- Inovio Pharmaceuticals will lay off approximately 80 employees, cut back on spending and drop several research programs in an effort to extend the time it can fund operations.
- Most notably, a Phase 1/2 study in bladder cancer will be discontinued, while a number of unspecified early-stage R&D programs will also be cut. Inovio will instead focus resources on its more advanced clinical candidates, including an immunotherapy aimed at cervical dysplasia and an human papillomavirus-associated rare disease.
- The planned layoffs represent 28% of Inovio's workforce, which numbered just over 280 at the end of March. Inovio CEO J. Joseph Kim said Wednesday the cuts would come from across the organization, but predominantly affect staff associated with now-discontinued research.
Inovio's company-wide restructuring follows changes to the biotech's executive team in March, when Chief Medical Officer Mark Bagarazzi departed and a medical council of three vice presidents was formed in his place.
As a result of the planned 25% reduction in Inovio's annual cash burn, the biotech now anticipates being able to fund operations in 2021, although the staff continuing with the company will be substantially fewer.
Inovio reported using $32 million in net cash to fund operating activities over the first three months of 2019, and had roughly $128 million in cash and equivalents as of the end of March.
"We're certainly not a huge organization, but we felt that we can do things more efficiently and more productively across the organization, and we think we have achieved that," said Inovio's Kim on a Wednesday conference call with analysts.
Among the changes, Inovio opted to discontinue a Phase 1/2 study of its experimental immunotherapy INO-5401 in advanced bladder cancer. Kim cited the program's high cost as well as a market made more competitive by the recent approval of Johnson & Johnson's Balversa (erdafitinib) and positive data from Seattle Genetics' enfortumab vedotin.
Given those changes, Wall Street analysts viewed the decision to stop further research as unsurprising.
Yet Piper Jaffray's Christopher Raymond did make note of several delays to Inovio's remaining clinical programs, changes that led the bank to lower its price target for the company to $10 per share. After sliding 14% in Wednesday morning trading, Inovio stock was trading at around $2.60 a share.
Raymond highlighted slower-than-expected enrollment into Inovio's REVEAL 1 and 2 studies of its lead asset VGX-3100 for cervical dysplasia caused by HPV. Data from the second study is now not expected until 2021, the analyst said.
"These delays don’t exactly bolster our confidence in a timely 2021 VGX-3100 BLA filing," wrote Piper Jaffray analyst Christopher Raymond in a Wednesday note to investors, referring to an application for U.S. approval of that drug.
Results could also come later from a Phase 2 study of a drug Inovio has partnered with AstraZeneca in head and neck cancer. While Inovio hopes data could be presented as soon as the American Association of Cancer Research's annual meeting next April, the company noted in its statement that AstraZeneca estimates completion of the study by August 2020.