Inovio Pharmaceuticals, Inc. Q2 FY2020 Earnings Call

Good day, and welcome to the Inovio Second Quarter 2020 Financial Results Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Ben Matone, Senior Director of Investor Relations. Please go ahead.

Thank you, operator. Good afternoon, and thank you for joining the Inovio's second quarter 2020 earnings conference call. Joining us today are Dr. J. Joseph Kim, President and CEO; Dr. Kate Broderick, Senior Vice President of Research and Development and Project Lead for Inovio's infectious disease programs; Dr. Jackie Shea, Inovio's Chief Operating Officer; and the company's Chief Financial Officer, Peter Kies. For today's call, we will review our corporate and financial information for the second quarter 2020 ended June 30, 2020 and as well as provide an update on our clinical programs progress, which includes the accelerated development for our COVID-19 vaccine program. This call is being webcast live on our website ir.inovio.com, and a replay will be made available. Following prepared remarks, we will be conducting a question-and-answer segment reserved for equity research analysts. During the course of this conference 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 integrated platform of DNA medicines, which include clinical and regulatory developments, and timing of clinical data readouts along with capital resources and strategic matters, as well as the impact of the COVID-19 pandemic on Inovio's business operations. All of these statements are based on the beliefs and expectations of management as of today. These statements involve certain assumptions risks and uncertainties and could cause actual results to differ materially. We assume no obligation to revise or update forward-looking statements, whether as a result of new information, future events or otherwise. Investors should read carefully the risks and uncertainties described in today's press release, as well as the risk factors included in today's 10-Q filing with the SEC. With that, I would now like to turn the call over to Joseph.

Thank you, Ben, and thanks everyone for joining the call today. We began this year stating that we were entering a new era for DNA medicines. This was before COVID-19 became the most urgent public health crisis the world has seen in a century. We are very proud of our accomplishments to date in addressing this growing pandemic and the evolving nature of SARS-CoV-2, the virus that causes COVID-19. The challenges of this still relatively unknown virus cannot be understated. We understand the importance of continuing to develop our scientific and medical understanding of the virus and its effects and having multiple approaches to defeat it remains paramount. Over the last decade, Inovio has led the field in demonstrating how optimized DNA plasmids can be rapidly developed and delivered into cells using the CELLECTRA smart device that overcomes historical obstacles in effectively delivering DNA medicines and producing safe and robust immune responses. Our goal is to generate data that challenges the status quo and focuses on the efficacy, durability, versatility, and safety of our DNA medicines, all of which are critical when confronted with a novel virus. We are delivering on that goal, and I am very proud of our COVID-19 DNA vaccine development team, which is led by Dr. Kate Broderick. She will be sharing with you shortly the amazing work completed this quarter with our COVID-19 DNA vaccine INO-4800. And I once again want to thank Kate and her entire Inovio team for their tireless and extraordinary efforts to combat this great threat. Through these efforts, our INO-4800 Phase 1 clinical results, which are now undergoing peer review for publication at a top medical journal have demonstrated robust immunogenicity, including neutralizing antibodies and T cell responses both CD8 and CD4 T-cell responses and a uniquely favorable safety profile that supports the foundation of promising responses we have seen in more than 2,000 patients and over 7,000 applications of our DNA medicines with our CELLECTRA delivery devices. Inovio has also set the standard with INO-4800 for durability of a protective response in a non-human primary animal challenge study at four months post-vaccination and has shown balanced antibody anti-cell immunogenicity against the emerging dominant strain of the virus known as G614. To our knowledge, we are the first to report the generation of neutralizing antibody against this mutated strain of the coronavirus by vaccinating non-human primates. This data has been published as a preprint on Bioarchive and is currently under review at a peer-reviewed journal. We look forward to publishing our additional animal challenge studies as well as being a part of Operation Warp Speed's non-human primate animal challenge study. We have also made significant strides in expanding our global coalition to manufacture large-scale quantities of INO-4800 and smart devices to deliver them. I look forward to having our Chief Operating Officer Dr. Jackie Shea provide you with our latest manufacturing update. I want to thank our partners and growing global manufacturing coalition which includes Richter Helm Biologics in Germany, other large-scale European manufacturers, and Ology Bioservices, and other large-scale manufacturers here in the U.S. With this support, we look forward to advancing INO-4800 into a Phase 2/3 trial in September and meeting our target to provide at least 1 million doses of our DNA vaccine this year and 100 million doses in 2021. And while this past quarter has been dominated by COVID-19 news, our team continues to drive forward our overall DNA medicines pipeline with important milestones that support our goal to produce data to challenge the status quo and focus on the safety, efficacy, durability, and versatility of our DNA medicines. As a quick recap, over the quarter, we accomplished the following. First, we presented positive interim data from our Phase 1/2a trial for our Middle East respiratory syndrome DNA vaccine INO-4700 at ASGCT and are moving forward with our Phase 2 trial in the Middle East. We are the first company with a Phase 2 vaccine for the coronavirus that causes MERS, which is in the same family of viruses as the coronavirus that causes COVID-19. Second, we presented positive 12 months overall survival data at ASCO demonstrating an 85% survival rate for our DNA immunotherapy INO-5401 for the devastating and difficult-to-treat glioblastoma multiforme. We look forward to the fourth quarter where we will be evaluating and providing overall survival at 18 months, which is the primary efficacy endpoint for the 52 patient Phase 2 trial. Third, we reported positive interim Phase 2 results for VGX-3100 against HPV-related pre-cancerous anal and vulvar dysplasia and we remain on track to report topline Phase 3 pivotal efficacy data for VGX-3100 against HPV-related precancerous cervical dysplasia from REVEAL 1 in the fourth quarter of this year. Fourth, for REVEAL 2, as we mentioned during our last earnings conference call in May, patient recruitment took a hit as a result of global pandemics since the first quarter. Our team continues to work relentlessly on getting us back on track to pre-pandemic enrollment rates in a safe manner and I am confident that we will be in a position to build off of a positive REVEAL 1 data this year. Fifth, we are also excited with the progress across our HPV programs, particularly for INO-3107 which recently received orphan drug designation from the FDA to treat the rare debilitating and potentially fatal condition called recurrent respiratory papillomatosis or RRP. We're currently conducting an open-label multicenter Phase 1/2 trial of INO-3107 in the U.S. As we mentioned during previous calls regarding RRP, these patients typically undergo multiple surgeries a year and literally plan their lives around scheduling their surgeries. As such, given the disease characteristics and the tight-knit community where patients are treated, we believe enrollment will be relatively swift and anticipate interim readouts by next year. We also expect to apply for regulatory approval to commence a trial to evaluate INO-3107 in pediatric patients after we have a chance to evaluate data from the current study. Broadening the outreach towards pediatrics will not only build on the overall value of INO-3107, but also provide a viable therapeutic option for these patients who suffer from this rare disease and lifelong surgeries. As this is an open-label trial, we're hoping to have the data to share with you in the second half of next year. Now I'd like to turn the call over to our SVP of R&D, Dr. Kate Broderick, who will provide an update on our COVID-19 program. Kate?

