Inovio Pharmaceuticals Inc (INO) 2015 Q4 法說會逐字稿

Greetings and welcome to the Inovio fourth-quarter and year-end 2015 financial results conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session with analysts with research coverage on Inovio will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Bernie Hertel, Vice President Investor Relations and Communications for Inovio. Thank you, Mr. Hertel. You may begin.

Thank you. Good morning, ladies and gentlemen. Thank you for joining Inovio's call today.

Today's call may contain certain forward-looking statements relating to our business, including our plans to develop DNA immunotherapies and electroporation-based delivery technologies, products and product candidates, as well as our capital resources, all of which involve certain assumptions, risks and uncertainties that are beyond our control and could cause actual results to differ materially from these statements. A description of these risks can be found in the latest SEC disclosure documents and recent press releases. These statements speak only as of today's date, and we undertake no duty to update or revise them.

Presenting today are Dr. J. Joseph Kim, Inovio's President and CEO, and Peter Kies, our CFO. I will now pass the call over to Joseph.

Good morning, everyone. With our review of 2015 and a look ahead at 2016, you'll see that we are executing on our strategies with multiple milestones coming to fruition this year. We think we are in an enviable position among development-stage biotech companies. We have the cash, the products, the positive data and the passion to deliver on our commitments to shareholders, regulators and patients with six major steps forward this year.

While it is most pertinent to look ahead, we have had an outstanding year, accomplishing many things over the past 12 months. Let me give you a brief review of 2015. Our highlights for the year were $730 million-plus deal for our HPV-related cancer product with Medimmune, AstraZeneca. Our Phase II HPV results were published in The Lancet. We advanced and substantially completed most of the major prep work for our planned Phase III study.

We also received more than $70 million in non-dilutive grants in the past 18 months for a global HIV vaccine, Ebola vaccine and vaccines and treatments for other diseases where our products have an advantage. For Ebola, we have already enrolled all 75 patients in the vaccine's trial.

Our quick responses to outbreaks for MERS and Zika -- the MERS trial has begun. We expect our Zika vaccine to be in people before the end of the year. Our DNA-based monoclonal antibody application is advancing with great promise. Our dMAB, as we call it, targeting dengue virus, provided 100% protection against a lethal dengue virus challenge in laboratory animals.

We reported the first data from our human study of HPV-related head and neck cancer, showing robust antigen-specific CD8 killer T-cell responses.

And finally, we initiated clinical studies for prostate cancer, hepatitis B therapy with Roche, Ebola vaccine and MERS vaccine.

It was an active and successful year. And this morning we announced another notable step in advancing our technology leadership. We are acquiring all assets from Bioject Medical Technologies, providing Inovio with needle-less vaccine administration technology that we will integrate with our new needle-less surface electroporation delivery technology. We are paying Bioject, which is a leader in noninvasive jet injection technology, $5.5 million in cash and stock for assets that include products and patents.

As a leader in next-generation immunotherapies, we believe that integrated needle-free jet electroporation delivery approach is ideally suited to facilitate vaccination in large populations against ever-changing flu strains, RSV and emerging infectious diseases with unmet medical needs like Zika. You can look at our press releases this morning or click on our website for more background on all of our 2015 activities. I will be pleased to also comment further on 2015's activities and on this acquisition during the Q&A part of this call.

In 2016 Inovio will take six major steps forward. Those major advancements are initiating our Phase III HPV-related cervical dysplasia trial; number two, entering into a Phase II trial in cervical cancer for INO-3112 with Medimmune and the EORTC; number three, launching our first combination studies in cancer with INO-3112 and Medimmune's immuno-oncology molecules; number four, introducing a new cancer product to our pipeline; number five, reporting interim Phase I cancer data from our prostate program and our hTERT study in breast, lung and pancreatic cancers; number six, reporting vaccine results for our infectious disease pipeline, including Ebola, MERS and other viral threats.

