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Edited Transcript of INO.OQ earnings conference call or presentation 11-May-20 8:30pm GMT

Q1 2020 Inovio Pharmaceuticals Inc Earnings Call

BLUE BELL Jun 17, 2020 (Thomson StreetEvents) — Edited Transcript of Inovio Pharmaceuticals Inc earnings conference call or presentation Monday, May 11, 2020 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Ben Matone

Inovio Pharmaceuticals, Inc. – Director of IR

* J. Joseph Kim

Inovio Pharmaceuticals, Inc. – CEO, President & Director

* Kate E. Broderick

Inovio Pharmaceuticals, Inc. – SVP of Research & Development

* Peter D. Kies

Inovio Pharmaceuticals, Inc. – CFO

* Prakash Bhuyan

Inovio Pharmaceuticals, Inc. – VP of Clinical Development

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Conference Call Participants

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* Gregory James Renza

RBC Capital Markets, Research Division – Analyst

* Jonathan Matthew Aschoff

Roth Capital Partners, LLC, Research Division – MD & Senior Research Analyst

* Naureen Quibria

Maxim Group, LLC – Senior Equity Research Associate

* Nicole Ashley Gabreski

Piper Sandler & Co., Research Division – Research Analyst

* Stephen Douglas Willey

Stifel, Nicolaus & Company, Incorporated, Research Division – Director

* Yi Chen

H.C. Wainwright & Co, LLC, Research Division – MD of Equity Research & Senior Healthcare Analyst

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Presentation

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Operator [1]

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Good day, everybody, and welcome to the Inovio First Quarter 2020 Financial Results Conference Call. (Operator Instructions)

Please note today’s event is being recorded.

I would now like to turn the conference over to Ben Matone, Senior Director of Investor Relations. Please proceed, sir.

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Ben Matone, Inovio Pharmaceuticals, Inc. – Director of IR [2]

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Thank you, operator, and thank you, everyone, for joining the Inovio First Quarter 2020 Earnings Call. With me today are Dr. J. Joseph Kim, President and CEO; Peter Kies, our Chief Financial Officer; Dr. Prakash Bhuyan, Vice President of Clinical Development and Head of Inovio’s Clinical Programs to treat HPV-related precancers; and Dr. Kate Broderick, Senior Vice President of Research and Development and Project Lead for Inovio’s infectious disease programs, who together will review our corporate, financial and development progress for the first quarter 2020. Dr. Jacqueline Shea, our Chief Operating Officer, is also with us and will be joining for the Q&A session following prepared remarks.

Today’s call is being webcast live on our website, ir.inovio.com, and a replay of today’s call will be made available shortly after the call is concluded. Following prepared remarks, we will conduct a question-and-answer segment which will be reserved for equity research analysts. During the course of this conference call, we will be making certain forward-looking statements regarding future events and the future performance of the company.

In particular, these events which relate to our business include plans to develop Inovio’s integrated platform of DNA medicines, clinical and regulatory developments and timing of clinical data readouts, along with capital resources and strategic matters, as well as the impact of the COVID-19 pandemic on Inovio’s business operations. All of these statements are based on the beliefs and expectations of management as of today. These statements involve certain assumptions, risks and uncertainties and could cause actual results to differ materially. We assume no obligation to revise or update forward-looking statements, whether as a result of new information, future events or otherwise. Investors should read carefully the risks and uncertainties described in today’s press release as well as the risk factors included in today’s 10-Q filing with the SEC.

Thank you for your attention. And with that, I would now like to turn the call over to Joseph.

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [3]

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Thank you, Ben. And good afternoon, everyone. Thank you for joining us on the call today. Inovio had a productive first quarter with developments across multiple clinical programs continuing to demonstrate the differentiating value and broad applicability of our DNA medicines platform. Please see the press release we just issued less than an hour ago for first quarter financial results and an extensive list of corporate highlights. I’m going to keep our remarks — prepared remarks brief so that we have plenty of time to address your questions.

But before we delve into updates for each therapeutic program, I want to first provide an update on the impact of the COVID-19 pandemic on our programs in progress. First, recognizing the importance of patient safety and adhering to the global stay-at-home government orders during the COVID-19 pandemic, our clinical operations and development teams have gone to great lengths to ensure patients participating in our clinical programs continue to be able to receive our DNA medicines and vaccines within a safe environment.

I personally cannot thank them enough for their dedication and focus during these challenging times. While we do not anticipate — while we do anticipate various impacts on every clinical trial as a result of the COVID-19 pandemic, as of today, our clinical catalysts for 2020 that we outlined at the beginning of this year remain on track.

Beyond 2020, it is still difficult to clearly project the exact impact the continuing COVID-19 pandemic will have on our clinical development programs. That said, we do anticipate that the enrollment rate for REVEAL 2, which has been at about 50% for the months of March and April during the pandemic lockdown will likely impact REVEAL 2 time line. Prakash will speak to this during his remarks on VGX-3100. But at this time, we are not changing guidance for our BLA anticipated timing and we will continue to work with the sites on REVEAL 2 accordingly to ensure both patient safety and data integrity.

