Good afternoon, ladies and gentlemen and welcome to the Inovio Third Quarter 2023 Financial Results Conference Call. At this time all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded on Thursday November 09, 2023. And I would now like to turn the conference over to Mr. Thomas Hong. Thank you. Please go ahead.

Good afternoon, and thank you for joining the Inovio 2023 third quarter conference call. Joining me on today's call are Dr. Jacque Shea, President and CEO; Dr. Michael Sumner, Chief Medical Officer; Mr. Mark Twyman, Chief Commercial Officer and Mr. Peter Kies, Chief Financial Officer. Today's call will review our corporate and financial information for the quarter ended September 30, 2023, as well as provide a development progress update for our DNA medicines platform. Following prepared remarks, we will conduct a question-and-answer segment. During the call, we will be making forward-looking statements regarding future events and the future performance of the company. These events relate to our business plans to develop Inovio's DNA medicines platform, which include clinical and regulatory developments and timing of clinical data readouts, along with capital resources and strategic matters. All of these statements are based on the beliefs and expectations of management as of today. Actual events or results could differ materially. We refer you to the documents we file from time to time with the SEC, which under the heading “Risk Factors” identify important factors that could cause actual results to differ materially from those expressed by the company verbally as well as statements made within this afternoon's press release. This call is being webcast live, and a link can be found on our website, ir.inovio.com, and a replay will be made available shortly after this call is concluded. I will now turn the call over to Inovio's President and CEO, Dr. Jacque Shea.

Good afternoon, and thank you to everyone for joining today's call. Over the last few months, I'm delighted to say that we've made significant progress advancing our lead candidate, INO-3107 for the treatment of recurrent respiratory papillomatosis, or RRP. After two very important regulatory developments, we are closer than ever to delivering on the promise of DNA medicines to patients, and bringing the first DNA medicine to market in the United States. Specifically, in the third quarter of 2023, the FDA granted breakthrough therapy designation to INO-3107, based on clinical evidence indicating that it may demonstrate substantial improvement over existing therapies for RRP. A couple of weeks following that breakthrough therapy designation, we received feedback from the FDA that data from our completed Phase 1 and 2 trial of 3107 could be used to support submission of a biological license application, or BLA, for review under the FDA's accelerated approval program. Our Chief Medical Officer, Mike Sumner, will provide more context shortly, but this news means that we no longer need to complete a Phase 3 trial before BLA submission, and will ultimately allow for a potentially much faster development pathway. We will, however, be required to initiate a confirmatory trial and satisfy all other FDA filing requirements prior to BLA submission, as is usual for the accelerated approval pathway. To achieve that, our team has already submitted a request for an initial comprehensive multidisciplinary breakthrough therapy meeting to the FDA for the fourth quarter. This meeting will help further align our plans with the FDA and determine the timing for critical deliverables associated with our BLA submission. As we make progress on this new expedited pathway, we have every intention to utilize the opportunity for increased communication with the FDA and other advantages offered by a breakthrough therapy designation,…

Thank you very much, Jacque, and greetings everyone. As Jacque has mentioned, we have made substantial progress with our lead candidate, INO-3107. To provide a little perspective on how fast this candidate has been advancing through development, we've created this timeline. We started our Phase 1/2 trial in 2020, the same year the FDA granted orphan drug status. After announcing positive final results from the trial earlier this year, the European Commission granted orphan drug status in May, followed by the FDA's breakthrough therapy designation in September. Shortly thereafter, we received important feedback that data from our completed Phase 1/2 trial could support submission of a BLA for review under the FDA's accelerated approval program. To take a candidate from proof-of-concept to filing a BLA in the span of three years is lightning speed and speaks to the hard work and collaboration of the broader Inovio team. Looking ahead, the opportunity to file our BLA under the accelerated approval program assures that our team will need to continue to run fast and hard. I'd like to speak briefly as to why we have been granted the opportunity to submit a BLA for 3107 under the FDA's accelerated approval program. First, keep in mind that the FDA instituted its accelerated approval program to allow for early approval of drugs that treat serious conditions and fill an unmet medical need. Additionally, they have recently issued a press release identifying their desire to utilize this program to further accelerate the development of rare disease therapies. In general, to qualify, a drug candidate must address a serious or life-threatening condition with consideration for the severity, rarity or prevalence of the condition, and available treatment options. For those who are not familiar with RRP, and I must include myself in this category before coming to…

