Inovio Reports First Quarter 2005 Financial Results.SAN DIEGO San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. -- Inovio Biomedical bi·o·med·i·cal adj. 1. Of or relating to biomedicine. 2. Of, relating to, or involving biological, medical, and physical sciences. Corporation (AMEX AMEX See: American Stock Exchange :INO Ino (ī`nō), in Greek mythology, daughter of Cadmus. She was the wife of Athamas, to whom she bore Learchus and Melicertes. She plotted to kill her stepchildren, Phrixus and Helle, but their mother, Nephele, saved them with the help of a winged ) today reported financial results for the quarter ended March 31, 2005. Total revenue for the quarter ended March 31, 2005, was $961,921, as compared to $69,385 for the same period in 2004. Revenue consisted of license fees, milestone payments, and amounts received from collaborative research and development arrangements and grants. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the quarter ended March 31, 2005, were $8,182,618, as compared to $1,686,056 for the same period in 2004. Included in total operating expenses for the quarter ended March 31, 2005, was a $3,332,000 non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. related to the write-off of acquired in-process research and development ("IPR&D") resulting from our acquisition of Inovio AS in January 2005. The net loss attributable to common stockholders for the quarter ended March 31, 2005, was $9,285,290, or $0.50 per share, as compared with a net loss attributable to common stockholders of $1,679,772, or $0.10 per share, for the same period in 2004. Included in net loss attributable to common stockholders for the quarter ended March 31, 2005, was the $3,332,000 non-cash charge related to the write-off of acquired IPR&D resulting from our acquisition of Inovio AS, as well as a non-cash imputed Attributed vicariously. In the legal sense, the term imputed is used to describe an action, fact, or quality, the knowledge of which is charged to an individual based upon the actions of another for whom the individual is responsible rather than on the individual's dividend charge of $1,942,773 related to the private placement we completed in January 2005. "We are pleased with the expansion of our clinical programs. Five ongoing oncology oncology /on·col·o·gy/ (ong-kol´ah-je) the sum of knowledge regarding tumors; the study of tumors. on·col·o·gy n. trials position us for extensive data on the benefits of treating solid tumors with our electrochemical electrochemical /elec·tro·chem·i·cal/ (-kem´i-k'l) pertaining to interaction or interconversion of chemical and electrical energies. e·lec·tro·chem·i·cal adj. ablation therapy ablation therapy See Ablation–cardiology. compared to surgery. We are also collecting the first human data on gene therapies delivered using electroporation electroporation (i·lekˈ·trō·p  ·rāˑ·sh in two trials with
partners," said Avtar Dhillon, MD, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Armed
with data from our clinical programs, we will be in an ideal position
for new license agreements in oncology and gene therapy."Revenue Revenue from license fees and milestone payments for the quarter ended March 31, 2005, was $99,839, as compared to $1,471 for the same period in 2004. The increase in license fees for the quarter ended March 31, 2005, as compared to the same period in 2004, was mainly due to license revenue recognized from the collaboration and licensing agreement with Merck signed in May 2004 to develop and commercialize our MedPulser(R) DNA DNA: see nucleic acid. DNA or deoxyribonucleic acid One of two types of nucleic acid (the other is RNA); a complex organic compound found in all living cells and many viruses. It is the chemical substance of genes. Delivery System, which is being developed for use with certain of Merck's DNA vaccine programs. Under this agreement, we will receive payments if certain product development milestones are achieved. The upfront payment received from Merck in 2004 and prospective future milestone payments will be amortized over the term of the agreement. Royalties are payable on sales utilizing the device developed under this agreement. Revenue recorded under collaborative research and development arrangements for the quarter ended March 31, 2005, was $517,612, as compared to $67,914 for the same period in 2004. The increase in revenue from collaborative research and development arrangements during the quarter ended March 31, 2005, as compared to the same period in 2004, was primarily due to revenue recognized from the collaboration and licensing agreement with Merck signed in May 2004. Grant revenue for the quarter ended March 31, 2005, was $344,470, as compared to $0 for the same period in 2004. The increase in grant revenue during the quarter ended March 31, 2005, as compared to the same period in 2004, was primarily due to $323,778 in grant revenue attributable to Inovio AS, the Norwegian company we acquired in January 2005. Expenses Research and development expenses for the quarter ended March 31, 2005, were $3,340,381, as compared to $588,860 for the same period in 2004. The increase in research and development expenses for the quarter ended March 31, 2005, as compared to the same period in 2004, was primarily due to an increase in clinical trial