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What changed in INOVIO PHARMACEUTICALS, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of INOVIO PHARMACEUTICALS, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+511 added−511 removedSource: 10-K (2024-03-06) vs 10-K (2023-03-01)

Top changes in INOVIO PHARMACEUTICALS, INC.'s 2023 10-K

511 paragraphs added · 511 removed · 344 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

131 edited+61 added−91 removed134 unchanged
Biggest changeWe are currently pursuing third-party sponsored and funded development of this candidate, but there can be no assurance that it will ever receive regulatory approval as a vaccine booster in any country, whether by Emergency Use Authorization or otherwise. • DNA medicines are a novel approach to treating and preventing disease, and negative perception of the efficacy, safety, or tolerability of any investigational medicines we develop could adversely affect our ability to conduct our business, advance our investigational medicines, or obtain regulatory approvals. • If we and the contract manufacturers upon whom we rely fail to produce our proprietary smart devices and DNA medicine candidates in the volumes that we require on a timely basis, or at all, or if these contractors fail to comply with their obligations to us or with stringent regulations, we may face delays in the development and commercialization of our proprietary smart devices and DNA medicine candidates. • If we lose or are unable to secure collaborators or partners, or if our collaborators or partners do not apply adequate resources to their relationships with us, our product development and potential for profitability will suffer. • We have agreements with government agencies, which are subject to termination and uncertain future funding, which could have a negative impact on our ability to develop certain of our pipeline candidates and/or require us to seek alternative funding sources to advance product candidates. 2 • Our operating results may be harmed if our restructuring plans do not achieve the anticipated results or cause undesirable consequences. • We are currently subject to litigation and may become subject to additional litigation, which could harm our business, financial condition and reputation. • We face intense and increasing competition and steps taken by our competitors, such as the introduction of a new, disruptive technology may impede our ability to successfully commercialize our DNA medicines, if approved. • We have entered into collaborations with Chinese companies and conduct certain research and development activities in China.
Biggest changeThese risk factors include, but are not limited to, the following: • We have incurred significant losses in recent years, expect to incur significant net losses in the foreseeable future and may never become profitable. • We have limited sources of revenue and our success is dependent on our ability to develop our DNA medicines and proprietary device technology. • We will need substantial additional capital to develop our DNA medicines and proprietary device technology, which may prove difficult or costly to obtain. • None of our DNA medicine candidates have been approved for sale, and we may never develop commercially successful DNA medicine products. • DNA medicines are a novel approach to treating and preventing disease, and our CELLECTRA ® delivery devices are a novel approach to administering medicines, and negative perception of the efficacy, safety, or tolerability of any investigational medicines we develop or our devices could adversely affect our ability to conduct our business, advance our investigational medicines, or obtain regulatory approvals. • If we and the contract manufacturers upon whom we rely fail to produce our proprietary devices and DNA medicine candidates in the volumes that we require on a timely basis, or at all, or if these contractors fail to comply with their obligations to us or with stringent regulations, we may face delays in the development and commercialization of our proprietary devices and DNA medicine candidates. • If we lose or are unable to secure collaborators or partners, or if our collaborators or partners do not apply adequate resources to their relationships with us, our product development and potential for profitability will suffer. • We have agreements with government agencies that are subject to termination and uncertain future funding.
We have generated immune responses, including CD4 + , CD8 + , and memory T cells, with SynCon-designed DNA medicines against various tumor-associated antigens, as well as against different strains of certain infectious diseases in human clinical trials. Because the engineered SynCon sequences are substantially similar to the original sequences, without matching them exactly, we believe they are patentable.
We have generated immune responses, including CD4+, CD8+, and memory T cells, with SynCon-designed DNA medicines against various tumor-associated antigens, as well as against different strains of certain infectious diseases in human clinical trials. Because the engineered sequences are substantially similar to the original sequences, without matching them exactly, we believe they are patentable.
Foreign Corrupt Practices Act, which, among other things, prohibits companies issuing stock in the U.S. from bribing foreign officials for government contracts and other business; and • state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers, state and local laws requiring the registration of pharmaceutical sales and medical representatives, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts; and • additional state and local laws such as laws in California and Massachusetts, which mandate implementation of compliance programs, compliance with industry ethics codes, and spending limits, and other state and local laws, such as laws in Vermont, Maine, and Minnesota which require reporting to state governments of gifts, compensation, and other remuneration to physicians.
Foreign Corrupt Practices Act, which, among other things, prohibits companies issuing stock in the U.S. from bribing foreign officials for government contracts and other business; • state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers, state and local laws requiring the registration of pharmaceutical sales and medical representatives, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts; and • additional state and local laws such as laws in California and Massachusetts, which mandate implementation of compliance programs, compliance with industry ethics codes, and spending limits, and other state and local laws, such as laws in Vermont, Maine, and Minnesota which require reporting to state governments of gifts, compensation, and other remuneration to physicians.
The process required by the FDA before a biologic may be marketed in the United States generally involves the following: • completion of extensive nonclinical, sometimes referred to as pre-clinical laboratory tests, pre-clinical animal studies and formulation studies in accordance with applicable regulations, including the FDA’s Good Laboratory Practice, or GLP, regulations; • submission to the FDA of an IND, which must become effective before human clinical trials may begin; • performance of adequate and well-controlled human clinical trials in accordance with applicable IND and other clinical trial-related regulations, sometimes referred to as good clinical practices, or GCPs, to establish the safety and efficacy of the proposed product candidate for its proposed indication; • submission to the FDA of a BLA; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the product is produced to assess compliance with the FDA’s current good manufacturing practice, or cGMP, requirements to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality, purity and potency; • potential FDA audit of the pre-clinical and/or clinical trial sites that generated the data in support of the BLA; and • FDA review and approval of the BLA prior to any commercial marketing or sale of the product in the United States.
The process required by the FDA before a biologic may be marketed in the United States generally involves the following: 14 • completion of extensive nonclinical, sometimes referred to as pre-clinical laboratory tests, pre-clinical animal studies and formulation studies in accordance with applicable regulations, including the FDA’s Good Laboratory Practice, or GLP, regulations; • submission to the FDA of an IND, which must become effective before human clinical trials may begin; • performance of adequate and well-controlled human clinical trials in accordance with applicable IND and other clinical trial-related regulations, sometimes referred to as good clinical practices, or GCPs, to establish the safety and efficacy of the proposed product candidate for its proposed indication; • submission to the FDA of a BLA; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the product is produced to assess compliance with the FDA’s current good manufacturing practice, or cGMP, requirements to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality, purity and potency; • potential FDA audit of the pre-clinical and/or clinical trial sites that generated the data in support of the BLA; and • FDA review and approval of the BLA prior to any commercial marketing or sale of the product in the United States.
If a pharmaceutical company’s operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to it, it may be 22 subject to significant penalties, including administrative, civil and criminal penalties, damages, fines, disgorgement, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, imprisonment, integrity and/or other oversight obligations, contractual damages, reputational harm and the curtailment or restructuring of operations.
If a pharmaceutical company’s operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to it, it may be subject to significant penalties, including administrative, civil and criminal penalties, damages, fines, disgorgement, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, imprisonment, integrity and/or other oversight obligations, contractual damages, reputational harm and the curtailment or restructuring of operations.
The primary endpoint of the trial was histologic clearance of the high-grade lesions and virologic clearance of the HPV-16/18 virus in anal/perianal tissue samples. In December 2020, we announced Phase 2 efficacy results from this trial. One-half of participants treated with VGX-3100 (11/22) showed resolution of HPV-16/18-associated anal HSIL at six months following the start of treatment.
The primary endpoint of the trial was histologic clearance of the high-grade lesions and virologic clearance of the HPV-16/18 virus in anal/perianal tissue samples. In December 2020, we announced Phase 2 efficacy results from this trial. 8 One-half of participants treated with VGX-3100 (11/22) showed resolution of HPV-16/18-associated anal HSIL at six months following the start of treatment.
At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
At the state level, legislatures have increasingly passed legislation and implemented 19 regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
Sponsors of certain clinical trials of FDA-regulated products, including biologics, are required to register and 17 disclose specified clinical trial information, which is publicly available at www.clinicaltrials.gov. Information related to the product, patient population, phase of investigation, trial sites and investigators, and other aspects of the clinical trial is then made public as part of the registration.
Sponsors of certain clinical trials of FDA-regulated products, including biologics, are required to register and disclose specified clinical trial information, which is publicly available at www.clinicaltrials.gov. Information related to the product, patient population, phase of investigation, trial sites and investigators, and other aspects of the clinical trial is then made public as part of the registration.
Viral Vaccine Delivery This technology utilizes a virus as a carrier, or vector, to deliver genetic material into target cells. The method is efficient for delivering immunotherapy antigens and has the advantage of mimicking real viral infection so that the recipient will mount a broad immune response against the immunotherapy.
Viral Vector-based Vaccine Delivery This technology utilizes a virus as a carrier, or vector, to deliver genetic material into target cells. The method is efficient for delivering immunotherapy antigens and has the advantage of mimicking real viral infection so that the recipient will mount a broad immune response against the immunotherapy.
Other Regulations We also are subject to various federal, state and local laws, regulations, and recommendations relating to safe working conditions, laboratory and manufacturing practices, the experimental use of animals, and the use and disposal of hazardous or potentially hazardous substances, including radioactive compounds and infectious disease agents, used in connection with our research.
Other Regulations We also are subject to various federal, state and local laws, regulations, and recommendations relating to safe working conditions, laboratory and manufacturing practices, the experimental use of animals, and the use and disposal of hazardous or potentially hazardous substances, including radioactive compounds and infectious disease agents, used in connection with our 20 research.
Furthermore, changes in, or different interpretations of, patent laws in the United States and other countries may result in patent laws that allow others to use our discoveries or develop and commercialize our products. We cannot guarantee that the patents we obtain or the unpatented technology we hold will afford us significant commercial protection.
Furthermore, changes in, or different interpretations of, patent laws 13 in the United States and other countries may result in patent laws that allow others to use our discoveries or develop and commercialize our products. We cannot guarantee that the patents we obtain or the unpatented technology we hold will afford us significant commercial protection.
Phase 3 clinical trials may include comparisons with placebo and/or other comparator treatments. The duration of treatment is often extended to mimic the actual use of a product during marketing. Generally, two adequate and well-controlled Phase 3 clinical trials are required by the FDA for approval of a BLA.
Phase 3 clinical trials may include comparisons with placebo and/or other 15 comparator treatments. The duration of treatment is often extended to mimic the actual use of a product during marketing. Generally, two adequate and well-controlled Phase 3 clinical trials are required by the FDA for approval of a BLA.
Moreover, the constituent parts of a combination product retain their regulatory status, for example, as a biologic or device, and as such, we may be subject to additional requirements in the Quality System Regulation, or QSR, applicable to medical devices, such as design controls, purchasing controls, and corrective and preventive action.
Moreover, the constituent parts of a combination product retain their regulatory status, for example, as a biologic or device, and as such, we may be subject to additional requirements in the Quality System Regulation, or QSR, applicable to 17 medical devices, such as design controls, purchasing controls, and corrective and preventive action.
We believe our plasmids can be produced in commercial quantities through uniform methods of fermentation and processing that are applicable to all plasmids. We believe we will be able to obtain sufficient supplies of plasmids for all foreseeable clinical investigations. Intellectual Property 14 Patents and other proprietary rights are essential to our business.
We believe our plasmids can be produced in commercial quantities through uniform methods of fermentation and processing that are applicable to all plasmids. We believe we will be able to obtain sufficient supplies of plasmids for all foreseeable clinical investigations. Intellectual Property Patents and other proprietary rights are essential to our business.
The environmental, health and safety team stays abreast of local, regional and global concerns and trends and ensures safety procedures are in place to mitigate workplace injuries and safety risks. Employees are required to complete training in various safety procedures for the laboratories and manufacturing facilities and specialized safety training based on particular job duties.
Our environmental, health and safety team stays abreast of local, regional and global concerns and trends and ensures safety procedures are in place to mitigate workplace injuries and safety risks. Employees are required to complete training in various safety procedures for the laboratories and manufacturing facilities and specialized safety training based on particular job duties.
The review process is often significantly extended by FDA requests for 18 additional information or clarification. If not accepted for filing, the sponsor must resubmit the BLA and begin the FDA’s review process again, including the initial 60-day review to determine if the application is sufficiently complete to permit substantive review.
The review process is often significantly extended by FDA requests for additional information or clarification. If not accepted for filing, the sponsor must resubmit the BLA and begin the FDA’s review process again, including the initial 60-day review to determine if the application is sufficiently complete to permit substantive review.
Products or service names of other companies mentioned in this Annual Report may be trademarks or registered trademarks of their respective owners. References herein to “we,” “our,” “us,” “INOVIO” or the “Company” refer to INOVIO Pharmaceuticals, Inc. and its subsidiaries.
Products or service names of other companies mentioned in this Annual Report may be trademarks or registered trademarks of their respective owners. References herein to “we,” “our,” “us,” “INOVIO” or the “Company” refer to INOVIO Pharmaceuticals, Inc. and its consolidated subsidiaries.
The FDA recommended using REVEAL2 as an exploratory trial and that conducting one or two additional well-controlled trials in the biomarker-selected population would be more likely to provide evidence to support approval of a marketing application.
The FDA recommended using REVEAL2 as an exploratory trial and that conducting one or two additional well-controlled trials in the biomarker-selected population would be more likely to provide evidence to support approval of a potential marketing application.
T Cell Responses: DNA medicines have demonstrated the ability to generate high levels of T cell (CD4 + , CD8 + , and memory) response along with antibody response. CD8 + T cell responses are thought to play an important role in clearing tumors or infected cells. b.
T Cell Responses: DNA medicines have demonstrated the ability to generate high levels of T cell (CD4+, CD8+, and memory) response along with antibody response. CD8+ T cell responses are thought to play an important role in clearing tumors or virally infected cells. b.
Department of Health and Human Services, or HHS, released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of 21 potential legislative policies that Congress could pursue to advance these principles.
Department of Health and Human Services, or HHS, released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue to advance these principles.
Further, if a patent infringement suit were brought against us, we could be forced to stop or delay research, development, manufacturing or sales of the product or biologic 15 drug candidate that is the subject of the suit.
Further, if a patent infringement suit were brought against us, we could be forced to stop or delay research, development, manufacturing or sales of the product or biologic drug candidate that is the subject of the suit.
Healthcare Reform 20 In both the United States and certain foreign jurisdictions there have been, and continue to be, a number of legislative and regulatory changes to the healthcare system that impact the ability to sell pharmaceutical products profitably.
Healthcare Reform In both the United States and certain foreign jurisdictions there have been, and continue to be, a number of legislative and regulatory changes to the healthcare system that impact the ability to sell pharmaceutical products profitably.
Our competitive position will be affected by the disease indications addressed by our product candidates and those of our competitors, the timing of market introduction for these products and the stage of development of other technologies to address these disease indications.
Our competitive position will be affected by the disease indications addressed by our product candidates versus those of our competitors, the timing of market introduction for these products and the stage of development of other technologies to address these disease indications.
The trials are designed to evaluate safety, tolerability and immunogenicity of INO-4800 as a homologous booster where INO-4800 was administered as the primary vaccine and as a heterologous booster where an inactivated vaccine was administered as the primary vaccine.
The trials are designed to evaluate safety, tolerability and immunogenicity of INO-4800 as a 9 homologous booster where INO-4800 was administered as the primary vaccine and as a heterologous booster where an inactivated vaccine was administered as the primary vaccine.
In July 2022, Wistar announced the dosing of the first participant in a Phase 1, open-label, single-center, 24-person dose escalation trial to evaluate the safety, tolerability and pharmacokinetic profile of two of our mAb product candidates , administered IM followed immediately by electroporation using our CELLECTRA 2000 device in a 1- and 2-dose regimen (Days 0 and 3) in healthy adults (NCT05293249).
In July 2022, Wistar announced the dosing of the first participant in a Phase 1, open-label, single-center, dose escalation trial to evaluate the safety, tolerability and pharmacokinetic profile of two of our mAb product candidates, administered IM followed immediately by electroporation using our CELLECTRA 2000 device in a 1- and 2-dose regimen (Days 0 and 3) in healthy adults (NCT05293249).
We also compete more specifically with companies seeking to utilize antigen-encoding DNA delivered with electroporation or other delivery technologies such as viral vectors or lipid vectors to induce in vivo generated antigen 13 production and immune responses to prevent or treat various diseases. These competitive technologies have shown promise, but they each also have their unique obstacles to overcome.
We also compete more specifically with companies seeking to utilize antigen-encoding DNA delivered with electroporation or other delivery technologies such as viral vectors or lipid delivery to induce in vivo generated antigen production and immune responses to prevent or treat various diseases. These competitive technologies have shown promise, but they each also have their own unique obstacles to overcome.
On August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, included reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute will remain in effect until 2031 unless additional Congressional action is taken.
In August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, included reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute will remain in effect until 2032 unless additional Congressional action is taken.
We believe these design capabilities allow us to better target appropriate immune system mechanisms and produce a higher level of antigen expression compared to traditional approaches, potentially enhancing the overall ability to induce the desired immune response. The plasmids are then manufactured in a bacterial fermentation process using scalable manufacturing technology.
We believe these design capabilities allow us to better target appropriate immune system mechanisms and produce a higher level of protein expression compared to traditional approaches, potentially enhancing the overall ability to induce the desired immune response. The plasmids are then manufactured in a bacterial fermentation process using scalable manufacturing technology.
We are aware of various established enterprises, including major pharmaceutical companies, broadly engaged in vaccine/immunotherapy research and development. These include AbbVie, AstraZeneca, BioNTech, Bristol-Myers Squibb, GlaxoSmithKline plc, Janssen Pharmaceuticals (part of J&J), Merck, Moderna, Novartis, Pfizer, Roche, and Sanofi-Aventis.
We are aware of various established enterprises, including major bio-pharmaceutical companies, broadly engaged in vaccine/immunotherapy research and development. These include AbbVie, AstraZeneca, BioNTech, Bristol-Myers Squibb, GlaxoSmithKline, Janssen Pharmaceuticals (part of J&J), Merck, Moderna, Novartis, Pfizer, Roche, and Sanofi-Aventis.
In April 2022, the trial protocol was amended to utilize a biomarker-selected population as the primary population, based on prior analysis of REVEAL1 results suggesting that this investigational biomarker had the potential to identify women more likely to respond to treatment with VGX-3100.
In April 2022, the trial protocol for REVEAL2 was amended to utilize a biomarker-selected population as the primary population, based on prior analysis of REVEAL1 results suggesting that this investigational biomarker had the potential to identify women more likely to respond to treatment with VGX-3100.
There is no assurance that the FDA will ultimately approve a product for marketing in the United States and we may encounter significant difficulties or costs during the review process.
There is no assurance that the FDA will ultimately approve a product for marketing in the United States and applicants may encounter significant difficulties or costs during the review process.
We have completed a Phase 1/2 immuno-oncology trial of INO-5401 and INO-9012 (IL-12 plasmid) in participants with newly diagnosed GBM, in combination with cemiplimab (Libtayo ® ), a PD-1 inhibitor developed by Regeneron Pharmaceuticals. This open-label trial began in 2018 and enrolled 52 newly diagnosed GBM participants.
