Inovio shares target cut by Oppenheimer, retains outperform on Q3 results

On Monday, Oppenheimer adjusted its stock price target for Inovio Pharmaceuticals (NASDAQ:INO), reducing it from the previous $33.00 to $15.00, while continuing to recommend the stock as Outperform. The adjustment follows Inovio's recent third-quarter financial report and updates on its business operations, including progress towards a Biologics License Application (BLA) for INO-3107, expected to be filed in mid-2025.

Inovio disclosed operational expenses for the third quarter amounting to $27.3 million. The company's remaining cash reserves, totaling $84.8 million, are projected to sustain operations through the third quarter of 2025, aligning with the anticipated timing for the BLA submission.

Analysts at Oppenheimer expressed optimism regarding Inovio's regulatory advancements outside the United States and new immunological data that reinforce the potential clinical benefits of INO-3107.

Despite the competitive landscape, where Precigen (NASDAQ:PGEN) announced its intention to begin a rolling BLA submission for PRGN-2012 in the fourth quarter of 2024, Oppenheimer believes that Inovio remains on a solid path to offer a leading therapy for Recurrent Respiratory Papillomatosis (RRP). In addition to INO-3107, Inovio is making headway with other early-stage candidates, including an Ebola vaccine booster, INO-4201, and anti-SARS-CoV-2 dMAb candidates.

The firm's updated financial model, which incorporates actual third-quarter results, underpins the revised price target. Despite the significant reduction in the target price, Oppenheimer's outlook for Inovio remains positive, as indicated by the maintained Outperform rating.

In other recent news, Inovio Pharmaceuticals reported a net loss of $25.2 million in its third-quarter financial results for 2024, an improvement from the projected loss of $30.1 million. The company also revealed an enhanced cash position of $84.8 million.

Inovio's lead product candidate, INO-3107, which targets recurrent respiratory papillomatosis (RRP), has shown promising results with an 81% clinical response rate in its Phase 1/2 trial. The company plans to complete all non-device modules for its Biologics License Application (BLA) by the end of 2024 and aims to submit the BLA by mid-2025.

However, Inovio is facing regulatory and competitive challenges. H.C. Wainwright and RBC Capital Markets have both downgraded their price targets for Inovio, citing competition from a gene therapy for RRP and manufacturing issues with a critical device component as influencing factors. Despite these hurdles, the company is actively preparing for a confirmatory trial for INO-3107 and engaging with European regulators on the trial design for another product, INO-3112.

These recent developments highlight Inovio's commitment to its DNA medicines platform and its strategic efforts to navigate the competitive pharmaceutical landscape.

InvestingPro Insights

Recent InvestingPro data provides additional context to Inovio Pharmaceuticals' financial situation and market performance. The company's market capitalization stands at $111.32 million, reflecting its current valuation in the biotech sector. Inovio's financial metrics reveal some challenges, with revenue for the last twelve months as of Q3 2024 at just $0.2 million, representing a significant year-over-year decline of 76.18%.

InvestingPro Tips highlight that Inovio is "quickly burning through cash" and "not profitable over the last twelve months," which aligns with the operational expenses and cash reserve projections mentioned in the article. The tip noting that Inovio "holds more cash than debt on its balance sheet" suggests some financial stability, potentially supporting the company's operations through Q3 2025 as discussed.

The stock's recent performance has been notably weak, with InvestingPro data showing a 45.53% price decline over the past three months and a 64.46% drop over six months. This downward trend is reflected in the InvestingPro Tip that the stock is "trading near 52-week low," which may explain Oppenheimer's significant price target reduction.

For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for Inovio Pharmaceuticals, providing a deeper understanding of the company's financial health and market position.

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