Now, let's start with our Phase III trial for HPV-caused cervical pre-cancer. Each year in the United States and Europe there are over 500,000 women newly diagnosed with late-stage pre-cancers caused by HPV infection. Please remember all cervical cancers arise from untreated late-stage dysplasia. With only surgery as a current treatment and nothing to eliminate the HPV that causes dysplasia, a major unmet need awaits Inovio's product. I am happy to report that all our preparations for Phase III are coming together very well. One of the biggest steps, scaling up DNA plasmid manufacturing with a commercial-scale CMO, has gone according to plan. We have already manufactured our first GNP-grade production lots of VGX-3100. And we are fully ready to produce more products commercially in our commercial-scale facility.

Another key step was finalizing the industrial design and usability features of our newly designed, fully automatic and integrated CELLECTRA 5PSP device, then scaling up manufacturing. Our optimized design for clinical use was completed. Manufacturing for Phase III is also on hand. These scaling up processes have also positioned Inovio for future commercial device production.

A key remaining step is our end of Phase II meeting with the FDA. In this Phase II face to face meeting, which is scheduled for early second-quarter, we will, number one, review and discuss our Phase II data, and, number two, review the proposed trial's design and endpoints for our Phase III study. We will then incorporate the FDA comments and recommendations into our trial protocol, and we aim to initiate it in the third quarter.

We have also taken other important steps to prepare for this Phase III study. We are prequalifying more than 100 clinical sites in more than 20 countries. We have selected a global CRO as our clinical partner. And lastly, we are planning for commercialization. Our marketing team is conducting market, pricing and payer research and preparation.

The second major key step involves our partner, Medimmune. Together, we plan to advance INO-3112, our immunotherapy to attack HPV-caused cancers, into a Phase II study for cervical cancer. 3112 works by generating CD8 killer T cells that destroy tumor cells transformed by HPV16 or 18, which are responsible for more than 70% of HPV-caused cervical pre-cancers and cancers.

This study will involve the EORTC, a European organization that organizes major cancer studies in Europe. We will announce details of this study when it is initiated. This event will trigger a significant Phase II milestone payment from Medimmune to Inovio.

We expect our third key step in 2016 to also involve Medimmune. Medi and we will advance our INO-3112 vaccine into a human study of an HPV-related cancers in combination with Medi's immuno-oncology molecules. Thought leaders have suggested that such combinations represent an important avenue to take patients' response rates beyond the 20% to 40% typically achieved by checkpoint inhibitors used as monotherapies.

We are talking about a powerful one-two punch. Medimmune's products can shut down, in this case, cancer's defensive shields to fend off T cells. Then our DNA immunotherapy can significantly raise the level of antigen-specific CD8 T cells in the body that are ready and able to pounce on the cancer cells. With the use of our cancer vaccine, rather than relying on just a handful of pre-existing soldiers, we can generate an army of T cells to perform the cancer-killing function. Again, details will be communicated when the study starts. This will be an important, very important step for Inovio's immuno-oncology program. Stay tuned.

In the fourth step, we plan to introduce a new cancer indication to our pipeline. INO-5400 will be another fully defined product for late-stage cancer. What we mean by fully defined is that it will be a multi-antigen cancer immunotherapy, plus a check point inhibitor. This new assault on cancer will be the result of reviewing the 130 or so tumor types that have been characterized and narrowing that list down to four we will develop and targeting one we will take into the clinic to share.

We are not ready to announce that indication yet for strategic reasons, but we plan to initiate this study by year end. I will say that the target is a cancer with very rapid progression after diagnosis and no good treatment alternatives at this time. INO-5400 product will include our hTERT antigen as one of the antigens, as well as two other top antigens from our extensive screening that we've done in the last couple of years.

Moving on to our fifth major step is recruitment is progressing on both our prostate cancer trial and our hTERT trial in patients who have had breast, lung or pancreatic cancer. We expect to report interim data from these two important studies this year.

To our sixth major step, in 2016 you can expect to see various results from Inovio on challenging and fast-moving emerging infectious diseases. For our public health reasons, I could even say these results are essential. Let me walk you through our infectious disease trials.

