|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Delaware
|
|
33-0969592
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
Title of Each Class
|
Trading Symbol(s)
|
Name of Each Exchange on Which Registered
|
COMMON STOCK, $0.001 PAR VALUE
|
INO
|
Nasdaq Global Select Market
|
|
Large accelerated filer
|
☐
|
|
Accelerated filer
|
☒
|
|
|
|
|
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
215,432,713
|
|
|
$
|
22,196,097
|
|
Short-term investments
|
156,231,102
|
|
|
67,338,017
|
|
||
Accounts receivable
|
3,513,159
|
|
|
700,073
|
|
||
Accounts receivable from affiliated entities
|
482,373
|
|
|
1,332,044
|
|
||
Prepaid expenses and other current assets
|
4,591,966
|
|
|
1,584,598
|
|
||
Prepaid expenses and other current assets from affiliated entities
|
1,811,140
|
|
|
1,050,140
|
|
||
Total current assets
|
382,062,453
|
|
|
94,200,969
|
|
||
Fixed assets, net
|
11,323,531
|
|
|
12,773,017
|
|
||
Investment in affiliated entities
|
17,327,569
|
|
|
6,315,356
|
|
||
Investment in Geneos
|
2,717,241
|
|
|
—
|
|
||
Intangible assets, net
|
3,420,311
|
|
|
3,693,851
|
|
||
Goodwill
|
10,513,371
|
|
|
10,513,371
|
|
||
Operating lease right-of-use assets
|
13,265,144
|
|
|
13,783,009
|
|
||
Other assets
|
2,555,782
|
|
|
2,672,024
|
|
||
Total assets
|
$
|
443,185,402
|
|
|
$
|
143,951,597
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
17,216,875
|
|
|
$
|
18,237,258
|
|
Accounts payable and accrued expenses due to affiliated entities
|
511,953
|
|
|
729,729
|
|
||
Accrued clinical trial expenses
|
6,870,450
|
|
|
4,049,727
|
|
||
Deferred revenue
|
14,853
|
|
|
92,353
|
|
||
Deferred revenue from affiliated entities
|
94,275
|
|
|
31,775
|
|
||
Operating lease liability
|
2,200,459
|
|
|
2,074,842
|
|
||
Grant funding liability
|
10,330,235
|
|
|
6,065,212
|
|
||
Grant funding liability from affiliated entities
|
742,875
|
|
|
708,425
|
|
||
Total current liabilities
|
37,981,975
|
|
|
31,989,321
|
|
||
Deferred revenue, net of current portion
|
86,641
|
|
|
101,567
|
|
||
Convertible senior notes
|
65,844,260
|
|
|
64,180,325
|
|
||
Convertible bonds
|
13,718,528
|
|
|
12,842,592
|
|
||
Derivative liability
|
119,796,000
|
|
|
8,819,023
|
|
||
Operating lease liability, net of current portion
|
19,261,354
|
|
|
20,409,922
|
|
||
Deferred tax liabilities
|
32,046
|
|
|
32,046
|
|
||
Grant funding liability from affiliated entity, net of current portion
|
37,500
|
|
|
135,000
|
|
||
Other liabilities
|
66,629
|
|
|
36,943
|
|
||
Total liabilities
|
256,824,933
|
|
|
138,546,739
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock
|
—
|
|
|
—
|
|
||
Common stock
|
158,756
|
|
|
101,361
|
|
||
Additional paid-in capital
|
1,087,745,242
|
|
|
742,646,785
|
|
||
Accumulated deficit
|
(901,029,768
|
)
|
|
(739,785,655
|
)
|
||
Accumulated other comprehensive income (loss)
|
(610,030
|
)
|
|
472,608
|
|
||
Total Inovio Pharmaceuticals, Inc. stockholders’ equity
|
186,264,200
|
|
|
3,435,099
|
|
||
Non-controlling interest
|
96,269
|
|
|
1,969,759
|
|
||
Total stockholders’ equity
|
186,360,469
|
|
|
5,404,858
|
|
||
Total liabilities and stockholders’ equity
|
$
|
443,185,402
|
|
|
$
|
143,951,597
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Revenue under collaborative research and development arrangements
|
$
|
74,102
|
|
|
$
|
64,283
|
|
|
$
|
145,602
|
|
|
$
|
2,834,995
|
|
Revenue under collaborative research and development arrangements with affiliated entities
|
95,146
|
|
|
71,390
|
|
|
1,267,272
|
|
|
126,970
|
|
||||
Miscellaneous revenue
|
97,939
|
|
|
—
|
|
|
181,587
|
|
|
3,614
|
|
||||
Total revenues
|
267,187
|
|
|
135,673
|
|
|
1,594,461
|
|
|
2,965,579
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
22,376,575
|
|
|
22,486,266
|
|
|
41,487,763
|
|
|
46,876,155
|
|
||||
General and administrative
|
11,071,510
|
|
|
5,850,101
|
|
|
18,519,864
|
|
|
12,825,129
|
|
||||
Total operating expenses
|
33,448,085
|
|
|
28,336,367
|
|
|
60,007,627
|
|
|
59,701,284
|
|
||||
Loss from operations
|
(33,180,898
|
)
|
|
(28,200,694
|
)
|
|
(58,413,166
|
)
|
|
(56,735,705
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest income
|
1,067,399
|
|
|
755,330
|
|
|
1,483,968
|
|
|
1,380,864
|
|
||||
Interest expense
|
(2,846,641
|
)
|
|
(2,194,783
|
)
|
|
(5,650,396
|
)
|
|
(2,851,031
|
)
|
||||
Change in fair value of derivative liability
|
(97,755,000
|
)
|
|
—
|
|
|
(110,976,977
|
)
|
|
—
|
|
||||
Gain (loss) on investment in affiliated entities
|
(3,883,176
|
)
|
|
(173,212
|
)
|
|
9,298,443
|
|
|
(923,315
|
)
|
||||
Net unrealized gain (loss) on available-for-sale equity securities
|
4,358,634
|
|
|
—
|
|
|
(691,458
|
)
|
|
—
|
|
||||
Other income (expense), net
|
(152,102
|
)
|
|
127,512
|
|
|
(577,602
|
)
|
|
91,673
|
|
||||
Gain on deconsolidation of Geneos
|
4,121,075
|
|
|
—
|
|
|
4,121,075
|
|
|
—
|
|
||||
Net loss before income tax benefit and share in net loss of Geneos
|
(128,270,709
|
)
|
|
(29,685,847
|
)
|
|
(161,406,113
|
)
|
|
(59,037,514
|
)
|
||||
Income tax benefit
|
—
|
|
|
106,771
|
|
|
—
|
|
|
169,571
|
|
||||
Share in net loss of Geneos
|
(901,757
|
)
|
|
—
|
|
|
(901,757
|
)
|
|
—
|
|
||||
Net loss
|
(129,172,466
|
)
|
|
(29,579,076
|
)
|
|
(162,307,870
|
)
|
|
(58,867,943
|
)
|
||||
Net loss attributable to non-controlling interest
|
469,407
|
|
|
191,850
|
|
|
1,063,757
|
|
|
261,455
|
|
||||
Net loss attributable to Inovio Pharmaceuticals, Inc.
