What: Inovio Pharmaceuticals (NASDAQ:INO), a clinical-stage synthetic DNA-vaccine-maker, announced this morning that it has signed a research collaboration deal with British pharma giant AstraZeneca (NASDAQ:AZN) for its killer T-cell activating immunotherapy INO-3112 (VGX-3100 plus DNA-based IL-12), as well as two products yet to be developed. This news sent shares soaring by over 25% in pre-market trading on heavy volume.
Per the terms of the deal, Inovio will receive $27.5 million upfront and potential developmental milestone payments up to $700 million. Astra's biotech subsidiary MedImmune plans on exploring the utility of combining INO-3112 with its own experimental immunotherapeutic products across a host of human papillomavirus-driven cancers, according to the press release. Inovio is presently testing INO-3112 in a handful of early to midstage studies in cervical, as well as head and neck, cancer.
So what: Inovio is a few years away from potentially filing a regulatory application of any kind. Its lead experimental product, VGX-3100, indicated for cervical dysplasia, is only now entering a late-stage study. As a result, this developmental vaccine-maker is highly dependent on research deals like this one with Astra to help advance its clinical program and provide non-dilutive sources of funding.
Now what: I think one of the most important, and perhaps overlooked, aspects of this new collaboration with Astra is the blinding speed at which this pharma giant has been able to ramp up its immunotherapy program. A big knock against Inovio over the last decade or so has been the turtle-like pace of its developmental program. Although VGX-3100's midstage trial reported top-line results over a year ago, for example, this key product is only now gearing up for a pivotal registry study. Based on the rapid evolution of Astra and MedImmune's immunotherapy platform to date, by contrast, I doubt they will let INO-3112 stew for that long. In fact, it wouldn't be surprising if INO-3112 quickly eclipsed VGX-3100's clinical progress, potentially making it Inovio's main value driver moving forward.