Inovio Pharmaceuticals prices $30 million offering of stock and warrants at $3.00

Inovio Pharmaceuticals, Inc. (Nasdaq: INO) priced an underwritten public offering of 10,000,000 shares of common stock, each sold with a warrant to buy one more share. The combined price is $3.00 per share and warrant. The warrants are exercisable immediately at $3.76 a share and expire five years from issuance. The prospectus says they will not be listed on any exchange and that no market for them is expected to develop.

Gross proceeds are $30,000,000.00 before underwriting discounts and expenses. The underwriting discount is $0.18 per share, or $1,800,000.00, leaving $28,200,000.00 before expenses. The company estimates net proceeds of approximately $27.6 million. The shares last traded at $4.03 on December 11, 2024, so the offering price sits below that level.

Dilution is immediate at $0.19 per share, measured against an as adjusted net tangible book value of $2.81 per share at September 30, 2024. Outstanding options, restricted stock units and the warrants could add dilution.

Who is selling the shares

Oppenheimer & Co. Inc. and Citizens JMP Securities, LLC are joint bookrunning managers, and Stephens Inc. is lead manager. Under the underwriting agreement, Oppenheimer committed to buy 5,200,000 shares and matching warrants, Citizens JMP 3,800,000 and Stephens 1,000,000. Each underwriter's obligation is several, so none is responsible for another's share. Delivery was expected on or about December 16, 2024. The securities are sold under a shelf registration filed November 9, 2023 and declared effective January 31, 2024.

The lead program and its data

The lead candidate is INO-3107, for recurrent respiratory papillomatosis, a life-long rare disease in which papillomas grow in the airway. The standard of care is surgery. The company says that in its Phase 1/2 trial, 81.3% of patients had fewer surgical interventions in the year after treatment than in the year before. The trial enrolled 32 patients, and the overall response rate was 72%, or 23 of 32 patients. Thirteen patients, or 41%, reported a treatment-related adverse event, none above Grade 2. Injection site pain was reported by 31% and fatigue by 9%.

The company also describes a statistically significant median decrease of three surgical interventions across its two cohorts. The sample is small, and the headline figure compares each patient's year after treatment with the year before. In a December 2024 retrospective analysis, the company followed 28 of the 32 patients for a median of 1,025 days. Of 21 responders who agreed to take part, 20 (95%) maintained or improved their response by the end of year two and 18 (86%) by year three. Four original patients could not be consented, so the follow-up is incomplete.

Regulatory delay

Inovio had expected to submit a Biologics License Application for INO-3107 by the end of 2024. It now says a manufacturing issue with the single-use, disposable administration component of its CELLECTRA 5PSP device delayed the plan. The component is used in the confirmatory trial the company must run before it can file. The prospectus says the part had no reported adverse issues in more than 1,200 clinical administrations, and that the problem surfaced only in intensive testing for the BLA. The company must also satisfy all FDA filing requirements under the accelerated approval program. The filing says the drug-device combination structure may require additional time for approval.

Other programs and partners

Inovio is developing INO-5401, an immunotherapy for glioblastoma. Its partner ApolloBio continues a Phase 3 trial of a candidate in China, after Inovio ceased development of that candidate in the United States in August 2023. Coherus will supply LOQTORZI for a planned Phase 3 trial in high-risk, HPV16/18 positive oropharyngeal squamous cell carcinoma, pending FDA alignment on the study design.

What comes next

The company says it will use the net proceeds mainly for pipeline development, preparation for a possible commercial launch of INO-3107 if it is approved, and general corporate purposes. It has no current commitments to license, acquire or invest in other businesses with the proceeds. The prospectus gives no new date for the BLA. It says the company has incurred significant losses in recent years, expects significant losses ahead and may never become profitable. The supplement gives no cash balance.

Report an error

Companies in this story

INOInovio Pharmaceuticals, Inc.NASDAQ · United StatesOpen the starter desk