|
$
|
(128,703,059
|
)
|
|
$
|
(29,387,226
|
)
|
|
$
|
(161,244,113
|
)
|
|
$
|
(58,606,488
|
)
|
Net loss per share attributable to Inovio Pharmaceuticals, Inc. stockholders
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
$
|
(0.83
|
)
|
|
$
|
(0.30
|
)
|
|
$
|
(1.15
|
)
|
|
$
|
(0.60
|
)
|
Weighted average number of common shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
155,807,054
|
|
|
98,083,896
|
|
|
140,215,158
|
|
|
97,795,910
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net loss
|
$
|
(129,172,466
|
)
|
|
$
|
(29,579,076
|
)
|
|
$
|
(162,307,870
|
)
|
|
$
|
(58,867,943
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on short-term investments, net of tax
|
846,900
|
|
|
441,545
|
|
|
(1,082,638
|
)
|
|
1,260,722
|
|
||||
Comprehensive loss
|
(128,325,566
|
)
|
|
(29,137,531
|
)
|
|
(163,390,508
|
)
|
|
(57,607,221
|
)
|
||||
Comprehensive loss attributable to non-controlling interest
|
469,407
|
|
|
191,850
|
|
|
1,063,757
|
|
|
261,455
|
|
||||
Comprehensive loss attributable to Inovio Pharmaceuticals, Inc.
|
$
|
(127,856,159
|
)
|
|
$
|
(28,945,681
|
)
|
|
$
|
(162,326,751
|
)
|
|
$
|
(57,345,766
|
)
|
|
Three and Six Months Ended June 30, 2020
|
||||||||||||||||||||||||||||||||
|
Preferred stock
|
|
Common stock
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Number
of shares |
|
Amount
|
|
Number
of shares |
|
Amount
|
|
Additional
paid-in capital |
|
Accumulated
deficit |
|
Accumulated
other comprehensive income (loss) |
|
Non-
controlling interest |
|
Total
stockholders’ equity |
||||||||||||||||
Balance at December 31, 2019
|
23
|
|
|
$
|
—
|
|
|
101,361,034
|
|
|
$
|
101,361
|
|
|
$
|
742,646,785
|
|
|
$
|
(739,785,655
|
)
|
|
$
|
472,608
|
|
|
$
|
1,969,759
|
|
|
$
|
5,404,858
|
|
Issuance of common stock for cash
|
—
|
|
|
—
|
|
|
43,148,952
|
|
|
43,149
|
|
|
208,198,784
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
208,241,933
|
|
|||||||
Exercise of stock options for cash and vesting of RSUs, net of tax payments
|
—
|
|
|
—
|
|
|
1,405,114
|
|
|
1,405
|
|
|
3,099,298
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,100,703
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,017,761
|
|
|
—
|
|
|
—
|
|
|
(16,208
|
)
|
|
4,001,553
|
|
|||||||
Acquisition of non-controlling interest in Geneos
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,169,998
|
|
|
2,169,998
|
|
|||||||
Net loss attributable to common stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,541,054
|
)
|
|
—
|
|
|
(594,350
|
)
|
|
(33,135,404
|
)
|
|||||||
Unrealized loss on short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,929,538
|
)
|
|
—
|
|
|
(1,929,538
|
)
|
|||||||
Balance at March 31, 2020
|
23
|
|
|
$
|
—
|
|
|
145,915,100
|
|
|
$
|
145,915
|
|
|
$
|
957,962,628
|
|
|
$
|
(772,326,709
|
)
|
|
$
|
(1,456,930
|
)
|
|
$
|
3,529,199
|
|
|
$
|
187,854,103
|
|
Issuance of common stock for cash
|
—
|
|
|
—
|
|
|
12,041,178
|
|
|
12,041
|
|
|
121,706,881
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
121,718,922
|
|
|||||||
Conversion of preferred stock to common stock
|
(14
|
)
|
|
—
|
|
|
5,147
|
|
|
5
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Exercise of stock options for cash and vesting of RSUs, net of tax payments
|
—
|
|
|
—
|
|
|
794,986
|
|
|
795
|
|
|
4,421,449
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,422,244
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,654,289
|
|
|
—
|
|
|
—
|
|
|
8,146
|
|
|
3,662,435
|
|
|||||||
Acquisition of non-controlling interest in Geneos
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
209,971
|
|
|
209,971
|
|
|||||||
Deconsolidation of Geneos
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,181,640
|
)
|
|
(3,181,640
|
)
|
|||||||
Net loss attributable to common stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(128,703,059
|
)
|
|
—
|
|
|
(469,407
|
)
|
|
(129,172,466
|
)
|
|||||||
Unrealized gain on short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
846,900
|
|
|
—
|
|
|
846,900
|
|
|||||||
Balance at June 30, 2020
|
9
|
|
|
$
|
—
|
|
|
158,756,411
|
|
|
$
|
158,756
|
|
|
$
|
1,087,745,242
|
|
|
$
|
(901,029,768
|
)
|
|
$
|
(610,030
|
)
|
|
$
|
96,269
|
|
|
$
|
186,360,469
|
|
|
Three and Six Months Ended June 30, 2019
|
||||||||||||||||||||||||||||||||
|
Preferred stock
|
|
Common stock
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Number
of shares |
|
Amount
|
|
Number
of shares |
|
Amount
|
|
Additional
paid-in capital |
|
Accumulated
deficit |
|
Accumulated
other comprehensive income (loss) |
|
Non-
controlling interest |
|
Total
stockholders’ equity |
||||||||||||||||
Balance at December 31, 2018
|
23
|
|
|
$
|
—
|
|
|
97,225,810
|
|
|
$
|
97,226
|
|
|
$
|
707,794,215
|
|
|
$
|
(620,426,436
|
)
|
|
$
|
(528,867
|
)
|
|
$
|
96,269
|
|
|
$
|
87,032,407
|
|
Issuance of common stock for cash
|
—
|
|
|
—
|
|
|
183,200
|
|
|
183
|
|
