On Friday, RBC Capital Markets adjusted its expectations for Inovio Pharmaceuticals (NASDAQ:INO) shares, reducing the company's price target from $11.00 to $8.00, while keeping a Sector Perform rating.
The adjustment was prompted by newly disclosed manufacturing challenges related to Inovio's INO-3107's CELLECTRA delivery device, which have pushed back the Biologics License Application (BLA) submission for accelerated approval to mid-2025, a delay from the second half of 2024.
The RBC Capital analyst noted the news as disappointing and a reason for continued caution. This development is considered a step back, especially when compared to competitor PGEN, which has its program PRGN-2012 and is still on track for a BLA submission within this year.
Inovio is expected to release immunology data in the fourth quarter during a series of medical conferences. The data will provide insights into the mechanism of action (MOA), but the analyst does not view this as a significant catalyst for the stock.
Additionally, the development of INO-3112, in combination with Loqtorzi, for HPV16/18 positive Oropharyngeal Squamous Cell Carcinoma (OPSCC) continues, but without prominence in the current outlook.
The manufacturing issues and subsequent delay in the INO-3107 BLA submission were key factors leading to the lowered price target. RBC Capital Markets has maintained its Sector Perform rating, acknowledging the speculative risks associated with the stock.
In other recent news, Inovio Pharmaceuticals has made significant progress with its lead candidate INO-3107. The drug, aimed at treating Recurrent Respiratory Papillomatosis (RRP), has received certification from the European Medicines Agency's Committee for Advanced Therapies and the Innovation Passport under the UK's Innovative Licensing and Access Pathway. This opens up the potential for expedited patient access to the new medicine.
Analyst firms such as H.C. Wainwright, RBC Capital Markets, JMP Securities, Oppenheimer, and Stephens have maintained positive ratings on Inovio, indicating confidence in the company's ongoing development.
Inovio Pharmaceuticals recently reported revenue of $0.1 million and a net loss of $25.0 million for Q1 of 2024. The company plans to submit a Biologics License Application for INO-3107 in the second half of 2024. Other early-stage candidates, including an Ebola vaccine booster named INO-4201 and anti-SARS-CoV-2 dMAb candidates, are also being advanced.
Inovio has managed to secure approximately $33 million through an offering of common stock and pre-funded warrants, extending its cash runway into the third quarter of 2025. These recent developments reflect Inovio's commitment to advancing its DNA medicine platform and providing innovative treatments to patients worldwide.
InvestingPro Insights
In light of the recent developments at Inovio Pharmaceuticals, current InvestingPro data presents a mixed picture. The company holds a market capitalization of $225.68 million and is trading at a previous close price of $8.71. Despite the setbacks mentioned, it's important to note that Inovio holds more cash than debt on its balance sheet, which may provide a cushion against short-term financial headwinds. However, analysts have flagged concerns such as a high revenue valuation multiple and expectations of a sales decline in the current year, which align with the cautious stance taken by RBC Capital Markets.
InvestingPro Tips also reveal that Inovio is quickly burning through cash and has not been profitable over the last twelve months. These insights may be crucial for investors considering the company's speculative risks. On a positive note, Inovio's liquid assets exceed its short-term obligations, suggesting some level of financial flexibility.
For those seeking a deeper analysis, InvestingPro offers additional tips, including the latest analyst revisions and profitability forecasts. Interested readers can find further details and tips at the InvestingPro platform, which lists 13 more tips to help investors make informed decisions.
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