Inovio Pharmaceuticals, Inc. (INO) CEO Joseph Kim on Q4 2018 Results - Earnings Call Transcript

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About: Inovio Pharmaceuticals, Inc. (INO)
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Earning Call Audio

Inovio Pharmaceuticals, Inc. (NASDAQ:INO) Q4 2018 Earnings Conference Call March 12, 2019 4:30 PM ET

Company Participants

Benjamin Matone - IR

Joseph Kim - President & CEO

Peter Kies - CFO

Conference Call Participants

Gregory Renza - RBC Capital Markets

Christopher Raymond - Piper Jaffray

Stephen Willey - Stifel

Operator

Good afternoon everyone, and welcome to Inovio Fourth Quarter 2018 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please also note, today's event is being recorded.

This time I'd like to turn the conference call over to Mr.Ben Matone, Director of Investor Relations. Sir, please go ahead.

Benjamin Matone

Thank you, operator.Good afternoon, everyone, and thank you for joining the Inovio Pharmaceuticals fourth quarter and full year 2018 corporate earnings conference call. This call is being webcast live on our website, ir.inovio.com, and a replay will be available as indicated in our press release. During this call, we will conduct a question-and-answer segment which will be reserved for equity research analysts.

Before we begin, I would like to remind everyone that on this call we will make certain forward-looking statements that relate to our business, which include our plans to develop our DNA immunotherapy platform, in combination with our proprietary delivery devices, developments and timing on certain clinical data and readout, as well as our capital resources which include our cash burn guidance for 2019. These statements involve certain assumptions, risks and uncertainties and could cause actual results to differ materially from these statements. All of these statements are based on the beliefs and expectations of management as of today. We assume no obligation to revise or update forward-looking statements, whether as a result of new information, future events, or otherwise. Investors should read carefully the risks and uncertainties described in today's press release which is posted on our website, as well as the risk factors included in our filings with the SEC.

Joining us from Inovio are Dr. J. Joseph Kim, President and CEO; and Peter Kies, Chief Financial Officer. Now, I would like to turn the call over to Inovio's President and CEO, Dr. J. Joseph Kim.

Joseph Kim

Thanks, Ben, good afternoon, everyone, thank you for joining us. Today I'd reflect on our progress from the last quarter and the past year, and tell you what you can expect from Inovioin 2019 from our HPV program, from our cancer combinations trial, from our global health effecting [ph] portfolio. Finally, I'll close with a progress report on our new and exciting dMAb program. Later in the call you will hear from our CFO, Peter Kieswith the financial update and more detail from our recent financing; financing by the way,that nearly doubled our year-end cash position of $81.5 million, and thus supports us in achieving results that will move our products over the goal line to commercialization.

For me the highlight of 2018 was when 4head and neck cancer patients who initially were treated with MEDI0457 and subsequently received the checkpoint inhibitor when their cancers progressed; the result,2 of the 4 patients achieved a sustained complete response or full cancer remission for over two years.This is every oncologists dream achieving a sustained complete response using an immunotherapy in their metastatic cancer patient.The fact that the treatment with our synthetic DNA vaccine followed with two different PD-1 inhibitors that showed a complete response in 2 out of 4 progressor is very encouraging. I'll do the math for you; that's 50%complete response rate using our combo strategy compared to 4%with complete response rate by PD-1 inhibitorsas monotherapies in metastatic head and neck cancer; that's only 8 of 192 patients with KEYTRUDA and only 6 out of 240 patients for OPDIVO. In this context, ourMEDI0457 data is even more impressive.

And to expand on these developments,we've reported that 20 out of 22 patients showed elevated CD8+ T cell response,T cell activity that lasted at least several months after the final vaccine dose. This strongly suggest that the sustained CD8 T cell responses from the dosingof MEDI0457 in these patients throughout the complete responses in combination with PD-1 inhibitors.While additional data from the ongoing MEDI0457Phase 2 clinical study will provide more insight than statistical power to these current data, the two complete responses demonstrate the potential of our overall cancer combination strategy using our T cell activating products combined with various checkpoint inhibitors against an array of cancers.We expect continued updates and future publications from this program which is now owned by AstraZeneca as we continue to monitor these 2 full remission patients, as well as the other 18 non-progressor from our Phase 1 study.