|
907,147
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
907,330
|
|
|||||||
Exercise of stock options for cash and vesting of RSUs, net of tax payments
|
—
|
|
|
—
|
|
|
525,000
|
|
|
525
|
|
|
(719,922
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(719,397
|
)
|
|||||||
Equity component of issuance of convertible notes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,752,698
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,752,698
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,432,796
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,432,796
|
|
|||||||
Acquisition of non-controlling interest in Geneos
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,030,107
|
|
|
3,030,107
|
|
|||||||
Net loss attributable to common stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,219,262
|
)
|
|
—
|
|
|
(69,605
|
)
|
|
(29,288,867
|
)
|
|||||||
Unrealized gain on short-term investments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
819,177
|
|
|
—
|
|
|
819,177
|
|
|||||||
Balance at March 31, 2019
|
23
|
|
|
$
|
—
|
|
|
97,934,010
|
|
|
$
|
97,934
|
|
|
$
|
727,166,934
|
|
|
$
|
(649,645,698
|
)
|
|
$
|
290,310
|
|
|
$
|
3,056,771
|
|
|
$
|
80,966,251
|
|
Issuance of common stock for cash
|
—
|
|
|
—
|
|
|
476,600
|
|
|
476
|
|
|
1,388,510
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,388,986
|
|
|||||||
Exercise of stock options for cash and vesting of RSUs, net of tax payments
|
—
|
|
|
—
|
|
|
173,761
|
|
|
174
|
|
|
(81,433
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(81,259
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,345,378
|
|
|
—
|
|
|
—
|
|
|
9,817
|
|
|
3,355,195
|
|
|||||||
Cost of acquisition of non-controlling interest in Geneos
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,569
|
)
|
|
(13,569
|
)
|
|||||||
Net loss attributable to common stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,387,226
|
)
|
|
—
|
|
|
(191,850
|
)
|
|
(29,579,076
|
)
|
|||||||
Unrealized gain on short-term investments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
441,545
|
|
|
—
|
|
|
441,545
|
|
|||||||
Balance at June 30, 2019
|
23
|
|
|
$
|
—
|
|
|
98,584,371
|
|
|
$
|
98,584
|
|
|
$
|
731,819,389
|
|
|
$
|
(679,032,924
|
)
|
|
$
|
731,855
|
|
|
$
|
2,861,169
|
|
|
$
|
56,478,073
|
|
|
Six Months Ended June 30,
|
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(162,307,870
|
)
|
|
$
|
(58,867,943
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation
|
1,608,060
|
|
|
1,863,225
|
|
||
Amortization of intangible assets
|
273,540
|
|
|
533,126
|
|
||
Change in fair value of derivative liability
|
110,976,977
|
|
|
—
|
|
||
Stock-based compensation
|
7,663,988
|
|
|
6,787,991
|
|
||
Non-cash interest expense
|
3,013,942
|
|
|
2,851,031
|
|
||
Amortization of premiums on investments
|
—
|
|
|
1,962
|
|
||
Loss on short-term investments
|
576,001
|
|
|
(93,273
|
)
|
||
Settlement of receivable with shares of common stock from affiliated entity (PLS)
|
(1,713,770
|
)
|
|
—
|
|
||
Gain on deconsolidation of Geneos
|
(4,121,075
|
)
|
|
|
|
||
(Gain) loss on equity investment in affiliated entities
|
(9,298,443
|
)
|
|
923,315
|
|
||
Share of net loss in Geneos
|
901,757
|
|
|
|
|
||
Net unrealized loss on available-for-sale equity securities
|
691,458
|
|
|
—
|
|
||
Non-cash lease expense
|
517,865
|
|
|
412,533
|
|
||
Tax benefit from other unrealized gains on short-term investments
|
—
|
|
|
(335,228
|
)
|
||
Unrealized transaction loss on foreign-currency denominated debt
|
(474,071
|
)
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(2,813,086
|
)
|
|
3,186,131
|
|
||
Accounts receivable from affiliated entities
|
865,832
|
|
|
(258,353
|
)
|
||
Prepaid expenses and other current assets
|
(3,084,082
|
)
|
|
(902,772
|
)
|
||
Prepaid expenses and other current assets from affiliated entities
|
(1,330,601
|
)
|
|
20,059
|
|
||
Other assets
|
116,242
|
|
|
(183,091
|
)
|
||
Accounts payable and accrued expenses
|
(732,774
|
)
|
|
(9,187,074
|
)
|
||
Accrued clinical trial expenses
|
2,882,486
|
|
|
(1,033,367
|
)
|
||
Accounts payable and accrued expenses due to affiliated entities
|
4,634
|
|
|
(324,224
|
)
|
||
Deferred revenue
|
(92,426
|
)
|
|
(137,046
|
)
|
||
Deferred revenue from affiliated entities
|
62,500
|
|
|
62,500
|
|
||
Operating lease right-of-use assets and liabilities, net
|
(1,022,951
|
)
|
|
(786,079
|
)
|
||
Grant funding liability
|
4,265,023
|
|
|
(1,695,191
|
)
|
||
Grant funding liability from affiliated entities
|
(63,050
|
)
|
|
817,125
|
|
||
Other liabilities
|
29,686
|
|
|
(34,688
|
)
|
||
Net cash used in operating activities
|
(52,604,208
|
)
|
|
(56,379,331
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of investments
|
(138,698,249
|
)
|
|
(73,698,391
|
)
|
||
Proceeds from sale or maturity of investments
|
47,455,067
|
|
|
46,688,689
|
|
||
Purchases of capital assets
