.09 per share was narrower than the Zacks Consensus Estimate of $1.17. However, the bottom line is wider than the year-ago loss of $1.01.

Pipeline and Other Update

VGX-3100, an HPV immunotherapy, is the most advanced candidate in the company’s pipeline, currently being evaluated in a phase III study for the treatment of cervical dysplasia, caused by human papillomavirus (“HPV”). The company is also conducting a phase II study to examine the efficacy of VGX-3100 in women with HPV-related vulvar neoplasia.

In January 2018, Inovio entered into a license and collaboration agreement, providing ApolloBio Corporation with the exclusive right to develop and commercialize VGX-3100 and HPV within Greater China (China, Hong Kong, Macao, Taiwan).

In mid-2017, the company started an independent phase I trial on its DNA immunotherapy, INO-1800, against hepatitis B virus, after Roche backed out from its collaboration agreement in July 2016. In the fourth-quarter conference call, the company announced positive interim results from the study, which demonstrated the potential of INO-1800 as an immunotherapy for this widespread infection (hepatitis B virus), which is a major cause of liver cancer.

Also, the company is working on the development of vaccines for Ebola, Zika and Middle East respiratory syndrome virus. In October, Inovio reported positive safety and immune response results from a first-in-man, multi-center phase I study of a vaccine (GLS-5700) against the Zika virus. The company, along with partner GeneOne Life Science, also initiated a phase I/IIa study to evaluate MERS (Middle East Respiratory Syndrome) virus vaccine, GLS-5300.

In November 2017, Inovio initiated a phase I/II study to evaluate the combination of its T-cell activating immunotherapy, INO-5401, with Regeneron’s PD-1 checkpoint inhibitor, REGN2810, on patients with newly diagnosed glioblastoma (GBM). The study is designed to evaluate safety, tolerability, immune responses as well as progression-free survival and overall survival of the combination therapy.

Inovio Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

Inovio Pharmaceuticals, Inc. Price, Consensus and EPS Surprise | Inovio Pharmaceuticals, Inc. Quote

Zacks Rank

Inovio carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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