Inovio Pharmaceuticals Inc (INO) Spikes 29% After AstraZeneca (AZN) Partnership Announcement

Inovio Pharmaceuticals Inc (NASDAQ:INO) has spiked by over 29% on Monday morning after the firm announced a strategic cancer vaccine collaboration and license agreement with AstraZeneca plc (ADR) (NYSE:AZN)’s MedImmune unit. As part of the agreement, MedImmune, AstraZeneca’s biologics research and development group, will have the exclusive rights to Inovio’s INO-3112 treatment, a combination of VGX-3100, Inovio’s most mature candidate in its pipeline, and IL-12, the firm’s immune activator. INO-3112, which is currently in phase I/II clinical trials for cervical and head and neck cancers is a treatment for human papillomavirus (HPV) type 16 and 18-caused cancers. Type 16 and 18 HPV cancers account for over 70% of cervical pre-cancers and cancers. The value of the partnership with AstraZeneca plc (ADR) (NYSE:AZN) is potentially worth as much as $700 million to Inovio depending on the development and commercial milestones that are achieved. The rise of Inovio’s stock today is doubly significant as it just reported results for its second quarter which missed Wall Street estimates. The firm reported a loss of $0.09 per share on revenues of $5.3 million, below expectations of a loss per share of $0.04 on revenues of $11 million.

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As the financial results for early-level biopharmaceutical companies are far less relevant than the progress of their treatment candidates or such partnerships as announced today, it’s unsurprising that the market has put far more weight behind the collaboration with AstraZeneca plc (ADR) (NYSE:AZN) than on the unexpectedly low revenues for the quarter. Based on our data, hedge funds appear to have foreseen the disappointing second quarter for Inovio Pharmaceuticals Inc (NASDAQ:INO), though not the partnership and resultant surge in its stock price. By the end of March, a total of nine of the hedge funds tracked by Insider Monkey were long in this stock, one more than from the end of the fourth quarter. However, the total value of holdings owned by hedge funds declined by 26.62% during the first quarter, to $4.8 million, while the stock was down by 11.11% during this period, so there was a flight of capital from the stock. Furthermore, as less than 1% of the firm’s outstanding shares are owned by hedge funds, hedge funds were not overly optimistic about the stock. The smart money was not wrong to do so, as shares fell by over 10% in the second quarter.

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Insider purchases or sales of shares is another area Insider Monkey looks at, to gauge insider sentiment. While there has been no sale of shares on record by Inovio insiders since 2012, Director Angel Cabrera acquired 8,000 shares of the company on April 13 of this year.

Camber Capital Management, helmed by Stephen DuBois, held the most valuable position in Inovio Pharmaceuticals Inc (NASDAQ:INO) on March 31, with 250,000 shares for a $2 million position. The biggest seller of Inovio stock was Fred Knoll’s Knoll Capital Management, which divested 82,088 shares worth about $754,000. Glenn Russell Dubin of Highbridge Capital Management was right behind this move, selling 37,359 shares.

Disclosure: None