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Operator
Good day and welcome to the Endovio third quarter 2022 results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. And to withdraw your question, please press star then two. Please note that this event is being recorded. I would now like to turn the conference over to Mr. Thomas Hong. Please go ahead, sir.
Thomas Hong
Thank you. Good afternoon and thank you for joining the Inovio third quarter 2022 financial results conference call. Joining me on today's call are Dr. Jackie Shea, President and CEO, Mr. Peter Keys, Chief Financial Officer, and Dr. Michael Sumner, Chief Medical Officer. We also have other members of Inovio's leadership here with us today, who will be part of our Q&A session. Today's call will review our corporate and financial information for the quarter ended September 30th, 2022, as well as provide an update on our efforts to develop our DNA medicines platform. Following prepared remarks, we will conduct a question and answer segment. During the call, we will be making forward-looking statements regarding future events and the future performance of the company. These events relate to our business plans to develop Inovio's DNA medicines platform, which include clinical and regulatory developments and timing of clinical data readouts, along with capital resources and strategic matters. All of these statements are based on the beliefs and expectations of management as of today. Actual events or results could differ materially. We refer you to the documents we file from time to time with the SEC which under the heading Risk Factors, identify important factors that could cause actual results to differ materially from those expressed by the company verbally, as well as statements made within this afternoon's press release. This call is being webcast live, and a link can be found on our website, ir.inovio.com, and a replay will be made available shortly after this call is concluded. I will now turn the call over to Inovio's President and CEO, Dr. Jackie Shea.
Jackie Shea
Thank you, Thomas. Good afternoon and thank you to everyone for joining today's call. In the third quarter, Inovio continued to implement our strategy of delivering the promise of DNA medicines by prioritizing our resources to those candidates that have the greatest near-term potential for patient benefit and commercialization. These include INO3107, our promising DNA medicine candidate for the treatment of HPV6, and or 11 caused recurrent respiratory papillomatosis or RRP. RRP is a debilitating, often lifelong condition characterized by the development of small wart-like growths or papillomas which while generally benign can cause severe life-threatening airway obstruction and respiratory complications. The papillomas have a tendency to grow back after they have been removed surgically which is the current standard of care. There are currently no FDA-approved therapeutic vaccines or drugs for the treatment of RRP. We are encouraged by the positive interim phase 1-2 results we announced last month, not only because they build upon our ongoing work, indicating that DNA medicines have the potential to treat HPV-associated diseases, but more importantly, because these data could be the first steps toward a new therapy to improve the lives of those patients suffering from this horrible disease. While Mike will talk about the INO3107 data in greater detail in just a moment, I'd like to highlight that Inovio has long been committed to developing innovative treatments for HPV-associated diseases. Our DNA medicines have a number of characteristics that make them uniquely suited to this therapeutic area. In previously completed trials, DNA medicines have been observed to induce antigen-specific, long-lived memory, helper, and killer T-cells, which we believe may play a role in clearing the HPV virus. DNA medicines also have exhibited the potential to be readministered without the loss of immunogenicity and have favorable safety and tolerability profiles, both of which we believe are important factors in the treatment of chronic HPV cases. associated conditions like RRP. We look forward to continuing to build upon the foundation of clinical data we have generated to date in our HPV franchise to bring potentially paradigm-shifting treatment options to patients in need. In addition, we expect to announce our Reveal 2 Phase 3 data with BGX3100 in cervical high-grade squamous intraepithelial lesions or HSIL, later this quarter or in the first quarter of 2023, which will help define the next steps for this HPV-related development program. Moving beyond our HPV franchise, we remain encouraged by other candidates in our pipeline, such as INO5401, which, as we reported earlier this year at ASCO, demonstrated positive results as a potential treatment for glioblastoma. and almost always fatal cancer of the brain. We've continued working on the next steps for this product candidate and look forward to sharing our plans with you next year once we finalize some key decisions. We also look forward to continuing to advance our other pipeline programs for which we anticipate data announcements in the coming months. Since I took over the reins of Inovio almost six months ago, we have been working on continuing to drive operational excellence throughout everything we do, from running clinical trials to managing our capital and other resources to optimize our chances of successfully bringing our product candidates to the market and helping patients. Our decision to discontinue our internally funded development of INO4800 as a heterologous COVID-19 booster vaccine due to changed market conditions is reflective of this strategy. We plan to deploy cost savings from this effort to the advancement of other promising candidates. We currently believe these cost savings will now extend our cash runway into the first quarter of 2025, and we will continue to evaluate how we best deploy those resources across our portfolio as we move ahead. With that, I'd like to turn it over to our Chief Medical Officer, Dr. Michael Sumner, to provide our clinical update for the quarter. Mike?