Thanks, Mike. Before I jump into the specifics of our commercial strategy, I'd just like to say that it's a pleasure to have the opportunity to speak with you all today and how excited I am about the prospects for INO-3107. While this is my first time on a quarterly financial call for Inovio, I have been with the company for about six years, and as Jacque mentioned earlier, I've been involved in the commercialization of biopharmaceutical products for many years for both small and large companies, as has my team. We are extremely excited to begin implementing many of the plans we have been working on to benefit patients who are in desperate need of options to improve their quality of life. Let's take a few minutes to discuss what we believe are five key areas to achieve success in the launch of an orphan drug. The first is to create a long-term commercial strategy by starting early and continuously updating based on in-market data. It is also important to build up the required resources as early as possible before regulatory approval is granted. As I mentioned, I've been at Inovio for several years, helping the company prepare to bring DNA medicines to market. We now have the opportunity to leverage existing cross-functional capabilities for the development and potential launch of INO-3107. The next key element to a successful launch of an orphan drug is demonstrating the value of your product to all stakeholders. This value proposition has to be provided in the context of any competition, and it must leverage trial data and real-world evidence. Next, a company that successfully launches a biopharmaceutical product must ensure that patients have a voice in their care and the options offered. This is accomplished by involving patients and patient organizations early…

Thank you, Mark. Before I cover some additional updates from our pipeline, I'd like to take a moment to reiterate some of the key takeaways from what you've heard today from Mike and Mark, which highlight why we believe in the commercial potential of 3107 and its ability to potentially transform the treatment paradigm for RRP. In our completed Phase 1/2 trial, 3107 was able to generate antigen-specific T-cell responses against both HPV-6 and 11, a result that was observed in patients across the spectrum of disease severity. We also saw reduction in surgery in HPV-6 and 11 positive patients, again across the spectrum of disease severity. 3107 was well-tolerated by participants in the trial, resulting in mostly low-grade treatment emergent adverse effects, such as injection site pain and fatigue. Unlike other T-cell generating platforms, 3107 and DNA medicines in general don't cause an antibacterial response, which means that 3107 could potentially be readministered over time to boost immune response if needed. Because RRP is a chronic viral disease that can lead to persistent reoccurring symptoms, readministration may be an important factor in extending efficacy over a lifetime, and we anticipate exploring that opportunity further if 3107 is approved. Thinking further down the line to potential use in market, it's important to reiterate the point that Mark made earlier. 3107 is refrigerator-stable at 2 to 8 degrees Celsius, does not require frozen or ultra-cold storage, and will be packaged in a single-use file, all of which will be key factors in distribution and administration. We see INO-3107 as an exemplar of the larger potential of our DNA medicines platform, and we remain dedicated to driving progress across our pipeline to unlock that potential for patients across the globe. We believe that this is achievable in a three-step process. As you…

Thank you, Jacque. Today I'd like to provide an overview of Inovio's operational highlights and financial condition for the third quarter of 2023. As Jacque noted, and as required in today's economic environment, Inovio is committed to financial discipline as we advance our pipeline. To achieve our longer-term goals, our strategy over the past 18 months has been to reprioritize our pipeline, reshape our organization, and scale our operational spend. As you can see from this slide, we have succeeded in bringing our operational spend down for both the third quarter and the nine-month period ended September 30, 2023, compared to the same period in 2022. For the third quarter 2023, operational expenses dropped 20% to $35.9 million from $44.9 million compared to the same period in 2022. The third quarter included a one-time non-cash charge for goodwill impairment that totaled $10.5 million. Excluding that one-time charge, our operational expenses for the third quarter would have declined 43% from the same period or same quarter in 2022. For the first nine months of 2023, we cut our operating expenses nearly in half, dropping to $117.3 million from $221.8 million in the first nine months of 2022. Breaking down total operating expenses a bit more, for the third quarter, our R&D expenses totaled $15.5 million in 2023 compared to $33.1 million for the same period in 2022. The decrease in R&D expenses was primarily the result of lower drug manufacturing, clinical trial expenses, and outside services related to INO-4800 and other COVID-19 studies, and lower employee and consultant compensation, including stock-based compensation, among other variances. G&A expenses for the third quarter of 2023 were $9.9 million compared to $11.9 million for the same period in 2022. Revenues for the third quarter of 2023 were $388,000 compared to $9.2 million for the…

Thanks, Peter. I'd now like to open up the call to answer any questions you might have. Operator?