|
(176,534
|
)
|
|
(739,808
|
)
|
||
Decrease in cash resulting from the deconsolidation of Geneos
|
(2,774,851
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(94,194,567
|
)
|
|
(27,749,510
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of convertible senior notes
|
—
|
|
|
75,658,953
|
|
||
Proceeds from issuance of common stock, net of issuance costs
|
329,960,855
|
|
|
2,296,316
|
|
||
Proceeds from stock option exercises
|
9,599,514
|
|
|
92,272
|
|
||
Taxes paid related to net share settlement of equity awards
|
(2,076,567
|
)
|
|
(892,928
|
)
|
||
Acquisition of non-controlling interest
|
2,379,969
|
|
|
3,016,538
|
|
||
Proceeds from Geneos issuance of note payable
|
171,620
|
|
|
—
|
|
||
Net cash provided by financing activities
|
340,035,391
|
|
|
80,171,151
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
||
Increase (Decrease) in cash and cash equivalents
|
193,236,616
|
|
|
(3,957,690
|
)
|
||
Cash and cash equivalents, beginning of period
|
22,196,097
|
|
|
23,693,633
|
|
||
Cash and cash equivalents, end of period
|
$
|
215,432,713
|
|
|
$
|
19,735,943
|
|
|
|
|
|
||||
Supplemental disclosures:
|
|
|
|
||||
Amounts accrued for purchases of property and equipment
|
$
|
1,620
|
|
|
$
|
—
|
|
Interest paid
|
$
|
2,636,454
|
|
|
$
|
—
|
|
Right-of-use assets obtained in exchange for lease obligations
|
$
|
—
|
|
|
$
|
14,634,769
|
|
|
|
|
As of June 30, 2020
|
||||||||||||||
|
Contractual
Maturity (in years)
|
Cost
|
|
Gross Unrealized
Gains
|
|
Gross Unrealized
Losses
|
|
Fair Market Value
|
|||||||||
Mutual funds
|
---
|
|
$
|
149,641,400
|
|
|
$
|
1,180,185
|
|
|
$
|
(1,871,643
|
)
|
|
$
|
148,949,942
|
|
Corporate debt securities
|
---
|
|
4,625,000
|
|
|
14,400
|
|
|
(376,600
|
)
|
|
4,262,800
|
|
||||
Certificates of deposit
|
Less than 1
|
|
3,000,000
|
|
|
38,360
|
|
|
(20,000
|
)
|
|
3,018,360
|
|
||||
|
|
|
$
|
157,266,400
|
|
|
$
|
1,232,945
|
|
|
$
|
(2,268,243
|
)
|
|
$
|
156,231,102
|
|
|
|
|
As of December 31, 2019
|
||||||||||||||
|
Contractual
Maturity (in years)
|
Cost
|
|
Gross Unrealized
Gains
|
|
Gross Unrealized
Losses
|
|
Fair Market Value
|
|||||||||
Mutual funds
|
---
|
|
$
|
66,599,219
|
|
|
$
|
754,709
|
|
|
$
|
(15,911
|
)
|
|
$
|
67,338,017
|
|
|
Fair Value Measurements at
|
||||||||||||||
|
June 30, 2020
|
||||||||||||||
|
Total
|
|
Quoted Prices
in Active Markets
(Level 1)
|
|
Significant
Other Unobservable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Mutual funds
|
148,949,942
|
|
|
148,949,942
|
|
|
—
|
|
|
—
|
|
||||
Corporate debt securities
|
4,262,800
|
|
|
4,262,800
|
|
|
—
|
|
|
—
|
|
||||
Certificates of deposit
|
3,018,360
|
|
|
—
|
|
|
3,018,360
|
|
|
—
|
|
||||
Investment in affiliated entities
|
17,327,569
|
|
|
17,327,569
|
|
|
—
|
|
|
—
|
|
||||
Total assets
|
$
|
173,558,671
|
|
|
$
|
170,540,311
|
|
|
$
|
3,018,360
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liability (Note 9)
|
$
|
119,796,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
119,796,000
|
|
|
Total liabilities
|
$
|
119,796,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
119,796,000
|
|
|
Fair Value Measurements at
|
||||||||||||||
|
December 31, 2019
|
||||||||||||||
|
Total
|
|
Quoted Prices
in Active Markets
(Level 1)
|
|
Significant
Other Unobservable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
2,349,729
|
|
|
$
|
2,349,729
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Mutual funds
|
67,338,017
|
|
|
67,338,017
|
|
|
—
|
|
|
—
|
|
||||
Investment in affiliated entities
|
6,315,356
|
|
|
6,315,356
|
|
|
—
|
|
|
—
|
|
||||
Total assets
|
$
|
76,003,102
|
|
|
$
|
76,003,102
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liability (Note 9)
|
$
|
8,819,023
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,819,023
|
|
Total Liabilities
|
$
|
8,819,023
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,819,023
|
|
Balance at December 31, 2019
|
$
|
8,819,023
|
|
Change in fair value
|
110,976,977
|
|
|
Balance at June 30, 2020
|
$
|
119,796,000
|
|
|
|
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
|
Weighted Average Useful
Life
(Yrs)
|
Gross
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
|||||||||||||
Indefinite lived:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill(a)
|
|
|
$
|
10,513,371
|
|
|
$
|
—
|
|
|
$
|
10,513,371
|
|
|
$
|
10,513,371
|
|
|
$
|
—
|
|
|
$
|
10,513,371
|
|
Definite lived:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Licenses
|
10
|
|
1,323,761
|
|
|
(1,262,478
|
)
|
|
61,283
|
|
|
1,323,761
|
|
|
(1,248,104
|
)
|
|
75,657
|
|
||||||
Bioject(b)
|
12
|
|
5,100,000
|
|
|
(2,322,222
|
)
|
|
2,777,778
|
|
|
5,100,000
|
|
|
(2,175,556
|
)
|
|
2,924,444
|
|
||||||
Other(c)
|
18
|
|
4,050,000
|
|
|
(3,468,750
|
)
|
|
581,250
|
|
|
4,050,000
|
|
|
(3,356,250
|
)
|
|
693,750
|
|
||||||
Total intangible assets
|
11
|
|
10,473,761
|
|
|
(7,053,450
|
)
|
|
3,420,311
