Investor Relations (IR) Questions: Inovio Pharmaceuticals INO
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Answers received: March 2013
Answers to the 5 questions contained in this post were gathered through my conversations with Bernie Hertel, the Senior Director of Corporate Communications at INO, news releases by INO and public filings made by INO.
1) When is the last time INO raised cash through an offering (diluted)?
On March 7, 2013 Inovio Pharmaceuticals, Inc. announced that it priced an underwritten offering of 27,377,266 shares of its common stock and warrants to purchase up to 13,688,633 shares of common stock at a combined price to the public of $0.55 per share and related warrant for gross proceeds of $15.1 million. The warrants are exercisable at an exercise price of $.7936 per share and will expire, unless exercised, on the date that is 180 days after the fifth anniversary of the date of issuance. The net proceeds from the sale of the shares and the related warrants, after deducting the underwriters' discounts and other estimated offering expenses payable by Inovio, will be approximately $14.0 million, which does not include any potential proceeds from the cash exercise of any warrants.
Source: March 7, 2013 INO News Release.
Inovio Current Share Capitalization at 3/20/13:
Description:................................ # of Shares......% of Fully Diluted......Weighted Avg......Proceeds.....
Common Issued & Outstanding......179,921,237............76.96%..................N/A..................N/A...........
Preferred Shares: Series C (26).............38,233..............0.02%..................N/A..................N/A...........
Warrants Outstanding.....................35,282,477.............15.09%................$1.02..........$35,925,122.13
Options Outstanding.......................18,535,647...............7.93%................$1.19..........$22,057,419.93
Total..............................................233,777,594................100%.................N/A............$57,982,542.06
2) How much cash (not cash equivalents) does INO have?
As of December 31, 2012 the company reported Cash, Cash Equivalents, and Short Term Investments totaling $13,680,022.
Subsequent to the December 31, 2012 reporting date the company reported that it had raised approximately $14 million from an offering and an additional $5.6 million from it's At-The-Market Equity Distribution Agreement (ATM).
3) What and approximately when is the next known catalyst?
a) INO expects to report in 1Q 2013 interim data of a phase II clinical trial, conducted by it's collaborator ChronTech Pharma AB treating hepatitis C virus with a DNA vaccine delivered with INO's proprietary electroporation delivery system in conjunction with a drug regimen.
b) The company expects to publish a paper on it's HIV study in 2Q 2013. A great deal of attention has already been generated around this research and released. However, the upcoming publication will include previously unreleased (new) data.
c) The company also expects to have additional data in 2Q 2013 from it's influenza study on the elderly population over 65.
d) Data is expected to be released on INO's cervical dysplasia phase II study in Q1 2014
e) INO is advancing discussions with large pharmaceutical companies regarding a prospective partnership. While Inovio knows that there is no partnership until one has been agreed upon and entered in to, some companies have already entered into discussions with INO not based on efficacy data (which is not yet available) but based on immune response data. Management believes that this is notable. Larger pharmaceutical companies would commonly want to wait until they could actually see efficacy data before pursuing a partnership.
4) What is INO's quarterly cash burn?
Inovio’s net operating cash flow in Q4 2012 was -$5.5M.
Source: F-7, INO Form 10-K filed March 18, 2013
A company’s net operating cash flow is typically most representative of “cash burn,” but is impacted by other investing or financing activities. In Inovio’s case, this figure can shift up or down quarter to quarter based on incoming grant payments, which are not always consistent quarter to quarter. Actual “cash burn” may also be reduced by securing new capital such as through as the use of an ATM, as Inovio has done in the past, extending the company’s operating runway.
Inovio has stated, “We believe that current cash and cash equivalents plus short-term investments are sufficient to meet planned working capital requirements through 2014”.
Source: Page 29, INO Form 10-K filed March 18, 2013
5) Does INO have an existing line of credit and if so how much can they draw against it?
INO does not have an existing credit facility. However, it does have available the ability to raise capital through the use of it's At-The-Market Equity Distribution Agreement (ATM) which the company entered into in June 2012 with an outside placement agent. Under the terms of the ATM, the company can raise up to $25 million from this source.
To date the company has reported the following utilization of it's ATM according to the 10-K filed March 13, 2013:
a) For the period between January 1, 2013 and February 28, 2013 the company sold 8,222,966 shares generating $5.6 million. [page F-31]
b) For the period between June 2012 and December 31, 2012 the company sold 9,344,611 shares at a weighted average of $0.59 per share generating $5.3 million. [page F-22]
Answers to the 5 questions contained in this post were gathered through my conversations with Bernie Hertel, the Senior Director of Corporate Communications at INO, news releases by INO and public filings made by INO.
