Earlier this month, Inovio Pharmaceuticals (INO +0.43%) announced results from a late-stage study of immunotherapy candidate VGX-3100 in treating precancerous cervical dysplasia. Although the primary and secondary endpoints of the study were achieved, investors didn't seem impressed. In this Motley Fool Live video, recorded on March 3, 2021, Fool.com contributors Keith Speights and Brian Orelli talk about why Inovio's results for VGX-3100 weren't very well received.

Keith Speights: Let's move on to another company, a small biotech that also reported their results on Monday after the market close. Inovio Pharmaceuticals, the ticker there is INO. Inovio reported what I would say was better-than-expected Q4 results. I think more importantly, the company reported what it categorized, described as, positive results from a late-stage study of VGX-3100. It's an immunotherapy that they're testing in that particular study in treating cervical dysplasia. But the stock fell nearly 14 percent yesterday on Tuesday. Why do you think investors didn't like what seemed to be, on the surface anyway, good news?

Brian Orelli: VGX-3100 treats HPV-associated pre-cancer. The results were from the phase 3 study, and they ended up having to do a modified intention to treat population.

Normally, the FDA would like to you just look at everybody that you intended to treat. They had some issues with missing data in the VGX-3100 group compared to the placebo group, and so they decided to exclude those patients and that's how you get to this modified intention to treat population.

I think there's probably big questions on whether the FDA will accept that data that's with some of the patients removed from the datasets. Even if the FDA does approve the drug based on that modified intention to treat group, the response rates were 24 percent for VGX-3100, and 11 percent for placebo. So a substantial improvement going from 11 percent to 24 percent.

But surgery, which is another option for these patients, has a success rate around 75 percent. So maybe some doctors would use VGX-3100 to see if it works, and then if it doesn't work, move to surgery. But I can imagine a lot of doctors just go straight surgery with another 24 percent numbers only curing a quarter of the people.

Then even then, maybe some of those aren't actual curious because you get 11 percent for placebo. The company is working on a companion diagnostic with Qiagen to identify patients who are more likely to respond to VGX-3100.

In the post-hoc analysis, it was able to predict 85 percent response rate with phase 2 data. They looked and saw, well, taking the subset of patients who we would've called positive on the companion diagnostic test, then looked at those and they've got an 85 percent response rate. But it's a post-hoc analysis, it wasn't hypothesis-driven.

So you have to take those with a grain of salt and they're certainly going to have to run a forward-looking clinical trial to test this hypothesis using the companion diagnostic and only taking the patients who test positive for the companion diagnostic will increase the response rate.