|
|
|
10,473,761
|
|
|
(6,779,910
|
)
|
|
3,693,851
|
|
||||||
Total goodwill and intangible assets
|
|
|
$
|
20,987,132
|
|
|
$
|
(7,053,450
|
)
|
|
$
|
13,933,682
|
|
|
$
|
20,987,132
|
|
|
$
|
(6,779,910
|
)
|
|
$
|
14,207,222
|
|
(a)
|
Goodwill was recorded from the Inovio AS acquisition in January 2005, the acquisition of VGX in June 2009 and the acquisition of Bioject in April 2016 for $3.9 million, $6.2 million and $400,000, respectively.
|
(b)
|
Bioject intangible assets represent the estimated fair value of developed technology and intellectual property which were recorded from the Bioject asset acquisition.
|
(c)
|
Other intangible assets represent the estimated fair value of acquired intellectual property from the Inovio AS acquisition.
|
Principal amount
|
$
|
78,500,000
|
|
Unamortized debt discount on the liability component
|
(12,619,675
|
)
|
|
Unamortized debt issuance cost
|
(1,736,898
|
)
|
|
Accrued interest
|
1,700,833
|
|
|
Net carrying amount
|
$
|
65,844,260
|
|
Principal amount
|
$
|
14,993,753
|
|
Unamortized debt discount
|
(5,600,302
|
)
|
|
Unamortized debt issuance cost
|
(211,272
|
)
|
|
Accretion of premium associated with the August 2019 Bonds
|
519,085
|
|
|
Accrued interest
|
37,484
|
|
|
Net carrying amount
|
$
|
9,738,748
|
|
Principal amount
|
$
|
3,915,035
|
|
Unamortized debt issuance cost
|
(40,681
|
)
|
|
Accretion of premium associated with the December 2019 Bonds
|
95,638
|
|
|
Accrued interest
|
9,788
|
|
|
Net carrying amount
|
$
|
3,979,780
|
|
|
|
Convertible Notes (1)
|
|
August 2019 Bonds (2)
|
|
December 2019 Bonds (2)
|
|
Total
|
||||||||
Remainder of 2020
|
|
$
|
2,551,000
|
|
|
$
|
75,000
|
|
|
$
|
20,000
|
|
|
$
|
2,646,000
|
|
2021
|
|
5,103,000
|
|
|
150,000
|
|
|
39,000
|
|
|
5,292,000
|
|
||||
2022
|
|
5,103,000
|
|
|
150,000
|
|
|
39,000
|
|
|
5,292,000
|
|
||||
2023
|
|
5,103,000
|
|
|
150,000
|
|
|
39,000
|
|
|
5,292,000
|
|
||||
2024
|
|
81,051,000
|
|
|
19,270,000
|
|
|
5,040,000
|
|
|
105,361,000
|
|
||||
Total
|
|
$
|
98,911,000
|
|
|
$
|
19,795,000
|
|
|
$
|
5,177,000
|
|
|
$
|
123,883,000
|
|
|
|
|
|
|
Outstanding as of
|
||||||
|
Authorized
|
|
Issued
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
Common Stock, par value $0.001 per share
|
600,000,000
|
|
|
158,756,411
|
|
|
158,756,411
|
|
|
101,361,034
|
|
Series C Preferred Stock, par value $0.001 per share
|
1,091
|
|
|
1,091
|
|
|
9
|
|
|
23
|
|
|
|
||||
Common Stock Equivalents
|
2020
|
|
2019
|
||
Options to purchase common stock
|
9,193,096
|
|
|
10,770,319
|
|
Restricted stock units
|
2,868,665
|
|
|
1,580,192
|
|
Convertible preferred stock
|
3,309
|
|
|
8,456
|
|
Convertible notes
|
14,585,653
|
|
|
14,585,653
|
|
August 2019 Bonds
|
4,962,364
|
|
|
—
|
|
December 2019 Bonds
|
1,009,450
|
|
|
—
|
|
Total
|
32,622,537
|
|
|
26,944,620
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Risk-free interest rate
|
0.40%
|
|
2.31%
|
|
0.67%
|
|
2.43%
|
Expected volatility
|
80%
|
|
70%
|
|
77%
|
|
70%
|
Expected life in years
|
5.9
|
|
6.2
|
|
5.9
|
|
6.2
|
Dividend yield
|
—
|
|
—
|
|
—
|
|
—
|
Remainder of 2020
|
$
|
1,956,000
|
|
2021
|
3,968,000
|
|
|
2022
|
4,045,000
|
|
|
2023
|
4,023,000
|
|
|
2024
|
3,001,000
|
|
|
Thereafter
|
12,951,000
|
|
|
Total remaining lease payments
|
29,944,000
|
|
|
Less: present value adjustment
|
(8,482,000
|
)
|
|
Total operating lease liabilities
|
21,462,000
|
|
|
Less: current portion
|
(2,201,000
|
)
|
|
Long-term operating lease liabilities
|
$
|
19,261,000
|
|
|
|
||
Weighted-average remaining lease term
|
7.8 years
|
|
|
Weighted-average discount rate
|
8.4
|
%
|
Working capital (excluding cash)
|
$
|
(59,992
|
)
|
Note Payable
|
171,620
|
|
|
Fixed Assets, net of accumulated depreciation
|
(16,340
|
)
|
|
Carrying value of noncontrolling interest
|
3,181,640
|
|
|
Fair value of investment in Geneos retained
|
3,618,998
|
|
|
Gain on deconsolidation of Geneos
|
(4,121,075
|
)
|
|
Decrease in cash resulting from the deconsolidation of Geneos
|
$
|
2,774,851
|
|
Geneos Share Class
|
Shares
|
|
Price per Share
|
|
Fair Value
|
|||||
Common
|
3,000,000
|
|
|
$
|
0.273
|
|
|
$
|
819,000
|
|
Preferred
|
2,113,206
|
|
|
$
|
1.325
|
|
|
$
|
2,799,998
|
|
Total
|
5,113,206
|
|
|
|
|
$
|
3,618,998
|
|
Expected term (years)
|
2.92
|
Volatility
|
70%
|
Risk-free interest rate
|
2.46%
|
Enterprise value
|
$4,966,531
|
•
|
developing and securing United States and/or foreign regulatory approvals for our product candidates, including securing regulatory approval for conducting clinical trials with product candidates;
|
•
|
developing our electroporation-based DNA delivery technology; and
|
•
|
commercializing any products for which we receive approval from the FDA and foreign regulatory authorities.
|
•
|
increasing our vulnerability to adverse economic and industry conditions;
|
•
|
limiting our ability to obtain additional financing;