With Roche as our partner, our hepatitis B Phase I study for INO-1800 has opened more than 20 sites in the US and in several countries in Asia-Pacific. For our HIV vaccine, PENNVAX-GP, the HIV vaccines trials network is currently running a study in healthy subjects. PENNVAX-GP targets multiple clades of HIV, providing global coverage. It has been funded through a $25 million NIAID contract awarded to Inovio and its collaborators. Our enrollment is going extremely well in this 94-patient Phase I study. Last year the NIAID awarded us and our collaborators an additional five-year $16 million grant to further the research on this vaccine. This work is ongoing.

Moving on to our Ebola program, which is funded through a $45 million DARPA grant, the Phase I studies assessing our DNA vaccine has completed enrollment of 75 healthy volunteers late last year. We will report on immunogenicity and safety data in the first half of 2016.

The second element of this program is the advancement of our DNA-based monoclonal antibody approach. These so-called dMAbs target a different immune mechanism and are highly complementary to our antigen-generating products. They have potential value across all cancers and infectious diseases. Our DARPA-funded programs are achieving promising animal data, and we expect to have multiple scientific publications highlighting our advancements in 2016.

For MERS we are working with our Korean affiliate, GeneOne Life Sciences, to complete a Phase I trial at the Walter Reed Army Hospital in Maryland. We already have positive data from three animal models and are well on our way to our goal of recruiting 75 participants in this human safety and immunogenicity trial.

There is much concern about Zika, and Inovio is moving rapidly to develop a vaccine to combat this virus. In fact, Inovio is in the lead as the first company to manufacture a Zika vaccine, the first to have positive animal data, and we aim to be the first in humans with safety and immunogenicity trials to start by the year end, if not earlier.

You might ask why Inovio, why is Inovio ideally suited to respond to these emerging virus threats? There are three reasons. First, because our DNA vaccines are synthetic or man-made, we can design and develop them faster than vaccines developed using other technologies. Our manufacturing process uses well-proven fermentation technology with a low hurdle in terms of cost and time to manufacture initial small batches for testing. But it is readily scalable to larger volumes to combat the outbreak.

Second, we can target multiple important antigens in a single shot, and our vaccine design is fundamentally based on the idea of encompassing multiple strains of a virus. This approach can provide broad-spectrum protection against inevitable mutations that occur with these diseases.

And third, perhaps most importantly, the number one worry at traditional vaccine makers is safety. At Inovio, today it has not been a concern for our platform of SynCon vaccines. Formulated essentially in pure water, we have had zero drug-related serious adverse events in our trials to date. This gives us a significant advantage over our vaccine competition.

Now, here is our CFO, Peter Kies, with the financial update.

Thank you, Joseph. Year-over-year our fourth-quarter revenue increased from $2.5 million in 2014 to $5.9 million in 2015. Revenue for the comparative years increased from $10.5 million to $40.6 million. The increases in revenue were primarily due to the development payments from our DARPA Ebola grant and $16 million of revenue recognized from the Medimmune upfront payment for our partnership. Accounting recognition of the remainder of the $27.5 million upfront payment has been deferred and will be triggered by future events.

Total operating expenses increased from $13.5 million to $20.5 million for the fourth quarter year over year and from $50 million to $74.9 million for the comparative year. These increases were related to greater R&D investment in our product development programs, as well as increased general and administrative expenses. As of December 31, 2015, cash and cash equivalents and short-term investments were $163 million compared to $93.6 million as of December 2014. This strong cash position will allow us to proactively advance our programs without being compromised by the market storm we have all endured for the last year and a half and provides funding for all of our key initiatives to which we are committed. As of December 31, 2015, we had 72.2 million shares outstanding and 78.9 million shares fully diluted.

You can view Inovio's balance sheet and income statements in this morning's earnings release. A form 10-K providing the complete 2015 financial report can be found on Inovio's website under Investor Relations tab.