1) When is the last time INO raised cash through an offering (diluted)?
On March 7, 2013 Inovio Pharmaceuticals, Inc. announced that it priced an underwritten offering of 27,377,266 shares of its common stock and warrants to purchase up to 13,688,633 shares of common stock at a combined price to the public of $0.55 per share and related warrant for gross proceeds of $15.1 million. The warrants are exercisable at an exercise price of $.7936 per share and will expire, unless exercised, on the date that is 180 days after the fifth anniversary of the date of issuance. The net proceeds from the sale of the shares and the related warrants, after deducting the underwriters' discounts and other estimated offering expenses payable by Inovio, will be approximately $14.0 million, which does not include any potential proceeds from the cash exercise of any warrants.
Source: March 7, 2013 INO News Release.
Inovio Current Share Capitalization at 3/20/13:
Description:................................ # of Shares......% of Fully Diluted......Weighted Avg......Proceeds.....
Common Issued & Outstanding......179,921,237............76.96%..................N/A..................N/A...........
Preferred Shares: Series C (26).............38,233..............0.02%..................N/A..................N/A...........
Warrants Outstanding.....................35,282,477.............15.09%................$1.02..........$35,925,122.13
Options Outstanding.......................18,535,647...............7.93%................$1.19..........$22,057,419.93
Total..............................................233,777,594................100%.................N/A............$57,982,542.06
2) How much cash (not cash equivalents) does INO have?
As of December 31, 2012 the company reported Cash, Cash Equivalents, and Short Term Investments totaling $13,680,022.
Subsequent to the December 31, 2012 reporting date the company reported that it had raised approximately $14 million from an offering and an additional $5.6 million from it's At-The-Market Equity Distribution Agreement (ATM).
3) What and approximately when is the next known catalyst?
a) INO expects to report in 1Q 2013 interim data of a phase II clinical trial, conducted by it's collaborator ChronTech Pharma AB treating hepatitis C virus with a DNA vaccine delivered with INO's proprietary electroporation delivery system in conjunction with a drug regimen.
b) The company expects to publish a paper on it's HIV study in 2Q 2013. A great deal of attention has already been generated around this research and released. However, the upcoming publication will include previously unreleased (new) data.
c) The company also expects to have additional data in 2Q 2013 from it's influenza study on the elderly population over 65.
d) Data is expected to be released on INO's cervical dysplasia phase II study in Q1 2014
e) INO is advancing discussions with large pharmaceutical companies regarding a prospective partnership. While Inovio knows that there is no partnership until one has been agreed upon and entered in to, some companies have already entered into discussions with INO not based on efficacy data (which is not yet available) but based on immune response data. Management believes that this is notable. Larger pharmaceutical companies would commonly want to wait until they could actually see efficacy data before pursuing a partnership.
4) What is INO's quarterly cash burn?
Inovio’s net operating cash flow in Q4 2012 was -$5.5M.
Source: F-7, INO Form 10-K filed March 18, 2013
A company’s net operating cash flow is typically most representative of “cash burn,” but is impacted by other investing or financing activities. In Inovio’s case, this figure can shift up or down quarter to quarter based on incoming grant payments, which are not always consistent quarter to quarter. Actual “cash burn” may also be reduced by securing new capital such as through as the use of an ATM, as Inovio has done in the past, extending the company’s operating runway.
Inovio has stated, “We believe that current cash and cash equivalents plus short-term investments are sufficient to meet planned working capital requirements through 2014”.
Source: Page 29, INO Form 10-K filed March 18, 2013
5) Does INO have an existing line of credit and if so how much can they draw against it?
INO does not have an existing credit facility. However, it does have available the ability to raise capital through the use of it's At-The-Market Equity Distribution Agreement (ATM) which the company entered into in June 2012 with an outside placement agent. Under the terms of the ATM, the company can raise up to $25 million from this source.
To date the company has reported the following utilization of it's ATM according to the 10-K filed March 13, 2013:
a) For the period between January 1, 2013 and February 28, 2013 the company sold 8,222,966 shares generating $5.6 million. [page F-31]
b) For the period between June 2012 and December 31, 2012 the company sold 9,344,611 shares at a weighted average of $0.59 per share generating $5.3 million. [page F-22]