Inovio remains on track and well positioned to have 2020 to be a transformative year for the company. We remain confident that this statement was true even in the midst of this global pandemic. Our team continues to be diligent and resourceful to ensure we are on track to deliver key data milestones in 2020, which include REVEAL 1 Phase III top line efficacy data from our lead asset, VGX-3100, in the fourth quarter. Overall survival at 12 months data or OS12 data from INO-5401 for our GBM therapy being presented at ASCO and abstracts available this afternoon, followed by OS18 data in the fourth quarter. And you’ll hear more from Peter during his financial update, but Inovio remains well capitalized, having a strong balance sheet which is essential for properly executing our product development and business objectives and the continued global uncertainty related to COVID-19.

While our 200-plus employees are not working all physically side-by-side, our R&D and manufacturing teams in San Diego are in our facilities relentlessly driving the development of our immunotherapies and vaccines, including INO-4800, while practicing social distancing and taking all measures necessary to keep our team safe. Rest of our team is working remotely and seamlessly together in our shared mission to urgently develop our DNA vaccine that we believe will play a significant part in addressing this global health crisis. As we highlighted in today’s press release, Inovio has validated the speed and versatility of our DNA medicines platform by rapidly entering the clinic with our novel DNA vaccine candidate, INO-4800 and the fight against COVID-19. Kate will elaborate more on this shortly, but I want to profess that our INO-4800 development effort has truly been a global and collaborative one. Since we began developing a COVID-19 vaccine in January, we have been forging and expanding collaborations with government entities and premier private funders, including the U.S. Department of Defense, CEPI and the Bill & Melinda Gates Foundation. Inovio is collaborating with leading labs around the world to test the vaccine and is working with a team of existing and new contract manufacturers to scale up the manufacturing capacities. These relationships have helped Inovio expedite vaccine development, access untapped resources and prepare to massively scale up our device and plasma manufacturing processes to potentially create hundreds of millions of INO-4800 doses to satisfy the urgent global demand for a safe and effective vaccine. We plan to update you in more detail in the coming months.

To speak more on our infectious disease experience and where we are with INO-4800, I would now like to turn the call over to Dr. Kate Broderick. Kate?

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Kate E. Broderick, Inovio Pharmaceuticals, Inc. – SVP of Research & Development [4]

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Thank you, Joseph, and good afternoon, everyone. It’s a pleasure to be here today. As Joseph expressed during his opening remarks, our team has been exceptionally productive during these exceptionally challenging times. And I’m so honored to be working with such a brilliant and dedicated team. Our dedication alongside our infectious disease expertise and preexisting collaborations have allowed us to be in a position to rise to this emerging public health challenge, being one of the first and few companies to be initially called on to develop a vaccine. In fact, when we first embarked on this development back in January, the name COVID-19 didn’t exist, and the virus, in fact, was not deemed a pandemic for another 5 to 6 weeks. And yet here we are, nearly 4 months later, and I’m very pleased to share with you our progress to date on our COVID-19 DNA vaccine and what you should expect to see over the next few months.

In 83 days, we went from a vaccine design to first human dosing. That is a remarkable speed. And last month, we completed the first of 2 doses in all 40 healthy volunteers in our Phase I clinical study with INO-4800 against COVID-19 disease. For this Phase I study, we enrolled at sites at the University of Pennsylvania and a clinic in Kansas City, Missouri. As of today, we are on track for all 40 volunteers to complete the second round of dosing by the last week of May. After which, we expect to have preliminary safety and immunogenicity data by late June in support of advancing rapidly to Phase II/III efficacy trial which is planned to potentially initiate in the July, August time frame and frontline health care workers in multiple major medical centers in the U.S.

Concurrently, we also expect our partners Advaccine and IVI to initiate 2 separate Phase I clinical trials of INO-4800 this summer in China and South Korea, respectively. Speaking of our previous MERS vaccine work, we will be presenting new positive data from our Phase I/IIa trial providing a great foundation for the current COVID-19 work at the American Society of Gene and Cell Therapy Conference this week. As already published in the conference abstract, for the study participants receiving the 0.6 mg of INO-4700 intradermally with the CELLECTRA device, 88% demonstrated 0 conversion after 2-dose regime at 0 and 8 weeks, while those receiving a 3-dose regime giving at 0, 4 and 12 weeks, 84% 0 converted after 2 doses and 100% after 3 doses as measured by a binding antibody assay against the full-length spike protein. Additionally, 92% of the vaccine recipients in both groups displayed the ability to neutralize the virus using a neutralization assay. Robust T cell responses were observed in 60% of the vaccine recipients after the 2-dose regime, and 84% of those in the 3-dose group. Interestingly, after a single dose of 0.6 mg of INO-4700, intradermal vaccination resulted in 74% binding antibody response rates and 48% neutralizing antibody response rate. We have designed our COVID-19 vaccine, INO-4800, using the same strategy as we did for INO-4700, including the selection of the full-length spike protein as the target and the use of intradermal CELLECTRA delivery device. We are both hopeful and optimistic that the ongoing Phase I clinical trial with INO-4800 who generate a similar level of clinical immune responses and safety data as we have just reported for INO-4700. Furthermore, this latest data demonstrated both the power of the intradermal delivery and the strength of our coronavirus experience. Furthermore, I’m really proud to say that while Inovio has been able to bring a new vaccine from construct design to Phase I clinical trials in record times, we were still able to confirm the robust immune responses of INO-4800 in multiple animal models that we typically test all our vaccine candidates in, including small animals, all the way up to nonhuman primates. In fact, our preclinical data has been accepted for a peer-reviewed publication in Nature Communications, demonstrating robust T and antibody responses, including neutralization antibody responses in several animal models with INO-4800 vaccination. Over the next couple of months, we will also expect to attain and report data from several animal challenge studies being conducted collaboratively at some of the world’s leading laboratories.