We have completed a Phase 1/2 immuno-oncology trial of INO-5401 and INO-9012 (an IL-12 plasmid) in participants with newly diagnosed GBM, in combination with cemiplimab (Libtayo ® ), a PD-1 immune checkpoint inhibitor developed by Regeneron Pharmaceuticals. This open-label trial began in 2018 and enrolled 52 newly diagnosed GBM participants.
We announced that this trial would no longer be considered to be a pivotal trial and would not lead to a BLA filing for a biomarker-selected population, as the FDA advised us that the biomarker-positive population would not be sufficient to support approval of a potential marketing application for VGX-3100.
We announced that this trial would no longer be considered a pivotal trial and would not lead to a BLA filing for a biomarker-selected population, as the FDA had advised us that the results from the biomarker-positive population would not be sufficient to support approval of a potential marketing application for VGX-3100.
INO-4201 for Ebola Virus Disease The Ebola virus causes one of the most virulent viral diseases, with case fatality rates averaging approximately 50% but approaching up to 90% in past outbreaks in areas with no or under-developed health care.
The study is ongoing. INO-4201 for Ebola Virus Disease The Ebola virus causes one of the most virulent viral diseases, with case fatality rates averaging approximately 50% but approaching up to 90% in past outbreaks in areas with no or under-developed health care.
Approximately one-half of our workforce is comprised of women and approximately one-half is comprised of individuals with ethnically diverse backgrounds. In addition, four of the eight members of our board of directors are women. None of our employees are subject to collective bargaining agreements. We con sider our relationship with our employees to be good.
Approximately one-half of our workforce is comprised of women and approximately one-half is comprised of individuals with ethnically diverse backgrounds. In addition, four of the eight members of our board of directors are women. None of our employees are subject to collective bargaining agreements. We consider our relationship with our employees to be good.
Our issued patents directed to our other product candidates expire between about 2023 and 2036 and our pending patent applications, if issued, would expire between about 2027 and 2042. Our issued patents directed to our device delivery systems expire between about 2023 and 2036 and our pending patent applications, if issued, would expire between about 2023 and 2042.
Our issued patents directed to our other product candidates expire between about 2027 and 2036 and our pending patent applications, if issued, would expire between about 2027 and 2042. Our issued patents directed to our device delivery systems expire between about 2024 and 2036 and our pending patent applications, if issued, would expire between about 2024 and 2042.
A distinguishing aspect of RRP is the tendency for the papilloma to recur after surgical procedures to remove them. If RRP develops in the lungs, affected individuals can potentially experience recurrent pneumonia, chronic lung disease (bronchiectasis) and, ultimately, progressive pulmonary failure. In extremely rare cases, RRP can develop into squamous cell carcinoma.
A distinguishing aspect of RRP is the tendency for the papillomas to recur after surgical procedures to remove them. If RRP develops in the lungs, affected individuals can potentially experience recurrent pneumonia, chronic lung disease (bronchiectasis) and, ultimately, progressive pulmonary failure. In extremely rare cases (approximately 2%), RRP can develop into squamous cell carcinoma.
ApolloBio’s obligation to pay royalties will continue for 10 years after the first commercial sale in a particular territory or, if later, until the expiration of the last-to-expire patent covering the licensed products in the specified territory. The License and Collaboration Agreement, once effective, will continue in force until ApolloBio has no remaining royalty obligations.
ApolloBio’s obligation to pay royalties will continue for 10 years after the first commercial sale in a particular territory or, if later, until the expiration of the last-to-expire patent covering the licensed products in the specified territory. After marketing approval in a territory, the License and Collaboration Agreement, will continue in force until ApolloBio has no remaining royalty obligations.
For each antigen, SynCon technology creates a new genetic sequence that represents a nucleotide consensus sequence of the targeted antigen. In doing so, we believe we can create a differentiated SynCon sequence to help the immune system better recognize the target antigen and potentially variations of the target antigen.
For each antigen, we create a new genetic sequence that represents a nucleotide consensus sequence of the targeted antigen. In doing so, we believe we can create a differentiated sequence to help the immune system better recognize the target antigen and potentially variations of the target antigen.
We believe we have competitive advantages over other companies focused on electroporation for multiple reasons: • We have an extensive history and experience in developing the methods and devices that optimize the use of electroporation in conjunction with DNA-based agents.
We believe we have competitive advantages over other companies focused on electroporation for multiple reasons: • We have an extensive history and experience in developing the methods and devices that optimize the use of electroporation in conjunction with DNA medicine.
This experience has been validated with multiple sets of interim data from clinical trials assessing DNA-based immunotherapies and vaccines against cancers and infectious disease. • We have a broad product line of electroporation instruments designed to enable DNA delivery, including our intradermal and intramuscular devices. • We have been proactive in filing for patents, as well as acquiring and licensing additional patents, to expand our global patent estate.
This experience has been validated with multiple sets of data from clinical trials assessing DNA medicine against cancers and infectious disease. • We have a broad product line of electroporation instruments designed to enable DNA delivery, including our intradermal and intramuscular devices. • We have been proactive in filing for patents, as well as acquiring and licensing additional patents, to expand our global patent estate.
This open-label single-arm trial plans to enroll approximately 90 participants who will receive up to four doses of VGX-3100 delivered by CELLECTRA-5PSP smart device. The primary endpoint of the trial is histological regression of high-grade anal lesions to low-grade SIL or normal histology.
This open-label single-arm trial plans to enroll approximately 90 participants who will receive up to four doses of VGX-3100 delivered by CELLECTRA 5PSP. The primary endpoint of the trial is histological regression of high-grade anal lesions to low-grade SIL or normal histology. This study is ongoing.
In the event that VGX-3100 is approved for marketing in these territories, we will be entitled to receive royalty payments based on a tiered percentage of annual net sales, with such percentage being in the low- to mid-teens, subject to reduction in the event of generic competition in a particular territory.
In the event that VGX-3100 is approved for marketing in Greater China, we will be entitled to receive royalty payments based on a tiered percentage of annual net sales, with such percentage being in the low- to mid-teens, subject to reduction in the event of generic competition in a particular territory.
The review and evaluation of a BLA by the FDA is extensive and time consuming and may take longer than originally planned to complete, and we may not receive a timely approval, if at all.
The review and evaluation of a BLA by the FDA is extensive and time consuming and may take longer than originally planned to complete, and an applicant may not receive a timely approval, if at all.
We have completed a Phase 2 clinical trial (HPV-203) to evaluate VGX-3100 in participants who are HIV-negative with histologically confirmed anal or perianal HSIL, or anal intraepithelial neoplasia (AIN), associated with HPV-16 and/or HPV-18. This open-label trial enrolled 24 participants who received three doses of VGX-3100 delivered by our CELLECTRA-5PSP device.
We conducted a Phase 2 clinical trial (HPV-203) to evaluate VGX-3100 in participants who were HIV-negative with histologically confirmed anal or perianal HSIL, or anal intraepithelial neoplasia (AIN), associated with HPV-16 and/or HPV-18. This open-label trial enrolled 24 participants who received three doses of VGX-3100 delivered by our CELLECTRA 5PSP device.
Department of Defense (DoD), HIV Vaccines Trial Network, International Vaccine Institute (IVI), Kaneka Eurogentec, National Cancer Institute (NCI), National Institutes of Health (NIH), National Institute of Allergy and Infectious Diseases (NIAID), the Parker Institute for Cancer Immunotherapy, Plumbline Life Sciences, Regeneron Pharmaceuticals, Richter-Helm BioLogics, Thermo Fisher Scientific, the University of Pennsylvania, the Walter Reed Army Institute of Research, and The Wistar Institute.
Department of Defense (DoD), HIV Vaccines Trial Network, International Vaccine Institute (IVI), Kaneka 10 Eurogentec, National Cancer Institute (NCI), National Institutes of Health (NIH), National Institute of Allergy and Infectious Diseases (NIAID), Plumbline Life Sciences (PLS), Regeneron Pharmaceuticals, Richter-Helm BioLogics, Thermo Fisher Scientific, the University of Pennsylvania, the Walter Reed Army Institute of Research, and The Wistar Institute.
We deliver the plasmid directly into cells of the body using our CELLECTRA smart delivery system, enabling the electroporated cells to manufacture those mAbs in vivo (i.e. by the body itself), unlike conventional mAb technology that requires manufacture outside of the body.
We deliver the plasmid directly into cells of the body using our CELLECTRA delivery system, enabling the electroporated cells to manufacture those DNA-encoded mAbs in vivo (i.e. by the body itself), unlike conventional recombinant mAb technology that requires manufacture outside of the body.
We communicate frequently and transparently with our employees through a variety of communication methods, including video and written communications, town hall meetings, employee surveys and our company intranet, and acknowledge individual contributions to INOVIO through several rewards and recognition initiatives.
We communicate frequently and transparently with our employees through a variety of communication methods, including video and written communications, town hall meetings, employee surveys and our company intranet, and 21 acknowledge individual contributions to our company’s success through several rewards and recognition initiatives.
In the second cohort of 11 patients who were administered INO-3107 via the exploratory side port needle, 10 of the 11 patients (91%) had a reduction in surgical interventions in the year following initial treatment, with measurement beginning at Day 0, the start of trial therapy. Of these 10 patients, four did not require surgery.
In the second cohort of 11 patients who were administered INO-3107 via an exploratory side port needle, 10 of the 11 patients (91%) saw a reduction in surgical interventions in the year following initial treatment, with the measurement beginning on Day 0, the start of trial therapy. Of these 10 patients, four did not require surgery.
We believe these engagement efforts keep employees informed about our strategy, culture and purpose and motivated to do their best work. Health, Safety and Wellness The physical health, financial well-being, life balance and mental health of our employees is vital to our success. In 2021, we launche d a Company-wide comprehensive wellness program inclusive of financial, physical, and mental well-being.
We believe these engagement efforts keep employees informed about our strategy, culture and purpose and motivated to do their best work. Health, Safety and Wellness The physical health, financial well-being, life balance and mental health of our employees is vital to our success. We have a company-wide comprehensive wellness program inclusive of financial, physical, and mental well-being.
INO-3107 for HPV-related Recurrent Respiratory Papillomatosis (RRP) RRP is a life-long, rare disease characterized by the growth of tumors in the respiratory tract primarily caused by HPV-6 and/or HPV-11 genotypes. Although mostly benign, such papillomas can cause severe, sometimes life-threatening airway obstruction and respiratory complications.
INO-3107 for HPV-related RRP RRP is a life-long, rare disease characterized by the growth of small tumors, or papillomas, in the respiratory tract primarily caused by HPV-6 and/or HPV-11 genotypes. Although mostly benign, these papillomas can cause severe, sometimes life-threatening airway obstruction and respiratory complications.
For the combined biomarker-selected population of 92 participants (68 participants in the treatment group, 24 in the placebo group), the percentage of participants meeting the primary endpoint was 54.4% (37/68 in the treatment group, versus 12.5% (3/24) in the placebo group (p= In both REVEAL1 and REVEAL2, VGX-3100 was well-tolerated.
For the combined biomarker-selected population of 92 participants (68 participants in the treatment group, 24 in the placebo group), the percentage of participants meeting the primary endpoint was 54.4% (37/68 in the treatment group, versus 12.5% (3/24) in the placebo group (p= In both REVEAL1 and REVEAL2, VGX-3100 delivered by the CELLECTRA 5PSP device was well tolerated.
VGX-3100 was well-tolerated in the trial. In addition to the Phase 2 anal HSIL trial described above, a separate ongoing Phase 2 trial sponsored by the AIDS Malignancy Consortium (AMC-103) is evaluating VGX-3100 in participants with histologically confirmed anal or perianal HSIL associated with HPV-16 and/or HPV-18 who are HIV-positive.
VGX-3100 delivered by CELLECTRA-5PSP device was well tolerated in the trial. In addition to the Phase 2 anal HSIL trial described above, a separate Phase 2 trial sponsored by the AIDS Malignancy Consortium (AMC-103 study) is evaluating VGX-3100 in participants with histologically confirmed anal or perianal HSIL associated with HPV-16 and/or HPV-18 who are HIV-positive.
The BLA is a request for approval to market the biologic for one or more specified indications and must contain proof of safety, purity, potency and efficacy, which is demonstrated by extensive pre-clinical and clinical testing. The application includes positive findings from pre-clinical and clinical trials as well as ambiguous or negative results.
The BLA is a request for approval to market the biologic in combination with the device, if applicable, for one or more specified indications and must contain proof of safety, purity, potency and efficacy, which is demonstrated by extensive pre-clinical and clinical testing. The application includes positive findings from pre-clinical and clinical trials as well as ambiguous or negative results.
Median OS duration in patients with an unmethylated MGMT promoter (Cohort A) was 17.9 months, which compares favorably to historical comparisons (14.6-16 months). Median OS data in patients with a MGMT methylated promoter (Cohort B), was 32.5 months, which compares favorably to historical comparisons (23.2-25 months).
Median OS duration in patients with an unmethylated MGMT promoter (Cohort A) was 17.9 months, which compared favorably to historical comparisons (between 14.6 and 16 months). Median OS data in patients with an MGMT methylated promoter (Cohort B) was 32.5 months, which also compared favorably to historical comparisons (between 23.2 and 25 months).
There remain judicial and Congressional challenges to certain aspects of the ACA. While Congress has not passed comprehensive repeal legislation, it has enacted laws that modify certain provisions of the ACA such as removing penalties, starting January 1, 2019, for not complying with the ACA’s individual mandate to carry qualifying health insurance coverage for all or part of a year.
While Congress has not passed comprehensive repeal legislation, it has enacted laws that modify certain provisions of the ACA such as removing penalties, starting January 1, 2019, for not complying with the ACA’s individual mandate to carry qualifying health insurance coverage for all or part of a year.
PDUFA also imposes an annual program fee for approved products. Fee waivers or reductions are available in certain circumstances, including a waiver of the application fee for the first application filed by a small business.
PDUFA also imposes an annual program fee for approved products. Fee waivers or reductions are available in certain circumstances, including a waiver of the application fee for the first application filed by a small business or a waiver of fee based on orphan drug status.
Phase 2/3 Clinical Trial – SOLIDARITY TRIAL VACCINES (STV) INO-4800 is one of two initial COVID-19 vaccine candidates included in the World Health Organization (WHO) sponsored Solidarity Trial Vaccines, which is designed to evaluate the efficacy and safety of promising new candidate vaccines selected by an independent vaccine prioritization advisory group composed of leading scientists and experts.
Infectious Disease Product Candidates INO-4800 for COVID-19 Phase 2/3 Clinical Trial – SOLIDARITY TRIAL VACCINES (STV) INO-4800 is one of two initial COVID-19 vaccine candidates included in the World Health Organization (WHO) sponsored Solidarity Trial Vaccines, or STV, which is designed to evaluate the efficacy and safety of vaccine candidates selected by an independent vaccine prioritization advisory group composed of leading scientists and experts.
Tolerability: DNA medicines appear to be well-tolerated when evaluated against multiple disease targets. Our DNA medicines have been administered over 15,000 times across more than 5,000 participants to date. c.
Tolerability: DNA medicines have been well tolerated by clinical trial participants when evaluated against multiple disease targets. Our DNA medicines have been administered over 15,000 times across more than 5,000 participants to date. c.
In addition to the upfront payment that we received in 2018, we are entitled to receive up to an aggregate of $20.0 million, less required income, withholding or other taxes, upon the achievement of specified milestones related to the regulatory approval of VGX-3100 in accordance with the Amended and Restated License and Collaboration Agreement.
We are entitled to receive up to an aggregate of $20.0 million, less required income, withholding or other taxes, upon the achievement of specified milestones related to the regulatory approval of VGX-3100 in accordance with the License and Collaboration Agreement.
Sponsors are also obligated to disclose the results of their clinical trials after completion. Clinical trials are generally conducted in three sequential phases that may overlap, known as Phase 1, Phase 2 and Phase 3 clinical trials. Phase 1 clinical trials generally involve a small number of healthy volunteers who are initially exposed to a product candidate.
The FDA requires sponsors to disclose the results of most, but not all, trials after completion. Clinical trials are generally conducted in three sequential phases that may overlap, known as Phase 1, Phase 2 and Phase 3 clinical trials. Phase 1 clinical trials generally involve a small number of healthy volunteers who are initially exposed to a product candidate.
INO-4201 was well-tolerated and boosted humoral responses in 100% (36 of 36) of treated participants. We and our collaborators plan to publish the data in a peer-reviewed journal and provide updates on the next steps for INO-4201.
In February 2023, we announced results from the Phase 1b trial. INO-4201 was well tolerated and boosted humoral responses in 100% (36 of 36) of treated participants. We and our collaborators plan to publish the data in a peer-reviewed journal and provide updates on the next steps for INO-4201.
Uncertainties regarding the interpretation and enforcement of Chinese laws, rules and regulations, a trade war, political unrest or unstable economic conditions in China could materially adversely affect our business, financial condition and results of operations. • It is difficult and costly to generate and protect our intellectual property and our proprietary technologies, and we may not be able to ensure their protection. • If we are sued for infringing intellectual property rights of third parties, it will be costly and time-consuming, and an unfavorable outcome in that litigation would have a material adverse effect on our business.
Uncertainties regarding the interpretation and enforcement of Chinese laws, rules and regulations, a trade war, political unrest or unstable economic conditions in China could materially adversely affect our business, financial condition and results of operations. • It is difficult and costly to generate and protect our intellectual property and our proprietary technologies, and we may not be able to ensure their protection. • If we are sued for infringing intellectual property rights of third parties, it will be costly and time-consuming, and an unfavorable outcome in that litigation would have a material adverse effect on our business. • Failure or perceived failure to comply with laws, regulations, contracts, self-regulatory schemes, notices and other obligations related to data privacy and security (including security incidents) could harm our business.
In addition, the IRA, among other things (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.
In addition, the IRA, among other things (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions take effect progressively starting in fiscal year 2023.
A summary of the key characteristics of DNA medicines that we believe are important for the treatment of HPV-related diseases are listed in the following graphic: 5 Our DNA Medicines in Development The chart below provides an overview of our DNA medicines pipeline. Each of the programs identified are described in more detail below.
A summary of the key characteristics of DNA medicines that we believe are important for the treatment of HPV-related diseases are listed in the following table: 5 Our DNA Medicines in Development The chart below provides an overview of our DNA medicines pipeline.
Employee Engagement As we work to make an impact on how healthcare is delivered, we believe it is critical that our employees are informed and engaged.
To that end, we invest in our employees to be an employer of choice. Employee Engagement As we work to make an impact on how healthcare is delivered, we believe it is critical that our employees are informed and engaged.
The primary endpoint was safety and tolerability, and the trial also evaluated immunogenicity and efficacy (Overall Survival, or OS). In May 2022, we presented OS data at the 2022 American Society of Clinical Oncology (ASCO) from GBM-001 Phase 2 trial.
The primary endpoint was safety and tolerability, and the trial also evaluated immunogenicity as well as efficacy based on overall survival, or OS, rates. In May 2022, we presented OS data at the 2022 American Society of Clinical Oncology (ASCO) from the trial.
As of December 31, 2022, our patent portfolio included approximately 100 issued U.S. patents and approximately 80 U.S. patent applications as well as approximately 800 issued foreign counterpart patents and approximately 700 counterpart foreign patent applications.