Let me add more on our ongoing partnership with AstraZeneca. This is what you can expect in the coming month.First, a Phase 2 study of MEDI0457 in combination with their checkpoint inhibitor, durvalumab in metastatic recurrent head and neck cancer is going well. Last December we announced that AZ started a second Phase 2 study in collaboration with MD Anderson to evaluate MEDI0457 plus durva targeting broader array of HPV-related cancers.Important to Inovio was that the treatment of the first patient with cervical cancer resulted in a milestone payments from AZ to Inovio with cervical cancer as the second major cancer indication for this product.Looking forward, we expect one additional Phase 2 milestone payments from AZ for a third major cancer indication when they dose a patient in another HPV-related cancer indication in the same study being conducted at MD Anderson in 2019.

Moving now to our INO-5401 cancer combination trials. I'll begin with our collaboration with Regeneron Pharmaceuticals. In this Phase 2 trial we're evaluating INO-5401 plus INO-9012 in combination with Regeneron's PD-1 inhibitor in patients with newly diagnosed glioblastoma. This trial currently has 20 sites open within the United States.The study continues to recruit extremely well with the total enrollment of 52 patients almost completed. We introspect [ph] interim efficacy data in the second half of this year that will show progression-free survival with 6 months accompanied with immune responses and safety data.Inovio's other Phase 2 study of INO-5401 plus INO-9012 in combination with Genentech's PD-1 inhibitor is under evaluation for the treatment of events for metastatic bladder cancer.Here we recently opened sites in Europe to further accelerate enrollment along with 13 active sites in the U.S. Just like our GeneOne [ph]Program we introspect interim efficacy result in the second half of this year.

To remind you,INO-5401 is composed of 3 of our most active SynConcancer antigens combined into a single product.Our goal is to see if we can replicate the level of T cell responses and anti-tumor responses re-observed in our head and neck cancer study.

Taking a look at our prostate cancer product INO-5150; late last year we presented data from our Phase 1/2a study at ASMO[ph]. INO-5150 demonstrated a slowing of prostate-specific antigen doubling time in men with prostate cancer. Additionally, thedata also revealed that 86% of the patients remain progression-free at week 72 of the study, and it's really exciting to see almost 9 out of 10 patients showed no growth in their tumors or year and a half after treatment.We hoped to advance [ph] INO-5150 into a novel checkpoint combination Phase 2 trial for prostate cancer with a partner.

Shifting now to our lead product,VGX-3100 which continues to move forward in global Phase 3 trials.At the beginning of the month we announced another company milestone with the start of the second and final portion of our Phase 3 trial,REVEAL 2, to begin recruiting patients.To be clear, with REVEAL 1enrollment nearly completed, we will be utilizing European and other ex-U.S. sites including new sites in Latin America to complete REVEAL 1 study.We are jumpstarting REVEAL 2 initially with only U.S. sites, both new sites, as well as those which have been our top U.S. recruiters for REVEAL 1. Once REVEAL 1 is completelyenrolled,we will shift all of these sites to focus on REVEAL 2.The decision to open REVEAL 2 ahead of schedule and utilize our relationships with both U.S. and ex-U.S. sites does two things. First, it ensures we won't interfere with an overburden at sites on active recruitment; and second, as previously guided,it keeps the company on-target to have a BLA submission for VGX-3100 in the year 2021.

Turning our attention now to developments within our infectious disease portfolio. We reported that Inovio's vaccine for HIV, Zika, Ebola deliver intra-dermally or through the skin generated robust long-term antibody and T cell immune responses demonstrating nearly 100%vaccine response rate with very favorable safety profile.In this regard,weexpect to see -- we expect to have clinical data from several Phase 1 vaccine programs published in the next few months which include Ebola vaccine study, MERS U.S. vaccine trial, HIVvaccine study, and the Puerto Rico Zika vaccine trial.So why is this important?This data is important because they are among the highest responses we've seen in any DNA vaccine; actually with any vaccine.These results are important because they will help us bring in more partnerships, as well as funding from extensive sources like CEPI, DARPA,Gates and the NIH. We plan to further develop transformative vaccines with future partnerships and funding.

In 2019 Inovio and it's partner GeneOne Life Science, with a full funding from the International Vaccine Institute, are conducting a Phase 1/2a MERS vaccine study in South Korea, with data report expected this year. Inovio also plans to initiate a Phase 2 MERS vaccine field trial in the Middle East with full CEPI funding in the second half of 2019.Regarding our other infectious disease targets with full funding from CEPI, we will move our Lassa vaccine into the first human trial in the second quarter, and a Phase 2 study is planned for year 2020 in Africa. TheseCEPI programs are important because our vaccines represent the first-in-class product and the successful completion of Phase 2 studies could lead to a stockpile of these vaccines by CEPI in preparation for emergency use.