Leveraging these preclinical results and continued work with our animal challenge studies, along with our expected Phase I data in June, we anticipate having the necessary immune response and safety data to support our plan to move into a large, randomized Phase II/III efficacy study.

And finally, another important advantage of Inovio’s platform technology I wanted to state here is that our DNA vaccines do not require the challenging deep frozen cold chain storage. In fact, our vaccines are stable at room temperature for at least 1 year. And for 5 years at 2 to 8 degrees Celsius, which, of course, is normal refrigeration temperature.

In comparison, most messenger RNA and viral vector vaccines are not temperature stable and are often have to be maintained in a freezer cold chain as low as minus 80 degrees Celsius. This is an important differentiator and key advantage of Inovio DNA vaccines.

And with that, I’ll now turn it back over to you, Joseph. Thank you.

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [5]

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Thank you, Kate. Appreciate that update, really amazing work. Again, I can’t thank you and the team enough for all the dedication and hard work that you have been doing in the midst of this pandemic. To reiterate, we are aiming to be in a Phase II/III efficacy study by the July, August time frame, where we will be targeting health care workers on the front line. We estimate the high side of the study size to be around 2,000 health care workers and our capable regulatory and clinical operations teams are confident that we could fully enroll this number of participants in about 1 month. Again, the actual size of the study will largely depend on the infection rate at that time. In addition to our plan to determine the true efficacy of our vaccine in a large well designed, randomized Phase II/III study we’re also planning to pursue the Emergency Use Authorization path to achieve emergency approval of INO-4800. We plan to utilize immunogenicity and safety data from our Phase I trial as well as from an early subset of Phase II/III participants, along with our anticipated preclinical efficacy data from our ongoing animal challenge studies to form our EUA submission being planned for potentially fourth quarter of this year.

Now let’s move our update to our mid- and late-stage clinical programs. In fact, in less than 48 hours from now, the overall survival at 12 months data for our INO-5401 immunotherapy in 52 newly diagnosed GBM patient study will be available to the public as our abstract has been accepted for presentation at ASCO. Abstracts will be available this Wednesday at 5:00 p.m., followed by a virtual presentation at the end of this month. We had previously presented very exciting progression-free survival at 6 months in this study last winter. So naturally, I know you are all really excited to see this early promising data fully translate to the OS12 data. You will not have to wait too long for this data.

Before I turn the call over to Prakash for an update on VGX-3100, I want to provide a brief update on INO-3107, which targets the rare orphan HPV-associated disease, RRP, or recurrent respiratory papillomatosis. Given the progressive nature of this rare, debilitating and potentially life-threatening disease, patients are eager for an alternative treatment so they can avoid repeated invasive surgery.

As we stated in our last call, the FDA accepted Inovio’s IND application to evaluate INO-3107 in a Phase I/II trial for the treatment of RRP. We expect to enroll approximately 63 patients in this Phase I/II trial to evaluate the efficacy, safety, tolerability and immunogenicity of INO-3107 in patients with high-risk HPV-6 and/or 11 associated RRP and who have needed at least 2 surgeries annually for the last 3 years or to remove the papilloma tumors. While the COVID-19 pandemic has thrown a curveball at this trial, we anticipate to begin dosing patients this summer.

So we have so much to look forward to the summer on top of our progress in INO-4800. Now I’d like to turn over the call to Dr. Prakash Bhuyan, M.D., Ph.D, who will provide an update on multiple targets and studies we have ongoing for VGX-3100. Prakash?

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Prakash Bhuyan, Inovio Pharmaceuticals, Inc. – VP of Clinical Development [6]

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Thank you, Joseph, and hello, everyone. As you know, our lead asset is VGX-3100, which targets HPV-associated diseases. Despite the negative impact of COVID-19 upon our clinical programs, we still plan to report top line efficacy data from REVEAL 1, which is our pivotal Phase III trial for HPV-related high-grade cervical dysplasia patients and that will be in the fourth quarter of this year. For REVEAL 2, recruitment is still underway at our sites around the world, and the COVID-19 pandemic has certainly had an impact upon our patient recruitment since March. We are hopeful in getting back to the pre-pandemic rates as soon as possible as various countries and regions begin to open back up.

As a reminder, REVEAL 2 has the same design and target patient enrollment of 198 subjects as in REVEAL 1. The main difference is the safety follow-up time of 1 month for REVEAL 2 versus 1 year for REVEAL 1.

Turning now to our positive interim data that we reported in March at ASCCP. We continue to validate the broader applicability of VGX-3100 and our HPV platform in general. So specifically, in our Phase II trial in anal dysplasia, we’ve reported that of the 20 patients with data available, 50% showed clearance of their HPV-16/18 positive precancerous lesions and 75% of the subjects showed a reduction in the HPV-16/18 positive precancerous lesion number just 6 months after the first dose. We do believe these data are extremely encouraging. Not only do they build upon the previously reported efficacy in our cervical dysplasia Phase IIb trial. But as further context to this, only 1 in 5 people with HPV-16 associated precancerous dysplasia would be expected to exhibit spontaneous resolution at 1 year.