Now, Joseph, back to you.

Thank you, Peter. Inovio has well-defined strategies for product development, partnerships and commercialization. I've told you today how we are on track, executing on our strategies for the benefit of our shareholders, patients and employees.

I will end by saying that this is an exciting time to be connected with tomorrow's medicine. My feeling is that there is a growing wave of emerging breakthroughs in medical research, especially for cancer. Inovio is at the leading edge of this wave, pioneering the field of DNA immunotherapies and vaccines. As described earlier, we are taking bold steps this year to bring treatments and disease prevention where none exists. We look forward to reporting on the progress of these steps throughout this year.

I thank you, our investors, for their support in 2015 and for placing your commitments next to ours in 2016 as we develop products to ease and end suffering for many and also create value for our shareholders.

I am now ready to answer any questions. Thank you.

(Operator Instructions) Charles Duncan, Piper Jaffray.

Thanks for taking my question, and congratulations on a good year of progress for your broadly applicable platform.

So, Joe, my first question is regarding the end of Phase II meeting that you are anticipating with FDA for 3100 for cervical pre-cancer. What do you think the focus of the meeting will be and expectations, if you will, regarding the size, dosing and design of the Phase III trial?

Yes, so your last question actually answers the first question or last part of your question. So basically, we want to get the concurrence of our protocol overall design, as well as the specific endpoints that we have proposed. So all of the written packages into the FDA, and we have a date set for this meeting. There will be ongoing discussions back and forth leading up to that meeting, which is set for early second quarter. And we expect to come out of this overall interaction and out of this meeting with a set idea on the trial protocol design, including the size, the total sample size, as well as the endpoints. The current estimation of the sample size currently is around 350 to 400 total patients, but we will have a better refined tied down information coming out of that meeting, and we look forward to starting the Phase III studies a month or two or a quarter after that. So we are projecting the start of the Phase III studies in the early third quarter of this year.

Okay. That's helpful, Joe. And I guess, as a corollary to that, do you still anticipate that the positive Phase II readout that we saw last year is good in terms of informing of net design and endpoints?

Yes. Our positive Phase II efficacy and Phase III readouts from our Phase IIb study, we are very encouraged by that, and it's a great step forward. We think we can build from that in Phase III to get this product on to the market post Phase III. And the significance of our Phase II data was validated with our publication of the results in The Lancet last fall. So yes, we feel very strongly that our final Phase II design and protocol will be very much similar to what we did in Phase II with some tweaks and refinements.

Okay. That's helpful. And then my last question is on the early-stage virus programs. It is pretty impressive the list of different VCs that you folks are involved with, and you have moved quickly. I guess my question is really which of those early-stage programs are you most enthusiastic about in terms of, first of all, demonstrating the technical capabilities of your platform but then, secondly, in terms of the commercial potential of the platform?

So I guess -- a very nice question. I would say Zika because of the potential and the outbreak of this new virus in the Western Hemisphere and the potential to hit the United States later this year has the biggest commercial potential as well as the global health threat potential.

As I said in the prepared statements, Inovio has shown that it can react the fastest by generating the vaccines faster after the outbreak, getting to the animal efficacy data as soon as possible, and then we expect us to be in the human safety and immunogenicity study by the end of this year, if not earlier. We are trying to get there as soon as possible.

And then, taking the MERS case as an example, we have gone from a validated animal testing data last summer to Phase I clinical initiation in January of this year. So we've gone from bench to IND and human studies in less than 12 months.

We are expecting to beat that with Zika. So we are very excited about that. And Zika virus isn't our only or the first product, a vaccine that we are then preparing to combat flaviviruses for viruses that are carried by these mosquitoes.

So we have a vaccine candidate for dengue. We have a published data on vaccine candidate for chikungunya, and we see in the future our commercial path, maybe not this year, but going forward, where we could have a trivalent or quadrivalent combination vaccine to prevent infection against these mosquito-borne viruses that are impacting millions of people across the world today. So we think that has a both global health as well as a commercial benefit potential for Inovio and its shareholders.

