04 Mar Inovio Pharmaceuticals: A Long Shot Investment!
Inovio Pharmaceuticals, Inc. (NASDAQ: INO) announced that it is pausing enrolment for an ongoing late-stage study evaluating its lead COVID-19 vaccine candidate INO-4800, as lab tests show that the candidate had significantly lower levels of antibodies against the Omicron variant.
The Company is now planning changes to the trial design and is seeking FDA approval to change the primary goal of the study to “prevention of severe disease due to COVID-19”. The primary endpoint earlier was “prevention of virologically confirmed COVID-19 disease”.
Inovio Pharmaceuticals, Inc. (NASDAQ: INO)
Market Cap: $654.3M; Current Share Price: 3.11 USD
Data by YCharts
Commenting on the development, Chief Executive Officer Joseph Kim stated
“The expectation for vaccination has changed. The highly infectious nature of Omicron has meant that while vaccines currently available in the market may not directly prevent infections, they can significantly protect the vaccinated from severe disease.”
The decision was made based on the recommendations of an independent data safety monitoring board, which asked for the enrolment to be paused, to account for Omicron’s potential impact on the trial. This would delay the interim efficacy data from the trial, which was expected to be announced in the first half of 2022.
Strength
Inovio Pharmaceuticals is focused on developing DNA-based immunotherapy and monoclonal therapies to fight cancer and infectious diseases. The Company’s immunotherapy enables a patient’s immune system to produce functional antibodies and killer T cells that are capable of combating cancer and infectious diseases. The technology helps identify strains and variants of a target cancer or virus, assess gene sequence of selected antigens, create an optimal consensus sequence for the antigen and insert a synthetic consensus sequence for each antigen into a separate DNA plasmid to manufacture SynCon Immunotherapy. The therapy can then be delivered into the muscle or skin using its Cellectra Device which causes the immune system to produce protective antibodies and killer T Cells to fight the infectious cells or cancer.
The Company’s proprietary CELLECTRA allows plasmid construction to be delivered via intramuscular or intradermal. It is an advanced transfection delivery that helps increase immunotherapy cellular intake and promotes antigen expression leading to CD8+ T cell activation and antibody response. Inovio has a diverse pipeline of candidates such as VGX-3100 meant for the treatment of Cervical Dysplasia, Vulvar Dysplasia and Anal Dysplasia (In collaboration with ApolloBio (China Exclusivity)). Furthermore, the Company is developing INO-3107 for the treatment of Recurrent Respiratory Papillomatosis (RRP), INO-5401 for the treatment of Glioblastoma, INO-5151 for Prostate Cancer (In association with Regeneron and Parker Institute for Cancer Immunotherapy).
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The Company is actively seeking strategic partnership and collaborations to fund and develop its platform of infectious diseases. In addition, the Company had entered into agreement with QIAGEN, to co-develop liquid biopsy-based pretreatment test to guide patient selection for VGX-3100, a potential first-in-class treatment for HPV Infection of the Cervix and the first non-invasive treatment for cervical pre-cancer.
Inovio is also making a foray into the diagnostics area with its tie up with QIAGEN; the Company believes that the Commercialization of a CDx test together with VGX-3100 could enhance market adoption. The collaboration aims to create an accurate test that would increase absolute efficacy of VGX-3100 among HPV-infected women who have progressed to HSIL/Cervical Pre-Cancer as per the Company.
The Company’s immunotherapy platform offers the advantage of an “off-the-shelf” product that does not require cold-chain storage and can be stored for over a year at room temperature. The platform also offers rapid and scalable manufacturing that is cost-effective and can be produced in bulk quantities.
Weakness
The late-stage Phase 3 trial evaluating the Company’s lead vaccine candidate was earlier placed on a clinical hold by the FDA for want of more information including details about a delivery device used for injecting genetic material into cells. The Company had resumed the trial in November 2021, after a gap of 14 months, at sites outside the U.S, in partnership with Advaccine Biopharmaceuticals, a Chinese biotech company. The hold on the trial cost the Company heavily, as other competitors like Pfizer and Moderna zoomed past with the vaccine development. The delay also impacted its ability to stake a claim to the market opportunity presented by the COVID-19 crisis.
The Company will find it hard to differentiate its product from that of competitors like Moderna, as both companies use a similar scientific approach to vaccine development. Both platforms aim to use the patient’s cells to create viral antigens that elicit a response from the immunity system and enable customization of genetic sequences that can be included in the shot. However, Moderna’s growth story is there for everyone to see, while Inovio is still trying to find its foothold.
In April 2021, the Company’s shares took a hit as news of the U.S government deciding to withdraw funding for its late-phase Innovate trial for INO-4800 intended for the treatment of COVID-19 vaccine became public. However, the decision did not affect the funding of its Phase 2 trial and did not have any bearing on its other programs with the U.S government. The Company continued the ex-US development of the vaccine candidate in association with its global partners such as Advaccine Biopharmaceuticals (China) and will be evaluating INO-4802, a pan-COVID vaccine candidate that could work against the current as well as the future strains of the disease.
A major concern for the Company is its cash situation. The Company’s operating expenses for trailing 12-months were $231.5 million, while liquid assets stood at $394.9 million. The Company’s pipeline does not have any other late-stage candidates which have a shot at commercialization for the foreseeable future at least.
Opportunity
According to the World Health Organization (WHO), Coronavirus (CoV) is a family of viruses that cause illnesses ranging from common cold to lethal diseases such as the Middle East Respiratory Syndrome (MERS-CoV), Severe Acute Respiratory Syndrome (SARS-CoV) and a new strain of CoV named, novel coronavirus (nCoV). The virus is Zoonotic as it is transmitted from animals to humans, with the presence of many strains that have not yet infected humans. The infection manifests in the form of respiratory symptoms, cough, fever, shortness of breath and can take the form of pneumonia, severe acute respiratory syndrome, kidney failure and even death.
There is no definite cure or treatment for eradication of CoV, with treatment being limited to alleviation of symptoms, and providing support and care to patients. Scientists have been able to sequence the virus genetic code; spurring organizations around the world into action.
The COVID-19 pandemic is likely to become endemic, similar to the seasonal FLU and countries have already undertaken vaccinations on a war-footing, even in less developed countries. The initial race to create vaccinations is now over, with some emerging as clear winners, while others ruin a missed opportunity.
However, new variants are emerging, the most recent being Omicron, which was designated as a variant of concern by the WHO on 26 November 2021. Omicron has several mutations and is currently spreading rapidly across the world, reinfecting those previously affected by COVID-19 as well. In view of the same, WHO has recommended countries to enhance surveillance, undertake sequencing of cases and share them on public databases such as GISAID, besides performing field and laboratory assessments.
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Threat
The Company’s pipeline primarily consists of candidates in preclinical, Phase 1 and Phase 2 trials, which will take a significant amount of time to reach approval and commercialization stage. Clinical Trials are fraught with risk and uncertainty. There is a possibility that the candidates in the Company’s developmental pipeline may not be able to meet their clinical endpoints in trials.
However, a diverse pipeline will help mitigate the risk in case of adverse results or the failure to meet endpoints in any of its ongoing trials. The success of its clinical trials will help the Company advance its pipeline but it should also be prepared to face any setbacks, in case its ongoing trials fail to meet their endpoints.
Key Takeaways
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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