Thank you. [Operator Instructions] Your first question comes from the line of Roger Song from Jefferies. Please go ahead.

Great. Congrats for all the progress and thanks for taking the question. Maybe just focusing on the RRP program, the first question is related to the BLA filing and the Phase 3 confirmatory study design. Can you just let us know what is the outstanding items for the filing and the confirmatory study design? And any current guidance around the timing of the BLA filing and the potential approval? Thank you.

Thanks, Roger. It's nice to hear your voice. So as we mentioned during the call, the news on accelerated approval pathway is relatively new. We just heard in September. So over the past few weeks, we've really been working to accelerate our timelines. We've put together quite a detailed package to be considered by the FDA under the upcoming meeting. And I'll hand over to Mike to provide a few more details there. But what we're really hoping to achieve in that meeting is to get some alignment with the FDA as to some of the content that needs to go into that submission package, as well as some further discussion on the design of the confirmatory study. Mike?

Thank you, Jacque. I think you hit some of the highlights. I mean, obviously, since we heard the news in September, I think we've made tremendous progress as a team. We've really mapped out every single function and what we need to do to get to our BLA. In terms of the input we need from the FDA, I mean, obviously, we have a strategy. We need to get the FDA to agree to that strategy. But we're pulling on significant data points that we've had. I mean, we've already gone through our PPQ strategy for 3100. We've used our selector device in our Phase 3 program. We've had several interactions with the agency on what we need to do for the device. We know, again, from a confirmatory study, what we want to propose, and we've had significant input of what we believe is going to be acceptable to the agency. And so we need alignment on that protocol as we do need to start that study prior to filing our BLA. But overall, I think based on all the interactions we've had on our platform and specifically around RRP, we're in a very good place. And now it's really just going through the process of aligning strategy with the agency so we can move rapidly forward.

Great. Thanks. Maybe just a quick question around the commercial infrastructure. With the current runway into second quarter 2025, how should we think about the overall commercialization cost post-approval for assuming the approval for the RRP?

Yes, that's a really great question, Roger. Before I ask Mark to jump in there, I think really this upcoming discussion with the agency will really help us be more definitive on the timelines. I think Mark can talk a bit about this in a bit more detail, but I think one of the encouraging things for us as a relatively small biotech company is that this is a rare disease. We believe that there are a reasonable number of call points for a company of our size to take on. We have in-house manufacturing for our device that we think can meet our device manufacturing needs. And we have well-established relationships with our drug manufacturing CMO to manufacture the drug. So, Mark, maybe you can talk a bit more about how we're thinking about going to market for 3107.

Thanks, Jacque. Great questions. I think that Jacque really hit the nail on the head when she was talking about this laryngology space and for RRP and being a perfect fit for Inovio. If we think about the PhilTels [Ph] organization, we're thinking now that there are roughly between 300 and 400 laryngologists that are performing the majority of the RRP surgeries in the U.S. And we really think that a small specialty sales force can kind of fiercely address the needs for both patients and physicians. But I think the other sort of component, and it sort of speaks to the experience that we have in the organization in commercializing products, we're getting an early start. It's not just about the sales organization, but it's about everything you're doing behind that, from the perspective of your distribution strategy, the early conversations you need to have with payers and PBM, specialty sort of pharmacy. So that's all work that's been started. And I think what is emerging is that we've identified the key work streams. We've begun to identify the key partners that we need to have on board. And I feel really good about where we are right now and being able to leverage this accelerated approval.

