Inovio Pharmaceuticals Beats Earnings & Announces Acquisition

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Inovio Pharmaceuticals Inc (NASDAQ: INO)

Inovio Pharmaceuticals is having an incredible day in the market today after reporting incredible financial data and announcing that it has entered into a license agreement with AstraZeneca (NYSE: AZN) for the acquisition of rights to INO-3112. Here are the details…

Inovio Pharmaceuticals Blows Earnings Expectations Out Of The Water!

As mentioned above, Inovio Pharmaceuticals presented incredible financial data; blowing earnings expectations out of the water. Here’s what we saw from the earnings report…

  • Top-Line Revenue – Top line revenue for the second quarter and first six months of 2015 both came in well above analyst expectations. For the 3 and 6 month periods, the company produced $5.3 million and $10.5 million respectively.
  • Earnings Per Share – Earnings per share came in at a loss of $0.09 for the quarter; a sharp contrast from the same period last year in which INO produced a loss of $0.18.

The Bigger Story Revolves Around INO-3112

While earnings proved to be positive, the bigger story today revolves around a deal that Inovio Pharmaceuticals made with MedImmune. MedImmune is the global biologics research and development subsidiary of AstraZenica. The announcement today outlined the fact that MedImmune and Inovio Pharmaceuticals have entered into a license agreement for the acquisition of Inovio Pharmaceuticals’ INO-3112.

According to the agreement, MedImmune will acquire exclusive rights to INO-3112; an immunotherapy that targets cancers caused by HPV types 16 and 18. The agreement is multifaceted. First and foremost, MedImmune will make an upfront payment of $27.5 million to INO. Following the upfront payment, INO will be entitled to potential future payments as INO-3112 reaches developmental and commercial milestones; which has the potential to earn INO up to $700 million in future payments. Also under the agreement, Inovio Pharmaceuticals will receive royalties that could end up in the double digits! All in all, this acquisition is a great move for both companies involved. Here are statements from key figures in both companies…

Today’s collaboration with Inovio leverages our deep internal expertise in the use of vaccines to drive antigen-specific T-cell responses. The Unique combination of our broad immuno-oncology portfolio with Inovio’s T-cell active INO-3112, which enhances cancer specific killer T-cells, has the potential to deliver real clinical benefits for patients.” – Dr. David Berman, SVP and Head of the Oncology Innovative Medicines unit at MedImmune.

Our licensing partnership with MedImmune represents and important step in executing our immuno-oncology combination strategy and advancing Inovio’s cancer vaccine R&D pipeline with a leading cancer immunotherapy company. INO-3112 is progressing, with positive interim data generated in an Inovio-initiated Phase 1 study. We appreciate MedImmune’s recognition of our ability to activate best-in-class killer T-cells in vivo and look forward to working with them on this collaboration.”

How The Market Reacted To The News

Not only did Inovio Pharmaceuticals beat earnings expectations, the deal with MedImmune is incredible news. Following positive news, we tend to expect to see gains; and that’s exactly what we’re seeing today. Currently (10:19), INO is trading at $8.40 per share after a gain of 29.40% so far today.

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