Finally, I'm really pleased to say that all patient sample have been collected for Inovio's Zika vaccine trial in Puerto Rico.Inovio's partner GeneOne is analyzing all samples politely [ph], and will report safety immune responses and infection rates data from this study later this year.

Before I turn over the call over to Peter, I'd like to touch on this morning'srelease where we announced the appointment of Dr.Jacqueline Shea as Inovio's Chief Operating Officer. Dr. Sheais an experienced life sciences senior executive with an extensive track-record of leadership.She has most recently servedas CEO and COO of Aris, the leading organization dedicated to developing new and more effective TBvaccine.At Inovio, she will be responsible for Inovio's manufacturing, commercial, BD and alliance management operations. Jackie will join us as a key member of the executive team along with our CFO and CSO in formulating and implementing overall corporate strategy. Under Dr. Shea's leadership,Aris and it's partner GSK recently reported groundbreaking primary efficacy data in the New England Journal of Medicine that GSK's M72 TB vaccine in a Phase 2b efficacy study significantly reduced the incidence of pulmonary tuberculosis disease in adults with latent TB giving much needed hope for a new, more effective TB vaccine.M72 vaccine tested successfully under Jackie's leadership is a potential game-changer and represents one of the greatest advancements in TB vaccine in the last 50 years.

Across the board, Inovio has taken steps to streamline our management responsibilities that are aligned comprehensive development strategy from discovery to commercialization. To make this happen we announce today that Inovio's global clinical regulatory an R&D functions will report to Dr.Laurent Humeau,Inovio's Chief Scientific Officer.As a part of this realignment, Dr. Mark Bagarazzi, formerly our Chief Medical Officer, has left the company. I've known Mark for 25 years and wish him the best in this next endeavor.In place of the Chief Medical Officer position, Inovio's newly formed Medical Council will oversee all clinical studies and medical related reporting and monitoring activities and report to Dr.Humeau.Inovio's Medical Council is comprised of three of Inovio's current Vice President of Clinical Development MD.Our strategic reorganization will improve execution of current clinical programs and provide the management alignment to seamlessly connect new product research to commercial product candidates. Jackie,Laurent, and the MDs who will serve on our Medical Council are all accomplished industry executives who have demonstrated their leadership qualities and deliver commercial results.

With that, I'll turn the call over to our CFO, Peter Kies, who will discuss Inovio's fourth quarter and financial -- year-end financials. Peter?

Peter Kies

Thanks, Joseph.Inovio's total revenue for the fourth quarter and year ended 2018 was $2.5 million, and $30.5 million respectively; this compares to $8.8 million and $42.2 million for the same periods in 2017.

Beginning on January 1, 2018,due to an accounting rule change all contributions received from current grant agreements have been recorded as a contra research and development expense as opposed to revenue on the consolidated statement of operations.For the quarter and year ended December 31,2018, $2.8 million and $9.5 million respectively was recorded as contra-research and development expense, which would have been classified as grant revenue in the prior year. Had this change in presentation not occurred, total revenue would have been $3.5 million and $40 million for the quarter and year ended December 31, 2018, respectively, compared to $8.8 million and $42.2 million for the same periods in 2017. Total operating expenses would have been $34.8 million and $134.1 million for the quarter and year ended December 31, 2018, respectively, compared to $31.7 million and $125.9 million for the same periods in 2017.

Research and development expenses for the quarter and year ended December 31, 2018 were $26.4 million and $95.3million respectively, compared to $24.6 million and $98.6 million for the same periodsin 2017.The year-over-year decrease in research and development expenses was primarily due to the $9.5 million contra-research and development expense recorded from grant agreements as previously discussed; this was offset by an increase in clinical trial costs and partnering expenses.Inovio's net loss for the quarter and year ended December 31, 2018 was $33 million, or $0.34 per share, basic and dilutive, and $97 million, or $1.05 per share, basic and dilutive, respectively, as compared to $21.5 million, or $0.24 per share, basic and dilutive, and $88.2 million, or $1.08 per share, basic and $1.09 per share, dilutive, for the same periods in 2017.