expenses. These clinical trial expenses include the use of a clinical research organization hired in association with our clinical trials and costs associated with the use of outside clinical and regulatory consultants. The remainder of the increase was mainly due to increased personnel expenses to support internal efforts related to product development and clinical trials, increased external research expenses, and additional travel and other consulting expenses associated with our clinical trials. During the quarter ended March 31, 2005, we also incurred research and development expenses of $273,385 attributable to Inovio AS. We initiated two Phase III Noun 1. phase III - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the FDA head and neck clinical trials during 2004 in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Europe. These trials compare our electroporation therapy electroporation therapy Therapeutics A form of drug delivery that generates electrical pulses via an electrode placed in a tumor to enhance the ability of a chemotherapeutic–eg, bleomycin to enter tumor cells involves using electric fields to open pores in to surgery using a primary endpoint of function preservation and secondary endpoints of local tumor tumor: see neoplasm. control, disease free survival, and overall survival. In addition, we initiated two European pre-marketing trials for skin cancer and head and neck cancer to gather additional clinical and pharmacoeconomic data. We have also initiated a Phase I clinical trial Noun 1. phase I clinical trial - a clinical trial on a few persons to determine the safety of a new drug or invasive medical device; for drugs, dosage or toxicity limits should be obtained phase I of our MedPulser(R) Electroporation Therapy System for the treatment of pancreatic cancer pancreatic cancer Malignant tumour of the pancreas. Risk factors include smoking, a diet high in fat, exposure to certain industrial products, and diseases such as diabetes and chronic pancreatitis. Pancreatic cancer is more common in men. . Due to the initiation of these clinical trials, we anticipate research and development expenses from clinical and regulatory activities to increase in fiscal 2005, as compared to fiscal 2004. General and administrative expenses, which include business development expenses, for the quarter ended March 31, 2005, were $1,472,737, compared to $1,097,196 for the same period in 2004. The increase in general and administrative expenses for the quarter ended March 31, 2005, as compared to the same period in 2004, was mainly due to increased consulting and legal expenses and increased personnel costs to support our administrative infrastructure, which includes our finance, investor relations Investor relations The process by which the corporation communicates with its investors. and information technology departments, and ongoing business development efforts. The increase in general and administrative expenses was also due to accounting-related expenses incurred during the quarter ended March 31, 2005, related mainly to the implementation of internal control over financial reporting requirements under Section 404 of the Sarbanes-Oxley Act See SOX. of 2002. During the quarter ended March 31, 2005, we also incurred general and administrative expenses of $38,672 attributable to Inovio AS. Amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. was $37,500 during the quarter ended March 31, 2005, related to an intangible asset associated with contracts and intellectual property acquired as part of our acquisition of Inovio AS. Operating expenses for the quarter ended March 31, 2005, include a $3,332,000 non-cash charge related to the write-off of acquired IPR&D resulting from the Inovio AS acquisition. The amount related to acquired IPR&D represents the estimated fair value of purchased in-process technology for projects that, as of the acquisition date, had not reached technological feasibility and had no alternative future use. Net Loss Attributable to Common Stockholders The increase in net loss attributable to common stockholders for the quarter ended March 31, 2005, as compared to the same period in 2004, resulted mainly from the $3,332,000 non-cash charge related to the write-off of acquired in-process research and development resulting from the Inovio AS acquisition, as well as an increase in our clinical trial and research and development expenses. In addition, in connection with the private placement we completed in January 2005, we recorded a non-cash imputed dividend charge of $1,942,773 during the quarter ended March 31, 2005. Capital Resources As of March 31, 2005, we had cash and cash equivalents of $11,809,900 and working capital of $7,679,106, as compared to cash and cash equivalents of $17,889,797 and working capital of $13,036,685 as of December 31, 2004. The decrease in working capital during the quarter ended March 31, 2005, was primarily due to the $3,000,000 we paid as part of the acquisition of Inovio AS in January 2005. The decrease in working capital was also due to increased expenditures related to research and development activities and upfront payments associated with our clinical trials activities, as well as various general and administrative and legal expenses related to investor relations, business development, and