As of December 31, 2023, our patent portfolio included approximately 120 issued U.S. patents and approximately 100 U.S. patent applications as well as approximately 1,100 issued foreign counterpart patents and approximately 800 counterpart foreign patent applications.
Collaboration and Alliances Our partners and collaborators include Advaccine Biopharmaceuticals Suzhou Co, ApolloBio Corporation, AstraZeneca, The Bill & Melinda Gates Foundation (Gates), Coalition for Epidemic Preparedness Innovations (CEPI), Defense Advanced Research Projects Agency (DARPA), The U.S.
Collaboration and Alliances In addition to our current collaboration with ApolloBio Corporation described below, our other partners and collaborators include Advaccine Biopharmaceuticals Suzhou Co, AstraZeneca, The Bill & Melinda Gates Foundation (Gates), Coalition for Epidemic Preparedness Innovations (CEPI), Coherus Biosciences, Defense Advanced Research Projects Agency (DARPA), The U.S.
The primary endpoint, as amended, was the percentage of biomarker-selected participants with regression of cervical HSIL and virologic clearance of HPV-16 and/or HPV-18 in the cervix. A secondary endpoint was the percentage of all participants with regression and virologic clearance. In March 2023, we announced data from our REVEAL2 trial.
The primary endpoint, as amended, was the percentage of biomarker-selected participants with regression of cervical HSIL and virologic clearance of HPV-16 and/or HPV-18 in the cervix. A secondary endpoint was the percentage of all participants with regression and virologic clearance.
ApolloBio In December 2017, we entered into an Amended and Restated License and Collaboration Agreement with Beijing Apollo Saturn Biological Technology Limited, a corporation organized under the laws of China, or ApolloBio.
In December 2017, we entered into an Amended and Restated License and Collaboration Agreement with Beijing Apollo Saturn Biological Technology Limited, a corporation organized under the laws of China, or ApolloBio, which was amended on June 14, 2023 (as so amended, the “License and Collaboration Agreement”).
Modifications or enhancements to the product or its labeling or changes of the site of manufacture are often subject to the approval of the FDA and other regulators, which may or may not be received or may result in a lengthy review process.
Modifications or enhancements to the product or its labeling or changes of the site of manufacture are often subject to the approval of the FDA and other regulators, which may or may not be received or may result in a lengthy review process. Prescription drug promotional materials must be submitted to the FDA in conjunction with their first use.
Prescription drug promotional materials must be submitted to the FDA in conjunction with their first use. 19 In the United States, once a product is approved, its manufacture is subject to comprehensive and continuing regulation by the FDA. The FDA regulations require that products be manufactured in specific approved facilities and in accordance with cGMP.
In the United States, once a product is approved, its manufacture is subject to comprehensive and continuing regulation by the FDA. The FDA regulations require that products be manufactured in specific approved facilities and in accordance with cGMP.
These surgeries can be invasive and may be needed repeatedly because the underlying HPV infection is not eliminated. This is especially true for chronic diseases such as RRP and anal dysplasia. In addition to surgery, other options are being explored to treat HPV-related diseases, including the usage of checkpoint inhibitors and other immunotherapies.
The current standard of care for many HPV-related diseases, including RRP and many cancers, is surgery. These surgeries can be invasive and may be needed repeatedly because the underlying HPV infection is not eliminated. In addition to surgery, other options are being explored to treat HPV-related diseases, including the usage of immune checkpoint inhibitors and other immunotherapies.
There were no treatment-related serious adverse events and most adverse events were considered to be mild to moderate. This combined data set will be used as supportive data in any future regulatory interactions involving VGX-3100. We will continue to evaluate the results to determine next steps for VGX-3100 in our HPV programs.
There were no treatment-related serious adverse events and most adverse events were considered to be mild to moderate. This combined data set will be used as supportive data in any future regulatory interactions involving VGX-3100.
We first identify one or more antigens that we believe are the best targets for directing the immune system toward a particular tumor or infectious disease. We then apply our SynCon design process, which analyzes the genetic make-up of the selected antigens from multiple variants of a tumor or strains of a virus.
We start by identifying one or more antigens that we believe are the best targets for directing the immune system toward HPV and then apply our SynCon design process, which analyzes the genetic make-up of the selected antigens from multiple strains of the virus.
We believe that all of our product candidates will have a biologic primary mode of action, with the device component reviewed under a Device Master File. U.S. Biological Product Development 16 In the United States, the FDA regulates biologics under FDCA, and the Public Health Service Act, or PHSA, and their implementing regulations.
We believe that all of our product candidates will have a biologic primary mode of action. U.S. Biological Product Development In the United States, the FDA regulates biologics under FDCA, and the Public Health Service Act, or PHSA, and their implementing regulations. Biologics are also subject to other federal, state, and local statutes and regulations.
The extent of government regulation that might result from any future legislation or administrative action cannot be accurately predicted. Significant Customers and Research and Development During the year ended December 31, 2022, we derived 94% of our revenue from the procurement contract with the DoD that we entered into in June 2020.
The extent of government regulation that might result from any future legislation or administrative action cannot be accurately predicted. Significant Customers and Research and Development During the year ended December 31, 2023, we derived 29% of our revenue from ApolloBio.
These are comprised, in part, of: • two U.S. patent applications and approximately 40 counterpart foreign patent applications, directed to treatment of RRP; • seven issued U.S. patents and five U.S. patent applications, as well as approximately 80 issued foreign counterpart patents and approximately 50 counterpart foreign patent applications, directed to treatment of GBM; • approximately 70 issued U.S. patents and approximately 50 U.S. patent applications, as well as approximately 400 issued foreign counterpart patents and approximately 500 counterpart foreign patent applications, directed to our other earlier-stage product candidates; and • approximately 30 issued U.S. patents and approximately 20 U.S. patent applications, as well as approximately 30 issued foreign counterpart patents and approximately 125 counterpart foreign patent applications, directed to our device delivery systems.
These are comprised, in part, of: • one U.S. patent, 4 U.S. patent applications and approximately 40 counterpart foreign patent applications directed to treatment of RRP; 12 • seven issued U.S. patents and four U.S. patent applications, as well as approximately 80 issued foreign counterpart patents and approximately 30 counterpart foreign patent applications, directed to treatment of GBM; • approximately 100 issued U.S. patents and approximately 80 U.S. patent applications, as well as approximately 850 issued foreign counterpart patents and approximately 590 counterpart foreign patent applications, directed to our other earlier-stage product candidates; and • 4 issued U.S. patents and 6 U.S. patent applications, as well as approximately 160 issued foreign counterpart patents and approximately 50 counterpart foreign patent applications, directed to our device delivery systems.
Under the terms of this License and Collaboration Agreement, which became effective in March 2018, we granted to ApolloBio the exclusive right to develop and commercialize VGX-3100, our DNA immunotherapy product candidate designed to treat pre-cancers caused by HPV, within the agreed upon territories - Greater China (defined as China, Hong Kong, Macao and Taiwan).
Under the terms of this License and Collaboration Agreement, we granted to ApolloBio the exclusive right to develop and commercialize VGX-3100, our DNA immunotherapy product candidate designed to treat pre-cancers caused by HPV, within Greater China (defined as China, Hong Kong, Macao and Taiwan). As part of the collaboration, ApolloBio will fund all clinical development costs within the licensed territory.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeHowever, the 2020 federal spending package permanently eliminated, effective January 1, 2020, this ACA-mandated medical device tax; • created an annual, nondeductible fee on any entity that manufactures or imports certain specified branded prescription drugs and biologic agents apportioned among these entities according to their market share in some government healthcare programs; • increased the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program, to 23.1% and 13% of the average manufacturer price for most branded and generic drugs, respectively and capped the total rebate amount for innovator drugs at 100% of the Average Manufacturer Price, or AMP; • created new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for certain drugs and biologics that are inhaled, infused, instilled, implanted or injected; • expanded eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability; • expanded the entities eligible for discounts under the Public Health program; • created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; • established a Center for Medicare & Medicaid Innovation at the Centers for Medicare & Medicaid Services, or CMS, to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending; and • created a licensure framework for follow on biologic products.
Biggest changeThe ACA, among other things, increased the minimum level of Medicaid rebates payable by manufacturers of brand name drugs; required collection of rebates for drugs paid by Medicaid managed care organizations; required manufacturers to participate in a coverage gap discount program, under which they must agree to offer point-of-sale discounts (increased to 70 percent, effective as of January 1, 2019) off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; imposed a non-deductible annual fee on pharmaceutical manufacturers or importers who sell certain “branded prescription drugs” to specified federal government programs, implemented a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected expanded the types of entities eligible for the 340B drug discount program; expanded eligibility criteria for Medicaid programs; created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and established a Center for Medicare Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.
Similar to the federal healthcare program Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and related regulations, which impose certain requirements relating to the privacy, security and transmission of individually identifiable health information on certain individuals and entities; • the Physician Payments Sunshine Act, created under the ACA, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with certain exceptions, to report annually to CMS, information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists, and 41 chiropractors), other healthcare professionals (such as physicians assistants and nurse practitioners) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; • the FDCA, which among other things, strictly regulates drug product marketing, prohibits manufacturers from marketing drug products for off-label use and regulates the distribution of drug samples; • the U.S.
Similar to the federal healthcare program Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and related regulations, which impose certain requirements relating to the privacy, security and transmission of individually identifiable health information on certain individuals and entities; • the Physician Payments Sunshine Act, created under the ACA, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with certain exceptions, to report annually to CMS, information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors), other healthcare professionals (such as physicians assistants and nurse practitioners) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; • the FDCA, which among other things, strictly regulates drug product marketing, prohibits manufacturers from marketing drug products for off-label use and regulates the distribution of drug samples; • the U.S.
For example: • we, or the parties from whom we have acquired or licensed patent rights, may not have been the first to file the underlying patent applications or the first to make the inventions covered by such patents; • the named inventors or co-inventors of patents or patent applications that we have licensed or acquired may be incorrect, which may give rise to inventorship and ownership challenges; 43 • others may develop similar or alternative technologies, or duplicate any of our products or technologies that may not be covered by our patents, including design-arounds; • pending patent applications may not result in issued patents; • the issued patents covering our products and technologies may not provide us with any competitive advantages or have any commercial value; • the issued patents may be challenged and invalidated, or rendered unenforceable; • governments in the United States or abroad may prevent us from enforcing patents on our vaccines, which could prevent us from excluding competitors from those markets; • the issued patents may be subject to reexamination, which could result in a narrowing of the scope of claims or cancellation of claims found unpatentable; • we may not develop or acquire additional proprietary technologies that are patentable; • our trademarks may be invalid or subject to a third party's prior use; or • our ability to enforce our patent rights will depend on our ability to detect infringement, and litigation to enforce patent rights may not be pursued due to significant financial costs, diversion of resources, and unpredictability of a favorable result or ruling.
For example: • we, or the parties from whom we have acquired or licensed patent rights, may not have been the first to file the underlying patent applications or the first to make the inventions covered by such patents; • the named inventors or co-inventors of patents or patent applications that we have licensed or acquired may be incorrect, which may give rise to inventorship and ownership challenges; • others may develop similar or alternative technologies, or duplicate any of our products or technologies that may not be covered by our patents, including design-arounds; • pending patent applications may not result in issued patents; • the issued patents covering our products and technologies may not provide us with any competitive advantages or have any commercial value; • the issued patents may be challenged and invalidated, or rendered unenforceable; • governments in the United States or abroad may prevent us from enforcing patents on our vaccines, which could prevent us from excluding competitors from those markets; • the issued patents may be subject to reexamination, which could result in a narrowing of the scope of claims or cancellation of claims found unpatentable; • we may not develop or acquire additional proprietary technologies that are patentable; • our trademarks may be invalid or subject to a third party's prior use; or • our ability to enforce our patent rights will depend on our ability to detect infringement, and litigation to enforce patent rights may not be pursued due to significant financial costs, diversion of resources, and unpredictability of a favorable result or ruling.
Our product candidates could fail to complete the clinical trial process for many reasons, including the following: • we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our proprietary smart device or product candidate is safe and effective for any indication; • the results of clinical trials may not meet the level of clinical or statistical significance required by the FDA or comparable foreign regulatory authorities for approval; • the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials; • we may not be successful in enrolling a sufficient number of participants in clinical trials; • we may be unable to demonstrate that our proprietary smart device or DNA medicine candidates' clinical and other benefits outweigh their safety risks; • we may be unable to demonstrate that our proprietary smart device or product candidate presents an advantage over existing therapies, or over placebo in any indications for which the FDA requires a placebo-controlled trial; • the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; • the data collected from clinical trials of our DNA medicine candidates may not be sufficient to support the submission of a new drug application or other submission or to obtain regulatory approval in the United States or elsewhere; • the FDA or comparable foreign regulatory authorities may fail to approve our manufacturing processes or facilities or that of third-party manufacturers with which we or our collaborators contract for clinical and commercial supplies; and • the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
Our product candidates could fail to complete the clinical trial process for many reasons, including the following: • we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our proprietary device or product candidate is safe and effective for any indication; • the results of clinical trials may not meet the level of clinical or statistical significance required by the FDA or comparable foreign regulatory authorities for approval; • the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials; • we may not be successful in enrolling a sufficient number of participants in clinical trials; • we may be unable to demonstrate that our proprietary device or DNA medicine candidates' clinical and other benefits outweigh their safety risks; • we may be unable to demonstrate that our proprietary device or product candidate presents an advantage over existing therapies, or over placebo in any indications for which the FDA requires a placebo-controlled trial; • the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; • the data collected from clinical trials of our DNA medicine candidates may not be sufficient to support the submission of a new drug application or other submission or to obtain regulatory approval in the United States or elsewhere; • the FDA or comparable foreign regulatory authorities may fail to approve our manufacturing processes or facilities or that of third-party manufacturers with which we or our collaborators contract for clinical and commercial supplies; and • the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
Our net loss and other operating results will be affected by numerous factors, including: • variations in the level of expenses related to our proprietary smart device, DNA medicine candidates or future development programs; • expenses related to corporate transactions, including ones not fully completed; • addition or termination of clinical trials or funding support; • any intellectual property infringement lawsuit in which we may become involved; • any legal claims that may be asserted against us or any of our officers; • regulatory developments affecting our proprietary smart device and DNA medicine candidates or those of our competitors; • debt service obligations; • changes in the fair value of our investments, including investments in affiliated entities; • our execution of any collaborative, licensing or similar arrangements, and the timing of payments we may make or receive under these arrangements; and • if any of our DNA medicine candidates receive regulatory approval, the levels of underlying demand for our products.
Our net loss and other operating results will be affected by numerous factors, including: • variations in the level of expenses related to our proprietary device, DNA medicine candidates or future development programs; • expenses related to corporate transactions, including ones not fully completed; • addition or termination of clinical trials or funding support; • any intellectual property infringement lawsuit in which we may become involved; • any legal claims that may be asserted against us or any of our officers; • regulatory developments affecting our proprietary device and DNA medicine candidates or those of our competitors; • debt service obligations; • changes in the fair value of our investments, including investments in affiliated entities; • our execution of any collaborative, licensing or similar arrangements, and the timing of payments we may make or receive under these arrangements; and • if any of our DNA medicine candidates receive regulatory approval, the levels of underlying demand for our products.
If a third party claims that we infringe its intellectual property rights, it could cause our business to suffer in a number of ways, including: 44 • we may become involved in time-consuming and expensive litigation, even if the claim is without merit, the third party's patent is invalid or we have not infringed; • we may become liable for substantial damages for past infringement if a court decides that our technologies infringe upon a third party's patent; • we may be enjoined by a court to stop making, selling or licensing our products or technologies without a license from a patent holder, which may not be available on commercially acceptable terms, if at all, or which may require us to pay substantial royalties or grant cross-licenses to our patents; and • we may have to redesign our products so that they do not infringe upon others' patent rights, which may not be possible or could require substantial investment or time.
If a third party claims that we infringe its intellectual property rights, it could cause our business to suffer in a number of ways, including: • we may become involved in time-consuming and expensive litigation, even if the claim is without merit, the third party's patent is invalid or we have not infringed; • we may become liable for substantial damages for past infringement if a court decides that our technologies infringe upon a third party's patent; • we may be enjoined by a court to stop making, selling or licensing our products or technologies without a license from a patent holder, which may not be available on commercially acceptable terms, if at all, or which may require us to pay substantial royalties or grant cross-licenses to our patents; and • we may have to redesign our products so that they do not infringe upon others' patent rights, which may not be possible or could require substantial investment or time.
The laws that may affect our ability to operate include: • the federal healthcare program Anti-Kickback Statute, which prohibits, among other things, people from soliciting, receiving or providing remuneration, directly or indirectly, to induce or reward either the referral of an individual, or ordering, or leasing of an item, good, facility or service, for which payment may be made by a federal healthcare program such as Medicare or Medicaid.
The laws that may affect our ability to operate include: • the federal healthcare program Anti-Kickback Statute, which prohibits, among other things, people from soliciting, receiving or providing remuneration, directly or indirectly, to induce or reward either the referral of an individual, or ordering, or leasing of an item, good, facility or service, for which payment may be made by a federal healthcare 40 program such as Medicare or Medicaid.
Coupled with the expansion of social media platforms and similar devices that allow individuals access to a broad audience, these claims have had a significant negative impact on some businesses. Certain companies that have faced employment- or harassment-related lawsuits have had to terminate management or other key personnel, and have suffered reputational harm that has negatively impacted their business.
Coupled with the expansion of social media platforms and similar devices that allow individuals access to a broad audience, these claims have had a significant negative impact on some businesses. Certain companies that have faced employment- or harassment-related lawsuits have had to 42 terminate management or other key personnel, and have suffered reputational harm that has negatively impacted their business.
Satisfaction of the approval requirements typically takes several years and the time needed to satisfy them may vary substantially, based on the type, complexity and novelty of the product. We do not know if or when we might receive regulatory approvals for our proprietary smart device and any of our DNA medicine candidates currently under development.
Satisfaction of the approval requirements typically takes several years and the time needed to satisfy them may vary substantially, based on the type, complexity and novelty of the product. We do not know if or when we might receive regulatory approvals for our proprietary device and any of our DNA medicine candidates currently under development.
We expect to continue to incur substantial additional operating losses for at least the next several years as we advance our clinical trials and research and development activities. We may never successfully commercialize our DNA medicine candidates or proprietary smart device technology and thus may never have any significant future revenues or achieve and sustain profitability.
We expect to continue to incur substantial additional operating losses for at least the next several years as we advance our clinical trials and research and development activities. We may never successfully commercialize our DNA medicine candidates or proprietary device technology and thus may never have any significant future revenues or achieve and sustain profitability.
Following an assessment of the current global demand for COVID-19 vaccines, changes in regulatory timelines and requirements, diminishing government financial support, and the overall growing uncertainty related to opportunities for heterologous booster vaccines, in the fourth quarter of 2022 we discontinued our internally funded efforts to develop INO-4800 as a COVID-19 heterologous booster vaccine.
Following an assessment of the current global demand for COVID-19 vaccines, changes in regulatory timelines and requirements, diminishing government financial support, and the overall growing uncertainty related to opportunities for 27 heterologous booster vaccines, in the fourth quarter of 2022 we discontinued our internally funded efforts to develop INO-4800 as a COVID-19 heterologous booster vaccine.