|
•
|
requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes;
|
•
|
limiting our flexibility to plan for, or react to, changes in our business;
|
•
|
diluting the interests of our existing stockholders if we issue additional shares of our common stock upon conversion of any convertible debt, such as the Notes and the December 2019 Bonds, in accordance with their respective terms; and
|
•
|
placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital.
|
•
|
the progress of our current and new product development programs;
|
•
|
the progress, scope and results of our pre-clinical and clinical testing;
|
•
|
the time and cost involved in obtaining regulatory approvals;
|
•
|
the cost of manufacturing our products and product candidates;
|
•
|
the cost of prosecuting, enforcing and defending against patent infringement claims and other intellectual property rights;
|
•
|
debt service obligations on the Notes and the December 2019 Bonds;
|
•
|
competing technological and market developments; and
|
•
|
our ability and costs to establish and maintain collaborative and other arrangements with third parties to assist in potentially bringing our products to market.
|
•
|
variations in the level of expenses related to our electroporation equipment, product candidates or future development programs;
|
•
|
expenses related to corporate transactions, including ones not fully completed;
|
•
|
addition or termination of clinical trials or funding support;
|
•
|
any intellectual property infringement lawsuit in which we may become involved;
|
•
|
any legal claims that may be asserted against us or any of our officers;
|
•
|
regulatory developments affecting our electroporation equipment and product candidates or those of our competitors;
|
•
|
debt service obligations on the Notes and the December 2019 Bonds;
|
•
|
changes in the fair value of our investments, including investments in affiliated entities;
|
•
|
our execution of any collaborative, licensing or similar arrangements, and the timing of payments we may make or receive under these arrangements; and
|
•
|
if any of our products receives regulatory approval, the levels of underlying demand for our products.
|
•
|
we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our electroporation equipment or product candidate is safe and effective for any indication;
|
•
|
the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;
|
•
|
the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;
|
•
|
we may not be successful in enrolling a sufficient number of participants in clinical trials;
|
•
|
we may be unable to demonstrate that our electroporation equipment or product candidate's clinical and other benefits outweigh its safety risks;
|
•
|
we may be unable to demonstrate that our electroporation equipment or product candidate presents an advantage over existing therapies, or over placebo in any indications for which the FDA requires a placebo-controlled trial;
|
•
|
the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;
|
•
|
the data collected from clinical trials of our product candidates may not be sufficient to support the submission of a new drug application or other submission or to obtain regulatory approval in the United States or elsewhere;
|
•
|
the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of us or third-party manufacturers with which we or our collaborators contract for clinical and commercial supplies; and
|
•
|
the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
|
•
|
obtaining regulatory approval to commence a clinical trial;
|
•
|
adverse results from third party clinical trials involving gene-based therapies and the regulatory response thereto;
|
•
|
reaching agreement on acceptable terms with prospective CROs and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;
|
•
|
future bans or stricter standards imposed on clinical trials of gene-based therapy;
|
•
|
manufacturing sufficient quantities of our electroporation equipment and product candidates for use in clinical trials;
|
•
|
obtaining institutional review board, or IRB, approval to conduct a clinical trial at a prospective site;
|
•
|
slower than expected recruitment and enrollment of patients to participate in clinical trials for a variety of reasons, including competition from other clinical trial programs for similar indications;
|
•
|
conducting clinical trials with sites internationally due to regulatory approvals and meeting international standards;
|
•
|
retaining patients who have initiated a clinical trial but may be prone to withdraw due to side effects from the therapy, lack of efficacy or personal issues, or who are lost to further follow-up;
|
•
|
collecting, reviewing and analyzing our clinical trial data; and
|
•
|
global unrest, global pathogen outbreaks or pandemics, terrorist activities, and economic and other external factors.