Thanks, Mark. And Roger, to answer your question about cost, we're planning to operate a lean and efficient model. So where it makes sense for us to do things in-house, we'll do them in-house. Where it makes sense to leverage other people's capabilities, such as a contract sales force and potentially defer expense there, we'll be doing that. So I think we'll be able to provide a bit more guidance in terms of our phasing of our cash runway over 2024, once we've had that discussion with the FDA.

Yes, that makes sense. Thanks a lot for the comments.

Thank you. [Operator Instructions] And your next question comes from the line of Yi Chen from H.C. Wainwright. Please go ahead.

Hi. Thank you for taking my questions. Could you tell us whether any patients in a clinical trial has been redosed with INL-3107? And in the real-world setting, commercially speaking, do you think laryngologists will have the flexibility of those choosing to dose, how often a particular patient should be dosed with 3107? Or that could be limited by payers to, let's say, just once every year?

I'll hand over to Mike, maybe, for talking about the initial clinical question on the completed phase 1/2 trial. And then, Mark, maybe you and Mike together can address the next question.

So, I mean, starting off, obviously, one of the real benefits of the DNA medicines platform is there's no anti-vector response. And we believe redosing is capable. In fact, we know redosing is capable from many of our oncology programs. At present, we have not redosed any of the patients from the phase 1/2 study. But as we come to think about those patients, we obviously saw some patients with complete response. We saw a significant number of patients with a very good partial response with greater than 50% reduction in their surgeries. And then, unfortunately, there were a few patients who did show such great response. For me, I keep all those three buckets separate from my clinical strategy. But we certainly want to, in the future, sort of examine how we can continue to build on the excellent clinical efficacy we've seen to date. But I would say, obviously, until that's in our label, it would all be off-label. And so it would be down to the clinicians to decide what they want to do with their patients.

I think what I would add to that, Mike, is the question, will payers decide? I think that what I know is that we have a very strong value proposition for INO-3107. I think we can all kind of look at the results to date from a clinical perspective and know that we have a real potential to address this unmet medical need, both from a patient perspective. It still unsettles me to know that some of these patients experience hundreds of surgeries over a lifetime. And that comes with significant cost burden and just how they go about living their daily lives. But the other sort of point is that physicians aren't satisfied. I mean, these surgeons are used to sort of treating and resolving an issue that their patient might have. And that's just not the case with RRP, and hence the name recurrent respiratory papillomatosis. And I know from having a number of discussions with some of the key KOLs and physicians that are doing a large number of surgeries that they are really looking forward to having this option. And it's really kind of our job, and it's the job we've already started, to make sure that there's alignment with what the payers, how the payers sort of value INO-3107, and the fact that physicians are looking for a new option for treating RRP. So I'm feeling really good about where we are, but we'll have to get to the finish line.

Will re-dosing be part of the Phase 3 trial?

We're still in discussions with the agency regarding that and haven't really put the details out there. But it's certainly, as I said, it's certainly something that we are thinking about.

Okay. Thank you.

Thank you. [Operator Instructions] There are no further questions at this time. Please continue.

Thank you. The significant progress we have made in advancing INO-3107 over the past few months means that we are moving closer to providing a potentially life-changing non-surgical treatment option to patients suffering from RRP. I remain incredibly grateful to the patients, patient advocates, trial investigators, and our dedicated team here at Inovio that has enabled us to achieve this. I'm confident that our experienced team is prepared for the next critical steps of development and potential commercialization for INO-3107. And thanks to the corporate strategy we've been implementing over the past year, I'm also confident that Inovio now has the key drivers in place for broader long-term success. We have a diversified pipeline focused on candidates with scientific and clinical promise, achievable pathways to market, and strong commercial potential. We have our proprietary DNA medicines platform and technology, along with a history of strong partnerships to accelerate progress and innovation. And we have the benefit of an incredibly experienced team focused on financial discipline, operational excellence, and motivated by the patients who could someday benefit from the power of DNA medicine. There is much work to be done, but I speak for the entire Inovio team when I say that we are energized by what the future could hold for DNA medicine and patients around the world. With that, thank you again for your attention. Have a great evening, everyone.

Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you all for participating. You may all disconnect.