That's helpful, Joe. Just one last question regarding the Zika virus and potential impact on partner engagement, particularly DARPA, on Ebola, your DARPA collaboration for Ebola. I'm wondering if you or Peter could remind us of the terms and the duration of that DARPA grant, and have you seen any change in terms of the partner engagement as a result of the emergence of Zika?

So I'll address that very quickly. With the $45 million contract to Inovio and our consortium partners, which includes Medimmune and now with David Weiner's lab, it was $45 million split into two tranches, $15 million and $20 million -- what was it, Peter? $25 million and $20 million or some like that.

Yes, that's correct.

But DARPA last year exercised the first option. So we have a full spending budget of $45 million between us and our partners. It's split into the vaccines, as well as the dMAb for Ebola, and we have a previous dMAb contract from DARPA for another $12 million and change. So this has been a substantial funding from DARPA.

And I have to say DARPA has been one of the best agencies for us to work with, a funder to work with, including commercial partners. So I think that partnership has been very beneficial to Inovio, and I feel that DARPA probably can speak for itself. But I think the relationship has been very positive mutually.

Going forward for Zika, so we have gotten into some funding discussions for Zika and MERS, and those discussions when they turn into actual agreements we will update the public as transparently as possible.

Okay. Thanks for taking my questions.

Tom Shrader, Stifel.

To return to what Charles was talking about, does the size of the trial depend strongly on whether you get an endpoint in reduction in cervical dysplasia versus resolution of cervical dysplasia? Would that have a big effect on trial size?

Yes. So both of those, if you recall, the initial primary endpoint for the Phase II study was regression down to CIN 1, which is a low grade or normal, and we have done a post hoc analysis where most of the responders were complete responders down to normal cervix.

So the results -- the sample size would depend on that, and we expect both of those endpoints to be a primary and a secondary. It just depends which one is the primary, and that would dictate the actual -- the size of the trial.

And the 350 was -- the assumption is that it would be reduction in grade rather than resolution?

So 350 to 400 was our best guess, based on that, yes, among others, yes.

And then do you think this would be the basis for accelerated approval and then you would have to follow with a longer trial showing reduction in development of cervical cancer, or would this be for full approval? Do you have a sense of that yet?

Yes. Those questions are what we are going to confirm with the FDA, so I would not want to front run the FDA. But these are really good questions, Tom.

Okay. I don't blame you, but I thought I'd ask.

Good try.

The Medimmune collaboration where you have access to a checkpoint inhibitor, is there -- can you pursue that for an infectious disease, or is that a cancer-only collaboration?

So I think -- I can't speak for Medimmune, but there are cases where I would think, and especially in chronic infections, where a checkpoint inhibitor that can shut down the virus's shielding effects, I could imagine things like hepatitis B or HIV or other very major or chronic infections could benefit from a checkpoint inhibitor therapy.

You also need to caution and weigh that with potential tolerability and toxicity of these molecules. As you already know, no drugs are totally safe or totally tolerable. So those are the things that the owners of these checkpoint molecules should weigh.

What I can tell you is combining in cancer settings, where you knock down the shields of the tumors with checkpoint inhibitor molecules, and there are multiple molecules that Medi and others have in development, not just PD-1, PDL-1, but there are dozens of other molecules that these pharma companies have that can shut down the shields of tumors.

And then really what we have shown the best at Inovio is to generate tumor-specific and antigen-specific killer T cells that can traffic to these tumors and finish off the job where checkpoint inhibitors start.

So I think it's a great one-two punch, and we are looking very much forward to showing that with INO-3112 as well as INO-5400, both of which will start in combination therapies this year.

Okay. And then one question on Zika. Is Zika as complicated as dengue, where you have multiple different subtypes, and being bit by one type may make you more susceptible to other types? Is Zika simpler? Are the antigens better known, or is it, again, quite a complicated story?

So my quick answer is it's a complicated story.