Thomas
Thank you very much, Jackie. And greetings, everyone. Last month, we announced positive interim results from our phase 1-2 study for INR3107 in patients with recurrent respiratory papillomatosis, or RRP. As a reminder, INR3107 is composed of a plasmid encoding respectively for HPV6 and 11 early antigen 6 and 7 proteins. and delivered with INO9012, a plasmid encoding for human interleukin-12. This vaccine candidate was evaluated in an open-label, multicenter trial to assess its safety, tolerability, immunogenicity, and efficacy in participants with HPV 6 and 11 associated RRP. The trial demonstrated statistical significance based on the clinical endpoint of a reduction in the number of RRP surgical interventions in the year following administration of INO3107 compared with the year prior to treatment in the initial cohort of 21 participants. In the trial, there was a median decrease of three surgical interventions Overall, 16 of the 21 participants, or 76%, showed a decrease in surgical interventions in the year following administration of INR 3107 relative to the number of surgeries in the year prior to the trial. Importantly, of those 16 participants, 6 or 29% required no surgical intervention during the entire 52-week trial period. Treatment with INO3107 induced immune responses, including CD4 and CD8 positive T cells, against both HPV6 and 11. All 21 participants demonstrated an increase in peripheral T cells to one or more antigens from baseline. Cellular immune responses against HPV6 and 11 were also observed at week 52, which was 43 weeks after the last treatment dose. indicating a persistent cellular memory response. We believe this memory response could be a key factor in the treatment of chronic diseases such as RRP. Finally, as we have seen with our other DNA medicines, INO30107 was well tolerated with all participants completing the treatment course. Treatment emergent adverse events observed in the trial were generally low grade with 86% of participants experiencing at least one treatment emergent adverse event, most of which were grade one. Three participants, or 14%, experienced a grade three treatment emergent adverse event, but none of these were deemed related to INR 3107. The most commonly reported treatment emergent adverse events were injection site pain at 38% and fatigue at 19%. While two serious adverse events were reported, these were also deemed unrelated to INR 3107. Based on the amounts data, we are planning to meet with regulatory agencies to discuss the next steps for this program and determine the most expeditious path to bring the potential benefits of INR 3107 to RRP patients in need. We expect that initial discussions with these regulatory bodies will include both adult and pediatric populations. Anovia will also consult key opinion leaders and patient advocacy groups for their perspectives and input as we determine the next clinical development steps. As Jackie mentioned, we are also considering the optimal path forward for our other promising candidates, including INO5401 for glioblastoma, for which we reported positive overall survival at 24 months data earlier this year. Over the coming months, we plan to solidify the next steps for our candidates in our pipeline that offer more near-term opportunities to advance our strategy and bring DNA medicines to market. In addition, we'll be working to identify new drug targets that specifically leverage our ability to generate a significant cellular response, encompassing broad T-cell responses to target antigens. Any project candidate that would emerge for prioritization in our current pipeline will be required to exhibit compelling qualities, not only belief in the candidate's clinical potential based on the existing data, but also the ability to offer competitive clinical and commercial advantages. Inovio will focus on these candidates that can reach the market successfully in as short a time as possible to contribute to improving patients' lives. I'll now turn the call over to our CFO, Peter Keyes, for our third quarter financial summary.