Without adequate treatment, precancerous anal dysplasia would typically progress to anal cancer. Having a DNA medicine that can clear these lesions without the burden of repetitive, multiple and painful surgical or invasive treatments would change the standard of care and provide patients with a true meaningful benefit. Demonstrating VGX-3100’s broad applicability, we also reported encouraging Phase II initial data in our vulvar dysplasia trial, where 12 of the 22 subjects completed their primary endpoint evaluation at 6 months following the treatment with VGX-3100.

The results were shared at ASCCP in March and demonstrated that 80% of treated women had an overall decrease in the lesion area 6 months after treatment. Two trial subjects completely resolved their HPV-16 vulvar dysplasia. And to put this into context, spontaneous regression for these patients is expected to be very low, about 2% to 5% and typically takes 1 to 2 years.

So taken together, these data build the case for VGX-3100’s broader potential to treat HPV-caused precancers and further proof-of-concept for our DNA medicine approach. We look forward to providing full study results for both the vulvar and anal precancers dysplasia trial later this year.

And with that, I’ll turn it back over to you, Joseph.

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [7]

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Great. Thank you, Prakash. Running a large global Phase III study is challenging enough. And working in the wake of a pandemic is unprecedented, you and your team have been truly rockstar through all this, showing your tireless dedication to work on providing a therapeutic alternative to surgery and improve the quality of life for these patients. Thank you again.

Now I will ask our CFO, Peter Kies, to provide a financial update. Peter?

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Peter D. Kies, Inovio Pharmaceuticals, Inc. – CFO [8]

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Thanks, Joseph, and good afternoon, everyone.

First, I will provide a summary of our capital resources for the first quarter of 2020. The company ended with 20 — with $270 million in cash, cash equivalents and short-term investments as of March 31, 2020. To this cash position, we added an additional $121.7 million through the ATM in April. Given the uncertainties associated with the macro impact that the pandemic may have on the global economy, we have been both prudent and proactive in maintaining a strong financial position, providing Inovio with multiyears worth of cash runway.

As both Kate and Joseph mentioned during their prepared remarks, the company anticipates to continue to receive external funding to support Inovio’s advancement of INO-4800.

Turning now to revenue and net income, or net loss in our case. We reported total revenue of $1.3 million for the 3 months ended March 31, 2020. Inovio’s net loss for the quarter ended March 31, 2020, was $32.5 million or $0.26 per share basic and dilutive. Lastly, R&D expenses for the 3 months ended March 31, 2020, were $19.1 million compared to $24.4 million for the same period in 2019. The decrease in R&D expenses was primarily related to a decrease in employee compensation expenses due to lower employee head count accompanied by a decrease in clinical trial expense timing, and there was an increase in our contra R&D expense recorded from grant revenues. A complete summary of our financial statements for the first quarter of 2020 can be found in today’s press release and in our Form 10-K filed with the SEC. This can also be accessed on our website under Investor Relations financial reports.

With that, I’ll turn it back to you, Joseph. Thanks.

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [9]

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Thank you, Peter. Before we turn to the analyst Q&A, I’d like to list all of the events we expect before our next earnings report in August. Here are the list: we expect to report on 12 months overall survival efficacy data from INO-5401 in GBM to be presented at ASCO in late May: Second, preliminary safety and immune responses data from our U.S. Phase I trial for COVID-19 vaccine INO-4800 in 40 healthy volunteers; next, data from our COVID-19 animal challenge studies; fourth, additional external funding to support INO-4800 development; fifth, either started or be poised to start our large, randomized Phase II/III efficacy trial upon regulatory approval; sixth, start of additional clinical trial for INO-4800 in China and in South Korea; seventh, start of patient dosing for Phase I/II clinical trial of INO-3107 to treat RRP, a lot of milestones to look forward to.

Now I look forward to taking your questions. Operator, please open the line for the analysts.

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Questions and Answers

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Operator [1]

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(Operator Instructions)

Our first question today will come from Stephen Willey with Stifel.

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Stephen Douglas Willey, Stifel, Nicolaus & Company, Incorporated, Research Division – Director [2]

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I think, Joseph, you mentioned in your comments a couple of times regarding your ability to secure external funding. I believe there was a CEPI grant handed out to a competitive program here after market hours today. And that’s obviously an organization that you have a pre-existing relationship with. They gave you, I think, $60 million for the MERS vaccine. So I’m not sure what you can say about the funding process itself, but I guess, anything you can say just with respect to active dialogues you may be having, whether this involves some kind of formal application process and to what extent the need to scale a device is potentially viewed as a rate-limiting step here by some of these agencies.

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [3]

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Well, thanks, Steve. Great question. And I guess, a great thing for Novavax and CEPI. As I stated before, there are extensive amount of fundings available for promising vaccine candidates as we all have seen BARDA contracts to both J&J and Moderna and now CEPI funding to Novavax. There’s probably at least $15 billion to $20 billion in total funding available in both BARDA and CEPI, and the Bill & Melinda Gates Foundation, each have said they will each support up to 5 or 6 for CEPI and BARDA’s case. And both CEPI and BMGF both have stated that they will support up to 8 different candidates in rapid scale up. So I think there are — congratulations to Novavax, and Moderna and J&J have already received theirs. So I think the potential of additional funding for Inovio, I think, is great. I do think there will be a total of 10 to 12 viable candidate vaccines, which will be heavily invested by these various funding agencies.

