On Monday, H.C. Wainwright adjusted its price target on shares of Inovio Pharmaceuticals (NASDAQ:INO), reducing it significantly from $12.00 to $5.00, while maintaining a Neutral rating on the stock. The revised target follows Inovio's recent announcement of its third-quarter financial results for 2024.
Inovio reported a net loss of $25.2 million, or $0.89 per share, which was lower than the anticipated loss of $30.1 million. The company's management also provided updates on the progress of INO-3107, stating that all non-device modules for its Biologics License Application (BLA) are expected to be completed by the end of 2024. The plan to resolve a manufacturing issue with the single-use array component of the device is ongoing.
The company has projected to submit the BLA for INO-3107 to the Food and Drug Administration (FDA) by mid-2025. A confirmatory trial for INO-3107, which targets recurrent respiratory papillomatosis (RRP), is planned before the BLA submission. INO-3107 has received Breakthrough Therapy designation and may be eligible for priority review, which could lead to regulatory approval potentially by late 2025 or early 2026.
However, the presence of a competing gene therapy for RRP, which is expected to begin a rolling BLA submission in the fourth quarter of 2024 under an accelerated approval pathway, has influenced H.C. Wainwright's valuation of Inovio. The firm's estimated market value has been reduced to $182 million, or approximately $5 per share. This valuation adjustment is the primary reason for the lowered price target on Inovio's stock.
In other recent news, Inovio Pharmaceuticals reported significant developments during its Q3 2024 earnings call. The company announced a net loss of $25.2 million but improved its cash position to $84.8 million. The firm's lead product candidate, INO-3107, targeting recurrent respiratory papillomatosis (RRP), demonstrated an 81% clinical response rate in its Phase 1/2 trial. Inovio plans to submit a Biologics License Application (BLA) by mid-2025, following a positive pre-BLA meeting with the FDA.
RBC Capital Markets adjusted its outlook on Inovio, reducing the price target to $6 from the previous $7 while retaining a Sector Perform rating. This change was brought about by Inovio's third-quarter earnings report, which highlighted the company's focus on INO-3107 amidst financial constraints. The firm continues to monitor Inovio's progress, the competitive environment, and pipeline developments.
Inovio is actively preparing for a confirmatory trial for INO-3107 and is engaging with European regulators on the trial design for INO-3112. Despite facing competition and manufacturing challenges, Inovio remains confident in the market potential of INO-3107 and is developing strategies for successful market entry.
InvestingPro Insights
Recent InvestingPro data paints a challenging picture for Inovio Pharmaceuticals, aligning with H.C. Wainwright's reduced price target. The company's market capitalization stands at $111.32 million, significantly below the analyst's estimated market value of $182 million. Inovio's financial health appears precarious, with a revenue of just $0.2 million in the last twelve months as of Q3 2024, representing a steep decline of 76.18% year-over-year.
InvestingPro Tips highlight that Inovio is "quickly burning through cash" and "not profitable over the last twelve months," which corroborates the company's reported net loss and the analyst's concerns. The stock is currently trading near its 52-week low, with a substantial 64.46% price decline over the past six months, reflecting investor skepticism about the company's near-term prospects.
Despite these challenges, Inovio maintains a strong balance sheet with more cash than debt, which could provide some financial flexibility as it works towards its BLA submission for INO-3107. However, the "weak gross profit margins" mentioned in the InvestingPro Tips suggest ongoing operational challenges that may impact the company's path to profitability.
For investors seeking a more comprehensive analysis, InvestingPro offers 16 additional tips on Inovio Pharmaceuticals, providing deeper insights into the company's financial position and market performance.
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