Thank you, Joseph, and good afternoon, everyone. Since I last spoke with you during our May earnings call, we have accomplished a huge amount in the fight against COVID-19 disease. As Joseph stated, the key to combat COVID-19 is to continue to build on our understanding of the virus and the disease and have multiple approaches to defeat it. We are very encouraged by the immune responses of our DNA vaccine candidate, INO-4800, and we look forward to beginning our planned Phase 2/3 trials in September upon FDA concurrence. So first, let me begin on where we are as of today. Our manuscript for the initial 40 subject Phase 1 trial in the U.S., which is comprised of week eight safety and immunogenicity analysis, is undergoing a peer review process at a top medical journal. Today in our COVID program, there have been no safety concerns as per the data safety monitoring board with no serious adverse events reported and only a few mild transient adverse events primarily related to injection-site reactions such as redness. So just to emphasize that one more time, all six related AEs were grade one, the lowest level in severity, and this profile compares superbly relative to currently marketed commercial vaccines and also other candidate vaccines being developed for COVID-19. The dataset includes a clinical immunology package, analyzing binding antibodies, live virus neutralization results, T cell responses using both ELISPOT assay and flow cytometry. Unfortunately, while I'm currently not at liberty to discuss the details of all these studies until they've been published, I can report that all participants in the trial showed strong antibodies and/or strong T cell immune responses. In terms of the human autoimmune responses, 95% of the participants see to convert and that's defined as those participants who respond with either neutralizing and/or binding antibodies after two doses. In addition, almost 90% of vaccinated participants generated strong T cell responses. Interestingly, statistically significant increases in both CD8 and CD4 T cells were noted post-vaccination. T cell responses were higher in magnitude than convalescent samples tested and were similar or greater responses to those previously reported for other COVID candidates. Several new recent studies have revealed that a large proportion of the population might possess T cells that could help recognize SARS-CoV-2 despite them never actually having encountered the virus before. These T cells are much more likely generated from previous infections with related coronaviruses, including four viruses that frequently cause the common cold. Many experts believe that these so-called cross-reactive T cells may make the COVID-19 disease milder and perhaps partly explain why some people who are infected become very sick while others can be asymptomatic. Leading infectious disease immunologists believe that vaccine-generated specific T cell responses could even be more helpful than these naturally established cross-reactive T cells in limiting the severity of COVID disease. Therefore, developing COVID-19 vaccines, which could generate strong T cell responses, as well as of course neutralizing antibody responses could ultimately represent better, more efficacious and durable vaccines against COVID-19. As such, our promising clinical data demonstrates INO-4800 is a COVID-19 vaccine candidate with a unique, highly favorable safety profile, which produces well-balanced immune responses, consisting of both neutralizing antibodies and T cells. In addition, the clinical data also suggests a fully boostable immunogenicity profile with no anti-vector immunity as expected. Our Phase 1 human data build upon our recent non-human primate animal challenge study, which is currently the closest thing that we have to testing a vaccine's efficacy when confronting a live virus. As Joseph mentioned, we were very encouraged with the duration of protection that INO-4800 demonstrated, as well as the robust immune response across the antibodies and the T cells mirroring the impressive clinical data. To give some more context, our challenge study is more stringent than what others have generated to date, as it was performed over three months from the last vaccination and not at the peak of their acute immune responses at one to four weeks post last dose. As such, our challenge study addresses protection from memory immune responses and not from high levels of circulating antibodies present during the acute post-vaccination phase. We also assess the ability of INO-4800 to generate neutralizing antibodies against the newly emerged virus strain G614, which is critical to ensuring that our research keeps pace with the virus as it evolves. And I want to emphasize here that no antibody-enhanced disease events were reported supporting our favorable safety profile. We look forward to reassessing the impact of INO-4800's durability of response at 12 months out, with our other ongoing non-human primate animal challenge studies and we're also pleased to be participating in Operation Warp Speed's non-human primate animal challenge. Finally, we are excited that our expanded U.S. Phase 1 trial is fully enrolled in older subjects and proceeding as planned and our Phase 1/2 trials in South Korea and China have begun. We look forward to providing data updates on these trials in the fourth quarter. And now, I'd like to hand it back over to Joseph. Thank you.