So as we make progress, I think the potential of Inovio’s receiving these external funding, as we mentioned in our prepared remarks, is very good. Lastly, touching on your question about the devices. We received already funding from Bill & Melinda Gates Foundation earlier this year to help accelerate our commercial vaccine device, and we’re on good track for doing that. So I don’t believe the devices and arrays are going to be a rate limiter for us to both scale up and also receive this external funding.

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Stephen Douglas Willey, Stifel, Nicolaus & Company, Incorporated, Research Division – Director [4]

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Okay. That’s helpful color. And you talked about the desire to pursue an Emergency Use Authorization path and I think maybe even referenced the submission here before the end of this year. Can you maybe just talk a little bit about how that process logistically works? And I believe the EUA is under the auspice of HHS, not FDA. So what kind of submission actually needs to be made? Is that analogous to, I guess, an NDA filing? Or how is that different, I guess, when you’re submitting something to an agency that’s outside of FDA?

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [5]

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Yes. I mean certainly, the secretary of HHS has the authority to provide EUA authorization. But of course, the FDA reports through the HHS. So as we have seen numerously in therapeutics and diagnostics case, there’s been dozens of EUAs provided for those 2 areas. For vaccines, there hasn’t been any, ever. So the clarity on how and when those may occur, is something that we and our team, our regulatory team, our clinical team are working through. But here’s what [Spence] communicated to us and others publicly. One is the vaccine has to demonstrate some level of safety and immune responses and especially if you can tie those immune responses to any challenge model data, if they’re relevant. So I think we would be at Inovio to be in position with our Phase I primary data readouts in June with multiple animal challenge studies, including nonhuman primates, ferrets and mice to be reported in the next couple of months that we will be in a great position to collect those data, evaluate and prepare a proper submission to the FDA for an EUA. So I think the exact mechanism and the process will be clarified in the next couple of months, but we should be in a great position to apply for that.

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Operator [6]

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Our next question will come from Chris Raymond of Piper Sandler.

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Nicole Ashley Gabreski, Piper Sandler & Co., Research Division – Research Analyst [7]

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Congrats on all the progress during the quarter. This is Nicole Gabreski on for Chris. So maybe just one ahead — ahead of the ASCO abstracts being released this week. I guess, we just wanted to clarify the INO-5401 data. What should we expect to see in the abstract versus what will be presented? Could you just provide a little more color on that?

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [8]

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Yes. The abstract will provide the actual percentage of our cohorts surviving at 12 months. So thus providing OS12 number. Just to jog everybody’s memory, we have a 52 total patients in our study, INO-5401 plus INO-9012 dose together with Regeneron’s LIBTAYO, their PD-1 checkpoint inhibitor. All the patients also received standard of care, which is comprised of surgery and chemo radiation, chemo with temozolomide. So we — what we’re looking for — what we’re looking forward to presenting is the overall survival of our total 52 patient population at 12 months and we will be able to compare that information OS12 to what we would expect from extensive publications in these populations from standard of care of surgery and chemo radiation.

And typically, all comers, both unmethylated and methylated, the standard of care has been reported in about 65% of those populations being alive at 12 months. So it’s a very devastating cancer, but we’re hopeful that we can present much higher than 65% in our abstract, which will be visible on Wednesday evening this week.

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Nicole Ashley Gabreski, Piper Sandler & Co., Research Division – Research Analyst [9]

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Great. That’s helpful. And then maybe just a second question on INO-4800. Just as far as the trial design that you laid out for the Phase II/III, today and just the target patient population and the trial size, have you talked to FDA about these details and received feedback on that at this point?

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [10]

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Well, we have interacted with the FDA in a general sense, but we expect to have a little more detailed communications regarding the trial design as we finalize them. So what I prepared, and what I provided to — disclosed today, really are rough design. Of course, our team is furiously working to finalize and refine in preparation with our interactions with the FDA to come.

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Operator [11]

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Our next question will come from Gregory Renza with RBC Capital Markets.

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Gregory James Renza, RBC Capital Markets, Research Division – Analyst [12]

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Congratulations, again, on all this progress. Thanks for your contribution here to the pandemic. Just wanted to start a little bit. As you sort of talk about INO-4800 and its profile. Mentioning, of course, the convenience with distribution as well as the suitability or targets with health care workers going after in the next trial. I’m just curious if you could discuss a little bit about the suitability of this asset. What makes it perhaps different from the others? And should we be thinking of particular either geographies or patient populations that would perhaps give INO-4800 a particular edge, especially in light of the fact that this can really be a multi-asset or multipronged approach to find a solution with a vaccine?

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [13]

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Yes. Thanks, Greg. Just quickly, as Kate summarized earlier, there’s a couple of attributes that makes Inovio’s INO-4800 more advantageous compared to other platforms out there. One is the stability of the product. So DNA plasmids are extremely stable. We have long-term product dating around 5 years with 2- to 8-degree Celsius refrigerated conditions, you can leave it in the ambient temperature for over a year and not lose any potency of the vaccine. So it’s a true advantage over most of the mRNA or viral vectors or proteins, which have to maintain frozen cold chain throughout the distribution and storage conditions.