If we and the contract manufacturers upon whom we rely fail to produce our proprietary smart devices and DNA medicine candidates in the volumes that we require on a timely basis, or at all, or if these contractors fail to comply with their obligations to us or with stringent regulations, we may face delays in the development and commercialization of our proprietary smart device and DNA medicine candidates.
If we and the contract manufacturers upon whom we rely fail to produce our proprietary devices and DNA medicine candidates in the volumes that we require on a timely basis, or at all, or if these contractors fail to comply with their obligations to us or with stringent regulations, we may face delays in the development and commercialization of our proprietary device and DNA medicine candidates.
We have entered into agreements with government agencies, such as the National Institutes of Health’s National Institute of Allergy and Infectious Diseases, DARPA, Medical CBRN Defense Consortium and the Department of Defense Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense, or DoD, and we intend to continue entering into these types of agreements in the future.
We have entered into agreements with government agencies, such as the National Institutes of Health’s National Institute of Allergy and Infectious Diseases, DARPA, Medical CBRN Defense Consortium and the Department of Defense (DoD) Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense, and we intend to continue entering into these types of agreements with government agencies in the future.
Our ability to generate future revenues depends heavily on our success in: • developing and securing United States and/or foreign regulatory approvals for our DNA medicine candidates, including securing regulatory approval for conducting clinical trials with DNA medicine candidates; • developing our proprietary smart device technology; and • commercializing any products for which we receive approval from the FDA and foreign regulatory authorities.
Our ability to generate future revenues depends heavily on our success in: • developing and securing United States and/or foreign regulatory approvals for our DNA medicine candidates, including securing regulatory approval for conducting clinical trials with DNA medicine candidates; • developing our proprietary device technology; and • commercializing any products for which we receive approval from the FDA and foreign regulatory authorities.
We manufacture some components of our proprietary smart devices and utilize the services of contract manufacturers to manufacture the remaining components of these devices. We also rely on third party contract manufacturers to produce our DNA medicine candidates for use in our clinical trials and potentially for commercial distribution, if any product candidate is approved by regulatory authorities.
We manufacture some components of our proprietary devices and utilize the services of contract manufacturers to manufacture the remaining components of these devices. We also rely on third party contract manufacturers to produce our DNA medicine candidates for use in our clinical trials and potentially for commercial distribution, if any product candidate is approved by regulatory authorities.
We and the CROs conducting clinical trials for our proprietary smart device and DNA medicine candidates are required to comply with current good clinical practices, or GCPs, regulations and guidelines enforced by the FDA for all of our products in clinical development. The FDA enforces GCPs through periodic inspections of trial sponsors, principal investigators and trial sites.
We and the CROs conducting clinical trials for our proprietary device and DNA medicine candidates are required to comply with current good clinical practices, or GCPs, regulations and guidelines enforced by the FDA for all of our products in clinical development. The FDA enforces GCPs through periodic inspections of trial sponsors, principal investigators and trial sites.
There may be significant delays in obtaining coverage and reimbursement as the process of determining coverage and reimbursement is often time-consuming and costly which will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage or adequate reimbursement will be obtained.
There may be significant 34 delays in obtaining coverage and reimbursement as the process of determining coverage and reimbursement is often time-consuming and costly which will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage or adequate reimbursement will be obtained.
In addition, the ACA-mandated “Cadillac” tax on high-cost employer-sponsored health coverage was eliminated, along with the health insurer tax. On June 17, 2021 the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.
In addition, the ACA-mandated “Cadillac” tax on high-cost employer-sponsored health coverage was 39 eliminated, along with the health insurer tax. On June 17, 2021 the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.
These and other claims may influence public perception of the use of vaccine and immunotherapy products and could result in greater governmental regulation, stricter labeling requirements and potential regulatory delays in the testing or approval of our potential products. 28 We previously expended significant resources on the development of a COVID-19 vaccine candidate.
These and other claims may influence public perception of the use of vaccine and immunotherapy products and could result in greater governmental regulation, stricter labeling requirements and potential regulatory delays in the testing or approval of our potential products. We previously expended significant resources on the development of a COVID-19 vaccine candidate.
While we seek to maintain adequate inventory of the single-source components and materials used in our product candidates, any interruption or delay in the supply of components or materials, or our inability to obtain components or materials from alternate sources at acceptable prices in a timely manner, could impair our ability to supply our investigational medicines.
While we seek to maintain adequate inventory of the single-source components and materials used in 29 our product candidates, any interruption or delay in the supply of components or materials, or our inability to obtain components or materials from alternate sources at acceptable prices in a timely manner, could impair our ability to supply our investigational medicines.
Accordingly, our ability to commercialize our proprietary smart device and DNA medicine candidates successfully will depend in part on the extent to which governmental authorities, including Medicare and Medicaid, private health insurers and other third-party payors establish appropriate coverage and reimbursement levels for our DNA medicine candidates and related treatments.
Accordingly, our ability to commercialize our proprietary device and DNA medicine candidates successfully will depend in part on the extent to which governmental authorities, including Medicare and Medicaid, private health insurers and other third-party payors establish appropriate coverage and reimbursement levels for our DNA medicine candidates and related treatments.
If we or our manufacturers were to encounter any of these difficulties or our manufacturers otherwise fail to comply with their obligations to us, our ability to provide our proprietary smart device to our partners and to supply DNA medicine candidates for clinical trials or to commercially launch a product would be jeopardized.
If we or our manufacturers were to encounter any of these difficulties or our manufacturers otherwise fail to comply with their obligations to us, our ability to provide our proprietary device to our partners and to supply DNA medicine candidates for clinical trials or to commercially launch a product would be jeopardized.
Conducting the costly and time-consuming research, pre-clinical studies and clinical testing necessary to obtain regulatory approvals and bring our DNA medicine candidates and proprietary smart device technology to market will require a commitment of substantial funds in excess of our current capital.
Conducting the costly and time-consuming research, pre-clinical studies and clinical testing necessary to obtain regulatory approvals and bring our DNA medicine candidates and proprietary device technology to market will require a commitment of substantial funds in excess of our current capital.
For drugs that have been designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens.
For drugs that have been 31 designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens.
In the event we are unable to develop our own marketing and sales force or collaborate with a third-party marketing and sales organization, we would not be able to commercialize our DNA medicine candidates which would negatively impact our ability to generate product revenues.
In the event we are unable to successfully develop our own marketing and sales force or collaborate with a third-party marketing and sales organization, we would not be able to commercialize our DNA medicine candidates which would negatively impact our ability to generate product revenues.
If our proprietary smart device and DNA medicine candidates are approved but do not achieve an adequate level of acceptance by physicians, healthcare payors and patients, we may not generate sufficient revenue from these products, and we may not become or remain profitable.
If our proprietary device and DNA medicine candidates are approved but do not achieve an adequate level of acceptance by physicians, healthcare payors and patients, we may not generate sufficient revenue from these products, and we may not become or remain profitable.
Our commercial success will depend in part on obtaining and maintaining patent, trademark, trade secret, and other intellectual property protection relating to our proprietary smart device and DNA medicine candidates, as well as successfully defending these intellectual property rights against third-party challenges.
Our commercial success will depend in part on obtaining and maintaining patent, trademark, trade secret, and other intellectual property protection relating to our proprietary device and DNA medicine candidates, as well as successfully defending these intellectual property rights against third-party challenges.
The tax regimes to which we are subject or under which we operate are unsettled and may be subject to significant change. In December 2017, tax legislation commonly known as the Tax Cuts and Jobs Act was enacted, which significantly revised the Internal Revenue Code of 1986, as amended, or the Code.
The tax regimes to which we are subject or under which we operate are unsettled and may be subject to significant change. In 2017, tax legislation commonly known as the Tax Cuts and Jobs Act, or Tax Act, was enacted, which significantly revised the Internal Revenue Code of 1986, as amended, or the Code.
Our future capital requirements will depend on many factors, including, among others: • the progress of our current and new product development programs; • the progress, scope and results of our pre-clinical and clinical testing; • the time and cost involved in obtaining regulatory approvals; • the cost of manufacturing our DNA medicine candidates; • the cost of prosecuting, enforcing and defending against patent infringement claims and other intellectual property rights; • debt service obligations; • competing technological and market developments; and 25 • our ability and the related costs to establish and maintain collaborative and other arrangements with third parties to assist in potentially bringing our products to market.
Our future capital requirements will depend on many factors, including, among others: • the progress of our current and new product development programs; • the progress, scope and results of our pre-clinical and clinical testing; • the time and cost involved in obtaining regulatory approvals; • the cost of manufacturing our DNA medicine candidates; • the cost of prosecuting, enforcing and defending against patent infringement claims and other intellectual property rights; • debt service obligations; • competing technological and market developments; and 23 • our ability and the related costs to establish and maintain collaborative and other arrangements with third parties to assist in potentially bringing our products to market.
Risks Related to Product Development, Manufacturing and Regulatory Approval If we are unable to obtain FDA approval of our product candidates, we will not be able to commercialize them in the United States. We need FDA approval prior to marketing our proprietary smart device and DNA medicine candidates in the United States.
Risks Related to Product Development, Manufacturing and Regulatory Approval If we are unable to obtain FDA approval of our product candidates, we will not be able to commercialize them in the United States. We need FDA approval prior to marketing our proprietary device and DNA medicine candidates in the United States.
To receive approval, we must, among other things, demonstrate with substantial evidence from well-controlled clinical trials that our proprietary smart device and DNA medicine candidates are both safe and effective for each indication for which approval is sought.
To receive approval, we must, among other things, demonstrate with substantial evidence from well-controlled clinical trials that our proprietary device and DNA medicine candidates are both safe and effective for each indication for which approval is sought.
If we experience delays in completion of, or if we terminate, any of our clinical trials, the commercial prospects for our proprietary smart device and our DNA medicine candidates may be harmed and our ability to generate product revenues will be delayed or eliminated altogether.
If we experience delays in completion of, or if we terminate, any of our clinical trials, the commercial prospects for our proprietary device and our DNA medicine candidates may be harmed and our ability to generate product revenues will be delayed or eliminated altogether.
The commercial success of our proprietary smart device and DNA medicine candidates for which we obtain marketing approval from the FDA or other regulatory authorities will depend upon the acceptance of these products by both the medical community and patient population.
The commercial success of our proprietary device and DNA medicine candidates for which we obtain marketing approval from the FDA or other regulatory authorities will depend upon the acceptance of these products by both the medical community and patient population.
The FDA has substantial discretion in the approval process and may either refuse to consider our application for substantive review or may form the opinion after review of our data that our application is insufficient to allow approval of our proprietary smart device and DNA medicine candidates.
The FDA has substantial discretion in the approval process and may either refuse to consider our application for substantive review or may form the opinion after review of our data that our application is insufficient to allow approval of our proprietary device and DNA medicine candidates.
These or similar events could result in future business and manufacturing disruption, or in reduced operations, any of which would materially affect our business, financial condition and results of operations. The COVID-19 pandemic also caused supply chain disruptions and supply shortages globally.
Similar events could result in future business and manufacturing disruption, or in reduced operations, any of which would materially affect our business, financial condition and results of operations. The COVID-19 pandemic also caused supply chain disruptions and supply shortages globally.
We and our manufacturers are subject to federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of these hazardous materials. In the event of an accident, state or federal authorities may curtail the use of these materials and interrupt our business operations.
We and our manufacturers are subject to federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of these hazardous materials. In the event of an accident, state or federal authorities may curtail the use of these 41 materials and interrupt our business operations.
Our proprietary smart device and DNA medicine candidates will require extensive additional clinical study and evaluation, regulatory approval in multiple jurisdictions, substantial investment and significant marketing efforts before we generate any revenues from product sales.
Our proprietary device and DNA medicine candidates will require extensive additional clinical study and evaluation, regulatory approval in multiple jurisdictions, substantial investment and significant marketing efforts before we generate any revenues from product sales.
If we fail to obtain FDA approval to market our proprietary smart device and DNA medicine candidates, we will be unable to sell our products in the United States, which will significantly impair our ability to generate any revenues.
If we fail to obtain FDA approval to market our proprietary device and DNA medicine candidates, we will be unable to sell our products in the United States, which will significantly impair our ability to generate any revenues.
Subject to compliance with applicable rules and regulations, we may issue our shares of common stock or securities convertible into our common stock from time to time in connection with a financing, acquisition, investment, our stock incentive plans or 47 otherwise.
Subject to compliance with applicable rules and regulations, we may issue our shares of common stock or securities convertible into our common stock from time to time in connection with a financing, acquisition, investment, our stock incentive plans or otherwise.
There has been limited clinical trial experience for the development of pharmaceuticals to treat these rare diseases in general, and we are not aware of a registrational trial that led to approval of a drug to treat these diseases.
There has been limited clinical trial experience for the development of pharmaceuticals to treat these rare diseases in general, and we are not aware of a registrational trial that led to approval of a 30 drug to treat these diseases.
The American Taxpayer Relief Act of 2012 reduced Medicare payments to several providers, including hospitals, 40 and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
The American Taxpayer Relief Act of 2012 reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
If we are able to find a replacement supplier, the 30 replacement supplier would need to be qualified and may require additional regulatory authority approval, which could result in further delay.
If we are able to find a replacement supplier, the replacement supplier would need to be qualified and may require additional regulatory authority approval, which could result in further delay.
We are not permitted to market or promote our proprietary smart device and DNA medicine candidates before we receive regulatory approval from the FDA or comparable foreign regulatory authorities.
We are not permitted to market or promote our proprietary device and DNA medicine candidates before we receive regulatory approval from the FDA or comparable foreign regulatory authorities.
We currently have only a small commercial organization to support pre-commercial activities for our proprietary smart device and DNA medicine candidates, if approved, and we do not currently have a sales organization.
We currently have only a small commercial organization to support pre-commercial activities for our proprietary device and DNA medicine candidates, if approved, and we do not currently have a sales organization.
Our business is partially dependent on the continued 33 performance by these government agencies of their responsibilities under these agreements, including adequate continued funding of the agencies and their programs.
Our business is partially dependent on the continued performance by these government agencies of their responsibilities under these agreements, including adequate continued funding of the agencies and their programs.
In addition, other legislative changes have been proposed and adopted since the ACA was enacted. The Budget Control Act of 2011 included reductions to Medicare payments to providers of 2% per fiscal year, which, due to subsequent legislative amendments to the statute will remain in effect until 2031, unless Congressional action is taken.
In addition, other legislative changes have been proposed and adopted since the ACA was enacted. The Budget Control Act of 2011 included reductions to Medicare payments to providers of 2% per fiscal year, which, due to subsequent legislative amendments to the statute will remain in effect until 2032, unless Congressional action is taken.
The Tax Cuts and Jobs Act, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35 percent to a flat rate of 21 percent, limitation of the tax deduction for interest expense to 30 percent of adjusted earnings (except for certain small businesses), limitation of the deduction for net operating losses to 80 percent of current-year taxable income and elimination of net operating loss carrybacks, one time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits (including reducing the business tax credit for certain clinical testing expenses incurred in the testing of certain drugs for rare diseases or conditions).
The Tax Act, among other things, resulted in significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35 percent to a flat rate of 21 percent, limitation of the tax deduction for interest expense to 30 percent of adjusted earnings (except for certain small businesses), limitation of the deduction for net operating losses to 80 percent of current-year taxable income and elimination of net operating loss carrybacks, one time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits (including reducing the business tax credit for certain clinical testing expenses incurred in the testing of certain drugs for rare diseases or conditions).
With respect to clinical trials of product candidates for rare diseases, such as our clinical trial of INO-3107 for the treatment of recurrent respiratory papillomatosis, or RRP, we may encounter difficulties in recruiting a sufficient number of patients to enroll in the trial due to the small number of patients with the disease.
With respect to clinical trials of product candidates for rare diseases, such as our planned confirmatory trial of INO-3107 for the treatment of recurrent respiratory papillomatosis, or RRP, we may encounter difficulties in recruiting a sufficient number of patients to enroll in the trial due to the small number of patients with the disease.
For example, our operating expenses during the period from 2020 to 2022 significantly increased due to development and manufacturing activities for our COVID-19 vaccine program, for which we discontinued internal funding in the fourth quarter of 2022. We may not deploy our current capital resources effectively.
For example, our operating expenses increased significantly from 2020 to 2022 due to development and manufacturing activities for our COVID-19 vaccine program, for which we discontinued internal funding in the fourth quarter of 2022. We may not deploy our current capital resources effectively.
The following factors, which are not exhaustive, in addition to the other risk factors described in this report, and the potentially low volume of trades in our common stock, may have a significant impact on the market price of our common stock, some of which are beyond our control: • developments concerning any research and development, clinical trials, manufacturing, and marketing efforts or collaborations; • fluctuating public or scientific interest in the potential for our vaccines or other DNA medicine candidates; • our announcement of significant acquisitions, strategic collaborations, joint ventures or capital commitments; • fluctuations in our operating results; • announcements of technological innovations; • new products or services that we or our competitors offer; • changes in the structure of healthcare payment systems; • the initiation, conduct and/or outcome of intellectual property and/or litigation matters; • changes in financial or other estimates by securities analysts or other reviewers or evaluators of our business; • conditions or trends in bio-pharmaceutical or other healthcare industries; • regulatory developments in the United States and other countries; • perceptions of gene-based therapy; • changes in the economic performance and/or market valuations of other biotechnology and medical device companies; • additions or departures of key personnel; • sales or other transactions involving our common stock; • changes in our capital structure; 45 • sales or other transactions by executive officers or directors involving our common stock; • changes in accounting principles; • global unrest including geopolitical risks emanating from countries such as Russia and China, terrorist activities, and economic and other external factors; and • catastrophic weather and/or global disease pandemics, including COVID-19.
The following factors, which are not exhaustive, in addition to the other risk factors described in this report, and the potentially low volume of trades in our common stock, may have a significant impact on the market price of our common stock, some of which are beyond our control: • developments concerning any research and development, clinical trials, manufacturing, and marketing efforts or collaborations; • fluctuating public or scientific interest in the potential for our vaccines or other DNA medicine candidates; • our announcement of significant acquisitions, strategic collaborations, joint ventures or capital commitments; • fluctuations in our operating results; • announcements of technological innovations; • new products or services that we or our competitors offer; • changes in the structure of healthcare payment systems; • the initiation, conduct and/or outcome of intellectual property and/or litigation matters; • changes in financial or other estimates by securities analysts or other reviewers or evaluators of our business; • conditions or trends in bio-pharmaceutical or other healthcare industries; • regulatory developments in the United States and other countries; • perceptions of gene-based therapy; • changes in the economic performance and/or market valuations of other biotechnology and medical device companies; • additions or departures of key personnel; • sales or other transactions involving our common stock; • changes in our capital structure; • sales or other transactions by executive officers or directors involving our common stock; • changes in accounting principles; • global unrest including geopolitical risks emanating from countries such as Russia and China, terrorist activities, the conflict between Israel and Hamas, bank failures, and other economic and other external factors; and • catastrophic weather and/or global disease pandemics.