Jackie
Peter? Thanks, Mike, and good afternoon, everyone. We finished the third quarter with $281.9 million in cash, cash equivalents and short-term investments, compared to $348.1 million as of June 30, 2022. As of September 30, 2022, Inovio had 249.5 million shares common outstanding and 268.7 million common shares outstanding on a fully diluted basis. Our revenue was $9.2 million for the three months ended September 30, 2022, compared to $292,000 for the same period in 2021. The increase in revenue resulted from the fulfillment of obligations under our contract with the U.S. Department of Defense for our Selectra 3P program. Inovio's research and development expenses for the three months ended September 30, 2022, were $33.1 million compared to $47.1 million for the same period in 2021. The decrease in R&D expenses was primarily related to a lower drug manufacturing costs, outside services, and clinical study expenses related to INO4800 and VGX3100. We also had lower engineering services and expensed equipment related to Selectra 3P device array related to our 3P device array automation project. These decreases were offset by $8.2 million lower Contra research and development expenses recorded from grants among other variances. General and administrative expenses were $11.8 million for the three months ended September 30th, 2022. versus $13.2 million for the same period in 2021. The decrease in G&A expenses was primarily related to a decrease in employee and consultant non-cash stock-based compensation among other variances. Total operating expenses for the third quarter 2022 decreased to $44.9 million compared to $60.2 million for the same period in 2021. Our net loss for the quarter ended September 30, 2022, was $37.8 million, or 15 cents per share, basic and dilutive, compared to a net loss of $60.2 million, or 29 cents per share, basic and dilutive, for the quarter ended September 30, 2021. Looking forward, Inovio expects an operating cash burn of approximately $45 million for the fourth quarter 2022. As Jackie mentioned, we are updating our prior cash runway guidance and are now projecting our cash and cash equivalents to take us into the first quarter of 2025. This projection does not include any funds that may or may not be raised from our ATM or other financing sources. As a reminder, you can find our full financial statements in this afternoon's press release, as well as in our Form 10-Q filed with the SEC. And with that, I'll turn it back over to Jackie.
Jackie Shea
Thank you, Peter. In summary, our work during the last quarter has enabled us to further advance our corporate strategy and sharpen our focus as we seek to realize the potential of DNA medicines for the benefit of patients globally. As we continue to prioritize operational excellence and financial discipline, we've also advanced our commitment to environmental, social, and governance, or ESG initiatives. In the third quarter, we undertook a baseline assessment of our business and created an internal team focused on incorporating ESG practices into our business where appropriate. With a particular focus on transparency, we recognize the impact our work can have on the world, and we are committed to producing high-quality products and developing them in a safe and ethical manner. With that, let's now open the call for questions.
Operator
Operator? Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. And to withdraw your question, please press star then 2. And at this time, we'll pause momentarily to assemble our roster. And the first question will come from Hartaj Singh with Oppenheimer and Company. Please go ahead.
Jackie
Great. Thank you. Thanks, Jackie, everyone, for the update. I'm glad to see the company is getting focused. Jackie and Tim and Jeff, I guess, you know, a question for me would be just on what do you think a potential trial could look like? So if you can just kind of walk us through a few specific, you know, components to that question. One is, you know, could the next trial be sort of proof of concept or a potential registration kind of pivotal kind of trial? That's number one. Would you require more than one sort of pivotal trial? Like, you know, for example, the HSIL. Excuse me. Then what patient numbers could we be looking at? And then lastly, you know, are you thinking of the therapy 3107 as sort of adjuvant or neoadjuvant use? You know, so meaning, you know, after surgery or before surgery is even contemplated? And I just got a quick housekeeping question right off. Thank you.
Jackie Shea
Hi, Hataj. Nice to hear from you. Yeah, you know, we're very excited, as you can hear, about 3107. And, you know, we're really excited around what the data we reported last month could mean for patients. So I'm going to hand you over to Mike to give more specifics around what we're thinking around the trials. Mike?
Thomas
Thank you, Jackie. Hi, Hataj, and thank you for your questions. Obviously, all things we are spending a lot of time discussing internally at the moment. As you saw from the data that we presented, we think that we were very encouraged by the efficacy data. We certainly believe there's a meaningful efficacy signal there. And also, obviously, the tolerability is in line with what we've seen with our other DNA plasmids. We will... ...design a study that we hope will be progressive in the registrational strategy. I think because it's a rare disease and we have had the efficacy signal we have, we would like to think that the FDA will see the next stage as a registrational study. However, obviously, we can't speak for the FDA. From a design perspective, We were very fortunate in having interactions with the agency before, and I think we have a lot of clues of how that study should be designed in terms of what the FDA is looking for. We haven't disclosed any of those things, and I actually think they're a competitive advantage to us in terms of how we move forward and propose the study design. We are hoping we will have a good, solid design that meets the FDA comments that they've made to us in the past and be able to move forward as quickly as possible.
Jackie
Great. Thank you, Mike. And then just the housekeeping questions from Peter. You said $45 million for the fourth quarter. Do you see sort of burns or tailing off next year? I mean, I know you've given us the quarter, but just how to think of FXP? Thanks.
Jackie
Well, we're not providing any guidance past the fourth quarter, but I will tell you that I do see currently those quarterly numbers continuing to decrease.
Jackie
Yeah, understood.
Operator
Thank you for all the questions.
Jeff Meacham
Yep.