Second major importance — major advantage that our DNA vaccines have compared to other platforms is our ability to generate both high levels of CD8 T cell, killer T cell responses against the antigen, along with our ability to generate the neutralizing antibodies. So we’ve demonstrated this in our Nature Communication publication and what I think is really important is both this balanced immune responses and CD8 T cell responses, which is less susceptible to changes in viral antigen sequences. So I think being able to provide, well, CD8 T cell response as well as a neutralizing antibody response is something that the other platform vaccines will not have as much. Certainly, what we saw in our MERS vaccine challenge studies in nonhuman primates or rhesus macaques, where we saw 100% protection against the pathogenic MERS virus challenge. We saw that it was very important to have both neutralizing antibodies or binding antibodies, but also very important to have strong T cell responses. So I think our ability to generate both T cells and antibody responses will lend us very well to perhaps immune-compromised populations maybe older, more senior populations and perhaps other segments as well as the general public.

I think the level of the immune responses that we’ve been generating, and I can turn to Kate for a little more details. What we are already seeing in nonhuman primates, in terms of the antibodies and T cell responses, I think we’re very excited about that compared to the convalescent patient data that others have published in recent publications.

Kate, would you like to discuss a little bit more about our immune responses compared to the published convalescent patient data?

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Kate E. Broderick, Inovio Pharmaceuticals, Inc. – SVP of Research & Development [14]

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Yes, absolutely. And then one thing that I was particularly excited to see was the rapidity. And so as Joseph quite rightly mentioned, we generated really rather robust both antibody and T cell responses include neutralizing antibody and all of the animal models that we tested. But what was really very heartening to see was the rapidity of those responses. So we started seeing really measurable responses really very early on, and that’s detailed in our Nature Communication paper. So it’s really — that’s really quite important, especially when you’re thinking about an emerging infectious disease as we are at the moment, obviously. But as Joseph mentioned, we’ve also had access to convalescent patients’ sera, and so we’re able to do side-by-side comparisons. And it’s really — it’s very, very encouraging to see the levels that we’re seeing in the animals as very comparable to the levels that we’re seeing in the convalescent patients. So it’s looking very promising at the moment.

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Gregory James Renza, RBC Capital Markets, Research Division – Analyst [15]

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That’s very helpful. And just one more quick one, if I may. I know you’ve already provided some color on device strategy and progress. I’m just curious if as you talk about 1 million doses by the end of the year to have the capacity for. How that translates into devices and what progress we should be looking for there, maybe more specifically what the dose-to-device ratio operational can be expected to be?

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [16]

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Yes. Thanks, Greg. Well, just roughly, when we say we’re preparing 1 million doses, we’re discussing or we’re stating both the plasmids and the device and arrays to deliver them. So you can’t really have one without the other. So we’re on right track to do that. But we’re preparing to do beyond that, we’re preparing and increasing our scale to be able to provide hundreds of millions of doses starting next year. So these are the preparations that take to — which we’re already doing to scale up in that massive scale. Assuming success of INO-4800, we will be in a great position to do so by relying on our current contract manufacturers of plasmids and adding on additional manufacturers that can help us scale.

In the device side, we’ve already have both produced enough arrays and devices to meet the 1 million need. So those processes are ongoing, both within our GMP facility in San Diego as well as our additional contract device and array manufacturers that we have brought on. So these are very extensive efforts. We’ve never had to prepare for hundreds of millions of doses, if not billions of doses that might be required to combat COVID-19 globally.

Prior to this year, most of our doses that we were planning for were in hundreds of thousands of doses if at most millions of doses. So I think this is a challenge our team has taken on. And I think we’re making a great progress in this regard.

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Operator [17]

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Our next question will come from Naureen Quibria of Maxim Group.

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Naureen Quibria, Maxim Group, LLC – Senior Equity Research Associate [18]

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Congrats on all the progress. I guess my first one is on the GBM study that you’ll be presenting on at ASCO, and we’ll get the data just in a few days. You mentioned that survival data for 1 year for these patients are historically 60% to 65% at 1 year. Are you able to share with us what kind of delta you hope to see from historical rates for the 12-month OS? What would you think would be encouraging?

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [19]

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Well, what number would get you excited, Naureen?

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Naureen Quibria, Maxim Group, LLC – Senior Equity Research Associate [20]

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Well, obviously — well higher than that.

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [21]

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That’s a great question. But yes, I think substantive increase over 65 — 60%, 65% will be very encouraging. This is not the totally finished line. We will follow these patients at least for another 6 months or longer. So we will be — I mean we feel like this is a data set that we’re building up. So from PFS6, which was very exciting between 20% to 30% difference compared to the standard of care at that early progression-free number was very encouraging to us and where we are today at overall survival at 12 months. And I think that adds to another level of validity and confidence in this data. And then as we continue to have longer tail in the survival curve in these patients at OS18, I mean that would even be even greater feat. So what would be a great number for you if you assume the standard care is 60% to 65%?

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Naureen Quibria, Maxim Group, LLC – Senior Equity Research Associate [22]

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Well, I like it — I would like it to be perfect. But that’s not of possible, right?

