UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
CURRENT REPORT
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Item 2.05 | Costs Associated with Exit or Disposal Activities. |
On January 31, 2023, Inovio Pharmaceuticals, Inc. (the “Company”) committed to and communicated a corporate reorganization plan, including a reduction in force (the “Reduction”). The purpose of the Reduction is to decrease expenses and maintain a streamlined organization to support key clinical programs that are expected to drive long-term growth. As part of the Reduction, the Company has reduced its overall headcount by approximately 24 employees, which represents 11% of its full-time employees. Along with other planned cost-saving measures, the Reduction is expected to provide annual savings of approximately $4.3 million. The Company expects to incur a one-time pre-tax charge of approximately $1.1 million in the first quarter of 2023 related to the Reduction, consisting primarily of one-time severance payments upon termination, continued benefits for a specific period of time, and outplacement services. The Company expects such costs to be the only direct expense of the Reduction. The Company expects all charges associated with the Reduction to be incurred during the quarter ending March 31, 2023, with related cash payments expected to be paid out in the first half of 2023.
Item 7.01 | Regulation FD Disclosure. |
On January 31, 2023, the Company issued a press release related to the Reduction and other matters, which is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information provided in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this Current Report on Form 8-K contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including, without limitation, implied and express statements regarding our business, including our plans to develop and commercialize DNA medicines, our expectations regarding our research and development programs, the availability and timing of data from clinical trials and expectations about the upfront costs and long-term cost reductions associated with our corporate reorganization. Actual events or results may differ from the expectations set forth herein as a result of a number of factors, including uncertainties inherent in pre-clinical studies, clinical trials, product development programs and commercialization activities and outcomes, the availability of funding to support continuing research and studies in an effort to prove safety and efficacy of electroporation technology as a delivery mechanism or develop viable DNA medicines, our ability to support our pipeline of DNA medicine products, the ability of our collaborators to attain development and commercial milestones for products we license and product sales that will enable us to receive future payments and royalties, the adequacy of our capital resources, the availability or potential availability of alternative therapies or treatments for the conditions targeted by us or collaborators, including alternatives that may be more efficacious or cost effective than any therapy or treatment that we and our collaborators hope to develop, issues involving product liability, issues involving patents and whether they or licenses to them will provide us with meaningful protection from others using the covered technologies, whether such proprietary rights are enforceable or defensible or infringe or allegedly infringe on rights of others or can withstand claims of invalidity and whether we can finance or devote other significant resources that may be necessary to prosecute, protect or defend them, the level of corporate expenditures, assessments of our technology by potential corporate or other partners or collaborators, capital market conditions, the impact of government healthcare proposals and other factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2021, our Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 and other filings we make from time to time with the Securities and Exchange Commission. There can be no assurance that any product candidate in our pipeline will be successfully developed, manufactured, or commercialized, that the results of clinical trials will be supportive of regulatory approvals required to market products, or that any of the forward-looking information provided herein will be proven accurate. Forward-looking statements speak only as of the date of this release, and we undertake no obligation to update or revise these statements, except as may be required by law.
Item 8.01 | Other Events. |
On January 18, 2023, the United States District Court for the Eastern District of Pennsylvania (the “Court”) entered an order (the “Order”) granting final approval of the settlement, as set forth in a stipulation of settlement (the “Settlement”), of the consolidated securities class action captioned McDermid. v. Inovio Pharmaceuticals, Inc. et al., No. 2:20-cv-01402-GJP (E.D. Pa.) (the “Class Action”).
The Settlement was subject to final approval by the Court and, upon entry of the Order by the Court on January 18, 2023, became fully and finally approved. The Order provides for the full and final settlement of the Class Action and all related claims according to the terms of the Settlement.
Pursuant to the terms of the Settlement, the Company will pay an award of $44.0 million, consisting of $30.0 million in cash and $14.0 million in shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”). Each individual class member’s recovery will depend on when they purchased their Common Stock, how much they paid for their Common Stock, and how many shares the individual purchased.
The Company previously disclosed the terms of the proposed Settlement, including the planned share issuance, in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2022. The Company’s insurance carriers have paid the cash component of the Settlement, which amounts were being held in escrow.
Pursuant to the Settlement, the Company will initially issue 7,000,000 shares of Common Stock. Following the expiration of the appeal period or resolution of an appeal if one is filed, the Company will make another contribution of Common Stock to the settlement fund. The number of shares will be calculated based on the average trading price of the Common Stock for the 10 trading days preceding the determination date pursuant to the terms of the Settlement.
The total number of shares of Common Stock to be issued in connection with the Settlement, even if the additional amount is elected to be paid in shares of Common Stock, is expected to constitute less than 5% of the Company’s currently outstanding Common Stock.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
Exhibit Number |
||
99.1 | Press Release, dated January 31, 2023, “INOVIO Announces Strategic Reorganization, Continues Efforts to Focus on Promising DNA Medicine Candidates” | |
104 | Cover Page Interactive Data File (formatted as inline XBRL). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
INOVIO PHARMACEUTICALS, INC. | ||||||
Date: January 31, 2023 | By: | /s/ Peter Kies | ||||
Peter Kies | ||||||
Chief Financial Officer |
Exhibit 99.1
INOVIO Announces Strategic Reorganization,
Continues Efforts to Focus on Promising DNA Medicine Candidates
| Cost-saving measures include 11% headcount reduction |
| Annual savings expected to be approximately $4.3 million |
| Data readouts expected in first quarter of 2023 for key programs including INO-3107 for RRP and VGX-3100 for cervical HSIL |
PLYMOUTH MEETING, PA, January 31, 2023 INOVIO (NASDAQ:INO), a biotechnology company focused on developing and commercializing DNA medicines to help treat and protect people from HPV-associated diseases, cancer, and infectious diseases, today announced a strategic reorganization that is intended to deliver on commitments to operational efficiency and better position the company to bring the promise of DNA medicines to patients. The reorganization is expected to provide annual savings of approximately $4.3 million and includes an 11% reduction of full-time employees following the previously announced discontinuation of clinical development programs in late 2022. These and other strategic measures redirect resources needed to advance key programs, including INOVIOs product candidate INO-3107 for the treatment for Recurrent Respiratory Papillomatosis (RRP).