Total cash and cash equivalents as of December 31 were $81.2 million compared to $85.5 million as of September 30, 2018. During the year-end December 31, the company sold approximately about 5.7million shares of it's common-stock under a current and prior ATM sales agreement for an aggregate net proceeds of $29.2 million.As Joseph mentioned earlier, following our latest offering in the first quarter of 2019 that resulted in net proceeds of approximately $75.8 million raised through a convertible senior note offering, the company has nearly doubled it's year-endcash balance.We expect the company's net burn to remain consistent with prior years where we anticipate the net burn to be approximately $70 million annually.As a reminder, our fourth quarter 2018 balance sheet and income and statement of operations can be found in today's press release or in the Form 10-K filed with the SEC, as well as on our website under Investor and Financial Reports.

With that, I'll turn the call back over to Joseph.Thanks.

Joseph Kim

Thanks, Peter.The last thing I want to draw your attention to today is actually a first; just a few weeks ago Inovio announced that a subject was dosed as part of the first ever human study of Inovio's DNA encoded monoclonal antibody or dMAb technology funded fully by the Gates Foundation.This trials focus is on evaluating this dMAb ability to prevent or treat Zika virus infection.However, results from this trial will also help to broadly advance Inovio's dMAb platform in infectious disease and cancer.Remember, the innovations passed in our dMAb when delivered directly into the body the genetic codes provided by the synthetic nucleus instruct the body's cells to become the factory which manufactures the therapeutic antibodies products enabling a major leap forward and in antibody technology.

While Inovio prepares a destructive alternative to traditional monoclonal antibodies, remember that they represent the largest segment of pharmaceutical markets today accounting for more than $100 billion in pharmaceutical sales each year with treatments spanning cancer, infectious diseases, inflammation, and cardiovascular diseases.With a synthetic design and in-patient production, dMAb products may represent a transformative entrance to this important class of pharmaceutical. We're in a great position to execute on our innovation and expansion into other areas that utilize our immunotherapy technology, the technology that has exhibited a very favorable safety profile, and one that generated continued funding and interest from groups like The Parker Institute,The Gates Foundation, DARPA,and many others, along with major pharma and biotech companies like AstraZeneca, Roche/Genentech and Regeneron.

In closing, we listen to our investors and we've taken strategic actions to ensure Inovio's continuedadvancement and to improve our ability to deliver results.Let's face it, we had a good 2018 but I know we can do better. I can confidently say that we are entering the rest of 2019 as a very well financed organization, with the right resources and leaders in place to advanceour later-stage programs into commercialization.

Now, I look forward to taking questions and adding additional color in our programs and developments with you. Operator, please open the line for the analysts.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question today comes from Gregory Renza from RBC Capital Markets.

Gregory Renza

Thanks for taking my question and congratulations on all the productsacross multiple front. My question is that, I just wanted to drill down a little bit on the REVEAL trials and the respective timelines.Helpful to hear about the alignment of REVEAL 1 and 2 as far as REVEAL initiation, as well as your reiteration of BLA [ph] filing around 2021. I just wanted to get a sense of what the implications are around seeing that data? I think previously you had spoken about the 2020 timeline,I just wanted to see how that squares with the trial alignments, and also just some observations on clintrials.gov which suggests that there may have been an extension of the completion date for the trial around 2021 for both trial.Thank you very much.

Joseph Kim

REVEAL 1 and REVEAL 2 as you know are -- we're enrolling 198 patients in each of these primary and confirmatory Phase 3 studies. Under our current assessment, we feel that we should be able to achieve clinical efficacy and safety data by the second half of 2020,obviously these are predicated upon our execution and close-out of the enrollments for both studies, and execution of the studies.In terms of the clintrials.gov,we're going to adjust those based on some regulatory requirements from the government, and it's going to reflect on full impact and estimates from all of the moving parts of the trial.But we're very optimistic and confident that we should be able to see the efficacy and safety data from both studies towards the end of 2020 as we had estimated previously, and we're on-target for our BLA filing by -- duringyear 2021.

Gregory Renza

And just a quick follow-up with respect to the addition of some Latin America sites. I'm just curious on your expectations for that, to what extent that would potentially accelerate or bolster the enrollment trajectory to-date?

Joseph Kim

We're very bullish on those new sites and new countries, certainly there are a lot of women with the cervical pre-cancer in those areas, and we are very optimistic that those new sites will bring additional acceleration for enrollment going forward for both, REVEAL 1 and REVEAL 2.

Operator

Our next question comes from Chris Raymond from Piper Jaffray.

Christopher Raymond

Sorry, this might be a little repetitive but I'm not sure I heard you answer in the first question but another one on REVEAL. So can you just confirm, I thought initiation of REVEAL was gated -- REVEAL 2, I'm sorry, was -- is gated by the completion of REVEAL 1. So can you just confirm are you -- you announced that you're initiating it but is first patient in -- still are ways off or when will that happen?