Operator
The next question will come from Gregory Renta with RBC Capital Markets. Please go ahead.
spk00
Hi, this is Yinglong for Greg. Congrats on the progress and thanks for taking our questions. Maybe first on 3100, could you help us set expectations around the Reveal 2 data that's upcoming and what's the internal benchmark and endpoints you're focusing on to make decisions around path forward for this program? And then maybe more broadly with the recent development of your pipeline and strategy, What's your latest thinking around prioritization and resource allocation among the programs and assets within your portfolio? Thank you.
Jackie Shea
Thanks very much. They're great questions. So first of all, we're on timing for Reveal 2 data. So we're on track for that data towards the end of this year or into quarter one. I think I'll hand over to Mike to talk a bit more around what we're expecting from that study, but to me, a good outcome would be meeting the primary endpoint for the trial. So, Mike, do you want to comment on that? And then I'll go back to the prioritization part of the question. Mike?
Thomas
Thank you, Jackie. I mean, you obviously hit on the top points where we're going to read out the data. We're targeting to read out the data by the end of this year or early next. That will actually be the primary endpoint which is looking at histological regression and viral clearance. And that will be both in the biomarker population and the general population that was recruited into the study. Obviously, we are expecting or hoping to see a greater potential for clinical benefit in the biomarker population. But at the moment, we haven't, until we see the data, we can't really comment. on what that clinical benefit in the biomarker population over and above the general population we think is going to look like. Thank you, Jackie.
Jackie Shea
Thank you, Mike. And so with regards to prioritization of the pipeline, I think over the past few months we've seen really encouraging data, both in the IO space for glioblastoma, also in the HPV-associated space with 3107 for RRP. And really what we're going to be doing going forward is prioritizing those resources, our resources on those product candidates that have the best chances for success, the best chances of bringing clinical benefit potentially rapidly to patients. So you'll see us really focusing our resources there. And I think one of the sort of things that we've been very excited about is the consistent way in which our DNA medicines platform have been able to generate T cell responses, so antigen-specific CD4 and CD8 T cell responses. And I think a focus on those T cell responses going forward is going to be part of how we think about prioritization.
Mike
That's great. Thank you very much.
Operator
The next question will come from Jeff Meacham with Bank of America. Please go ahead.
Jeff Meacham
Hey, this is Charlie for Jeff. Thanks for taking the question. I guess I have a kind of general question regarding the, you know, how you think about the HPV vaccine kind of impact in terms of how longer term treatable population. That's number one. And number two, I think just think about the revenue from DOD, like how should we think about that going forward? Thank you.
Jackie Shea
Both great questions. So I think while HPV vaccines have helped reduce HPV infections and consequence HPV-associated diseases since they were introduced back in, I think, now 2006, there is lower uptake and unfortunately lower regimen adherence and completion rate than with other vaccines. And this leaves a sizable number of people still at risk of becoming infected. infected with HPV, which can lead to development of diseases such as RRP and cervical dysplasia. So, I think, you know, whilst vaccination rates vary around the globe, I think, unfortunately, we're still not seeing the levels of vaccination, which mean that HPV-associated disease is going to be with us for quite a while to come. So I think, you know, in terms of how we think about our relationship with DoD, I mean, we've been extremely grateful for the support that we've had from DoD across multiple of our platforms, including support for the development, manufacturing, and scale-up of our ID investigational device, the Selectra 3 PSP. We're very grateful for that. We're actually in the final stages of completing our obligations under those agreements, and we look forward to wrapping up that work very soon.
Mike
Thank you.
Operator
Again, if you have a question, please press star, then 1. Our next question will come from Yi Chen with A.T. Wainwright. Please go ahead, sir.
Yi Chen
Hey, this is Chet. Hey, this is Chet on behalf of E10. You've answered most of our questions. So the only quick question we have is on INO5401 and in glioblastoma. What can we expect from this asset as it relates to clinical updates and or other key decisions moving into 2023? Thank you.
Jackie Shea
Yeah, that's a great question. And I think I mentioned during the call that we're We're currently thinking about the next steps for 5401 together with our partner, Regeneron, and we expect to be providing an update on that next year.
Mike
Great. Thank you.
Operator
This concludes our question and answer session. I would like to turn the conference back over to Dr. Jacqueline Shea for any closing remarks. Please go ahead, ma'am.
Jackie Shea
I'd just like to thank everybody for their questions and for joining us today. Have a good evening, everyone. Bye-bye.
Operator
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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