The commencement and completion of clinical trials can be delayed for a number of reasons, including delays related to: • obtaining regulatory approval to commence a clinical trial; 27 • adverse results from third party clinical trials involving gene-based therapies and the regulatory response thereto; • reaching agreement on acceptable terms with prospective CROs and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • future bans or stricter standards imposed on clinical trials of gene-based therapy; • manufacturing sufficient quantities of our proprietary smart device and DNA medicine candidates for use in clinical trials; • obtaining Internal Review Board, or IRB, approval to conduct a clinical trial at a prospective site; • slower than expected recruitment and enrollment of patients to participate in clinical trials for a variety of reasons, including competition from other clinical trial programs for similar indications; • conducting clinical trials with sites internationally due to regulatory approvals and meeting international standards; • retaining patients who have initiated a clinical trial but may be prone to withdraw due to side effects from the therapy, lack of efficacy or personal issues, or who are lost to further follow-up; • collecting, reviewing and analyzing our clinical trial data; and • global unrest, including geopolitical risks emanating from countries such as Russia and China, global pathogen outbreaks or pandemics, terrorist activities, and economic and other external factors beyond our control.
The commencement and completion of clinical trials can be delayed for a number of reasons, including delays related to: • obtaining regulatory approval to commence a clinical trial; • adverse results from third-party clinical trials involving gene-based therapies and the regulatory response thereto; • reaching agreement on acceptable terms with prospective CROs and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • future bans or stricter standards imposed on clinical trials of gene-based therapy; • manufacturing sufficient quantities of our proprietary device and DNA medicine candidates for use in clinical trials; • obtaining Internal Review Board, or IRB, approval to conduct a clinical trial at a prospective site; • slower than expected recruitment and enrollment of patients to participate in clinical trials for a variety of reasons, including competition from other clinical trial programs for similar indications; • conducting clinical trials with sites internationally due to regulatory approvals and meeting international standards; 26 • retaining patients who have initiated a clinical trial but may be prone to withdraw due to side effects from the therapy, lack of efficacy or personal issues, or who are lost to further follow-up; • collecting, reviewing and analyzing our clinical trial data; and • global unrest, including geopolitical risks emanating from countries such as Russia and China, global pathogen outbreaks or pandemics, terrorist activities, the conflict between Israel and Hamas, bank failures and other economic and other external factors beyond our control.
There is also a risk of inappropriate disclosure of sensitive information or negative or inaccurate posts or comments about us on any social networking website. If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face regulatory actions, or incur other harm to our business. 48 ITEM 1B.
There is also a risk of inappropriate disclosure of sensitive information or negative or inaccurate posts or comments about us on any social networking website. If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face regulatory actions, or incur other harm to our business.
The degree of market acceptance of any of our approved products will depend on a number of factors, including: • our ability to provide acceptable evidence of safety and efficacy; • the relative convenience and ease of administration, including the acceptance and usage of our proprietary smart device by the medical community; • the prevalence and severity of any actual or perceived adverse side effects; • limitations or warnings contained in a product's FDA-approved labeling, including, for example, potential “black box” warnings; • availability of alternative treatments; • pricing and cost effectiveness; • the effectiveness of our or any future collaborators' sales and marketing strategies; • the public perception of new therapies and the reputational challenges that the vaccine industry is facing related to the growing momentum of the anti-vaccine movement; • our ability to obtain sufficient third-party coverage and adequate reimbursement; and • the willingness of patients to pay out of pocket in the absence of third-party coverage.
The degree of market acceptance of any of our approved products will depend on a number of factors, including: • our ability to provide acceptable evidence of safety and efficacy; • the relative convenience and ease of administration, including the acceptance and usage of our proprietary device by the medical community; • the prevalence and severity of any actual or perceived adverse side effects; • limitations or warnings contained in a product's FDA-approved labeling, including, for example, potential “black box” warnings; • availability of alternative treatments; • pricing and cost effectiveness; • the effectiveness of our or any future collaborators' sales and marketing strategies; • the potential public perception of new therapies and the reputational challenges that the industry is facing related to drug costs; • our ability to obtain sufficient third-party coverage and adequate reimbursement; and • the willingness of patients to pay out of pocket in the absence of third-party coverage.
We will need substantial additional capital to develop our DNA medicines and proprietary smart device technology, which may prove difficult and costly to obtain.
We will need substantial additional capital to develop our DNA medicines and proprietary device technology, which may prove difficult or costly to obtain.
We may not be able to obtain third-party payor coverage or reimbursement for our products in whole or in part. Risks Related to Employee and Operational Matters Our operating results may be harmed if our restructuring plans do not achieve the anticipated results or cause undesirable consequences.
We may not be able to obtain third-party payor coverage or reimbursement for our products in whole or in part. Risks Related to Employee and Operational Matters Our operating results may be harmed if our corporate restructuring plans and cost reduction efforts do not achieve the anticipated results or cause undesirable consequences.
Period to period comparisons are not indicative of future performance.
Period to period comparisons are not 44 indicative of future performance.
We have experienced significant operating losses over the last several years. As of December 31, 2022 our accumulated deficit was $1.5 billion. We have generated limited revenues, primarily consisting of license revenue, grant funding and interest income.
We have experienced significant operating losses over the last several years. As of December 31, 2023 our accumulated deficit was $1.6 billion. We have generated limited revenues, primarily consisting of license revenue, grant funding and interest income.
If any of our competitors develop products with efficacy or safety profiles significantly better than our product candidates and introduce new, disruptive technology, we may not be able to commercialize our products, if approved, and sales of any of our commercialized products could be harmed.
If any of our competitors develop products with efficacy or safety profiles significantly better than our product candidates and introduce new, disruptive technology, we may not be able to complete the development of or commercialize our product candidates, and sales of any commercialized products could be harmed.
Although our common stock is listed on the Nasdaq Global Select Market, we cannot be certain that an active trading market for our shares will continue to be sustained.
Although our common stock is listed on the Nasdaq Capital Market, we cannot be certain that an active trading market for our shares will continue to be sustained.
The failure by our management to apply our funds effectively could result in financial losses that could have a material adverse impact on our business, cause the price of our common stock to decline, and delay the development of our investigational medicines.
The failure by our management to apply our funds effectively could result in financial losses that could have a material adverse impact on our business, cause the price of our common stock to decline, and delay the development of our product candidates.
We face intense and increasing competition and steps taken by our competitors such as the introduction of a new, disruptive technology may impede our ability to successfully commercialize our DNA medicines, if approved.
We face intense and increasing competition and steps taken by our competitors such as the introduction of a new, disruptive technology may impede our ability to develop and commercialize our DNA medicines.
We have agreements with government agencies, which are subject to termination and uncertain future funding, which could have a negative impact on our ability to develop certain of our pipeline candidates and/or require us to seek alternative funding sources to advance product candidates.
We have agreements with government agencies that are subject to termination and uncertain future funding. Termination or cessation of funding would have a negative impact on our ability to develop certain of our pipeline candidates and/or require us to seek alternative funding sources to advance product candidates.
Concerns over inflation, energy costs, geopolitical issues, global pathogen outbreaks or pandemics, including COVID-19, and the availability and cost of credit have in the past and may continue to contribute to increased volatility and diminished expectations for the economy and the markets going forward. Market upheavals may have an adverse effect on us.
Concerns over inflation, rising interest rates, energy costs, geopolitical issues, global pathogen outbreaks or pandemics, and the availability and cost of credit have in the past and may continue to contribute to increased 46 volatility and diminished expectations for the economy and the markets going forward. Market upheavals may have an adverse effect on us.
If we do not receive regulatory approval for and successfully commercialize any products, we will not generate any revenues from sales of proprietary smart device and DNA medicine products, and we may not be able to continue our operations. A small number of licensing partners and government contracts currently account for a substantial portion of our revenue.
If we do not receive regulatory approval for and successfully commercialize any products, we will not generate any revenues from sales of proprietary devices and DNA medicine products, and we may not be able to continue our operations. A small number of licensing partners and government contracts have accounted for a substantial portion of our revenue.
Because RRP is caused by specific HPV types, 6 and 11, and there is currently no standard protocol for diagnostic/screening of RRP patients unless there are symptoms of respiratory distress, it may be difficult to identify and diagnose patients for whom INO-3107 may be a potential treatment.
Because RRP is caused by specific HPV types, 6 and 11, and there is currently no standard protocol for diagnostic/screening of RRP patients unless there are symptoms of dysphonia, respiratory distress or other symptoms related to the presence of papillomas, it may be difficult to identify and diagnose patients for whom INO-3107 may be a potential treatment.
In addition, there is also a risk that due to changes in laws and regulations, such as alternative minimum taxes or suspensions on the use 46 of net operating losses, or other unforeseen reasons, our existing net operating losses could expire or otherwise become unavailable to offset future income tax liabilities.
In addition, there is also a risk that due to changes in laws and regulations, such as alternative minimum taxes or suspensions on the use of net operating losses, or other unforeseen reasons, our existing net operating losses could expire or otherwise become unavailable to offset future income tax liabilities. General Risk Factors Our quarterly operating results may fluctuate significantly.
If we are subject to any liability as a result of our or our third-party manufacturers' activities involving hazardous materials, our business and financial condition may be adversely affected. We have entered into collaborations with Chinese companies and conduct certain research and development activities in China.
If we are subject to any liability as a result of our or our third-party manufacturers' activities involving hazardous materials, our business and financial condition may be adversely affected. We have entered into collaborations with Chinese companies and rely on clinical materials manufactured in China for our development efforts.
Although we have settled the current class action securities litigation, there can be no guarantee that we will not become subject to similar claims in the future. We may also become party to litigation with third parties as a result of our business activities.
Although we have resolved these actions, there can be no guarantee that we will not become subject to similar claims in the future. We may also become party to litigation with third parties as a result of our business activities.
In order to 34 commercialize any products, we must build our marketing, sales, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services. We contemplate establishing our own sales force or seeking third-party partners to sell our products.
In order to successfully commercialize INO-3107 or any other products that may receive regulatory approval, we must build our marketing, sales, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services. We contemplate establishing our own sales force or seeking third-party partners to sell our products.
We also compete more specifically with companies seeking to utilize antigen-encoding DNA delivered with electroporation or other delivery technologies such as viral vectors or lipid vectors to induce in vivo generated antigen production and immune responses to prevent or treat various diseases.
Many companies are pursuing different approaches to pre-cancers and cancers we are targeting. 36 We also compete more specifically with companies seeking to utilize antigen-encoding DNA delivered with electroporation or other delivery technologies such as viral vectors or lipid vectors to induce in vivo generated antigen production and immune responses to prevent or treat various diseases.
In addition, the IRA, among other things (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.
In addition, the IRA, among other things (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions take effect progressively starting in fiscal year 2023.
Research and development by others may seek to render our technologies or products obsolete or noncompetitive. See “Business—Competition” for additional information on our competitive landscape. Our failure to successfully acquire, develop and market additional product candidates or approved products would impair our ability to grow. We may acquire, in-license, develop and/or market additional products and product candidates.
Research and development by others may seek to render our technologies or products obsolete or noncompetitive. Our failure to successfully acquire, develop and market additional product candidates or approved products would impair our ability to grow. We may acquire, in-license, develop and/or market additional products and product candidates.
For example, in recent years, including for 35 days from December 2018 to January 2019, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.
For example, in recent years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.
An EUA may not be available if countries are no longer in a state of public health emergency, in which case full approval would need to be sought. Our COVID-19 vaccine candidate continues to be evaluated as part of the World Health Organization’s Solidarity Trial Vaccines.
An EUA may not be available if countries are no longer in a state of public health emergency, in which case full approval would need to be sought. We await the results of our COVID-19 vaccine candidate's participation in the World Health Organization’s Solidarity Trial Vaccines.
A breakthrough therapy designation or fast track designation by the FDA for a drug may not lead to a faster development or regulatory review or approval process, and it would not increase the likelihood that the drug will receive marketing approval. 32 We may seek a breakthrough therapy designation for one or more of our investigational medicines.
A breakthrough therapy designation or fast track designation by the FDA for a drug may not lead to a faster development or regulatory review or approval process, and it would not increase the likelihood that the drug will receive marketing approval.
Competition for qualified personnel is intense among companies, academic institutions and other organizations. If we are unable to attract and retain key personnel and advisors, it may negatively affect our ability to successfully develop, test, commercialize and market our products and DNA medicine candidates.
Competition for qualified personnel is intense among companies, academic institutions and other organizations. If we are unable to attract and retain key personnel and advisors, it may negatively affect our ability to successfully develop, test, commercialize and market our products and DNA medicine candidates. Our business could be adversely affected by the effects of health epidemics.
These problems include difficulties with production costs and yields, quality control, including stability of the equipment and DNA medicine candidates and quality assurance testing, shortages of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations.
Manufacturers often encounter difficulties in production, particularly in scaling up for commercial production. 28 These problems include difficulties with production costs and yields, quality control, including stability of the equipment and DNA medicine candidates and quality assurance testing, shortages of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations.
We collect, store and transmit large amounts of confidential information (including personal information and pseudonymized information), and we deploy and operate an array of technical and procedural controls to maintain the confidentiality and integrity of such confidential information.
We collect, store and transmit large amounts of confidential, proprietary or otherwise sensitive information (including personal information and pseudonymized information), and we deploy and operate an array of technical and procedural controls designed to maintain the confidentiality, availability and integrity of such information as appropriate.
We may also be exposed to fluctuations in the value of the local currency in China. These uncertainties may impede our ability to enforce the contracts we have entered into and our ability to continue our research and development activities and could materially and adversely affect our business, financial condition and results of operations.
These uncertainties may impede our ability to enforce the contracts we have entered into and our ability to continue our research and development activities and could materially and adversely affect our business, financial condition and results of operations.
Additional attrition could impede our ability to meet our operational goals, which could have a material adverse effect on our financial performance. In addition, as a result of the reductions in our workforce, we may face an increased risk of employment litigation.
During the second half of 2022, we experienced increased voluntary attrition after conducting the first reduction in force. Additional attrition could impede our ability to meet our operational goals, which could have a material adverse effect on our financial performance. In addition, as a result of the reductions in our workforce, we may face an increased risk of employment litigation.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn connection with this amendment, we paid the landlord an additional security deposit of $75,000. In the fourth quarter of 2019, we entered into two agreements to sublease a total of approximately 13,500 square feet in our Plymouth Meeting headquarters with one period through March 31, 2025 and the other month-to-month after December 31, 2022.
Biggest changeIn addition, we have paid security deposits totaling $124,000. We have entered into four agreements to sublease a total of approximately 25,000 square feet in our Plymouth Meeting headquarters, with one sublease term through March 31, 2025, two terms through December 31, 2026, and one month-to-month.
The base rent adjusts periodically throughout the term of the Second San Diego Lease. As of December 31, 2022, rent payments under the Second San Diego Lease include base rent with an annual increase of approximately 3 percent, and additional monthly fees to cover our share of certain facility expenses, including utilities, property taxes, insurance and maintenance.
The base rent adjusts periodically throughout the term of the Plymouth Meeting Lease. As of December 31, 2023, rent payments under the Plymouth Meeting Lease include base rent with an annual increase of approximately two percent, and additional monthly fees to cover our share of certain facility expenses, including utilities, property taxes, insurance and maintenance.
As of December 31, 2022, rent payments under the Plymouth Meeting Lease include base rent with an annual increase of approximately 2 percent, and additional monthly fees to cover our share of certain facility expenses, including utilities, property taxes, insurance and maintenance. In addition, we have paid a security deposit of $49,000.
As of December 31, 2023, rent payments under the Second San Diego Lease include base rent with an annual increase of approximately three percent, and additional monthly fees to cover our share of certain facility expenses, including utilities, property taxes, insurance and maintenance. In addition, we have paid a security deposit of $95,000.
ITEM 2. PROPERTIES We own no real property and have no plans to acquire any real property in the future. San Diego Leases In April 2013, we entered into a lease, or the First San Diego Lease, for office space in San Diego, California. The term of the First San Diego Lease commenced on December 1, 2013.
ITEM 2. PROPERTIES We own no real property and have no plans to acquire any real property in the future. San Diego Leases In November 2023, we entered into a lease agreement, or the New San Diego Lease, for research and development space in San Diego, California.
The commencement of the amended First San Diego Lease was in January 2016. As of December 31, 2022, rent payments under the First San Diego Lease include base rent with an annual increase of approximately 3 percent, and additional monthly fees to cover our share of certain facility expenses, including utilities, property taxes, insurance and maintenance.
Rent payments under the New San Diego Lease will include base rent with an annual increase of approximately three percent, and additional monthly fees to cover our share of certain facility expenses, including utilities, property taxes, insurance and maintenance. In addition, we have paid a security deposit of $33,000.
In July 2015, we amended the Plymouth Meeting Lease to increase the total leased space to 27,583 square feet. In June 2017, we entered into another amendment to the Plymouth Meeting Lease to increase the total leased space to 57,361 square feet and extend the lease term through December 31, 2029.
Plymouth Meeting Lease In 2014, we entered into a lease, or the Plymouth Meeting Lease, for our corporate headquarters in Plymouth Meeting, Pennsylvania. We have amended the Plymouth Meeting Lease on multiple occasions to increase the total leased space to 57,361 square feet and extend the lease term through December 31, 2029.
We had an option to terminate the First San Diego Lease on December 1, 2019, which we did not exercise. In October 2016, we entered into an office lease, or the Second San Diego Lease, for a second property in San Diego, California. The total space under the Second San Diego Lease is approximately 51,000 square feet.
In November 2023, we extended the term of the First San Diego Lease until February 29, 2024. In 2016, we entered into an office lease, or the Second San Diego Lease, for a second property in San Diego, California. The total space under the Second San Diego Lease is approximately 51,000 square feet.
The initial term of the First San Diego Lease is ten years, with an option to extend the term by five years, subject to specified conditions. In June 2015, we amended the First San Diego Lease to increase the total leased space to 31,207 square feet and occupy the entire building.
In 2013, we entered into a lease, or the First San Diego Lease, for office space in San Diego, California. The initial term of the First San Diego Lease was through November 2023. In June 2015, we amended the First San Diego Lease to increase the total leased space to 31,207 square feet and occupy the entire building.
We are using the facility for office, manufacturing and research and development purposes. The term of the Second San Diego Lease commenced on June 1, 2017. The initial term of the Second San Diego Lease is ten years, with a right to terminate on November 30, 2023, subject to specified conditions.
We are using the facility for office, manufacturing and research and development purposes. The term of the Second San Diego Lease commenced in June 2017 and continues through May 2027. The base rent adjusts periodically throughout the term of the Second San Diego Lease.
Removed
In addition, we have paid a security deposit of $95,000. Plymouth Meeting Lease In March 2014, we entered into a lease, or the Plymouth Meeting Lease, for our corporate headquarters in Plymouth Meeting, Pennsylvania. We occupied the space in June 2014.
Added
The total space under the New San Diego Lease is approximately 5,563 square feet. The term of the New San Diego Lease commenced on February 10, 2024 and the initial term is 4.3 years. The base rent adjusts periodically throughout the term of the New San Diego Lease.
Removed
The initial term of the Plymouth Meeting Lease was 11.5 years, with a right to extend the term by five years, subject to specified conditions. We use the space for office purposes. The base rent adjusts periodically throughout the term of the Plymouth Meeting Lease.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeUnder the settlement, we will pay $30.0 million in cash and $14.0 million in shares of our common stock to settle all outstanding claims. Our insurance carriers have paid the $30.0 million cash component of the settlement.
Biggest changeAfter additional motions were filed in the case, in June 2022 the parties negotiated an agreement in principle to settle the shareholder class action complaint, which was approved by the court in January 2023. Under the settlement, we agreed to pay $30.0 million in cash and $14.0 million in shares of its common stock to settle all outstanding claims.