Todays announcement is a reflection of measured efforts INOVIO has undertaken to assess the portfolio and prioritize those programs with the greatest benefit for patients and commercial potential, said INOVIOs President and Chief Executive Officer, Dr. Jacqueline Shea. This decision followed thoughtful consideration and thorough diligence to better position the organization and ultimately realize the potential of DNA medicines. While this is a difficult decision, I want to both recognize and thank my colleagues who were impacted by todays news for their contributions to INOVIO and their dedication to patients around the world.
INOVIO expects to incur a one-time restructuring charge of approximately $1.1 million in the first quarter of 2023. More detailed financial guidance will be provided as part of INOVIOs 2022 fourth quarter and year-end financial results announcement planned for March 2023.
INOVIOs lead programs include its treatments for HPV-associated diseases, such as INO-3107 for RRP and VGX-3100 for cervical high-grade squamous intraepithelial lesions (HSIL). Data readouts for INOVIOs Phase 3 REVEAL2 trial for VGX-3100 and the second cohort from the Phase 1/2 trial for INO-3107 are expected to be announced in the first quarter of 2023.
About INOVIO
INOVIO is a biotechnology company focused on developing and commercializing DNA medicines to help treat and protect people from HPV-associated diseases, cancer, and infectious diseases. INOVIOs DNA medicines in development are delivered using its investigational proprietary smart device, CELLECTRA®, to produce immune responses against targeted pathogens and cancers. For more information, visit www.inovio.com.
Contacts
Media: | Jennie Willson (267) 429-8567 jennie.willson@inovio.com |
Investors: | Thomas Hong (267) 440-4298 thomas.hong@inovio.com |
Forward-Looking Statements
This press release contains certain forward-looking statements relating to our business, our expectations regarding our DNA medicine research and development programs and the commercial potential of our product candidates, the availability and timing of data from clinical trials and expectations about the upfront costs and long-term cost savings associated with headcount reductions and related strategic measures. Actual events or results may differ from the expectations set forth herein as a result of a number of factors, including uncertainties inherent in pre-clinical studies, clinical trials, product development programs and commercialization activities and outcomes, the availability of funding to support continuing research and studies in an effort to prove safety and efficacy of electroporation technology as a delivery mechanism or develop viable DNA medicines, our ability to support our pipeline of DNA medicine product candidates, the ability of our collaborators to attain development and commercial milestones for products we license and product sales that will enable us to receive future payments and royalties, the adequacy of our capital resources, the availability or potential availability of alternative therapies or treatments for the conditions targeted by us or collaborators, including alternatives that may be more efficacious or cost effective than any therapy or treatment that we and our collaborators hope to develop, issues involving product liability, issues involving patents and whether they or licenses to them will provide us with meaningful protection from others using the covered technologies, whether such proprietary rights are enforceable or defensible or infringe or allegedly infringe on rights of others or can withstand claims of invalidity and whether we can finance or devote other significant resources that may be necessary to prosecute, protect or defend them, the level of corporate expenditures, assessments of our technology by potential corporate or other partners or collaborators, capital market conditions, the impact of government healthcare proposals and other factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2021, our Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, and other filings we make from time to time with the Securities and Exchange Commission. There can be no assurance that any product candidate in our pipeline will be successfully developed, manufactured, or commercialized, that the results of clinical trials will be supportive of regulatory approvals required to market products, or that any of the forward-looking information provided herein will be proven accurate. Forward-looking statements speak only as of the date of this release, and we undertake no obligation to update or revise these statements, except as may be required by law.
Document and Entity Information |
Jan. 18, 2023 |
---|---|
Cover [Abstract] | |
Amendment Flag | false |
Entity Central Index Key | 0001055726 |
Document Type | 8-K |
Document Period End Date | Jan. 18, 2023 |
Entity Registrant Name | Inovio Pharmaceuticals, Inc. |
Entity Incorporation State Country Code | DE |
Entity File Number | 001-14888 |
Entity Tax Identification Number | 33-0969592 |
Entity Address, Address Line One | 660 W. Germantown Pike |
Entity Address, Address Line Two | Suite 110 |
Entity Address, City or Town | Plymouth Meeting |
Entity Address, State or Province | PA |
Entity Address, Postal Zip Code | 19462 |
City Area Code | (267) |
Local Phone Number | 440-4200 |
Written Communications | false |
Soliciting Material | false |
Pre Commencement Tender Offer | false |
Pre Commencement Issuer Tender Offer | false |
Security 12b Title | Common Stock, $0.001 par value |
Trading Symbol | INO |
Security Exchange Name | NASDAQ |
Entity Emerging Growth Company | false |
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