In a Dec. 18 research note, analyst Jonathan Aschoff reported that ROTH Capital Partners initiated coverage on Inovio Pharmaceuticals Inc. (INO:NASDAQ) with a Buy rating and a "conservative" 12-month target price of $13 per share. The stock is trading at around $3.70 per share.
Aschoff reviewed Inovio's two platforms. One, it is developing synthetic consensus full-length plasmid (SynCon) immunotherapies, or DNA vaccines for treatment and prevention of disease. Two, with its proprietary device CELLECTRA, the biotech can deliver its therapies using electroporation to boost cellular uptake and expression of unformulated DNA (only DNA and a saline buffer).
"Antigens produced by the SynCon platform are potentially capable of inducing the immune system to generate polyclonal antibodies or killer T-cells that have preventative or therapeutic functions, and the monoclonal antibodies produced would have direct therapeutic action," Aschoff explained.
The analyst summarized the major investment points concerning Inovio. He highlighted that 2020 into early 2021 will be "catalyst rich" for the company with data readouts from two Phase 3 trials, four Phase 2 trials, and three Phase 1 trials.
For one, topline results from the Phase 3 program evaluating VGX-3100 in high-grade cervical intraepithelial neoplasia are expected to be released in Q4/20. Filing for U.S. Food and Drug Administration approval could occur in late 2021 and commercial sales could begin in 2023, "at an initial price of $10,000."
The next studies Inovio plans to initiate are INO-3107 in recurrent respiratory papillomatosis and INO-5401 in glioblastoma multiforme, both of which ROTH expects will be "pivotal trials, thereby helping to rapidly advance these programs through the clinic," Aschoff indicated. The forecasted starting prices for INO-3107 and INO-3107 are $50,000 and $100,000 per treatment course, respectively.
ROTH projected that Inovio will reach about $1 billion in total sales in 2030 from the three immunotherapies, VGX-3100, INO-3107 and INO-5401, and has based its valuation of Inovio on those. Any other commercial success will constitute upside.
"We believe that Inovio, especially with its HPV-related, precancer pipeline, has prudently selected areas of oncology that combine unmet need and, therefore, ultimately market demand, with a high likelihood of clinical success," commented Aschoff.
Additionally, Inovio has a full pipeline of clinical candidates it also developed using the SynCon platform, including INO-5151 for prostate cancer, INO-1800 for hepatitis B virus, GLS-6150 for hepatitis C virus, INO-4212 for Ebola virus, GLS-5300 for Middle East respiratory syndrome, GLS-5700 for Zika virus infection, PENNVAX-GP for human immunodeficiency virus and INO-4500 for Lassa fever virus.
"It is relatively easy for Inovio to have so many ongoing programs because it is relatively easy for the company to generate its therapeutic candidates, once the rate-limiting step of target identification is complete," wrote Aschoff. "The unformulated DNA plasmids, once the sequences are created, are quick and extremely cost efficient to manufacture."[NLINSERT]
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Disclosures from ROTH Capital Partners, Inovio Pharmaceuticals, Company Note, December 18, 2019
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
ROTH makes a market in shares of Inovio Pharmaceuticals, Moderna, Inc. and Translate Bio, Inc. and as such, buys and sells from customers on a principal basis.
Shares of Inovio Pharmaceuticals may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.