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [23]

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So do I. Remember very difficult. Cancer population, everyone dies in 5 years, right? So — and the overall survival median survival for unmethylated population is around 1 year, about 13, 14 months and methylated populations around 20, 22 months. So these are really patients who are suffering from a very deadly cancer. So anything we can do, because there hasn’t been a huge advancement in GBM therapy since temozolomide. So if we are INO-5401 plus Regeneron’s LIBTAYO can make an impact on this important cancer, I would be really thrilled with the data. So I think you just got to stay — be stay tuned for a couple more days to see our data.

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Naureen Quibria, Maxim Group, LLC – Senior Equity Research Associate [24]

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Great. And as for — you also posted positive interim data on the vulvar and dysplasia studies on a proportion of patients back in March. Can you remind us, are those studies actually fully enrolled?

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [25]

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Yes. Yes. They were fully enrolled last year. What we presented at the ASCCP and publicly disclosed were the patients who crossed the 6 months, the actual endpoint time line. So over the next couple of months, I think we will have full data set from all the patients in both Phase II study. So we will have those data available later this year.

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Naureen Quibria, Maxim Group, LLC – Senior Equity Research Associate [26]

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Okay. Great. And one last one for me. This is regarding the MEDI0457 with the durva study. Actually, just last week, on the clinical trials website, AstraZeneca updated their head and neck study and they changed the anticipated number of patients from 40 to 35 actual patients, from 40 anticipated to 35. I’m just curious, is there anything we might be able to read from that? Do you have any thoughts on that?

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [27]

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No. We had publicly disclosed, I believe, last year that they had fully enrolled at 35 patients. And they’re continually following these patients for survival benefits as well. So we — as we stated before, I still expect AstraZeneca to report some data this year, but we can’t really say when that may be. So they have full control — AZ has full control over the data and when and where to present, but we expect that to be in sometime in 2020.

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Operator [28]

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Our next question will come from Yi Chen with H.C. Wainwright.

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Yi Chen, H.C. Wainwright & Co, LLC, Research Division – MD of Equity Research & Senior Healthcare Analyst [29]

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My first question is, how many data sets from the animal challenge studies shall we expect in the coming months?

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [30]

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Yes. So we have mouse challenge. Well, Kate, would you like to address this? These are your studies. So…

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Kate E. Broderick, Inovio Pharmaceuticals, Inc. – SVP of Research & Development [31]

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Yes. Certainly, Joseph. Thank you. So we really have consciously chosen to look at a wide spectrum of challenge models. That includes the mouse challenge, the ferret challenge and the primate challenge. And we think that’s going to give us a really broad-spectrum picture of how well our vaccine is performing. We’re very confident about that.

So we’ve partnered with, really, labs all across the globe who are clearly leaders in their particular fields of challenge. And so we’re going to be getting those data as it comes out with the mouse data being delivered the soonest in the next month or so.

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Yi Chen, H.C. Wainwright & Co, LLC, Research Division – MD of Equity Research & Senior Healthcare Analyst [32]

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Next question regarding the design of the Phase II/III trial this summer. At that time, I guess, there will be other vaccines — COVID-19 vaccines probably being evaluating Phase II trials as well. Do you think they will also recruit frontline health care workers to be enrolled in their vaccine trial? And if so, well, of course, these health care workers probably will be constantly exposed to COVID-19 viruses. So how long do you plan to follow these workers after injection of the vaccine?

And also, they will likely be wearing personal protective equipment, so I guess at the end of the trial, you will probably measure how many people got actually get infected. But of those who are not getting affected, how do you know they are getting the protection from the vaccine or they’re getting protection from the personal protective equipment?

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [33]

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Yes. Great, great questions. So duration of follow-up, obviously, we’ll report after we get the determination with the FDA. So as it could be as long as a year, it could be about 6 months we look for the duration that makes sense for us. Either way, we will continue to follow up with these volunteers in a Phase IV study, if we’re successful.

In terms of the vaccine efficacy. Yes, this will be a randomized, double-blinded study. So we expect half the participants will get our vaccine, half placebo. So it will be a true randomized design, true efficacy determinating study. So while we’re targeting — why we want to do this is the health care frontline workers are these are our heroes and they’re day in and day out, even with PPE, constantly exposed to a potential infection with the virus. So we feel that this population is the frontline population that we would want to protect first. So getting a true efficacy data in this setting will be highly valuable for not just our vaccine development, but overall advancement of the field as a whole. But we also feel that we have a very compelling candidate in INO-4800. So we like to get it tested in this very challenging environment so that we can bring the vaccine as fast as we can to these heroes and the general public as rapidly as possible. In terms of the overall performance of the vaccine, I think we’ll get a very good idea by June how well our vaccine is doing from immune responses data in all 40 healthy volunteers. And by the way, as I mentioned or Kate earlier, that all of the 40 folks who bravely volunteer for this important study, their safety profile has been great thus far. They will all receive their second dose by the end of — before the end of May. So we’re very excited how well that study is ongoing. And of course, our animal response data, as I mentioned, will be publicly viewable soon as that paper has been accepted through a peer review in Nature Communications.