VGXI Litigation On June 3, 2020, we filed a complaint in the Court of Common Pleas of Montgomery County, Pennsylvania against VGXI, Inc. and GeneOne Life Science, Inc., or GeneOne, and together with VGXI, Inc. collectively referred to as VGXI, alleging that VGXI had materially breached our supply agreement with them.
VGXI Litigation In June 2020, we filed a complaint in the Court of Common Pleas of Montgomery County, Pennsylvania against VGXI, Inc. and GeneOne Life Science, Inc., or GeneOne, and together with VGXI, Inc. collectively referred to as VGXI, alleging that VGXI had materially breached our supply agreement with them.
ITEM 3. LEGAL PROCEEDINGS Securities Litigation Securities Class Action Litigation On March 12, 2020, a purported shareholder class action complaint, McDermid v. Inovio Pharmaceuticals, Inc. and J. Joseph Kim, was filed in the United States District Court for the Eastern District of Pennsylvania, naming us and J. Joseph Kim, our former President and Chief Executive Officer, as defendants.
ITEM 3. LEGAL PROCEEDINGS Securities Litigation Securities Class Action Litigation In March 2020, a purported shareholder class action complaint, McDermid v. Inovio Pharmaceuticals, Inc. and J. Joseph Kim, was filed in the United States District Court for the Eastern District of Pennsylvania, naming the Company and its former President and Chief Executive Officer as defendants.
Kim, et al., was filed in the United States District Court for the Eastern District of Pennsylvania, naming eight current and former directors as defendants. The lawsuit asserts state and federal claims and is based on the same alleged misstatements as the shareholder class action complaint.
Kim, et al., was filed in the United States District Court for the Eastern District of Pennsylvania, naming eight current and former directors of the Company as defendants. The lawsuit asserted state and federal claims and was based on the same alleged misstatements as the shareholder class action complaint described above.
The complaint seeks declaratory judgments, specific performance of the agreement, injunctive relief, an accounting, damages, attorneys’ fees, interest, costs and other relief from VGXI. On June 3, 2020, we filed a petition for preliminary injunction, which was denied on June 25, 2020.
The complaint seeks declaratory judgments, specific performance of the agreement, injunctive relief, an accounting, damages, attorneys’ fees, interest, costs and other relief from VGXI. In June 2020, the Company filed a petition for preliminary injunction, which was denied.
On September 13, 2021, we filed an answer to the complaint, new matter, and counterclaims. The Company’s counterclaims allege that GeneOne breached the Agreement, and assert claims for breach of contract and declaratory judgment. The counterclaims seek damages, interest, expenses, attorney’s fees, and costs. On October 18, 2021, GeneOne filed its answer to our counterclaims and new matter.
Our counterclaims allege that GeneOne breached the Agreement, and assert claims for breach of contract and declaratory judgment. The counterclaims seek damages, interest, expenses, attorney’s fees, and costs. On October 18, 2021, GeneOne filed its answer to our counterclaims and new matter. A trial date for this litigation has not been set.
GeneOne Litigation 50 On December 7, 2020, GeneOne filed a complaint in the Court of Common Pleas of Montgomery County, Pennsylvania against us, alleging that we had breached the CELLECTRA Device License Agreement, or the Agreement, between us and GeneOne. We terminated the Agreement on October 9, 2020.
GeneOne Litigation In December 2020, GeneOne filed a complaint in the Court of Common Pleas of Montgomery County, Pennsylvania against us, alleging that we had breached the CELLECTRA Device License Agreement, or the Agreement, between us and GeneOne. We terminated the Agreement in October 2020. The complaint asserts claims for breach of contract, declaratory judgment, unfair competition, and unjust enrichment.
On November 8, 2021, we filed our answer to GeneOne’s new matter. A trial date for this litigation has not been set. We intend to aggressively prosecute the claims set forth in our counterclaims against GeneOne and to vigorously defend ourselves against the claims in GeneOne’s complaint. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 51 PART II
We intend to aggressively prosecute the claims set forth in our counterclaims against GeneOne and to vigorously defend ourselves against the claims in GeneOne’s complaint. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 54 PART II
The lawsuit accuses our board of directors of failing to exercise reasonable and prudent supervision over our management, policies, practices, and internal controls. The plaintiff seeks unspecified monetary damages on behalf of us as well as governance reforms.
The lawsuit accused the Company’s board of directors of failing to exercise reasonable and prudent supervision over our management, policies, practices, and internal controls. The plaintiff sought unspecified monetary damages on behalf of the Company as well as governance reforms. Between June 2020 and August 2020, additional shareholder derivative complaints were filed and later consolidated by the court.
On July 27, 2020, we filed an answer to VGXI’s counterclaims, disputing the allegations and the claims raised in VGXI’s filing. On October 1, 2020, we filed a notice of discontinuance of appeal with the Pennsylvania Superior Court. A trial date for the litigation has not been set.
In October 2020, we filed a notice of discontinuance of appeal with the Pennsylvania Superior Court. A trial date for the litigation has not been set. We intend to aggressively prosecute the claims set forth in its complaint against VGXI and to vigorously defend ourselves against VGXI’s counterclaims.
On March 28, 2022, a fifth shareholder derivative complaint, Schumacher v. Benito et al., was filed in the Delaware Court of Chancery, naming eight current and former directors as defendants. The complaint asserts substantially similar claims as those in the consolidated derivative action. On May 4, 2022, the Delaware Court of Chancery entered a stay of the litigation.
In March 2022, an additional shareholder derivative complaint was filed in the Delaware Court of Chancery, asserting substantially similar claims as those in the consolidated derivative action. In May 2022, the Delaware Court of Chancery entered a stay of the litigation.
The counterclaims seek injunctive relief, damages, attorneys’ fees, interest, costs and other relief from us. Also, on July 7, 2020, VGXI filed a third-party complaint against Ology Bioservices, Inc., a contract manufacturing organization that we had engaged to provide services similar to those that were being provided by VGXI.
VGXI also filed a third-party complaint against Ology Bioservices, Inc., a contract manufacturing organization that we had engaged to provide services similar to those that were being provided by VGXI. We filed an answer to VGXI’s counterclaims, disputing the allegations and the claims raised in VGXI’s filing.
The lawsuit alleges that we made materially false and misleading statements regarding our development of a vaccine for COVID-19 in our public disclosures in violation of certain federal securities laws. The plaintiff seeks unspecified monetary damages on behalf of the putative class and an award of costs and expenses, including reasonable attorneys’ fees.
The lawsuit alleged that the Company made materially false and misleading statements in violation of certain federal securities laws. The plaintiffs sought unspecified monetary damages on 52 behalf of the putative class and an award of costs and expenses, including reasonable attorneys’ fees. The plaintiffs’ complaint was later amended to include certain of the Company’s other officers as defendants.
The complaint asserts claims for breach of contract, declaratory judgment, unfair competition, and unjust enrichment. The complaint seeks injunctive relief, an accounting, damages, disgorgement of profits, attorneys’ fees, interest, and other relief from us. On January 29, 2021, we filed preliminary objections to the complaint. On August 23, 2021, the Court overruled our preliminary objections to the complaint.
The complaint seeks injunctive relief, an accounting, damages, 53 disgorgement of profits, attorneys’ fees, interest, and other relief from us. We filed preliminary objections to the complaint, which were overruled. In September 2021, we filed an answer to the complaint, new matter, and counterclaims.
On June 26, 2020, we filed notice of appeal of the denial of the petition with the Pennsylvania Superior Court. On July 7, 2020, VGXI filed an answer, new matter and counterclaims against us, alleging that we had breached the supply agreement, as well as misappropriation of trade secrets and unjust enrichment.
Following our appeal, in July 2020 VGXI filed counterclaims against us, alleging that we had breached the supply agreement, as well as misappropriation of trade secrets and unjust enrichment. The counterclaims seek injunctive relief, damages, attorneys’ fees, interest, costs and other relief from us.
The number of shares will be calculated based on the average trading price of our common stock for the 10 trading days preceding the determination date pursuant to the terms of the securities class action settlement. Shareholder Derivative Litigation On April 20, 2020, a purported shareholder derivative complaint, Behesti v.
Our insurance carriers paid the $30.0 million cash component of the settlement. During the three months ended March 31, 2023, we issued 760,083 shares of common stock pursuant to the securities class action settlement. Shareholder Derivative Litigation In April 2020, a purported shareholder derivative complaint, Behesti v.
Removed
On June 18, 2020, the court appointed Manuel Williams to serve as lead plaintiff. On August 3, 2020, Mr. Williams filed a consolidated complaint, naming us and three of our officers as defendants. 49 On September 21, 2020, Mr. Williams and another purported stockholder, Andrew Zenoff filed a first amended complaint, naming us and three of our officers as defendants.
Added
In March 2023, the parties submitted a joint status report to the Court of Chancery reporting that the parties agreed to a settlement in principle, which also provided for the resolution of the consolidated derivative action and certain stockholder demands.
Removed
Defendants filed a motion to dismiss plaintiff’s first amended complaint on November 5, 2020. On February 16, 2021, the court issued an order granting in part, and denying in part, Defendants’ motion to dismiss. The court granted Defendants’ motion to dismiss, and dismissed with prejudice, the claims premised on the April 30 and June 30, 2020 statements.
Added
In April 2023, the plaintiffs in the consolidated derivative action filed a motion for preliminary approval of settlement with the United States District Court for the Eastern District of Pennsylvania. The proposed settlement provided for resolution of the consolidated derivative action, the derivative action pending in the Delaware Court of Chancery, and certain stockholder demands.
Removed
The court denied Defendants’ motion to dismiss as to the remaining statements. On March 9, 2021, Defendants filed their answer to the complaint. After additional motions were filed in the case, in June 2022 the parties negotiated an agreement in principle to settle the shareholder class action complaint.
Added
In June 2023, the court entered an order preliminarily approving the proposed settlement of the derivative claims, in accordance with a Stipulation of Settlement. The Stipulation of Settlement contemplated that, following the settlement hearing and the final approval of the settlement by the court, we would implement certain corporate governance reforms described in the Stipulation of Settlement.
Removed
On August 31, 2022, the court granted preliminary approval of the settlement, and on January 18, 2023, the court entered an order granting final approval of the settlement, as set forth in a stipulation of settlement. In February 2023, pursuant to the securities class action settlement, we issued 7,000,000 shares of common stock.
Added
The preliminary order also approved the form and manner of the notice of the Settlement. As part of the Settlement, in July 2023 we paid $1.2 million to plaintiffs’ counsel for their fees and expenses. In October 2023, the court entered an order and final judgment approving the Settlement, which became effective in November 2023.
Removed
Following the expiration of the appeal period or resolution of an appeal if one is filed, we will make another contribution of common stock to the settlement fund with a value of approximately $2.1 million.
Added
The Company has implemented the corporate governance reforms in response to the provisions of the Stipulation of Settlement.
Removed
On June 5, 2020, the court stayed the Beheshti action pending resolution of a forthcoming motion to dismiss the McDermid securities class action or until any party provides notice that they no longer consent to the stay.
Removed
On June 12 and June 15, 2020, two additional shareholder derivative complaints were filed in the United States District Court for the Eastern District of Pennsylvania, captioned Isman v. Benito, et al. and Devarakonda et al. v. Kim, et. al. The complaints assert substantially similar claims as the Beheshti action and name our current directors as defendants.
Removed
The Devarakonda complaint also names one of our former directors as a defendant. On July 21, 2020, the court consolidated the three derivative cases under the caption In re Inovio Pharmaceuticals, Inc. Derivative Litigation. The consolidated action is stayed. On July 7, 2020, a fourth shareholder derivative complaint, Fettig v.
Removed
Kim et al., was filed in the United States District Court for the Eastern District of Pennsylvania, naming eight current and former directors as defendants. The complaint asserts substantially similar claims as those in the consolidated derivative action. On August 27, 2020, the Fettig action was consolidated with the other derivative cases, which remain stayed as explained above.
Removed
We intend to aggressively prosecute the claims set forth in our complaint against VGXI and to vigorously defend ourselves against VGXI’s counterclaims.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES 51 PART II 52 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 52 ITEM 6. [RESERVED] 53 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 54 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 62 ITEM 8.
Biggest changeITEM 4. MINE SAFETY DISCLOSURES 54 PART II 55 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 55 ITEM 6. [RESERVED] 56 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 57 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 63 ITEM 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+2 added−1 removed3 unchanged
Biggest changeAs of February 24, 2023, we had approximately 100 common stockholders of record. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
Biggest changeThe actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.
Performance Graph The graph below compares the performance of our common stock with the performance of the NYSE American Index, the S&P SuperCap Biotechnology index and the Nasdaq Composite Index for the five years ended December 31, 2022.
Performance Graph The graph below compares the performance of our common stock with the performance of the NYSE American Index, the S&P SuperCap Biotechnology index and the Nasdaq Composite Index for the five years ended December 31, 2023.
The graph assumes a $100 investment on December 31, 2017 in our common stock and in each index, with the reinvestment of all dividends, if any. *$100 invested on 12/31/17 in stock or index, including reinvestment of dividends.
The graph assumes a $100 investment on December 31, 2018 in our common stock and in each index, with the reinvestment of all dividends, if any. *$100 invested on 12/31/18 in stock or index, including reinvestment of dividends.
Dividends The payment of any dividends on our common stock is within the discretion of our board of directors. We have never paid cash dividends on our common stock and the board of directors does not expect to declare cash dividends on the common stock in the foreseeable future.
We have never paid cash dividends on our common stock and the board of directors does not expect to declare cash dividends on the common stock in the foreseeable future.
Fiscal year ended December 31. 52 12/17 12/18 12/19 12/20 12/21 12/22 Inovio Pharmaceuticals, Inc. 100.00 96.85 79.90 214.29 120.82 37.77 NYSE American 100.00 82.80 91.24 86.80 111.40 107.09 Nasdaq Composite 100.00 97.16 132.81 192.47 235.15 158.65 S&P SuperCap Biotechnology Index 100.00 94.71 110.80 121.76 134.95 153.42 The stock price performance included in this graph is not necessarily indicative of future stock price performance.
Fiscal year ended December 31. 55 12/18 12/19 12/20 12/21 12/22 12/23 Inovio Pharmaceuticals, Inc. 100.00 82.50 221.25 124.75 39.00 12.75 NYSE American 100.00 110.19 104.83 134.55 129.34 131.60 Nasdaq Composite 100.00 136.69 198.10 242.03 163.28 236.17 S&P SuperCap Biotechnology Index 100.00 116.98 128.56 142.49 161.98 167.26 The stock price performance included in this graph is not necessarily indicative of future stock price performance.
Removed
This number of holders of record also does not include stockholders whose shares may be held in trust by other entities. The closing price per share of our common stock on February 24, 2023 was $1.28, as reported on the Nasdaq Global Select Market.
Added
On November 2, 2023, the listing of our common stock was transferred to the Nasdaq Capital Market. On January 24, 2024, we implemented a 1-for-12 reverse stock split of our common stock. As of March 1, 2024, we had approximately 58 common stockholders of record.
Added
The closing price per share of our common stock on March 1, 2024 was $9.55, as reported on the Nasdaq Capital Market. Dividends The payment of any dividends on our common stock is within the discretion of our board of directors.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

50 edited+18 added−45 removed23 unchanged
Biggest changeResults of Operations The consolidated financial data for the years ended December 31, 2022, 2021 and 2020 is presented in the following table and the results of these periods are used in the discussion thereafter. 57 Year Ended December 31, Increase/(Decrease) 2022 vs. 2021 Increase/(Decrease) 2021 vs. 2020 2022 2021 2020 $ % $ % Revenue from collaborative arrangements and other contracts, including affiliated entity $ 10,262,268 $ 1,774,758 $ 7,411,220 $ 8,487,510 478 % $ (5,636,462) (76) % Operating expenses: Research and development 187,650,503 249,240,324 94,245,436 (61,589,821) (25) 154,994,888 164 General and administrative 90,185,285 53,752,353 37,247,828 36,432,932 68 16,504,525 44 Total operating expenses 277,835,788 302,992,677 131,493,264 (25,156,889) (8) 171,499,413 130 Loss from operations (267,573,520) (301,217,919) (124,082,044) 33,644,399 11 (177,135,875) (143) Interest income 4,782,030 3,363,080 3,311,846 1,418,950 42 51,234 2 Interest expense (1,253,952) (1,936,447) (8,702,450) 682,495 (35) 6,766,003 (78) Change in fair value of derivative liability — — (75,670,977) — * 75,670,977 * (Loss) gain on investment in affiliated entity (1,899,654) (553,570) 36,556,658 (1,346,084) * (37,110,228) * Net unrealized (loss) gain on available-for-sale equity securities (7,846,172) (3,222,838) 1,695,497 (4,623,334) * (4,918,335) * Other (expense) income, net (3,861,584) 343,371 (704,896) (4,204,955) * 1,048,267 * Gain on deconsolidation of Geneos — — 4,121,075 — * (4,121,075) * Loss on extinguishment of convertible bonds — — (8,177,043) — * 8,177,043 * Gain on extinguishment of convertible senior notes — — 8,762,030 — * (8,762,030) * Net loss before share in net loss of Geneos (277,652,852) (303,224,323) (162,890,304) 25,571,471 8 (140,334,019) (86) Share in net loss of Geneos (2,165,213) (434,387) (4,584,610) (1,730,826) * 4,150,223 * Net loss (279,818,065) (303,658,710) (167,474,914) 23,840,645 (8) (136,183,796) 81 Net loss attributable to non-controlling interest — — 1,063,757 — * (1,063,757) (100) Net loss attributed to Inovio Pharmaceuticals, Inc. $ (279,818,065) $ (303,658,710) $ (166,411,157) $ 23,840,645 8 % $ (137,247,553) (82) % *Not meaningful Comparison of Years Ended December 31, 2022 and 2021 Revenue Revenue was primarily derived under collaborative arrangements and contracts, including arrangements with affiliated entities, for the years ended December 31, 2022 and 2021 .
Biggest changeYear Ended December 31, Increase/(Decrease) 2023 vs. 2022 Increase/(Decrease) 2022 vs. 2021 2023 2022 2021 $ % $ % Revenue from collaborative arrangements and other contracts, including affiliated entity $ 832,010 $ 10,262,268 $ 1,774,758 $ (9,430,258) (92) % $ 8,487,510 478 % Operating expenses: Research and development 86,676,563 187,650,503 249,240,324 (100,973,940) (54) (61,589,821) (25) General and administrative 47,582,104 90,185,285 53,752,353 (42,603,181) (47) 36,432,932 68 Impairment of Goodwill 10,513,371 — — 10,513,371 100 — — Total operating expenses 144,772,038 277,835,788 302,992,677 (133,063,750) (48) (25,156,889) (8) Loss from operations (143,940,028) (267,573,520) (301,217,919) 123,633,492 46 33,644,399 11 Interest income 8,133,290 4,782,030 3,363,080 3,351,260 70 1,418,950 42 Interest expense (1,222,789) (1,253,952) (1,936,447) 31,163 (2) 682,495 (35) Gain (loss) on investment in affiliated entity 773,145 (1,899,654) (553,570) 2,672,799 * (1,346,084) * Net unrealized gain (loss) on available-for-sale equity securities 5,850,626 (7,846,172) (3,222,838) 13,696,798 * (4,623,334) * Other (expense) income, net (4,711,596) (3,861,584) 343,371 (850,012) * (4,204,955) * Net loss before share in net loss of Geneos (135,117,352) (277,652,852) (303,224,323) 142,535,500 51 25,571,471 8 Share in net loss of Geneos — (2,165,213) (434,387) 2,165,213 * (1,730,826) * Net loss $ (135,117,352) $ (279,818,065) $ (303,658,710) $ 144,700,713 (52) % $ 23,840,645 (8) % *Not meaningful Comparison of Years Ended December 31, 2023 and 2022 Revenue Revenue was primarily derived under collaborative arrangements and other contracts, including arrangements with affiliated entities, for the years ended December 31, 2023 and 2022 .