Thank you, Kate. Great summary. Now I'll turn over to our COO, Dr. Jackie Shea, for our manufacturing update.

Thank you, Joseph, and good afternoon everyone. First I'd like to take a moment to recap and highlight the unique advantages of our DNA vaccines platform, specific to how quickly DNA medicines can be designed and manufactured, as well as the stability of the products, which are both critical aspects in addressing a global pandemic. In terms of rapid and scalable manufacturing, our DNA vaccine development is achieved via a fully scalable manufacturing process, which is well established. They are cost-effective to manufacture and produce in large quantities. And very importantly, DNA medicines are also very easily characterized from a manufacturing perspective, much more so than many other biologic products, and this facilitates production through multiple manufacturers. As Joseph mentioned, we have an established plan in place for manufacturing at least 1 million 1 mg doses of INO-4800 this year and a target of 100 million doses by 2021. We are also working on further expanding our manufacturing consortium. In terms of stability, INO-4800 does not require frozen shipping or storage, meaning no minus 20 or minus 80 freezers are required. Our vaccine is stable for a year at room temperature or for two months at 37 degrees Celsius and has a five-year projected shelf life when refrigerated. The formulation consists of optimized DNA plasmids, water, and salt, with no lipid nanoparticles or adjuvants required, further leading to not only better stability of the vaccine but also better tolerability when administered. This stability is a unique and important differentiating factor that positions INO-4800 very favorably when considering the logistics of addressing global vaccination needs during a pandemic. Also, as Joseph mentioned, Inovio made significant strides in expanding our global coalition of collaborators, partners, manufacturers, and funders to rapidly advance and manufacture large-scale quantities of INO-4800 to meet the demands of this pandemic. To give you some scale-up highlights, at the end of the first quarter the Department of Defense awarded Ology Bioservices an $11.9 million contract to work with Inovio to manufacture INO-4800 for the DOD for clinical trials. In the second quarter, we also expanded our manufacturing partnership with Richter Helm Biologics in Germany, partially funded through the Coalition for Epidemic Preparedness Innovations or CEPI. We are also in the process of finalizing additional manufacturing partnerships in the U.S. and in Europe to fulfill our vaccine candidate production goals of 1 million doses this year, 100 million next, and plan to make announcements about the expanded consortium over the next few months. In addition, we are uniquely positioned with our CELLECTRA smart devices that deliver our DNA vaccines intradermally into the cells, overcoming a key limitation of other DNA and other nucleic acid approaches. CELLECTRA 3PSP is our next-generation smart device that leverages the efficacy and safety track record of an earlier version of the device called CELLECTRA 2000 that has received the CE Mark certification and has been used in clinical trials to safely provide more than 7,000 administrations of Inovio's DNA medicines. The 3PSP has a small footprint and is similar to the size of an electric toothbrush. It is portable, battery-powered, rechargeable, and very user-friendly, with excellent patient and clinician feedback. Additionally, it is multi-use and able to administer up to 5,000 doses per device. Very importantly, the delivery process for our DNA medicines using the CELLECTRA device is complete in less than 20 seconds and has been described by patients and volunteers in our trials as more tolerable than the standard flu shot. I'm pleased to report that in late June, we received $71 million in funding from the U.S. Department of Defense to scale up manufacturing of our CELLECTRA 3PSP smart device and for procurement of CELLECTRA 2000 devices for clinical use. Both devices are used to deliver INO-4800 directly into the skin. The DOD contract builds upon two prior separate $5 million grants earlier this year from the Bill & Melinda Gates Foundation and from CEPI to accelerate testing of the CELLECTRA 3PSP device. We are extremely grateful for the DOD's commitment and it speaks to the confidence that a major U.S. government entity sees in the value of our smart device and the potential role of INO-4800 in combating infectious disease pandemics such as COVID-19. Finally, I'd like to reiterate our gratitude to all of our partners, collaborators, manufacturing partners, and funders once again, and look forward to sharing continued updates as we scale up INO-4800 production. Now I'll hand back to Joseph.