Joseph Kim

We were very simplistic in our description of the switchover previously. Obviously, you don't -- it's not a spigot [ph] that you turn-off right away and opening up second trial; so there is going to be an overlap between REVEAL1 and REVEAL2. So we launched REVEAL 2 a couple of weeks ago and we expect the first dosing from REVEAL2 to occur in April, and we're continually finishing up the REVEAL 1 enrollment.So there is going to be a lot of overlap and it's like the two curves overlapping in the front and the back-end.So we felt this would provide the best crossover and best positioning of both studies because finishing one study before the other really doesn't buy us any time in our BLA submission; so as we have been executing our REVEAL studies for the last year or so, we felt that this is the best way to maximize overall, the timeline or shorten the timeline to BLA filing the best.

Christopher Raymond

And then maybe just a follow-up; I think you mentioned your GBM combo trial for 5041 is almost done with enrollment. Can you -- I'm sorry if you said this already, but can you maybe talk about when it will be completed?What's your sort of sequence for providing the data or what can we expect to hear on that trial, I guess this year?

Joseph Kim

Yes, we're so excited about finishing the enrollment for 5401 GBM study.Just to remind you of our primary efficacy endpoint is the improvement in overall survival at both 18 months, and also at 12 months. At 18 months, OS18 being more definitive, but obviously that's going to take some time; so this year we have been projecting that data for PFS or progression-free survival at 6 months into the study as a early indicator for how well these patients are doing. But I have full confidence that we'll do that with total 52 patients before the year-end. I have also strong confidence that we'll have PFS-12 with 12 months for a vast majority of our patients before the year-end. So what do these results mean?Well, we can contract the progression-free status of these patients leading into our overall endpoints, probably early next year.Obviously, OS numbers are more definitive and it's tracking certainly to our primary endpoints but I think PFS will give us a pretty early good readout how well these patients and how well our trials executing.

But overall, I'm very happy,we're ahead of the schedule in terms of enrolling theseGBM patients, and then we're challenge ourselves to catch-up or bring our bladder study to the similar rate that we're enjoying in GBM. So, this goes back to all of our Phase 2 and Phase 3 studies; we've been doing well upto now, we want to make sure we can do even better, and that's part of our strategic rework [ph] and our renewed focus in reenergizing of our programs to make sure we have full alignment, full devotion of our resources and efficiency, and ultimately, patients are waiting and we want to make sure that we can get to our final data as rapidly as possible.

Operator

Our next question comes from Joel [ph] from Citi.

Unidentified Analyst

First one is on MEDI0457. Obviously, the early data has shown a strong response rate in small number of patients, much higher than what you see with monoclonal antibodies. Could you discuss what the data could be coming next and what remains to be seen before advancing that program into a simple study?

Joseph Kim

We're very, very excited about MEDI0457, it's second of our efficacy readouts, the first being 3100 that's showing, and we're beginning to have larger body of evidence during the clinical efficacy of our programs really impacting the disease, and we're very excited about that. Now that being said, this product was licensed out to AstraZeneca in 2015, so they have a full say and full development rights and so on.Inovio is as a passenger in their vehicle, certainly very profitable in that, as they advance those programs will be collecting our milestone and ultimately the royalties and so on which are very significant, and -- but as we observe these data to come out, we expect the MEDI'sPhase 2 trial targeted with about 50 head and neck metastatic cancer patients in combination of 457 plus their durva PD-1inhibitor to be the next study report to come out.

AZ has complete control over that study results but I can tell you that they are probably very excited to report those data in the coming months and quarters but they have the full say.Now, they have expanded into other indications in the second study; so I touched on that in my prepared remarks. So, the MD Anderson study is a pan-HPV cancer study,MEDI0457 plus durva study.So dosing of the cervical cancer patients as part of that study triggers a second Phase 2 milestone payments from MEDI to us or AZ to us.We expect the third indication to be dosed -- patient to be dosed later this quarter potentially or the second quarter and that will trigger anyday now, a thirdPhase 2 milestone payment from them.

So these trials are moving,obviously AZ has the full control and cadence of executing these trials but the data that will come out -- we feel will comprehensively support our thesis which is taking Inovio's T cell --CD8 T cell generating immunotherapy combined with a checkpoint inhibitor will bring about higher clinical efficacy than just the monotherapy with the checkpoint inhibitor, and it should work against all of these different cancers caused byor associated with HPV.With Medimmune product we want to expand that with our own study in INO-5401 into GBM and bladder and other cancers that we can hit with INO-5401. If we can completely -- if we can expand what we saw in MEDI0457 to INO-5401, there is no ceiling for what Inovio's platform or immunotherapy platform will do in cancer, and we're very excited about what's to come.