Readers are also urged to carefully review and consider the various disclosures made by us which attempt to advise interested parties of the factors which affect our business, including without limitation the disclosures made in Item 1A of Part I of this Annual Report under the caption “Risk Factors.” Risk factors that could cause actual results to differ from those contained in the forward-looking statements include but are not limited to: our history of losses; our lack of products that have received regulatory approval; uncertainties inherent in clinical trials and product development programs, including but not limited to the fact that pre-clinical and clinical results may not be indicative of results achievable in other trials or for other indications, that the studies or trials may not be successful or achieve desired results, that preclinical studies and clinical trials may not commence, have sufficient enrollment or be completed in the time periods anticipated, that results from one study may not necessarily be reflected or supported by the results of other similar studies, that results from an animal study may not be indicative of results achievable in human studies, that clinical testing is expensive and can take many years to complete, that the outcome of any clinical trial is uncertain and failure can occur at any time during the clinical trial process, and that our proprietary smart device technology and DNA medicine candidates may fail to show the desired safety and efficacy traits in clinical trials; the availability of funding; the ability to manufacture our DNA medicine candidates; the availability or potential availability of alternative therapies or treatments for the conditions targeted by us or our collaborators, including alternatives that may be more efficacious or cost-effective than any therapy or treatment that we and our collaborators hope to develop; our ability to receive development, regulatory and commercialization event-based payments under our collaborative agreements; whether our proprietary rights are enforceable or defensible or infringe or allegedly infringe on rights of others or can withstand claims of invalidity; and the impact of government healthcare laws and proposals.
Readers are also urged to carefully review and consider the various disclosures made by us which attempt to advise interested parties of the factors which affect our business, including without limitation the disclosures made in Item 1A of Part I of this Annual Report under the caption “Risk Factors.” Risk factors that could cause actual results to differ from those contained in the forward-looking statements include but are not limited to: our history of losses; our lack of products that have received regulatory approval; uncertainties inherent in clinical trials and product development programs, including but not limited to the fact that pre-clinical and clinical results may not be indicative of results achievable in other trials or for other indications, that the studies or trials may not be successful or achieve desired results, that preclinical studies and clinical trials may not commence, have sufficient enrollment or be completed in the time periods anticipated, that results from one study may not necessarily be reflected or supported by the results of other similar studies, that results from an animal study may not be indicative of results achievable in human studies, that clinical testing is expensive and can take many years to complete, that the outcome of any clinical trial is uncertain and failure can occur at any time during the clinical trial process, and that our proprietary device technology and DNA medicine candidates may fail to show the desired safety and efficacy traits in clinical trials; the availability of funding; the ability to manufacture our DNA medicine candidates; the availability or potential availability of alternative therapies or treatments for the conditions targeted by us or our collaborators, including alternatives that may be more efficacious or cost-effective than any therapy or treatment that we and our collaborators hope to develop; our ability to receive development, regulatory and commercialization event-based payments under our collaborative agreements; whether our proprietary rights are enforceable or defensible or infringe or allegedly infringe on rights of others or can withstand claims of invalidity; and the impact of government healthcare laws and proposals.
We utilize a labor reporting system to record employee compensation on a project-by-project basis. Unallocated research and development expenses include engineering and device-related expenses that are not allocable to a specific project, as well as stock-based compensation, other employee-related expenses that are not related to a specific project, and facilities and depreciation expenses.
We utilize a labor reporting system to record employee 59 compensation on a project-by-project basis. Unallocated research and development expenses include engineering and device-related expenses that are not allocable to a specific project, as well as stock-based compensation, other employee-related expenses that are not related to a specific project, and facilities and depreciation expenses.
Research and Development Expenses - Clinical Trial Accruals Our activities have largely consisted of research and development efforts related to developing proprietary smart device technologies, DNA medicine candidates and dMABs. For clinical trial expenses, judgments used in estimating accruals rely on estimates of total costs incurred based on participant enrollment, completion of studies and other events.
Research and Development Expenses - Clinical Trial Accruals 58 Our activities have largely consisted of research and development efforts related to developing proprietary device technologies, DNA medicine candidates and dMABs. For clinical trial expenses, judgments used in estimating accruals rely on estimates of total costs incurred based on participant enrollment, completion of studies and other events.
Comparison of Years Ended December 31, 2021 and 2020 For a comparison of the years ended December 31, 2021 and 2020, you may refer to Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 1, 2022.
Comparison of Years Ended December 31, 2022 and 2021 For a comparison of the years ended December 31, 2022 and 2021, you may refer to Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 1, 2023.
Our partners and collaborators include Advaccine Biopharmaceuticals Suzhou Co, ApolloBio Corporation, AstraZeneca, The Bill & Melinda Gates Foundation (Gates), Coalition for Epidemic Preparedness Innovations (CEPI), Defense Advanced Research Projects Agency (DARPA), The U.S.
Our partners and collaborators include Advaccine Biopharmaceuticals Suzhou Co, ApolloBio Corporation, AstraZeneca, The Bill & Melinda Gates Foundation (Gates), Coalition for Epidemic Preparedness Innovations (CEPI), Coherus Biosciences, Defense Advanced Research Projects Agency (DARPA), The U.S.
Subject to the terms and conditions of the Sales Agreement, the Sales Agents may sell the common stock by any method permitted by law deemed to be an “at the market offering”.
Subject to the terms and conditions of the Sales Agreement, the Sales Agents may sell the common stock by any method permitted by law deemed to be an “at the market" offering.
During the year ended December 31, 2022, stock options to purchase 118,694 shares of common stock were exercised for aggregate net proceeds of $283,000, which proceeds were offset by tax payments made related to net share settlement of RSU awards of $1.4 million.
During the year ended December 31, 2022, stock options to purchase 9,891 shares of common stock were exercised for aggregate net proceeds of $283,000, which proceeds were offset by tax payments made related to net share settlement of RSU awards of $1.4 million.
Issuances of Common Stock On November 9, 2021, we entered into an ATM Equity Offering SM Sales Agreement (the “Sales Agreement”) with outside sales agents (collectively, the “Sales Agents”) under which we may offer and sell, from time to time at our sole discretion, shares of our common stock with aggregate gross proceeds of up to $300.0 million, through the Sales Agents.
Issuances of Common Stock On November 9, 2021, we entered into an ATM Equity Offering SM Sales Agreement, or the Sales Agreement, with outside sale s agents, or collectively, the Sales Agents, under which we may offer and sell, from time to time at our sole discretion, shares of our common stock with aggregate gross proceeds of up to $300.0 million, through the Sales Agents.
Liquidity and Capital Resources Historically, our primary uses of cash have been to finance research and development activities including clinical trial activities for the advancement of DNA medicine candidates. Since inception, we have satisfied our cash requirements principally from proceeds from the sale of equity securities, indebtedness and grants and government contracts.
Liquidity and Capital Resources Our primary uses of cash are to finance research and development activities, including clinical trial activities for the advancement of our DNA medicine candidates. We have satisfied our cash requirements principally from proceeds from the sale of equity securities, indebtedness and grants and government contracts.
We may not be successful in our research and development efforts, and we may never generate sufficient product revenue to be profitable. As of December 31, 2022, we had an accumulated deficit of $1.5 billion.
We may not be successful in our research and development efforts, and we may never generate sufficient product revenue to be profitable. As of December 31, 2023, we had an accumulated deficit of $1.6 billion.
During the year ended December 31, 2021, stock options to purchase 1,310,263 shares of common stock were exercised for aggregate net proceeds of $6.7 million, which proceeds were offset by tax payments made related to net share settlement of RSU awards of $4.6 million.
During the year ended December 31, 2021, stock options to purchase 109,188 shares of common stock were exercised for aggregate net proceeds of $6.7 million, which proceeds were offset by tax payments made related to net share settlement of RSU awards of $4.6 million.
Research and development costs are expensed as incurred. Non-refundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized.
Research and development costs are expensed as incurred. Non-refundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized. The capitalized amounts are expensed as the related goods are delivered or the services are performed.
Our current cash resources, including amounts that we may be able to obtain through sales of common stock under our “at the market” equity facility, will not be sufficient to complete the clinical development of any of our product candidates, and we anticipate that additional financing will be required in order to commercialize and generate revenues from the sale of any product candidates that receive regulatory approval.
Our current cash resources, including amounts that we may be able to obtain through sales of common stock under the S ales Agreement, will not be sufficient to complete the clinical development of any of our product candidates, and we anticipate that additional financing will be required in order to complete the development of and to commercialize and generate revenues from the sale of any product candidates that receive regulatory approval.
Cash Flows Operating Activities Net cash used in operating activities was $216.2 million and $215.7 million for the years ended December 31, 2022 and 2021, respectively. The variance was primarily due to the timing and changes in working capital balances, offset by decreased operating expenses.
Cash Flows Operating Activities Net cash used in operating activities was $124.4 million and $216.2 million for the years ended December 31, 2023 and 2022, respectively. The variance was primarily due to the timing and changes in working capital balances, offset by decreased operating expenses.
As of December 31, 2022, we expect to receive aggregate future minimum lease payments totaling $434,000 (non-discounted) over the duration of the sublease agreements, which expected payments are not included in the table above. (3) Remaining purchase obligations from supply agreements with contract manufacturers.
As of December 31, 2023, we expect to receive aggregate future minimum lease payments totaling $1.3 million (non-discounted) over the duration of the sublease agreements, which expected payments are not included in the table above. (3) Purchase obligations from supply agreements with contract manufacturers.
Contributions received from current grant agreements and recorded as contra-research and development expense were $24.5 million and $53.7 million for the years ended December 31, 2022 and 2021, respectively.
Contributions received from current grant agreements and recorded as contra-research and development expense were $6.8 million and $24.5 million for the years ended December 31, 2023 and 2022, respectively.
Investing Activities 60 Net cash provided by (used in) investing activities was $109.6 million and $(175.3) million for the years ended December 31, 2022 and 2021, respectively. The variance was primarily the result of timing differences in short-term investment purchases, sales and maturities.
Investing Activities Net cash provided by investing activities was $87.4 million and $109.6 million for the years ended December 31, 2023 and 2022, respectively. The variance was primarily the result of timing differences in short-term investment purchases, sales and maturities.
Contractual Obligations 61 As of December 31, 2022, future minimum payments due under our contractual obligations are set forth in the table below. We expect to be able to satisfy these obligations, both in the short-term and in the longer-term, with cash on hand and proceeds from sales of our common stock under the Sales Agreement.
Contractual Obligations As of December 31, 2023, future minimum payments due under our contractual obligations are set forth in the table below. We expect to be able to satisfy these obligations, both in the short-term and in the longer-term, with cash on hand.
Loss on Investment in Affiliated Entity The loss on investment in affiliated entity resulted from the declines in the fair market value of our investment in PLS of $1.9 million and $554,000 for the years ended December 31, 2022 and 2021, respectively.
Gain (Loss) on Investment in Affiliated Entity The gain (loss) on investment in affiliated entity resulted from the change in the fair market value of our investment in PLS of $773,000 and $(1.9) million for the years ended December 31, 2023 and 2022, respectively.
Our DNA medicine candidates will require significant additional research and development efforts, including extensive preclinical and clinical testing. All DNA medicine candidates that we advance to clinical testing will require regulatory approval prior to commercial use, and will require significant costs for commercialization.
We earn revenue from license fees and milestone revenue and collaborative research and development agreements and contracts. Our DNA medicine candidates will require significant additional research and development efforts, including extensive preclinical and clinical testing. All DNA medicine candidates that we advance to clinical testing will require regulatory approval prior to commercial use, and will require significant costs for commercialization.
We also had U.S. federal and state research and development tax credits of $40.5 million and $4.7 million, respectively, net of the federal research and development credits that will expire due to IRC Section 383 limitations. The net operating losses and credits began to expire during 2022.
We also had U.S. federal and state research and development tax credits of $41.6 million and $6.1 million, respectively, net of the federal research and development credits that will expire due to IRC Section 383 limitations. The net operating losses and credits began to expire during 2023.
As of December 31, 2022, we had net operating loss carry forwards for U.S. federal, California and Pennsylvania income tax purposes of $920.6 million, $210.3 million and $89.6 million, respectively, net of the net operating losses that will expire due to IRC Section 382 limitations.
As of December 31, 2023, we had net operating loss carry forwards for U.S. federal, California and Pennsylvania income tax purposes of $1,013.3 million, $251.4 million and $102.6 million, respectively, net of the net operating losses that will expire due to IRC Section 382 61 limitations.
Net Unrealized Loss on Available-for-Sale Equity Securities The net unrealized loss on available-for-sale equity securities for the years ended December 31, 2022 and 2021 was $7.8 million and $3.2 million, respectively, which resulted from a change in the fair market value of the investments.
Net Unrealized Gain (Loss) on Available-for-Sale Equity Securities The net unrealized gain (loss) on available-for-sale equity securities for the years ended December 31, 2023 and 2022 was $5.9 million and $(7.8) million, respectively, which resulted from a change in the fair market value of the investments. Other (Expense) Income , net.
Total employee stock-based compensation cost for the 59 years ended December 31, 2022 and 2021 was $22.2 million and $25.0 million, of which $8.8 million and $13.4 million was included in research and development expenses and $13.4 million and $11.6 million was included in general and administrative expenses, respectively.
Total employee stock-based compensation cost for the years ended December 31, 2023 and 2022 was $10.4 million and $22.2 million, of which $4.5 million and $8.8 million was included in research and development expenses and $5.9 million and $13.4 million was included in general and administrative expenses, respectively.
Working Capital and Liquidity As of December 31, 2022, we had cash and short-term investments of $253.0 million and working capital of $218.4 million, as compared to $401.3 million and $382.7 million as of December 31, 2021, respectively.
Working Capital and Liquidity As of December 31, 2023, we had cash and short-term investments of $145.3 million and working capital of $110.5 million, as compared to $253.0 million and $218.4 million as of December 31, 2022, respectively.
We believe that our current cash and short-term investments are sufficient to meet our planned working capital requirements for at least the next twelve months from the date of this report.
We believe that our current cash and short-term investments are sufficient to meet our planned working capital requirements for at least the next twelve months from the date of this report. During 2023, we undertook actions to decrease our expenses, including multiple headcount reductions.
We expect to continue to incur substantial operating losses in the future due to our commitment to our research and development programs, the funding of preclinical studies, clinical trials and regulatory activities and the costs of general and administrative activities. VGX-3100 Update REVEAL2 is our second Phase 3 trial with VGX-3100.
We expect to continue to incur substantial operating losses in the future due to our commitment to our research and development programs, the funding of preclinical studies, clinical trials and regulatory activities and the costs of general and administrative activities.
Funding Requirements As of December 31, 2022, we had an accumulated deficit of $1.5 billion and we expect to continue to operate at a loss for some time. The amount of the accumulated deficit will continue to increase, as it will be expensive to continue research and development efforts.
Funding Requirements 62 As of December 31, 2023, we had an accumulated deficit of $1.6 billion and we expect to continue to operate at a loss in the near term. The amount of our accumulated deficit will continue to increase, as it will be expensive to continue research and development efforts.
Utilization of net operating losses and tax credits are subject to a substantial annual limitation due to ownership change limitations provided by the Internal Revenue Code of 1986, as amended, or IRC.
Income Taxes Since inception, we have incurred operating losses and accordingly have not recorded a provision for U.S. income taxes for any of the periods presented. Utilization of net operating losses and tax credits are subject to a substantial annual limitation due to ownership change limitations provided by the Internal Revenue Code of 1986, as amended, or IRC.
Interest Income The $1.4 million increase in interest income for the year ended December 31, 2022 as compared to 2021 was primarily due to higher interest rates.
Interest Income The $3.4 million increase in interest income for the year ended December 31, 2023 as compared to 2022 was primarily due to higher interest rates earned on our cash balance. Interest Expense There was a $31,000 decrease in interest expense for the year ended December 31, 2023 as compared to 2022.
Employee stock-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense over the employee’s requisite service period.
For more information, see Note 8 – Goodwill and Intangible Assets to the consolidated financial statements included in this report. Stock-based compensation Employee stock-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense over the employee’s requisite service period.
(2) We have entered into operating leases for our facilities, which expire from 2023 to 2029, and operating leases for office equipment, which expire in 2024.
See Note 9, Convertible Debt, to the consolidated financial statements in this report for additional information. (2) We have entered into operating leases for our facilities, which expire from 2024 to 2029, and operating leases for office equipment, which expire in 2024.
In the fourth quarter of 2019, we entered into two subleases for a portion of our Plymouth Meeting corporate headquarters facility with one period through March 31, 2025 and the other month-to-month after December 31, 2022.
We have four active subleases for portions of our Plymouth Meeting corporate headquarters facility with periods through March 31, 2025, two through December 31, 2026 and the other month-to-month.
Department of Defense (DoD), HIV Vaccines Trial Network, International Vaccine Institute (IVI), Kaneka Eurogentec, National Cancer Institute (NCI), National Institutes of Health (NIH), National Institute of Allergy and Infectious Diseases (NIAID), the Parker Institute for Cancer Immunotherapy, Plumbline Life Sciences, Regeneron Pharmaceuticals, Richter-Helm BioLogics, Thermo Fisher Scientific, the University of Pennsylvania, the Walter Reed Army Institute of Research, and The Wistar Institute. 54 We or our collaborators are currently evaluating the feasibility of, or conducting or planning clinical studies of, our DNA medicines for Ebola HPV-related precancers, including cervical, vulvar, and anal dysplasia; HPV-related cancers, including head & neck, cervical, anal, penile, vulvar, and vaginal; other HPV-related disorders, such as RRP; and GBM.
Department of Defense (DoD), HIV Vaccines Trial Network, International Vaccine Institute (IVI), Kaneka Eurogentec, National Cancer Institute (NCI), National Institutes of Health (NIH), National Institute of Allergy and Infectious Diseases (NIAID), Plumbline Life Sciences, Regeneron Pharmaceuticals, Richter-Helm BioLogics, Thermo Fisher Scientific, the University of Pennsylvania, the Walter Reed Army Institute of Research, and The Wistar Institute.
These decreases were offset by an increase of $5.3 million, earned primarily under the sub-grant through Wistar for DARPA COVID-19 dMAb. General and Administrative Expenses General and administrative expenses, which include business development expenses, the amortization of intangible assets and patent expenses, were $90.2 million for the year ended December 31, 2022 as compared to $53.8 million in 2021.
General and Administrative Expenses General and administrative expenses, which include business development expenses, the amortization of intangible assets and patent expenses, were $47.6 million for the year ended December 31, 2023 as compared to $90.2 million in 2022.
