Clinical-stage, synthetic-vaccine maker Inovio Pharmaceuticals (NASDAQ:INO) posted first-quarter earnings this morning and gave a number of clinical updates for its growing DNA-vaccine platform. Here is what you need to know from today's release. 

Business and corporate update
For the first quarter, Inovio lost $10 million, or $0.05 a share, which was $0.01 higher than analysts had expected. However, Inovio's revenue came in at $2.4 million for the quarter, considerably higher than the consensus of $1.41 million. Nearly all revenue in the quarter was earned from Inovio's research agreement with Roche (NASDAQOTH:RHHBY), consisting of three developmental fees totaling $1.4 million.

The modest increase in loss per share was due primarily to an increase in research expenses, which came in at $8.5 million, compared to $5.1 million for the same period a year ago. Inovio ended the quarter with $116.8 million in cash and cash equivalents, with $63.3 million coming from an underwritten offering during the quarter. Based on its current burn rate and incoming revenue from its Roche deal, Inovio's cash runway should extend into 2017. 

Clinical update
Most important, Inovio provided a brief update on clinical activities for its lead vaccine candidate, VGX-3100. According to the release, VGX-3100 is on track to by mid-2014 read out top-line data from its midstage trial as a potential treatment for late stage cervical pre-cancer to early stage pre-cancer. The trial is currently blinded, so management won't have much further insight until midyear. Even so, Inovio's management said it is preparing to push the vaccine into a late-stage trial, assuming the treatment meets its predefined efficacy and safety endpoints in its going study.

Additionally, Inovio said today it plans to test VGX-3100 in both HPV-caused cervical cancer and head and neck cancer in early stage studies later this year. These studies will incorporate an immune activator called IL-12 that couldincrease the immune response when used in conjunction with VGX-3100. 

Turning to the company's clinical activities with Roche, Inovio plans on initiating an early stage study for its prostate cancer vaccine by the third quarter of this year. Animal studies have suggested this vaccine could trigger a powerful immune response in clinical testing, which is probably why Roche was interested in partnering in the first place. Moreover, Inovio will receive its first milestone payment upon the launch of the trial, giving investors more to look forward to for the company's strengthening balance sheet. 

Foolish wrap-up
Inovio shares have dropped over 25% year to date. What's interesting is that this dramatic downturn hasn't been accompanied by any particular news. My take is that, in addition to the sector-wide biotech drop investors witnessed in March and April, short-term traders might be exiting the stock ahead of the top-line data readout for VGX-3100, assuming it will be negative. There is cause for concern because Inovio's vaccine platform has yet to be validated in a midstage trial. And if VGX-3100 fails in its current trial, the stock may return to its former sub-dollar territory.

That being said, you can't find many publicly traded developmental-stage vaccine makers these days, because these types of companies tend to be so valuable that large pharmas buy them up. Indeed, we know from Novavax's (NASDAQ:NVAX) first-quarter earnings call that it is attempting to stave off large pharma interest and remain independent in order to retain the tremendous value of its RSV franchise. If Inovio can surprise the market and report positive midstage data for VGX-3100 in a month or so, I suspect it will have the same problem. And that's not a bad problem to have.
 

George Budwell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.