Unidentified Analyst

And then another question on the dMAb program; just a few weeks ago I saw that it sounds like you dosed the first patient; could you discuss the process of monitoring that patient and where that's out of 10 [ph],and what the steps would be towards dosing additional patients with dMAb?

Joseph Kim

Yes, thank you.These are dose escalation studies, so the first 3 -- standard 3 plus 3 design; so first 3 patients have been dosed, there has been zero safety concerns at the lowest dose, and then after 28 days we move on to the second dose and so on, and once all those escalations been done we can complete and backfill all 24 patients. So our bar for the first study -- our objectives are pretty low, we want to see measurable expression of thesedMAbs in the patient's blood.Once we can detect that, we can utilize our optimization algorithm to improve the overall expression. So while this is a Zika dMAb study, it also has huge value for our dMAb platform development at the same time.And I can add here that being able to democratize the uses of powerful monoclonal antibody therapy for additional people around the world has been the dream of Bill Gates, and that's a dream that I share, and we may have the true technology to be able to do that.So that's why Gates Foundation is interesting because you can apply the dMAbs in a much practical fashion.

Inovio has additional motives, we think this is a better product, all of our products are kept in the long-term at2 to 8 refrigeration instead of being frozen. We can express better, we just had a new paper that compares our optimized design of KEYTRUDA to have 3 or 4 higher expression -- gene-for-gene with additional potential patents covering those sequences. So the potential of our dMAb products platform is immense and we're at the -- we went from no conceptual wish to animal tests with high levels of expression in medium [ph] of 2-3 years, now we have progressed this program into clinical evaluation.So I don't know where we're going to be,we're certainly going to advance the ball quite a bit in the next 12 months with additional trial starting.We expect additional corporate partnerships in this regard, certainly a lot more funding from Gates and other sources; so far we've received funding from DARPA,and the NIH and Gates Foundation.We expect additional support of funding from multiple organizations in the addition to corporate partnerships that we would like to strike, and we have discussions ongoing at this point.

So I think that dMAbs are not fully baked into any of your models, all of the analysts on the call; so I think this is where we can bring more value to our shareholders moving forward.

Operator

Our next question comes from Steven Willey from Stifel.

Stephen Willey

Just to follow-up on REVEAL; just the -- the guidance for year-end'20 data dissemination;is that the 40-week read from both REVEAL 1 and REVEAL 2?

Joseph Kim

REVEAL 1 is 36primary endpoint with additional one year safety period; so that is full 88-week study. REVEAL 2 in contrast has one month follow-up or 4-weeks follow-up; so that's 40-week study.So that's the only difference between REVEAL 1 and REVEAL 2.

Stephen Willey

So in terms of the guidance for having data from these trials in the second half of 2020; is that going to be the 36-week and 40-week data from both of these trials?

Joseph Kim

No, we expect 88-weeks and 40-weeks data from REVEAL 1 and REVEAL 2, respectively.

Stephen Willey

And then just with respect to enrollment into the bladder cancer trial, it sounds like -- it's maybe occurring a little bit slower than expected.What's the attribution there? Is that -- I know it's a pretty competitive development landscape right now, is it just difficulty in finding patients? Is it just site logistics?

Joseph Kim

Well, I think compared to a sister study in GBM,ourbladder study is behind but that speaks to the desperation and the demand that the GBM patients and sites have for that disease.So I wouldn't characterize that we're behind but I will say that bladder is a lot more competitive. But I think our U.S. based-- 13 sites we have in the U.S. are competitive enrolling patients, we wanted to bring in more sites ex-U.S. to accelerate this trial because we designed the 5401 study to be a book-end study to looking at the spectrum of immune responsiveness tumors, bladder being one and more immune responses type of tumor versus GBMbeing the other.So we would like to execute on both studies when we started to be in the similar cadence and timing. Now, we were just -- we've got overblown by the demand and the enrollment velocity that we had for our GBM study, so wejust want to push given that store bladder study as well.So we have a little bit of sibling rivalry within our programs, I think that's healthy and we want to -- the resources that we're saving in GBM in terms of the accrual, we can push into our bladder; so that's why we're doing that.

