What happened

Shares of Inovio Pharmaceuticals (NASDAQ:INO) were sinking 14.1% lower as of 11:08 a.m. EDT on Friday. This continued a slide that began on Wednesday after the clinical-stage biotech revealed in a regulatory filing that its partner, AstraZeneca (NYSE:AZN), is scaling back its collaboration on several clinical programs.

So what

It's not surprising that Inovio's share price would fall on news of AstraZeneca's decision. The small biotech doesn't have any products on the market to generate revenue. Most of its revenue in the first quarter came from a milestone payment received from AstraZeneca.

Scientist looking through a microscope

Image source: Getty Images.

However, AstraZeneca isn't pulling out of the most important program included in its collaboration agreement with Inovio. The two companies continue to work together in developing MEDI0457. AstraZeneca is evaluating the experimental drug in combination with its immunotherapy Imfinzi in several phase 2 clinical studies. Inovio remains eligible to potentially receive milestone payments related to the development and commercialization of MEDI0457.

Also, AstraZeneca's scaling back on its collaboration with Inovio has no impact on the biotech's lead candidate, VGX-3100. Inovio CEO Joseph Kim expressed confidence, in his remarks in the company's Q1 conference call, that Inovio remained on track to file for approval of VGX-3100 in 2021 if all goes well with its pivotal clinical studies of the immunotherapy.

Now what

The next steps for Inovio are no different than they were before the revelation about AstraZeneca's decision. Inovio plans to complete enrollment for its Reveal 1 phase 3 study of VGX-3100. It also expects to announce interim data from a couple of phase 2 studies of the drug later this year.

AstraZeneca isn't Inovio's only big partner. Inovio hopes to report interim results from a phase 1/2 study of INO-5401 in combination with Regeneron's (NASDAQ:REGN) Libtayo by late 2019. It also teamed up with Roche (OTC:RHHBY) to evaluate INO-5401 in combination with Tecentriq.