Thank you Jackie for the update and for your team's outstanding work. Our CFO, Peter Kies joins us now for a review of second quarter financial results. Results I have to add include almost $400 million in cash reserves. Peter?

Thanks Joseph. Total revenue was $267,000 for the three months ended June 30, 2020, compared to $136,000 for the same period in 2019, while operating expenses were $33.4 million compared to $28.3 million for the same period in 2019. INOVIO's net loss for the quarter was $128.2 million, or $0.83 per share basic and diluted, compared to $29.4 million, or $0.30 per share basic and diluted for the same period in 2019. It is important to understand that the increase in net loss for the quarter was primarily due to the change in fair value of the derivative liability related to the embedded conversion feature in our August 2019 convertible bonds. This is revalued at each reporting period. Without this non-cash derivative liability expense, the company's net loss for the quarter would be consistent with the second quarter of 2019 and our net loss per share would be $0.20 per share rather than $0.83 per share, which is $0.10 less per share than for the same period in 2019. Subsequent to June 30, 2020, these bonds were converted voluntarily by the bondholders into common stock. For operating expenses, R&D expenses for the second quarter were $22.4 million, compared to $22.5 million for the same period in 2019. Here, the decrease in R&D expenses was primarily related to an increase in contra-research and development expenses recorded from grant agreements, offset by an increase in drug manufacturing expense related to our COVID-19 and VGX-3100 clinical trials and an increase in device inventory and engineering equipment. G&A expenses were $11.1 million for Q2 versus $5.9 million for the same period in 2019. The increase in G&A expenses was primarily related to an increase in legal expenses, work performed related to corporate marketing and communications, and higher non-cash employee-stock-based compensation expense. The end of the quarter cash position included net proceeds of $121.7 million. The company received by selling approximately 10 million to 12 million shares of its common stock during the three months ended June 30, 2020 under an at-the-market ATM sales agreement. As Joseph noted, we have strong capital resources. As of June 30, cash, cash equivalents, and short-term investments were $371.7 million compared to $89.5 million at December 31, 2019. As of June 30, 2020, the company had 158.8 million common shares outstanding and 191.4 million common shares outstanding on a fully diluted basis. This is after giving effect to the second quarter ATM activity, stock option exercises, and restricted stock vesting. Additional information is included in Inovio's quarterly report on Form 10-Q for the quarter ended June 30, 2020, which can be accessed on Inovio's Investor page, under the Financial Reports tab. Back to you, Joseph. Thanks.

Thank you, Peter. It's certainly great to present our strong financial position. In closing, Inovio is razor-focused on executing the following INO-4800 objectives for the remainder of this year. Number one, advancing INO-4800; two, conducting Phase 1/2 trials next month, continue to build out manufacturing consortium with several U.S. and European manufacturing partners to meet Inovio's and the world's need for hundreds of millions of COVID-19 vaccine doses; and third, achieving additional external funding for scale-up and manufacturing of vaccine doses. Furthermore, we will round out the transformative 2020 with very important VGX-3100 REVEAL one Phase 3 top line efficacy and safety data, as well as INO-5401, overall survival data at 18 months in the fourth quarter. Everyone at Inovio is committed to bringing these DNA medicines forward with urgency because we know that patients are waiting. Now we will turn to your questions and comments. Operator, please open the line for the analysts.

We will now begin the question-and-answer session. Our first question today will come from Gregory Renza with RBC Capital. Please go ahead.

Hey, good evening, Joseph and team. Thank you for taking my questions and congratulations on the progress. Joseph, I just wanted to start with your commentary around the plans for the Phase 2/3 trial for INO-4800. I'm just curious if you could perhaps comment on the current gating factors for getting that going. It sounds like you're targeting a September start maybe just slightly a delay from maybe previous commentary. So I just want to understand maybe what the pushes and pulls are there. And then secondarily, just related to some of the resources or monies that would perhaps be involved to support that and help to execute on that. Thank you very much.

Yes. Thank you, Greg. So we've been working urgently to get our Phase 2/3 event. We are in very active discussions with the FDA on the design and we feel that we are very close to this process. So in terms of drug doses, we have everything available to execute. In terms of the devices we have everything – we have very encouraging and positive Phase 1 data, which is undergoing peer review. So we feel like we are executing on this. Obviously, we are concurrently working on getting external funding to support this large trial. So please stay tuned because we will be able to certainly announce the Phase 2/3 start with external funding in this regard by September.

That's great. Thank you very much. And then just a quick follow-up on the non-human primate study data. Just how should we be thinking about the length of that follow-up period, as well as perhaps the dose used for the challenge study when comparing that with perhaps other non-human primate studies? Thanks, again. I'll hop back into the queue.

Yes, absolutely. Maybe I'll turn this to Kate Broderick to handle this question. Kate?