finance activities. The remaining cash proceeds of $2,430,000 from our January 2005 private placement will be received upon the earlier of (1) September 30, 2005, or (2) the occurrence of an "early triggering event Triggering Event A certain milestone or event that a participant in a qualified plan must experience in order to be eligible to receive a distribution from a qualified plan. ," as defined in the private placement agreement. Recent Highlights --Acquired Inovio AS, a Norwegian company engaged in developing drug delivery solutions based on electroporation of skeletal muscles Skeletal muscles Muscles that move the skeleton. All of the muscles under voluntary control are skeletal muscles. Mentioned in: Creatine Kinase Test for gene therapy and DNA vaccination DNA vaccination is a proposed experimental technique for protecting an organism against disease by injecting it with naked DNA to produce an immunological response. Thus far, few experimental trials have evoked a response sufficiently strong enough to protect against disease, and . --Launched our new company name, Inovio Biomedical Corporation. --Completed a $3,037,500 private placement of our common stock. --Initiated a Phase I clinical trial in patients with malignant melanoma Malignant Melanoma Definition Malignant melanoma is a type of cancer arising from the melanocyte cells of the skin. Melanocytes are cells in the skin that produce a pigment called melanin. at the prestigious H. Lee Moffitt Cancer Center. --Initiated a Phase I pancreatic cancer trial using our MedPulser(R) Electroporation Therapy System. --Presented data from studies of the clinical utility of electroporation-mediated DNA delivery, showing that this method is safe and tolerable tol·er·a·ble adj. 1. Capable of being tolerated; endurable. 2. Fairly good; passable. See Synonyms at average. tol . --Obtained a patent for vascular therapy. --Initiated a Phase I/II clinical trial, in collaboration with University of Southhampton, for patients with recurrent recurrent /re·cur·rent/ (re-kur´ent) [L. recurrens returning] 1. running back, or toward the source. 2. returning after remissions. re·cur·rent adj. 1. prostate cancer prostate cancer, cancer originating in the prostate gland. Prostate cancer is the leading malignancy in men in the United States and is second only to lung cancer as a cause of cancer death in men. using electroporation to deliver a therapeutic plasmid-based DNA vaccine to skeletal muscles. About Inovio Biomedical Corporation Inovio Biomedical Corporation is a late stage biomedical company focused on building an oncology franchise based on our proprietary electroporation therapy. The therapy targets a significant unmet un·met adj. Not satisfied or fulfilled: unmet demands. clinical need: the selective killing of cancer cells cells once believed to be peculiar to cancers, but now know to be epithelial cells differing in no respect from those found elsewhere in the body, and distinguished only by peculiarity of location and grouping. See also: Cancer and local ablation ablation /ab·la·tion/ (-shun) 1. separation or detachment; extirpation; eradication. 2. removal or destruction, especially by cutting. ab·la·tion n. of solid tumors while preserving healthy tissue. We are moving our lead product, the MedPulser(R) Electroporation Therapy System, through pre-marketing studies for head and neck cancer and skin cancers in Europe, where we have received CE Mark accreditation accreditation, n a process of formal recognition of a school or institution attesting to the required ability and performance in an area of education, training, or practice. , a U.S. Phase III pivotal study for recurrent head and neck cancer, and a Phase I pancreatic cancer trial. Merck, Vical, Chiron, the U.S. Navy, and other partners are employing our electroporation technology, which enhances local delivery and cellular uptake uptake /up·take/ (up´tak) absorption and incorporation of a substance by living tissue. up·take n. of useful biopharmaceuticals, in their development of novel DNA vaccines and gene therapies. We are a leader in electroporation, with 57 U.S. and 125 corresponding foreign issued patents, plus numerous pending patents in the U.S. and abroad. More information can be obtained at www.inovio.com. This press release contains certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our plans to develop our electroporation drug and gene delivery technology and to maximize shareholder value. Actual events or results may differ from our expectations as a result of a number of factors, including the uncertainties inherent in clinical trials and product development programs, evaluation of potential opportunities, the level of corporate expenditures, the assessment of our technology by potential corporate partners, capital market conditions, and other factors set forth in the our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the twelve-month period ended December 31, 2004, and our Form 10-Q Form 10-Q See 10-Q. for the three-month period ended March 31, 2005, and other regulatory filings. There can be no assurance that any product in our product pipeline will be successfully developed or manufactured, or that final results of clinical studies will be supportive of regulatory approvals required to market licensed products.