And what Kate mentioned about the challenge studies, we should have the mouse challenge data. That’s being run in China. We have ferret challenge studies ongoing in Australia, and we have nonhuman primate studies ongoing in England and in the U.S. So we think we have a very compelling vaccine and we hope to demonstrate not just the immunogenicity and potentially the protective ability of this vaccine, leading into our Phase II/III efficacy study.

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Yi Chen, H.C. Wainwright & Co, LLC, Research Division – MD of Equity Research & Senior Healthcare Analyst [34]

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Got it. It appears back in the ’90s that the FDA and CBER has agreed to a human challenge study for in cholera vaccine. Do you think this is necessary for COVID-19? What’s your comment?

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [35]

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I’m still very concerned about a human challenge. There’s been other human challenge studies for vaccines successfully done for influenza, for RSV and others, I think norovirus as well. But so much is still unknown about SARS-CoV-2 virus and COVID-19 disease. I think the risk really outweighs the potential benefit for those volunteers. So I personally have some ethical questions that still is unresolved for us to support a human challenge study in such a new disease.

That being said, I think the spirit of moving faster is something that we all prescribe to at Inovio. And that’s why we want to get to a well-designed large efficacy trial, both to demonstrate the efficacy and the true safety of our vaccine. We feel really strongly that our vaccine is safe. Across what we have demonstrated in our previous clinical studies, and we look forward to demonstrating that in our Phase I study with INO-4800 and upcoming Phase II/III trial as well in larger population.

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Yi Chen, H.C. Wainwright & Co, LLC, Research Division – MD of Equity Research & Senior Healthcare Analyst [36]

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Got it. My last question is on the operating expenses. So as long as the economy lockdown is still in place across the country, do you expect the R&D expenses to remain relatively low going forward?

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [37]

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Our R&D expenses? Yes, go ahead, Peter.

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Peter D. Kies, Inovio Pharmaceuticals, Inc. – CFO [38]

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Yes. We expect them to remain fairly consistent.

As we said before, we expect most of the INO-4800 expenses to be funded by external forces. And so we expect the expenses to remain fairly consistent. But we will see — we did have a bonus payout that we hadn’t budgeted, so that added a little bit more.

So we’re looking at about $80 million annually, $80 million to $85 million net burn annually.

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [39]

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And with that projection, our cash runway is quite healthy. So we feel that with uncertainty of the pandemic we have a strong financial position.

We have lots of important data milestones coming up. Even without COVID-19 vaccine in GBM and REVEAL 1, but then you add in or develop a rapid development in COVID-19 vaccine, both in Phase I data and all of the challenge results in the next couple of months. We really have a very data full 2020 in the next several months.

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Operator [40]

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Our next question will come from Jonathan Aschoff with Roth Capital.

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Jonathan Matthew Aschoff, Roth Capital Partners, LLC, Research Division – MD & Senior Research Analyst [41]

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I was wondering earlier in your comments, did you say that REVEAL 2 was 50% enrolled or that COVID-19 is making the enrollment rate 50% of what it was before COVID-19.

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [42]

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For — it’s latter, for March and April. So we saw a decrease in enrollment rate from prior to the pandemic level because of all of the lockdown and such stay-at-home orders globally.

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Jonathan Matthew Aschoff, Roth Capital Partners, LLC, Research Division – MD & Senior Research Analyst [43]

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Okay. And how much do you think will be spent in total you plus the external funding on INO-4800, up to the point that you know if INO-4800 is clinically successful enough to seek a program?

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [44]

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Well, I mean it depends on EUA or traditional BLA. So EUA, it could be even before we finish the Phase II/III trial as the efficacy is not a required element in EUA application. But if we’re counting the Phase II/III and really a lot of the spending will be on the scale-up of the manufacturing and the money spent to provide the doses. So obviously, clinical trial expenses and Phase I studies have already been funded through CEPI and others. And we expect to receive additional funding for our next clinical development stages, including Phase II/III. So I think we’re going to be very well-funded in support of advancing INO-4800. The next steps are to make sure that we can deliver many, many doses that is required from the society. Continually, as more people die across the globe, but especially in the United States, there’s more increase and an increasing demand for a safe and effective vaccine to get to the public as soon as possible. So we’re taking a stepwise approach, taking both the EUA path where emergency approval could be granted for specific targeted population like the first responders and health care workers, and then getting it through — getting our clinical development plan through the randomized large, well-designed efficacy trial together the true efficacy of our vaccine and the safety in large numbers in support of a BLA approval.

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Jonathan Matthew Aschoff, Roth Capital Partners, LLC, Research Division – MD & Senior Research Analyst [45]

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Joe, if it was a BLA, how much do you think it would cost through that full process, including 1 million doses?

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [46]

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So potentially, our next trial could be a registrational trial, Phase II/III, if we assume that. And we assume a million doses. I mean that will be in a total value of 100 — mid-$100 million dose, $150 million from start.

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Operator [47]

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This concludes our question-and-answer session.

I would now like to turn the conference back over to Joseph Kim for any closing remarks.

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J. Joseph Kim, Inovio Pharmaceuticals, Inc. – CEO, President & Director [48]

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I’d like to thank everyone for your attention. We look forward to another productive and important quarter coming up. So we look forward to sharing with you all of these important milestones in the next few months. Thank you very much.

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Operator [49]

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The conference has now concluded. Thank you very much for attending today’s presentation. You may now disconnect.

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