Thanks so much for that question because that gives me the opportunity to really underscore how incredibly important that non-human primate data is. I do want to be clear that at this point, to my knowledge anyway, we Inovio and INO-4800 is the only vaccine candidate to show durability in protection from COVID-19 disease. And really that is incredibly important; a good vaccine has to be safe, it has to be effective, but also has to have durability. You can only protect for a few weeks or a month, but really doesn't have a whole lot of relevance in the situation today. So we are very excited by the data that we just recently released on bioRxiv, and I truly think that is going to be important as we survey a lot of people of vaccine candidates which is really much more similar to what would actually happen in real life as opposed to kind of an artificial situation when you challenge immediately after the acute period of a new responses. I hope that helps answer your question.

Yes. Thanks, Kate.

Yes. Good afternoon. Thanks for taking the questions.

Hi, Steve.

Hi, Joseph. Can you provide more details on the expected timing for the Phase I publication? I noticed in the press release that the study was extended to include more participants and raise the age bracket. Additionally, it seems a lower dose was added as part of the study extension. Should we interpret the inclusion of a lower dose as indicating there may not have been a clear dose response between the one mg and two mg cohorts? Also, I have a couple of follow-up questions.

Let me address the last part of your question first. We did see that the Phase I extension studies were conducted before we had all the immune response results from the initial cohort of 40 participants. One of the goals was to meet the FDA's requirements for age group escalation. Initially, we started with cohorts of individuals aged 18 to 50, using one milligram and two milligram doses. Subsequently, we included a population aged 51 and older. We also felt it was important to explore a wider range of doses, including a reduction to 0.5 milligram for comprehensive dose escalation. Although we are moving quickly due to the pandemic response, these steps are essential for completing our overall clinical development plan. We believe both the one-milligram and two-milligram doses are highly immunogenic and demonstrate excellent safety and tolerability, particularly in comparison to already approved conventional vaccines and other vaccine candidates. Regarding the timing of the peer review, I am looking forward to it as much as you are. The peer review process will take its time, but we hope it will be sooner rather than later. All aspects of the humoral and cellular immune responses, as well as detailed safety and tolerability information, will be included in the published paper.

Okay. So I guess should we expect to have that Phase I publication in hand before the decision's announced or before the initiation of the Phase II/III in September?

No. These are two parallel events.

Okay. And then just I guess on the VGX ongoing, I guess litigation or arbitration whatever you want to call it does this impact at all the likelihood of starting a Phase II/III in September? And I guess what are the projected timelines to a resolution here if this does indeed need to be litigated?

I don’t want to go into too much detail about the ongoing litigation, but I can definitely state that this or any other litigation does not affect our INO-4800 development plan, including the Phase II/III efficacy trials or our goal of scaling up to 100 million doses in 2021. As I mentioned earlier, we have all the doses and the necessary manufacturing resources to support our trials, and our primary focus is on achieving the 100 million doses we believe are required this year.

Okay. And then just lastly and I guess it was kind of asked at the outset, but I guess you characterized the initiation of the II/III as kind of being dependent upon receiving FDA concurrence. I guess can you maybe just talk a little bit about what that FDA concurrence looks like? And should we anticipate that a registrational program here is something like the NIH master protocol?

Yes. FDA concurrence is simply a formal term for FDA approval of any process in the steps involved. Nothing is officially approved yet. An IND is not approved as concurred, you are permitted to proceed. It's just a matter of terminology. We could have easily used more straightforward language, like saying we received FDA approval to move to the next steps. Without going into details, our 2/3 approach is enabling us to swiftly navigate through the Phase 2 segment and reach the Phase 3 efficacy stage as quickly as possible. As we have previously mentioned, this will be a placebo-controlled randomized double-blind efficacy trial. Overall, our approach will be consistent with other ongoing Phase 3 trials from different groups.

And in terms of patient numbers, should we expect to see a patient number based upon this achievement of FDA concurrence that looks like the NIH master protocol?

Yeah. We expect it to depend on the actual infection rates at that time. The specific groups we target, particularly those with a higher risk profile, will influence the overall sample size, but it will be of a similar magnitude.

Hi, thank you for taking my questions.

Hi.

Hi, Joseph. My first question is do you follow-up with the original 38 healthy volunteers in the Phase 1 trial just to see how long the antibody and T cell responses can last?

Yes. We have designed the protocol to follow up for up to one year after the second dose. The total follow-up will last up to 13 months from the start of the trial, focusing on both safety and the durability of the immune response.

Got it. And are the Phase 1 trials in South Korea and China have the same protocol as the U.S. Phase 1 trial? And can you tell us how many patients were being rolled into China Phase 1 trial?

Yeah. So both South Korea trial and China trial of INO-4800, their Phase 1 portions are very much similar to our initial 40% cohort of Phase 1 studies. So it's similar in design. Where it would differ is the intent and the sizing of the Phase 2 portions of those trials. So in China, the Phase 2 trial is estimated to be in several hundred patients, subjects. In South Korea, we're looking to expand into the older population in larger numbers. So they're trying to broaden our database of safety and immunogenicity and overall value to the franchise globally.

Got it. And I think you previously mentioned that you would enroll healthcare workers in the Phase 3 trial of INO-4800. With so many candidates entering Phase 3 trials in the second half of this year, do you think there's going to be a competition for enrollment of the subjects in pivotal trials?