Stephen Willey

And then just on the dMAb program; is that presumably targeting a viral protein that's part of the…

Joseph Kim

No. Well, so…

Stephen Willey

Or is it targeting a host protein?

Joseph Kim

So this is a full length sequence -- optimized sequence for -- that binds to a Zika GP-protein. This particular dMAb product that's in Phase 1 study but in theory and we have developed a couple of dozen different dMAbs targeting anyway from PCSK9[ph], all the way to our own version of KEYTRUDA and OPDIVO, all the way to HEMURA [ph] equivalent. So, it really -- I don't think it really matters what we target, we can bind and maintain functionality just by adjusting our DNA sequence; that's really the beauty of this platformis. We can transcend some of the folding and stability issues of protein-based monoclonal'sduring their construct and during their manufacturing and during their formulation and delivery. Soour dMAb platform has significant advantages over conventional MAb technology, so -- andour goal is to make sure that we have the proper delivery and know-how and algorithm to design and execute on thesedMAbs and we're learning really tremendous amounts every week and every month.

So there will be even more exciting scientific advancements in dMAbs in the coming weeks and this clinical study that we initiated last month just really points to the advancement of this inhuman subjects and so far so good.

Stephen Willey

So the program is specifically targeting the viral protein that doesn't have any host homology?

Joseph Kim

Yes.

Stephen Willey

And it's the threshold; I know you talked about some of the other targets that you'vedeveloped preclinically or atthe bench but does -- is the threshold for moving into patients and targeting obviously a functional host protein -- is the safety threshold there become higher?

Joseph Kim

Well, higher than a viral protein but lot of our targets have already been tried like PD-1 target, we don't believe we will add any more safety concerns that protein PD-1 inhibitor like PEMBRO or NIVO[ph] for instance. But these are -- I mean, we're going to take necessary care and due diligence when we dose escalate each of these programs.

Operator

Our next question comes from Jason McCarthy from Maxim Group.

Unidentified Analyst

This is actually Noren [ph] on for Jason.So I'd like to just drill down on the GBM study that you have with Regeneron'sPD-1. If you're looking at checkpoints they've been -- it's been challenging in GBM indication and a lot of others haven't found much success. If you look at Checkmate-143 with OPDIVO; the rationale was that it didn't succeed because 40% of the patients were taking steroids to control brain-swelling but they clearly interviewed with the immune response.Are you taking that into consideration with your combination as part of your trial or how do you address to circumvent this issue?

Joseph Kim

Yes, those are all considerations. Obviously, the doctors have to treat the patients,any complications developed during their cancer. The difference I think between the study that you referred to versus this one is we have targeted the newly diagnosed patients. I agree with you, GBM has been a challenge for checkpoint monotherapy. Let's face it,the GBMhas been a challenge for all therapies, so that speaks to a lower bar or high bar and showing efficacy but low bar and showing marginal improvements in efficacy. So I spoke earlier while talking to Steve about the tumor responsiveness spectrum, we think that's one of the reasons why GBM has been so hard to treat,especially with immunotherapy.We think we can improve that by generating CD8 T cells against our three targets, WT1, PSMA,and NH3[ph] and combining with Regeneron's PD-1inhibitor that has been tested in GBM as a monotherapy.We think we can improve the overall impact of the innumo therapy, that's our goal.

As I said, the bladder has a higher probability of success but higher threshold or higher bar and showing the marginal improvements, GBM as a sister study has got a higher threshold of efficacy but lower bar to show marginal improvements in efficacy. So that's why we are concurrently conducting these two studies.We also feel that our immunotherapies 5401 or MEDI0457, this should all work with any checkpoint inhibitors and that's the reason why we've chosen to use to the front checkpoint inhibitor withRegeneron'sPD-1 for GBM and Genentech'sPDL-1 for bladder.And we look forward to seeing the data and reporting the data in the coming months.

Unidentified Analyst

And in the same study these are post-surgical patients, correct?

Joseph Kim

Yes.

Unidentified Analyst

So just as a follow-up, you know, recently at UCLA there was a small study that showed that if you treat with checkpoints prior to surgery it's more effective; so would you consider putting an ARM combining INO-5401 plus Regeneron's PD-1 prior to surgery and radiation treatment?

Joseph Kim

We haven't looked --well, we haven't considered all different possibilities and study designs. So as we develop this program to the current trial we are very -- our -- Jeffrey Skolnik, who heads up our Oncology Clinical Development, and his team are extremely well in tune with other goings on and other advancements. So if it rises to our interest to actively test our hypothesis or whether passively see how those results are going to evolve, we can -- I can't really comment on that in this call. But rest assured, we are looking at all of our competitive approaches and another data and GBM is challenging and that's why we chose this as one of our targets.And I think it speaks to the desperation of this disease and certainly the opportunity to bring better medical intervention utilizing -- hopefully, with INO-5401and Regeneron'sPD-1 inhibitor cemiplimab; so we're very optimistic with this program.