Okay.

The longer answer is dengue has been studied extensively for the last 20 years but even much longer. Zika was discovered in 1947 in the Zika forest of Uganda; that's where the name came from. And nobody gave a hoot for the last 60 years. There's a tremendous, embarrassing dearth of scientific or medical publications in the last 60 years on Zika.

Now, that being said, there's a lot of renewed interest and research being done not just in the pathogenesis of Zika causing these birth defects and Guillain-Barre and other problems of the nervous system, but the virus itself is being studied more extensively. So -- and on top of that, I think there are some early research showing that actual co-infections with dengue or other flavi or mosquito-borne viruses can impact the disease that's caused by Zika infection.

So yes, I think we are not done with this story. And unlike Ebola, which starts in a flare-up and dies down, I think the Zika is going to be with us, especially in this hemisphere, for the next several years.

Okay. Great. Thanks a lot for all the answers.

Jonathan Aschoff, Brean.

I was wondering what's going to change in incidence of CIN 2/3, if any, over the past few years, given that it has been 10 and seven years since Gardasil and Cervarix approvals?

Gardasil

Yes. You know, I don't believe there's a huge drop-off in the actual incidence of CIN 2/3 in US and Europe, especially with the uses of Gardasil and so on. What I do expect over long-term to see is a change in serotype from dominancy by 16 and 18 causing infections to other major serotypes that will come out because of the vaccine pressure. But I expect those numbers not to change for a decade or so.

Okay. But you would expect like a similar amount of problem with non-16 and non-18, a similar --

Yes. So I expect a non-16 and 18 to rise and become more important. Classically, what the KOLs have been saying is 16 and 18 cause about 70% of all cancers and pre-cancers. I think that still remains to be more or less true, but that number is going to decrease, and the other major serotypes are going to come up.

So Inovio is already working on the second generation. Just the way that Gardasil 9 replaced Gardasil at Merck for preventive vaccine, we expect to -- it's very easy and straightforward for us to add additional serotypes to our final vaccine combination. It's just another plasmid for us to add.

All right. Thanks. I was wondering what would be involved in taking a product, let's say, for which you've already run a pivotal trial with a needle delivery device, but you want to convert it to a delivery, from whatever form of delivery device you determine in the future is the best needle-free device. What you would do to -- ?

Well, typically -- thank you for asking that, and typically it requires a bridging study, if the product is already on the market. But those are the conversations that we would have with the regulators. And I just want to clarify, the Bioject acquisition is not to replace our CELLECTRA 5PSP device, which is our Phase III and commercial device for our immunotherapy products, including VGX-3100, INO-3112, INO-1800, the last two with Medi and Roche, respectively. So it's really the IN delivered electroporation fully integrated automatic device. 5PSP is our commercial device. That's what I call the Corvette of electroporation systems.

Now, what we think is important for, on the other side of it, max vaccinations like if there is an outbreak as we see with Zika and we want to dose millions of people, that's going to require certain things: number one, high tolerability. So we have developed a pain-free or painless electroporation surface, electroporation that doesn't even penetrate the skin.

But what good is it to have a surface EP when you still have to use the needle and syringe to deliver the vaccine? So that's where our acquisition of Bioject comes in. You know, they have developed this jet injection technology where you can pain freely inject through a propulsion of jet to put the vaccine into the skin. And we have gotten a great set of data from our research collaboration and animal models, and that's why we decided to bring that in-house. So that will allow us to have an automatic one-button-push, low disposable cost as there's no needles to buy or syringe to buy, allowing us to set up for these mass vaccination, global health positioning approach for our vaccine delivery.

So, you know, we are greedy. We got the IM immunotherapy route pat, down. We feel very happy about where we are. We spent millions of dollars in building up the CELLECTRA 5PSP for immunotherapy product delivery. Now we are going to spend -- and we are in a great position to dominate the pain-free skin needle-less delivery of our DNA vaccines to treat things like universal flu, RSV, Zika and others that we have been working on for the last several years. So it opens up a huge avenue for our vaccine delivery when we combine our surface EP plus jet delivery.