Yes, that's a great question, Yi. I believe all the trials we’re discussing will take place in the U.S. Given the current outbreak and the heightened concerns nationwide and globally, I don't think we'll face significant limitations in finding volunteers for the Phase 3 trials. There are some practical limitations, though. The first six or seven vaccines shouldn't have any trouble enrolling participants. However, if you're the 28th vaccine entering Phase 3, you might encounter some availability issues. Still, I don’t anticipate any challenges in enrolling participants because the pandemic is affecting us all and is a prominent topic in the news. Therefore, I expect enthusiasm for volunteering in these trials to remain high for the foreseeable future.

Got it. And lastly, could you give us some color on the enrollment status for the REVEAL 2 trial?

The pandemic certainly affected our REVEAL 2 trials. Like all global clinical trials, being locked down at home made it difficult to access trial sites. As we navigate this situation, we have a dedicated team and our contract research organization working tirelessly to continue our efforts and potentially return to pre-pandemic enrollment rates. I can't provide specific numbers, but I can say that the pandemic is impacting our enrollment rate, and we are doing everything we can to address this.

Hi, Joe and team. Thanks for taking my questions.

Hey, Charles. Yes.

Yeah, unfortunately, I stepped on to the call late. So I apologize if some of these questions have been asked. I wanted to first of all get an understanding of when would you anticipate some additional data details from the Phase 1. And then when you consider the Phase 2/3 patient cohort would you include older adults in that study? Or do you have a separate study going on that could read out before then?

Yes, absolutely. We are currently in the peer review process for the Phase 1 data at one of the top medical journals. We hope to complete this soon and publish the full report, including detailed information on safety, immunogenicity, and tolerability from the first 40 subjects. Regarding age groups, we believe our vaccine is particularly suitable for those at higher risk of COVID-19, specifically older populations and individuals with co-morbidities. We have already expanded our Phase 1 studies to include participants up to 65 years and older, and we expect to have that data in the next one to two months. As for Phase 2/3, it will encompass all age groups, including those aged 18 to 50, which was part of the original cohort, as well as individuals aged 51 and older.

Okay. That's fabulous. And when you consider longer-term safety of any of these COVID vaccines, I guess, I'm wondering when do you think it's best to evaluate that? I know I'm asking you to speculate here, but what would you look for out of longer-term safety? And how will you gain comfort with that for broader licensure and access?

Yes. If you examine the ongoing Phase 3 trials, specifically Moderna's, they have a two-year evaluation period for their Phase 3. The long-term safety could be assessed over one to two years regarding the vaccine's immune response, its effectiveness in preventing infection or disease, or its impact on disease severity, which are the primary and secondary efficacy endpoints. Long-term safety that can be monitored is also quite valuable. In early Phase 1 and Phase 2a clinical trials, the focus is primarily on tolerability and acute reactogenicity grades 1, 2, and 3. It's exciting that INO-4800, as mentioned by Kate, had only six related adverse events, all of which were grade 1 in severity. This performance compares very favorably to conventional vaccines currently available. When considering other candidates, some are in Phase 2 and Phase 3 trials for COVID-19. What stands out about INO-4800 and Inovio's DNA medicines platform is that we can generate both balanced neutralizing antibodies and T-cell immune responses. Furthermore, all participants in Phase 1 exhibited either humoral or T-cell responses, which is quite promising. It's crucial that we generate these T-cell immune responses, which are increasingly recognized as vital against SARS-CoV-2 and COVID-19 disease. Additionally, our DNA vaccine is notably stable. It can be stored at normal refrigeration for up to five years and can remain effective at room temperature for over a year, providing a significant advantage over other vaccines requiring rigorous cold chain maintenance.

Joe your answer just addressed many of the other questions that I had. I just had two more and I'll throw them into one so you can address those and that is really related to capacity and its capacity not only to conduct a Phase 2/3. And I think you're probably still talking about a 20,000, 30,000-patient study on the upper end but I'm wondering if you could provide some color on that. And then with regard to capacity the other capacity and that is manufacturing some folks have wondered about logistics and manufacturing capacity that you may or may not have and I'm wondering how you solve for that problem and fund it.

Let me discuss the first point and then I'll hand over to Dr. Jackie Shea for the manufacturing details. Regarding our Phase 2/3 clinical trials, we already have all the vaccine doses and devices needed for the trial. Our focus now is on securing external funding to support this effort, and we anticipate that the funding information will be available around the same time we receive FDA approval to advance to our Phase 2/3 trials. Additionally, we have made significant strides in the past quarter by establishing a global manufacturing consortium. Now, I will turn it over to Dr. Shea for more detailed discussion.

Thank you, Joseph. To address your question in parts, we already have the doses manufactured that we need for our ongoing clinical studies, including the upcoming Phase 2/3. Regarding long-term supply and the ability to produce hundreds of millions of doses, we identified this need early on, as far back as January. We understood that we needed to approach manufacturing in a novel and different way. Similar to other companies that have formed manufacturing consortiums for their vaccines, we have also adopted this strategy with INO-4800. We've mentioned some of our manufacturing partnerships, like those with Richter Helm and Ology. In the next few months, we will be announcing additional manufacturing partnerships based in the U.S. and Europe, and we are now also exploring options beyond these regions.