|
•
|
failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols;
|
•
|
inspection of the clinical trial operations or trial sites by the FDA or other regulatory authorities resulting in the imposition of a clinical hold;
|
•
|
unforeseen safety issues; and
|
•
|
lack of adequate funding to continue the clinical trial.
|
•
|
issue Warning Letters or untitled letters;
|
•
|
impose civil or criminal penalties;
|
•
|
suspend regulatory approval;
|
•
|
suspend any ongoing clinical trials;
|
•
|
refuse to approve pending applications or supplements to applications filed by us;
|
•
|
impose restrictions on operations, including costly new manufacturing requirements; or
|
•
|
seize or detain products or require us to initiate a product recall.
|
•
|
decreased demand for our product candidates;
|
•
|
impairment of our business reputation;
|
•
|
withdrawal of clinical trial participants;
|
•
|
costs of related litigation;
|
•
|
distraction of management's attention from our primary business;
|
•
|
substantial monetary awards to patients or other claimants;
|
•
|
loss of revenues; and
|
•
|
inability to commercialize our products.
|
•
|
our ability to provide acceptable evidence of safety and efficacy;
|
•
|
the relative convenience and ease of administration;
|
•
|
the prevalence and severity of any actual or perceived adverse side effects;
|
•
|
limitations or warnings contained in a product's FDA-approved labeling, including, for example, potential “black box” warnings
|
•
|
availability of alternative treatments;
|
•
|
pricing and cost effectiveness;
|
•
|
the effectiveness of our or any future collaborators' sales and marketing strategies;
|
•
|
our ability to obtain sufficient third-party coverage and adequate reimbursement; and
|
•
|
the willingness of patients to pay out of pocket in the absence of third-party coverage.
|
•
|
imposed an annual excise tax of 2.3% on any entity that manufactures or imports medical devices offered for sale in the United States, with limited exceptions, although the effective rate paid may be lower. Under the Consolidated Appropriations Act of 2016, the excise tax was suspended through December 31, 2017, and under the continuing resolution on appropriations for fiscal year 2018, or 2018 Appropriations Resolution, signed by President Trump on January 22, 2018, was further suspended through December 31, 2019;
|
•
|
created an annual, nondeductible fee on any entity that manufactures or imports certain specified branded prescription drugs and biologic agents apportioned among these entities according to their market share in some government healthcare programs;
|
•
|
increased the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program, to 23.1% and 13% of the average manufacturer price for most branded and generic drugs, respectively and capped the total rebate amount for innovator drugs at 100% of the Average Manufacturer Price, or AMP;
|
•
|
created new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for certain drugs and biologics that are inhaled, infused, instilled, implanted or injected;
|
•
|
expanded eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability;
|
•
|
expanded the entities eligible for discounts under the Public Health program;
|
•
|
created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;
|
•
|
established a Center for Medicare & Medicaid Innovation at the Centers for Medicare & Medicaid Services, or CMS, to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending that began on January 1, 2011; and
|
•
|
created a licensure framework for follow on biologic products.
|
•
|
our ability to set a price we believe is fair for our products;
|
•
|
our ability to generate revenues and achieve or maintain profitability;
|
•
|
the availability of capital; and
|
•
|
our ability to obtain timely approval of our products.
|
•
|
the federal healthcare program Anti-Kickback Statute, which prohibits, among other things, people from soliciting, receiving or providing remuneration, directly or indirectly, to induce or reward either the referral of an individual, or ordering, or leasing of an item, good, facility or service, for which payment may be made by a federal healthcare program such as Medicare or Medicaid. The intent standard under the federal healthcare program Anti-Kickback Statute was amended by the ACA to a stricter standard such that a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. Further, the
|
•
|
federal civil and criminal false claims laws, including the civil False Claims Act, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent;
|
•
|
the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which prohibits, among other things, executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters. Similar to the federal healthcare program Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
|
•
|
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information on certain individuals and entities;
|
•
|
the Physician Payments Sunshine Act, created under the ACA, which requires pharmaceutical companies to record any transfers of value made to doctors and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members, and to annually report such data to CMS;
|
•
|
the Federal Food, Drug, and Cosmetic Act, which among other things, strictly regulates drug product marketing, prohibits manufacturers from marketing drug products for off-label use and regulates the distribution of drug samples;
|
•
|
the U.S. Foreign Corrupt Practices Act, which, among other things, prohibits companies issuing stock in the U.S. from bribing foreign officials for government contracts and other business;
|
•
|
state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers, state and local laws requiring the registration of pharmaceutical sales and medical representatives, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts; and
|
•
|
additional state and local laws such as laws in California and Massachusetts, which mandate implementation of compliance programs, compliance with industry ethics codes, and spending limits, and other state and local laws, such as laws in Vermont, Maine, and Minnesota which require reporting to state governments of gifts, compensation, and other remuneration to physicians.