All right. Thanks, Joe. And just lastly, as for things -- I can remember back to you guys in SARS and avian flu and everything through Zika. Will you maybe, in the future, restrict your efforts to viruses, let's call it, more like Zika and less towards those for which it's easy to make an argument that the commercial opportunity is far less? Because it doesn't seem to me that you need to demonstrate much more in the way of early indications of efficacy or demonstrate again a relatively rapid pace to vaccine development.

So we feel like we have a platform that we can apply to have our cake and eat it, too, which is to be the wall against these emerging infectious diseases, be the first responder, like the New York City firemen and police, get out there and be the wall protecting us from these scary emerging diseases. But also we think there are ways to do that with other people's money. We've shown -- we've gotten over $130 million from NIH, DoD, DARPA and others in the past six years for these efforts. And we expect to get as much is that or more going forward.

So we can do that, and there are commercial ends. These are through biodefense stockpile programs through BARDA and others when it comes to MERS and Ebola. And there are other commercial -- there's a huge potential in infectious disease targets for vaccines for these larger-market potential diseases.

So yes, we are going to focus -- we have the potential and the platform. We have the cash. As Peter mentioned, we ended the last -- this year, in 2015, with $163 million. We can get, always, more grants and other funding from nondilutive sources going forward. So we feel like we are in a great position to take on any challenge that we may face, and we are advancing our lead product into Phase III, our Medi product into Phase II. I think we are showing true fundamental advancements of our pipeline products up and down across our portfolio.

So I feel very good about where we are sitting right now and looking forward to showing more advancements even with these infectious disease programs, including Ebola, MERS and Zika, in this year.

Thanks for that. I was just wondering, at the end here, very quick, did you guys say how long your cash runway was or did I not miss that?

We haven't strictly said. We expect the run rate to cover us at least through the end of 2018. So we have plenty of cash at this point.

Thank you.

Jason McCarthy, Maxim.

Congratulations on all the progress and thanks for taking the question. I want to go back to, if you don't mind, to the infectious diseases side in general. And when you are talking about your dengue vaccine or the Ebola vaccine or, now, Zika or MERS, are you generating -- I know that your vaccine approach generates robust CD8 T cells, which is good for killing virally infected cells. Can you talk about the antibody titers that you are generating and if you're going to potentially need a DNA-based monoclonal like you are making for Ebola to supplement for a T cell generating vaccine?

So quick answer is we tend to focus on the CD8 T cells because that's an arm of the immune responses that almost every other platforms for immunotherapy and vaccines are poor at generating. So that's a true differentiating factor for Inovio's immunotherapy for oncology as well as vaccines for ID.

But I don't want to understress our ability to generate antibody responses against these viral targets. So we do generate very high levels of finding and neutralizing antibodies against these targets. It's really the one-two punch from the immune protection perspective, being able to generate very quickly the antibodies against these viral antigens and have the T cells arise enough to clear all of the remaining. So I think we need to do a better job of showcasing the antibody generation part of our platform.

But let me add to the other part of your question, which was the dMAbs. dMAbs are different. dMAbs are strictly -- these aren't -- we are not using our own immune system to generate these monoclonals or induce it. It's actually prepackaged into our DNA plasmid at full-length sequences for the monoclonal antibodies. So all we need is a bunch of cells in our body to make them. They become the factory for our monoclonal antibodies, thereby we can take out the middlemen like Merck and Amgen and so on who manufacture these monoclonal antibodies in huge vats and chose cells that are other mammalian cells and have to worry about all the intricacies of manufacturing them safely and worrying about those folding of the monoclonals and so on.

We cut through all of that. We let the patient, the person who receives the dMAb to make the level of monoclonals that are sufficient to ameliorate or control the disease, whether it is shutting down cancer cells or improving anti-inflammatory responses or neutralized viruses.

