Biotech Inovio Pharmaceuticals cut costs: shares have risen

Biotech company Inovio Pharmaceuticals Inc. (INO) has announced its intention to reorganize to reduce costs. Investors reacted positively to this news, as only by reducing spending will the company be able to continue promising research. Currently, Inovio Pharmaceuticals does not have commercial drugs because the company does not yet receive revenue from sales — payment in the second quarter was less than $ 1 million. The closest to commercialization is the COVID-19 vaccine candidate. But in addition, other early- and mid-stage infectious disease programs are in development, such as the Middle East Respiratory Syndrome (MERS) vaccine in phase II trials. 

Another area of work is the prevention and treatment of oncological diseases. The company announced a successful trial of the PD-1 inhibitor, which provided remission of head and neck cancer for two years. VGX-3100 immunotherapy from Inovio Pharmaceuticals is currently in the study. Cleansing the body of HPV-16 and HPV-18 viruses that cause cancer may be the world’s first way to remove a papillomavirus infection from the human body. Until now, it was only possible to prevent disease with certain strains or treat symptoms. 

According to the presented plan, Inovio Pharmaceuticals plans to lay off 18% of full-time employees and reduce the number of contractors by 86%. Management expects that the reduction will reduce operating costs by about 30%. Thus, the company should have enough money to continue working until the third quarter of 2024. Inovio Pharmaceuticals’ net loss of $108.5 million in the second quarter means that if the company does not save cash (currently, the stock is $348 million), it will go bankrupt and will not be able to continue research. The new cost-cutting plan is a plus, as it will allow the company to work until the start of the sale of its first drug.