Very good. Thanks for taking my questions. Good luck for the future.

Thank you.

Thank you. Good afternoon, everyone. Congratulations with the progress this quarter. So first question I have is about the potential anticipated pricing assumptions given 1 million this year, 100 million next year and how close that would be to something that was already announced by the competition.

Well, I'm going to also turn this question – this is a very important question, and pricing at mass large-scale commercial scale is something that is very important to the world but also important to Inovio. So I'm going to turn over to Jackie in this regard as well.

Thank you, Joseph. I think what I can say about pricing at this stage is that these vaccines need to be affordable and accessible and we're confident at the scale that we're trying to produce that we will be in a similar ballpark to many of the other leading vaccines. But I'm afraid at this stage, that's all I can say.

Great. I appreciate that. Another question I have is that you mentioned in the press release 100% demonstrated overall immune responses 95% are converted. 90% had T-cell responses including CD8+. Could you give us a breakdown of the percentage of patients who show CD8+ responses and how important in your opinion are those responses for this vaccine?

Yeah. A great question. I think the true granular detail you may have to wait for the actual publication post peer review. But what I can tell you is CD8 T-cells are important overall classically as an antiviral response, but specifically also against SARS-CoV-2. We as the field are learning that there's a couple of ways that the body's immune system is responding to actual SARS-CoV-2 infection. One is through neutralizing antibodies that takes out the virus and limiting the infections and the spread. The other is once the virus is already in the cell, there's only one way to extricate them and those are predominantly through killer CD8 T-cell response with some aspects of the CH1 type of CD4 response. But so in our publication, we have measured in our Phase 1 subjects in terms of the T-cells both the CD8 and CD4 T cell responses. And not surprisingly, we were able to observe strong levels of CD8 T-cell response along with CD4. So these are similar to what we have published in our vaccine against Ebola and MERS and HIV previously. So that part wasn't surprising. I think what we were gratified and satisfied was the level and the fact that we can see it in the COVID-19 setting. So it really goes to the powerful consistencies that we are having across our pipeline efforts.

All right. I appreciate the responses. And another question, I got is so how should we think about annual production of INO-4800 post 2021? I know it's a little bit early but from a demand and capacity standpoint. And in general, do you think it would be annual kind of repetitive revenue just like production of flu vaccines?

Yeah, I think so. At least in the first several years, I do think this is – it's going to require – but let me put it this way. All of the early manufacturers, who get their vaccines approved, I think we will collectively sell everything that we manufacture globally. And then depending on the durability of the vaccine protective response most KOLs are saying that it's most likely that vaccine durability is not going to be multiyear long. It would likely mirror the natural infection immune response, which in many cases are only several months when it comes to antibodies. The T-cell responses could be more durable. So I think that's where Inovio's vaccine could have some immunologic advantage. But also, Kate mentioned – touched on this earlier. We can boost our vaccine almost infinitely. In our cancer therapies and vaccine studies, our patients receive up to a dozen or more doses without any safety or tolerability issues or without any anti-vector response, and this isn't something that you can say that with other platforms that are going after COVID-19. In terms of overall production, our immediate goal for 2021 is 100 million doses. As soon as we achieve that consortium manufacturing capacity, then we'll go up to 200 million doses and so on. So our current projection is because of our attributes of INO-4800 that I had described earlier, we think we could pretty much sell and supply as many doses as we can manufacture. So our focus where Jackie's teams are truly focused on is how do we get to those hundreds of millions of dose levels both in plasma manufacturing and device and race manufacturing, and I'm really excited to tell the Street that we're making great progress, and we should be able to fulfill our goal for 2021 and beyond.

Thank you. Thank you. And the last question is, if we assume that you're going to start the trial in September, so when do you expect INO-4800 to be approved via probably emergency use authorization? What's the earliest that you would think of in terms of approval?

Yes. We think sometime in 2021. The Phase 3 portion, we will likely build in interim looks. But also it really depends on the infection rates at the time of our Phase 3 recruitment. So all of these things will come into play. But if we sort of transpose what's going on today, where there are quite a bit of infections across the country, if we think this is going to sustain over some time, we think the emergency use authorization through early efficacy look along with immune responses, hopefully having some correlates of that can be generated, immunological correlates, we think 2021 sometime is a logical projection for an EUA approval. Actual BLA could take years or beyond that due to the follow-up in safety and all of those things that we touched on earlier.

Hi, Joseph. Congratulations on the progress. Most of my questions have already been answered, but I just wanted to clarify something you've mentioned. I'm interested in your thoughts on neutralizing antibodies and T-cell responses concerning INO-4800. In one of your previous press releases, you referenced a publication on convalescent data that suggests reduced or low antibody titers. Are you weighing T-cell responses more heavily than the others? What are your thoughts on this?