INOVIO BIOMEDICAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2005 2004
---------------- ---------------
(Unaudited)
ASSETS
Cash and cash equivalents $ 11,809,900 $ 17,889,797
Accounts receivables 461,498 424,157
Prepaid expenses and other 717,452 124,723
---------------- ---------------
Total current assets 12,988,850 18,438,677
Fixed assets, net 422,908 155,253
Patents and other assets, net 2,300,088 2,357,572
Goodwill 3,156,594 --
Intangible assets, net 4,012,500 --
--------------------------------
Total assets $ 22,880,940 $ 20,951,502
================ ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 1,672,519 $ 2,155,592
Accrued clinical trial expenses 2,554,071 2,195,816
Deferred revenue 1,083,154 1,050,584
---------------- ---------------
Total current liabilities 5,309,744 5,401,992
Deferred rent 332,393 --
Long-term liabilities 10,924 --
---------------- ---------------
Total liabilities 5,653,061 5,401,992
---------------- ---------------
Stockholders' equity:
Preferred stock 1,968 2
Common stock 19,021 18,420
Common stock issuable 4,990,000 --
Additional paid-in capital 114,402,725 103,438,408
Accumulated deficit (97,192,610) (87,907,320)
Subscription receivable (4,990,000) --
Other comprehensive loss (3,225) --
---------------- ---------------
Total stockholders' equity 17,227,879 15,549,510
---------------- ---------------
Total liabilities and stockholders'
equity $ 22,880,940 $ 20,951,502
================ ===============
INOVIO BIOMEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Month Three Month
Period Ended Period Ended
March 31, March 31,
2005 2004
---------------- ---------------
Revenue:
License fee and milestone payments $ 99,839 $ 1,471
Revenue under collaborative research
and development arrangements 517,612 67,914
Grants 344,470 --
---------------- ---------------
Total revenue 961,921 69,385
---------------- ---------------
Operating expenses:
Research and development 3,340,381 588,860
General and administrative 1,472,737 1,097,196
Amortization of intangible assets 37,500 --
Charge for acquired IPR&D 3,332,000 --
---------------- ---------------
Total operating expenses 8,182,618 1,686,056
---------------- ---------------
Loss from operations (7,220,697) (1,616,671)
Other income (expense):
Interest income 81,543 35,039
Other income (expense), net (645) --
---------------- ---------------
Net loss (7,139,799) (1,581,632)
Imputed and declared dividends on
preferred stock (2,145,491) (98,140)
---------------- ---------------
Net loss attributable to common
stockholders $ (9,285,290) $ (1,679,772)
================ ===============
Amounts per common share - basic and
diluted:
Net loss $ (0.38) $ (0.09)
Imputed and declared dividends on
preferred stock (0.12) (0.01)
---------------- ---------------
Net loss per common share $ (0.50) $ (0.10)
================ ===============
Weighted average number of common
shares - basic and diluted 18,628,245 16,826,998
All applicable share and per share amounts have been adjusted to give effect to the one-for-four reverse stock split of our common stock on September 13, 2004. |
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