So it's a true game changing, paradigm shifting technology, and that's why DARPA -- who are really known to fund these rocket launchers and things like that -- that's why they were intrigued by our technology because this may be the only platform that can achieve that in a practical sense. And just in the last 18 months or actually less than that, we have gone from designing the proof of concept vaccines or plasmids that can express monoclonals. Now we are consistently generating very high levels of blood-level monoclonal antibodies in animals.

And these dMAbs have shown to be functionally active. We published that we can protect against dengue challenge using a dMAb against dengue virus. And, as I said in the prepared remarks, we're going to have up to maybe half a dozen publications that will come out in 2016 really showcasing the potential and power of this dMAb approach. And we expect to have multiple clinical studies next year or by end of this year, which will start. But it couldn't really flourish in 2017.

So we got the great funding from DARPA, and we are using it to really advance our whole platform.

Great. And just a follow-up: given the size of the Zika virus outbreak and the Ebola outbreak, in an emergency setting, you guys -- Inovio has the ability to single-dose, which might be a tremendous advantage over somebody making a viral vector-based vaccine for any of these indications. Would you agree with that, or is that how you see --

Yes.

-- your therapy in infectious disease?

Yes. So Ebola is a slightly different story. There are related viruses like Marburg and so on we can also combine into a single dose. Zika -- I think I mentioned this earlier -- there are other viruses that spread similarly in the same area by mosquitoes, like dengue, yellow fever and chikungunya. Although chick-V is not a flavi, the comorbidity is very high.

So yes, the difference between us and combining these different -- into a trivalent or quadrivalent -- yes, it's as simple as us mixing a bunch of plasmids together into a single injection. Viral vectors -- it's highly more complicated, several logs of more difficulty, and we think that's another advantage that we have with Inovio's platform.

Great. Thanks. Looking forward to the Phase III in VGX.

Yi Chen, H.C. Wainwright.

I just wanted to clarify that currently there is no plan to use the Bioject technology in the VGX-3100 program. Right?

Correct. Yes, that's for preventive indications going forward. Go ahead?

So when do we expect to see the utilization of Bioject technology in the preventive vaccine in terms of clinical trials?

So I would say that would take at least a year and a half, two years to fully integrate that into our path. In the meantime, in a fully integrated capacity, in the meantime, we will do a lot of development work, and they can be used singularly and sequentially. That could be earlier than that.

So yes, I mean it really depends on what the outbreak needs are. We are fully prepared to go step by step but also accelerate as the market needs come up here. But it takes about two years to build a fully integrated system that gets fully tested and vetted, just like CELLECTRA 5PSP.

You know, these things don't just appear like Jeannie and the magic. It takes thousands of man-hours and millions of dollars to prepare. No matter how much money you throw in, there are certain things, testing and so on, that occurs. So I think sometimes people lose sight of how long some of these things take.

But yes, we have this underlying technology that's going to make our skin delivery, the preventive vaccine application of our vaccines, much more advantageous, easier to deliver and, I would say, I would project, more efficacious in the field. And I'm very excited about bringing this technology in the folds of Inovio.

You may ask also, if the Bioject technology is so great, why are we able to acquire that? Well, it's because as a standalone technology it really was providing a service to a need that didn't exist. But in our hands, with Inovio's surface EP, it becomes a very integral portion of the solution that we can provide. With SEP plus jet, we can provide this very important mass vaccination capabilities to DNA vaccines which was lacking. So I think it's very similar to different acquisitions we've done as a corporation in the past. So it really is a win-win going forward for us.

Okay. Thank you very much.

We have no further questions at this time. I would now like to turn the floor back over to management for closing comments.

Yes. I think the analysts asked really great questions. I would just stress here Inovio has the cash, Inovio has the partnerships, Inovio has the technology -- over 1000 patents now protecting our assets. We have all these exciting key programs coming through in 2016 and beyond, and we have a lot of catalysts that will drive the market interest.

So please stay tuned, and we look forward to executing on all of these things, including our Phase III going forward. So thank you very much.