Thank you, Naureen. The ongoing reports from the field, especially from studies involving convalescent subjects, indicate that T cells are significantly limiting the severity of natural infections in these individuals. Naive individuals should not have pre-existing T cells in their bodies. An important paper from the Rockefeller Group and others continues to support this, along with publications from China and Europe presenting similar data. For instance, in the case of the USS Roosevelt, where many sailors were infected, numerous individuals tested negative for antibodies but positive through PCR tests. This raises the question of how asymptomatic individuals can fend off the infection. These studies suggest that cross-reactive T cells, as mentioned by Kate in the prepared remarks, are likely a key factor. While we acknowledge the importance of neutralizing antibodies, they do not last long. We have consistently asserted that generating immune responses from vaccines that balance neutralizing antibodies with CD8 and CD4 T cell responses provides the most effective defense against potential infections and COVID-19. The data we have from our studies, along with convalescent data from the field, supports this view.

Got it. And then just one quick one. You're also participating in the non-human primate study for Operation Warp Speed. Has there been any guidance to when that data will become available?

When we know the schedules of our non-human primate studies and whether this will all be presented together with the OWS, we will discuss it with OWS, but it should be in the next few months.

Okay. And then you have INO-4800 taking center stage, and you have VGX-3100. But are you deprioritizing any other programs because of that?

No. The investor sentiments, in terms of questions and focus, have been centered around 4800, which is completely understandable. As a company, we are dedicating significant focus and resources to that. However, as I mentioned earlier in the call, VGX-3100, our pivotal top line efficacy data, our first Phase 3 data, is on the horizon and I'm very excited about it. INO-5401, in any other year, excluding the COVID-19 pandemic, we would be discussing the outstanding OS12 data presented at ASCO, showing 85% survival at 12 months compared to the mid-60% for standard-of-care. With OS18 coming up in November at a cancer conference, we are eagerly anticipating that presentation from a robust study involving 52 patients. I would be remiss not to highlight our orphan designated INO-3107, which we believe holds significant value for patients and potential high value for our shareholders as a first non-surgical therapy. If successful, it would provide a new option for those enduring the burden of multiple surgeries each year. It’s exciting that INOVIO is taking the lead in delivering innovative therapies in this area. We have non-surgical immunotherapies for cervical dysplasia, anal and vulvar dysplasia, and novel immunotherapy treatments for the difficult-to-treat GBM and for other severe conditions like RRP. INOVIO is committed to delivering these essential products to patients who need them. I can confidently say that we haven’t slowed down any initiatives; rather, we have concentrated and invested significantly in our COVID-19 vaccine. We are enthusiastic about all these aspects of INOVIO's work. We are advancing new therapies where practical solutions were previously lacking for RRP, GBM, and VGX-3100 indications while also addressing the enormous challenge posed by the pandemic. Though we might wish to progress more swiftly, our team is working tirelessly to achieve these goals. I believe that 2020 will be a groundbreaking year, as I stated at the beginning of the year, and I stand by that expectation. By the end of this year, we will reflect on INOVIO's crucial role in addressing not only the pandemic but also all the other pipeline diseases we aim to provide new treatments for.

Got it. Yeah, that was very helpful. Congrats again on the progress.

Thank you, Naureen.

And our next question will come from Chris Raymond with Piper Sandler. Please go ahead.

Hey, thanks for letting me ask a question. So I just wonder about the progress.

Hi, Chris.

Hi, Joseph. So I just want to make sure I understand the math. Back on I guess it was the 30th of June you guys in that Phase 1 cohort noted 34 of 36 participants had demonstrated overall immunological responses. And I think I heard you say, it's now 38 of 38. So I guess the question, I just wanted to make sure I understand what's going on with the patient numbers. Did you enroll more patients? Because I think there were a couple of patients as I remember that dropped out because they were COVID positive. Just help us understand the bridge from the dataset on the 30th to now please. Thanks.

Yeah. Thanks for that question. And certainly, this requires some clarification. No, we haven't added any more subjects to the dataset, but we have the luxury of having additional time to rerun those samples, and where samples are unavailable find the next time point. So looking at holistically both in week six and week eight, we're able to make those response judgments a little more wisely. Now of the 40, one person did drop out totally unrelated to the vaccination or the trial. She just can't find the transportation to the sites. So that's one person. And one person did confirm consistently to have at a baseline antibody responses to nuclear protein and other viral proteins indicating that he/she was previously exposed to SARS-CoV-2. All the other 38 people we were able to evaluate their immune responses. So where we have positioned preliminary immune response on June 30 we have a lot more data to be more confirmatory in all 38 subjects who are available for evaluating in this first two cohort study.

I'm sorry, but were those COVID positive patients included?

No. One person was confirmed and so we did not include that person into the evaluation because they had very high baseline immune responses at entry. So one person dropped for unrelated reason, one person was COVID positive. So that's 38.

Oh, I'm sorry your press release on the 30th talk. I think you talked to three patients being excluded due to prior COVID.

So two persons were suspected and ended up not being confirmed, so again that's why we say preliminary analysis on those things.

And this will conclude our question-and-answer session. I'd like to turn the conference back over to Joseph Kim for any closing remarks.

Great. Thank you very much. We look forward to staying in touch obviously and sharing more updates on our COVID-19 studies, as well as all of the other important milestones including REVEAL and GBM OS18 data. So please stay tuned. Have a great night and stay safe. Thank you very much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.