Operator

Our next question comes from Chen [ph] from H.C. Wainwright.

Unidentified Analyst

Is there any update regarding GLS-5700 in Puerto Rico?And whether that trial is going to read out before the dMAb study?And if both trials have positive results; does one product takes priority, the dMAb product takes priority over GLS-5700?And which of them has potentially the fastest regulatory pathway available to reach the market?

Joseph Kim

GLS-5700, our Zika vaccine in Puerto Rico; as I updated in the prepared comments, all of the visit samples have been collected,the data analysis assays are being done now, it was -- just to recollect ourselves, it's a sub-blind [ph] trial, 80 patients receiving our vaccine, 80 placebo;and we're opportunistically looking at infection rates of Zika. So it's a very ambitious and very exciting study, and we'll report this as soon as we have the full set of data.So we're very much looking forward to this.We will present this and publish in just the way we do with all of our programs.Now, I wouldn't say our Zika dMAb plus or the Zika vaccine does not necessarily competing per se, in fact, our DARPA contract that we receivedfirst for Ebola and for other programs; actually the beauty of our technology is you can co-dose both, the dMAbfor short-term immediate protection and for vaccine to provide a longer term protection and these were deemed to be very important for U.S. military, as well as perhaps the travelers and other healthcare professionals, and highly risk groups, and folks who are more exposed endemically [ph].

So I think one doesnot preclude the other but that will be a great problem for us to have. But independently,I expect to have data from both studies providing great information. The development path for each of those really will depend on partners and funders, and real -- and clinical and for thesevaccines and dMAbs. But they both have their own strengthand what we're trying to get out from these clinical studies.

Operator

Our next question comes from Jonathan [ph] from National Securities.

Unidentified Analyst

I was kind of wondering, regarding both of the head and neck cancer patients that responded to PD-1's after progressing on 0457; is there really any evidence that 0457 contributed to either of those complete responses given that the patients progress between vaccination and PD-1therapy?

Joseph Kim

Yes, great question.So we're able to tease out the antigen-specific T cell responses in thesepatients and some of that was included in the clinical cancer research publications from last fall. Obviously, we're doing lot more follow-ups from these patients, as well as more patients eventually progress, we'll be able to track that. Perhaps, the best answer would be many of these concurrent study that they are dosing, already metastasizing recurrent head and neck patients with both durva and MEDI0457,and testing the immune responses in these patients and looking at clinical response compared to the patient experience with durva alone, I think that's a more direct comparison. So a lot more data should be forthcoming from all of these studies.

Unidentified Analyst

Outside of any ATM use or warranty exercise or receipt of milestones; how long does your $157million last?Would that be about mid-2020?

Joseph Kim

No, it's -- our guidance is about $70million in net fund for '19 and '20 each. So we think we'll have -- but more than two years of cash runway.

Unidentified Analyst

But that burnincludes things like ATM and warrant and milestones or it excludes them?

Peter Kies

Hi John, this is Peter Kies. It excludes the ATM activity but milestone activity would be included in that.

Unidentified Analyst

And lastly, can I ask why Mark left?

Joseph Kim

Can you say that again?

Unidentified Analyst

Why did Mark leave?

Joseph Kim

It was just part of the strategic reorg, I felt that combining and aligning -- I asked him to leave. And aligning clinical, regulatory and R&D functions under same supervision would benefit from better alignment and better execution. So -- and we explained that in the prepared remarks but I think we should be able to -- you know, we've been doing this well but I feel that we can do better, we've got to move faster, we have to execute better, we owe it to our shareholders, we owe it to the patients that we're looking to help, and this strategic reorg --and really, frankly, all of our efforts are trying to enhance our capabilities in our execution, our capabilities to improve on our delivery.

Operator

And ladies and gentlemen, at this time we're showing no additional questions. I'd like to turn the conference call back over to management for any closing remarks.

Joseph Kim

Well, thank you everyone for your questions and joining us on the call today.We look forward to sharing more on our trials and program advancements on our next earnings call in May.Have a great evening.Thank you.

Operator

Ladies and gentlemen, that does conclude today's conference.We do thank you for joining.You may now disconnect your lines.