The decrease year over year was primarily due to decreases of $21.0 million, $5.8 million, $3.3 million and $3.2 million earned under the DoD 3PSP device development grant, CEPI grants related to INO-4800 and device development activities, reimbursements from Advaccine and the CEPI Lassa and MERS grant, respectively.
The decrease year over year was primarily due to decreases of $7.7 million earned under the sub-grant through Wistar primarily for DARPA COVID-19 dMAb, $6.1 million from the DoD 3PSP device development grant and $5.0 million earned under the CEPI Lassa and MERS grants. These decreases were offset by an increase of $2.4 million in reimbursements from Advaccine.
All of our DNA medicine candidates are in the research and development phase. We have not generated any revenues from the sale of any products, and we do not expect to generate any such revenues for at least the next several years. We earn revenue from license fees and milestone revenue and collaborative research and development agreements and contracts.
All of our DNA medicine candidates are in the research and development phase. We have not generated any revenues from the sale of any products, and we do not expect to generate any material revenues unless and until we obtain marketing approval for and successfully commercialize INO-3107 and our other product candidates.
During the year ended December 31, 2022, we sold 34,445,743 shares of common stock under the Sales Agreement for aggregate net proceeds of $83.0 million. During the year ended December 31, 2021, we sold 6,955,341 shares of common stock under the Sales Agreement for aggregate net proceeds of $47.7 million.
During the year ended December 31, 2022, we sold 2,870,478 shares of common stock under the Sales Agreement for aggregate net proceeds of $83.0 million. From January 1, 2024 through the date of this report, we sold an additional 543,620 shares of common stock under the Sales Agreement for net proceeds of $5.2 million.
Recent Accounting Pronouncements Information regarding recent accounting pronouncements is contained in Note 2 to the consolidated financial statements, included elsewhere in this report.
Recent Accounting Pronouncements Information regarding recent accounting pronouncements is contained in Note 2 to the consolidated financial statements, included elsewhere in this report. Results of Operations The consolidated financial data for the years ended December 31, 2023, 2022 and 2021 is presented in the following table and the results of these periods are used in the discussion thereafter.
The $36.4 overall increase year over year was primarily the result of: • $44.0 million related to the class action securities litigation settlement, which was reduced by $30.0 million of insurance recoveries, resulting in a net $14.0 million expense, which is the value of our common stock to be issued in connection with the settlement; • $14.3 million in higher legal expenses, primarily related to litigation matters; • $6.9 million in severance expenses related to the separation of our former President and Chief Executive Officer in May 2022, including $4.2 million of stock-based compensation expense related to equity award modifications (see Note 10 to our consolidated financial statements included in this report for additional information); and • $1.6 million in overall higher employee compensation.
The $42.6 overall decrease year over year was primarily the result of: 60 • $14.0 million in net expense related to the class action securities litigation settlement, which was accrued in 2022 but paid in 2023; • $11.3 million in lower legal expenses, primarily the result of the conclusion of litigation in 2023; • $6.9 million in one-time severance expenses related to the separation of our former President and Chief Executive Officer in 2022, including $4.2 million of stock-based compensation expense related to equity award modifications, that did not recur in 2023; • $5.9 million in lower employee compensation, including employee and consultant stock-based compensation, as a result of headcount reductions in 2023; • $1.9 million in lower insurance expenses; and • $1.4 million in lower other outside services related to our discontinued INO-4800 and VGX-3100 programs.
Financing Activities Net cash provided by financing activities was $81.8 million and $211.5 million for the years ended December 31, 2022 and 2021, respectively.
Financing Activities Net cash provided by financing activities was $5.0 million and $81.8 million for the years ended December 31, 2023 and 2022, respectively. The variance was primarily due to net proceeds of $5.5 million from the sale of common stock under the Sales Agreement (defined below) in 2023 compared to net proceeds of $83.0 million received during 2022.
The $8.5 million increase in revenue was primarily due to higher revenue earned from our Procurement Contract with the DoD.
The $9.4 million decrease in revenue was primarily due to no revenue from our Procurement Contract with the DoD as all performance obligations were satisfied during 2022.
Overview We are a biotechnology company focused on developing and commercializing DNA medicines to help treat and protect people from diseases associated with HPV, cancer, and infectious diseases. Our goal is to advance our diverse pipeline of product candidates and deliver on the promise of DNA medicines technology in treating and preventing a wide array of diseases.
Overview We are a clinical-stage biotechnology company focused on developing and commercializing DNA medicines to help treat and protect people from diseases associated with human papillomavirus (HPV), cancer, and infectious diseases. Our platform harnesses the power of in vivo protein production, featuring optimized design and delivery of DNA medicines that teach the body to manufacture its own disease-fighting tools.
During the year ended December 31, 2020, stock options to purchase 2,178,252 shares of common stock were exercised for aggregate net proceeds of $12.3 million, which proceeds were offset by tax payments made related to net share settlement of RSU awards of $4.0 million.
During the year ended December 31, 2023, no stock options were exercised and tax payments of $467,000 were made related to the net sh are settlement of RSU awards.
During the year ended December 31, 2020, we sold 66,064,887 shares of common stock for aggregate net proceeds of $454.5 million under previous ATM sales agreements. On January 25, 2021, we closed an underwritten public offering of 20,355,000 shares of our common stock at a public offering price of $8.50 per share.
During the year ended December 31, 2023 , we sold 875,305 shares of our common stock under the Sales Agreement at a weighted average price of $6.33 per share, resulting in aggregate net proceeds of $5.5 million.
Many of our lead candidates are focused on diseases associated with HPV. In 2022, we announced data from a Phase 1/2 clinical trial with INO-3107 for the treatment of HPV-6 and HPV-11 associated RRP.
In our completed Phase 1/2 clinical trial of INO-3107 for the treatment of HPV-6 and HPV-11-associated RRP, 81.3% of patients experienced a reduction in the number of surgical interventions in the year following administration of INO-3107, when compared with the year prior to treatment.
Payments Due by Period Total Less than 1 year 1 – 3 years 3 – 5 years More than 5 years Convertible senior notes (1) $ 18,015,000 $ 1,067,000 $ 16,948,000 $ — $ — Operating lease obligations (2) $ 20,090,000 $ 4,089,000 $ 6,113,000 $ 5,665,000 $ 4,223,000 Manufacturing commitments (3) $ 11,515,000 $ 11,515,000 $ — $ — $ — (1) Amounts represent remaining contractual amounts due under our Notes, including interest based on the fixed rate of 6.5% per year.
Payments Due by Period Total Less than 1 year 1 – 3 years 3 – 5 years More than 5 years Convertible senior notes (1) $ 16,948,000 $ 16,948,000 $ — $ — $ — Operating lease obligations (2) $ 17,665,000 $ 3,247,000 $ 7,021,000 $ 5,265,000 $ 2,132,000 Manufacturing commitments (3) $ 4,489,000 $ 4,489,000 $ — $ — $ — (1) On March 1, 2024 these Convertible Senior Notes matured and we satisfied the obligation in full from existing cash.
Also, in October 2022, we announced that we have discontinued our internally funded efforts to develop INO-4800 as a COVID-19 heterologous booster vaccine. We expect these actions to reduce our operating expenses incrementally and extend our cash runway into the first quarter of 2025, without giving effect to any further capital raising activities, whether under the Sales Agreement or otherwise.
Taking into account these actions, as well as the changes to our clinical development plan for INO-3107 as a result of FDA feedback, we expect our cash runway to extend into the second quarter of 2025, without giving effect to any further capital raising activities.
The capitalized amounts are expensed as the related goods are delivered or the services are performed. 58 The following tables summarize our research and development expense by product candidate for the years ended December 31, 2022 and 2021 : Years Ended December 31, Increase (Decrease) (dollars in thousands) 2022 2021 $ % INO-4800 and other Covid-19 $ 93,464 $ 109,587 $ (16,123) (15) % VGX-3100 15,989 30,873 (14,884) (48) INO-3107 8,133 9,109 (976) (11) INO-5401 and other Immuno-oncology 2,775 2,404 371 15 Other research and development programs 6,227 4,442 1,785 40 Engineering and device-related 25,187 47,889 (22,702) (47) Stock-based compensation 9,059 13,378 (4,319) (32) Other unallocated expenses 26,817 31,558 (4,741) (15) Research and development expense $ 187,651 $ 249,240 $ (61,589) (25) % The $61.6 million overall decrease in research and development expenses year over year was primarily the result of: • $45.9 million in lower drug manufacturing and outside services related to INO-4800; • $21.9 million of costs related to the acquisition and installation of manufacturing equipment for INO-4800 during 2021 that did not recur in 2022; • $15.6 million in lower engineering services and expensed equipment related to our CELLECTRA 3PSP device and array automation project; • $11.8 million in lower clinical study, outside services and immunology expenses related to VGX-3100; • $4.9 million in lower expensed inventory related to the CELLECTRA 2000 device; and • $4.6 million in lower employee stock-based compensation primarily from lower weighted average grant date fair values for the awards granted during 2022.
The following tables summarize our research and development expense by product candidate for the years ended December 31, 2023 and 2022 : Years Ended December 31, Increase (Decrease) (dollars in thousands) 2023 2022 $ % INO-4800 and other Covid-19 $ 8,869 $ 93,464 $ (84,595) (91) % VGX-3100 4,748 15,989 (11,241) (70) INO-3107 17,841 8,133 9,708 119 INO-5401 and other Immuno-oncology 8,372 2,775 5,597 202 Other research and development programs (a) 8,472 6,227 2,245 36 Engineering and device-related 8,863 25,187 (16,324) (65) Stock-based compensation 4,606 9,059 (4,453) (49) Other unallocated expenses (b) 24,906 26,817 (1,911) (7) Research and development expense $ 86,677 $ 187,651 $ (100,974) (54) % (a) Net of contributions received from grant agreements and recorded as contra-research and development expense.
Removed
In clinical trials, our DNA medicine candidates have shown the ability to generate immune responses, especially CD4 + , CD8 + , and memory T-cell responses against targeted pathogens and cancers, via our precisely designed plasmids. These plasmids are delivered into cells using our investigational proprietary smart device, CELLECTRA.
Added
We use proprietary technology to design DNA plasmids which are small circular DNA molecules that work like software the body’s cells can download to produce specific proteins to target and fight disease. Our proprietary investigational CELLECTRA ® delivery devices help our DNA medicines enter the body’s cells for optimal effect.
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In this trial, treatment with INO-3107 resulted in a statistically significant reduction of the median number of surgeries, a result that reinforces our belief that DNA medicines may play a key role in the treatment of HPV-related diseases.
Added
Our lead candidate is INO-3107 for the treatment of recurrent respiratory papillomatosis, or RRP, a rare and debilitating disease of the respiratory tract caused by HPV infection.
Removed
In April 2022, the trial protocol was amended to utilize a biomarker-selected population as the primary population, based on prior analysis of REVEAL1 results suggesting that this investigational biomarker had the potential to identify women more likely to respond to treatment with VGX-3100.
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In February 2023, we announced data from the second cohort of our Phase 1/2 clinical trial, which followed the announcement of the first cohort in October 2022.
Removed
We announced that this trial would no longer be considered to be a pivotal trial and would not lead to a BLA filing for a biomarker-selected population, as the FDA advised us that the biomarker-positive population would not be sufficient to support approval of a potential marketing application for VGX-3100.
Added
In the second cohort of 11 patients who were administered INO-3107 via an exploratory side port injection needle, 10 of the 11 patients (91%) saw a reduction in surgical interventions in the year following initial treatment, with the measurement beginning on Day 0, the start of trial therapy. Of these 10 patients, four did not require surgery.
Removed
The FDA recommended using REVEAL2 as an exploratory trial and that conducting one or two additional well-controlled trials in the biomarker-selected population would be more likely to provide evidence to support approval of a marketing application.
Added
There was a statistically significant median decrease of three surgical interventions when comparing the year following treatment to the year prior to treatment. INO-3107 was well-tolerated and immunogenic among patients in the second cohort.
Removed
Trial participants in REVEAL2 included 203 women, 18 years of age or older, who had histologically-confirmed cervical HSIL associated with HPV-16 and/or HPV-18, but who were otherwise healthy. Participants received either VGX-3100 or placebo at 0, 4 and 12 weeks (randomized 2:1).
Added
The safety and efficacy results for the second cohort were consistent with results announced for the first cohort in October 2022. 57 In the fourth quarter of 2023, we received feedback from the U.S.
Removed
The primary endpoint, as amended, was the percentage of biomarker-selected participants with regression of cervical HSIL and virologic clearance of HPV-16 and/or HPV-18 in the cervix. A secondary endpoint was the percentage of all participants with regression and virologic clearance. In March 2023, we announced data from our REVEAL2 trial.
Added
Food and Drug Administration, or FDA, that the data from this completed trial could be used to support the submission of a Biologic License Application, or BLA, for review under the FDA’s accelerated approval program.
Removed
Statistical significance was not achieved in the investigational biomarker-selected population for the endpoint of lesion regression and viral clearance. However, statistical significance was achieved in the all-participants population for the endpoint of lesion regression and viral clearance.
Added
As part of submitting our BLA under the accelerated program, we will need to satisfy all FDA filing requirements and initiate a confirmatory clinical trial prior to BLA submission.
Removed
The percentage of participants in the investigational biomarker-selected population meeting the primary endpoint was 28.6% (6/21) in the treatment group, versus 0% (0/4) in the placebo group (p=0.115; difference in percentage 28.6, 95%CI: -24.6, 50.4), which was not statistically significant.
Added
In addition to our development efforts with INO-3107, we are actively developing or planning to develop DNA medicines for other indications, including HPV-related anal dysplasia and oropharyngeal squamous cell carcinoma, or OPSCC; glioblastoma multiforme, or GBM, a deadly form of brain cancer; and a potential vaccine booster to protect against the Ebola virus.
Removed
The result of the all-participants population of 203 participants (134 participants in the treatment group, 69 in the placebo group) was statistically significant, with 27.6% (37/134) of the participants meeting the endpoint in the treatment group, versus 8.7% (6/69) in the placebo group (p=0.001; difference in percentage 18.9, 95%CI: 7.8, 28.6).
Added
We were previously conducting clinical trials of a DNA medicine candidate for the treatment of HPV-related cervical high-grade squamous intraepithelial lesions, or HSIL, but announced in August 2023 that we were ceasing development for this indication in the United States.
Removed
In particular, in the all-participants population of REVEAL2, viral clearance was observed in 37.3% (50/134) in the treatment group versus 8.7% (6/69) in the placebo group. Given the importance of viral clearance in removing the underlying cause of the HPV-related diseases, this data may have positive implications in our other HPV-related programs.
Added
However, our collaborator ApolloBio Corporation continues to conduct a Phase 3 clinical trial of this candidate in China and plans to seek regulatory approval for and potentially commercialize the candidate in that jurisdiction.
Removed
An ad-hoc integrated efficacy analysis of the results for both REVEAL1 and REVEAL2 achieved statistical significance in the biomarker-selected and all-participants populations for lesion regression and viral clearance.
Added
(b) Includes impairment of intangible assets of $2.0 million recorded in the second quarter of 2023.
Removed
For the combined biomarker-selected population of 92 participants (68 participants in the treatment group, 24 in the placebo group), the percentage of participants meeting the primary endpoint was 54.4% (37/68 in the treatment group, versus 12.5% (3/24) in the placebo group (p= In both REVEAL1 and REVEAL2, VGX-3100 was well-tolerated.
Added
The $101.0 million overall decrease in research and development expenses year over year was primarily the result of: • $61.4 million in lower drug manufacturing, clinical study expenses, outside services and expensed inventory related to INO-4800 after we discontinued this program in the fourth quarter of 2022; • $17.9 million in lower drug manufacturing and clinical study expenses related to other COVID-19 studies that ceased after we discontinued development of INO-4800; • $15.0 million in lower employee and consultant compensation, including stock-based compensation, primarily due to reductions in headcount in 2023; • $9.4 million in lower expensed inventory and outside services related to our CELLECTRA 3PSP device and array automation project; • $8.4 million in lower immunology, clinical study expenses and outside services related to VGX-3100 as we discontinued development of this product candidate in the third quarter of 2023; and • $4.4 million in lower drug manufacturing related to the sub-grant through Wistar for COVID-19 dMAbs These decreases were partially offset by: • $17.7 million of lower contra-research and development expense recorded from grant agreements; and • $5.8 million of higher other drug manufacturing costs.
Removed
There were no treatment-related serious adverse events and most adverse events were considered to be mild to moderate. This combined data set will be used as supportive data in future regulatory interactions involving VGX-3100. We will continue to evaluate the results to determine next steps for VGX-3100 in our HPV programs.
Added
Impairment of goodwill In September 2023, we concluded that our goodwill was impaired due to a sustained decline in our stock price and related market capitalization, and a general decline in equity values in the biotechnology industry. Based on this analysis, we recognized a non-cash, pre-tax goodwill impairment charge of $10.5 million during the three months ended September 30, 2023.
Removed
We plan to submit the data for publication in a peer-reviewed journal later this year. INO-4800 Update 55 On October 27, 2022, we announced that we have discontinued our internally funded efforts to develop INO-4800 as a COVID-19 heterologous booster vaccine.
Added
We expect interest expense to decrease materially in 2024 due to the maturity and repayment in full of our convertible senior notes on March 1, 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeDuring the year ended December 31, 2022, there was a pronounced increase in prevailing interest rates in the United States, which contributed to a loss of $7.8 million in the market value of our investment portfolio during the period. The interest rate on our indebtedness is fixed and not subject to fluctuations in interest rates.
Biggest changeDuring much of 2022 and into the year ended December 31, 2023, there was a pronounced overall increase in prevailing interest rates in the United States compared to the first half of 2022, which contributed to the unrealized loss of $3.9 million in the market value of our investment portfolio as of December 31, 2023.
We do not use derivative financial instruments for speculative purposes and do not engage in exchange rate hedging or hold or issue foreign exchange contracts for trading purposes. 62 Inflation Risk Inflation generally affects us by increasing our cost of labor.
We do not use derivative financial instruments for speculative purposes and do not engage in exchange rate hedging or hold or issue foreign exchange contracts for trading purposes. Inflation Risk Inflation generally affects us by increasing our cost of labor.
Accordingly, we have not had any material exposure to foreign currency rate fluctuations, with the exception of certain cash and cash equivalents held in South Korea that are denominated in South Korean Won and the valuation of our equity investment in PLS, which is denominated in South Korean Won and then translated into United States dollars.
Accordingly, we do not have any material exposure to foreign currency rate fluctuations, with the exception of certain cash and cash equivalents held in South Korea that are denominated in South Korean Won and the valuation of our equity investment in PLS, which is denominated in South Korean Won and then translated into United States dollars.
Although inflation has increased generally in the United States in recent months, we do not believe that inflation has had a material effect on our business, financial condition or results of operations during the year ended December 31, 2022.
Although inflation has increased generally in the United States in recent years, we do not believe that inflation has had a material effect on our business, financial condition or results of operations during the year ended December 31, 2023.
Foreign Currency Risk We have operated primarily in the United States and most transactions during the year ended December 31, 2022 were made in United States dollars.
The interest rate on our indebtedness at December 31, 2023 was fixed and not subject to fluctuations in interest rates. As of March 1, 2024, we have no indebtedness. Foreign Currency Risk 63 We operate primarily in the United States and most transactions during the year ended December 31, 2023 were made in United States dollars.

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