|
•
|
exposure to unknown liabilities;
|
•
|
disruption of our business and diversion of our management's time and attention to develop acquired products or technologies;
|
•
|
incurrence of substantial debt or dilutive issuances of securities to pay for acquisitions;
|
•
|
higher than expected acquisition and integration costs;
|
•
|
increased amortization expenses;
|
•
|
difficulty and cost in combining the operations and personnel of any acquired businesses with our operations and personnel;
|
•
|
impairment of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership; and
|
•
|
inability to retain key employees of any acquired businesses.
|
•
|
we, or the parties from whom we have acquired or licensed patent rights, may not have been the first to file the underlying patent applications or the first to make the inventions covered by such patents;
|
•
|
the named inventors or co-inventors of patents or patent applications that we have licensed or acquired may be incorrect, which may give rise to inventorship and ownership challenges;
|
•
|
others may develop similar or alternative technologies, or duplicate any of our products or technologies that may not be covered by our patents, including design-arounds;
|
•
|
pending patent applications may not result in issued patents;
|
•
|
the issued patents covering our products and technologies may not provide us with any competitive advantages or have any commercial value;
|
•
|
the issued patents may be challenged and invalidated, or rendered unenforceable;
|
•
|
the issued patents may be subject to reexamination, which could result in a narrowing of the scope of claims or cancellation of claims found unpatentable;
|
•
|
we may not develop or acquire additional proprietary technologies that are patentable;
|
•
|
our trademarks may be invalid or subject to a third party's prior use; or
|
•
|
our ability to enforce our patent rights will depend on our ability to detect infringement, and litigation to enforce patent rights may not be pursued due to significant financial costs, diversion of resources, and unpredictability of a favorable result or ruling.
|
•
|
we may become involved in time-consuming and expensive litigation, even if the claim is without merit, the third party's patent is invalid or we have not infringed;
|
•
|
we may become liable for substantial damages for past infringement if a court decides that our technologies infringe upon a third party's patent;
|
•
|
we may be enjoined by a court to stop making, selling or licensing our products or technologies without a license from a patent holder, which may not be available on commercially acceptable terms, if at all, or which may require us to pay substantial royalties or grant cross-licenses to our patents; and
|
•
|
we may have to redesign our products so that they do not infringe upon others' patent rights, which may not be possible or could require substantial investment or time.
|
•
|
developments concerning any research and development, clinical trials, manufacturing, and marketing efforts or collaborations, particularly developments concerning the prospects of INO-4800 as a potential vaccine candidate against COVID-19;
|
•
|
fluctuating public or scientific interest in the potential for COVID-19 and other pandemic or other applications for our vaccine or other product candidates;
|
•
|
our announcement of significant acquisitions, strategic collaborations, joint ventures or capital commitments;
|
•
|
fluctuations in our operating results;
|
•
|
announcements of technological innovations;
|
•
|
new products or services that we or our competitors offer;
|
•
|
changes in the structure of healthcare payment systems;
|
•
|
the initiation, conduct and/or outcome of intellectual property and/or litigation matters;
|
•
|
changes in financial or other estimates by securities analysts or other reviewers or evaluators of our business;
|
•
|
conditions or trends in bio-pharmaceutical or other healthcare industries;
|
•
|
regulatory developments in the United States and other countries;
|
•
|
negative perception of gene-based therapy;
|
•
|
changes in the economic performance and/or market valuations of other biotechnology and medical device companies;
|
•
|
additions or departures of key personnel;
|
•
|
sales or other transactions involving our common stock;
|
•
|
changes in our capital structure;
|
•
|
sales or other transactions by executive officers or directors involving our common stock;
|
•
|
changes in accounting principles;
|
•
|
global unrest, terrorist activities, and economic and other external factors; and
|
•
|
catastrophic weather and/or global disease pandemics, such as the recent COVID-19 outbreak.
|
•
|
the authority of our board of directors to issue shares of undesignated preferred stock and to determine the rights, preferences and privileges of these shares, without stockholder approval;
|
•
|
all stockholder actions must be effected at a duly called meeting of stockholders and not by written consent; and
|
•
|
the elimination of cumulative voting.
|
Exhibit
Number
|
|
Description of Document
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101.INS
|
|
XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
|
|
|
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
*
|
This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.
|
|
|
#
|
Pursuant to Item 601(b)(10)(iv) of Regulation S-K promulgated by the SEC, certain portions of this exhibit have been redacted because such portions, indicated by asterisks, are both not material and would likely cause competitive harm to the Registrant if publicly disclosed. The Registrant hereby agrees to furnish supplementally to the SEC, upon its request, an unredacted copy of this exhibit.
|
|
|
Inovio Pharmaceuticals, Inc.
|
|
|
|
|
|
Date:
|
August 10, 2020
|
By
|
/s/ J. JOSEPH KIM
|
|
|
|
J. Joseph Kim
President, Chief Executive Officer and Director (On Behalf of the Registrant)
|
|
|
|
|
Date:
|
August 10, 2020
|
By
|
/s/ PETER KIES
|
|
|
|
Peter Kies
Chief Financial Officer (Principal Financial and Accounting Officer)
|
Awardee
|
|
Government
|
|
|
|
/s/ J. Joseph Kim
|
|
/s/ Lawrence Mize
|
Signature
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Signature
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J. Joseph Kim
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Lawrence Mize
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Printed Name
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Printed Name
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CEO
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Agreement Officer
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Title
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Title
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6/20/2020
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6/20/2020
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Date
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Date
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ii.
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disallow all or part of the cost of the activity or action not in compliance,
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iii.
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wholly or partly suspend or terminate this Agreement,
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iv.
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withhold further funding,
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vi.
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take any other legally available remedies.
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1.
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Repurchase Against Contractors Account.
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Primary Project Manager:
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Alternate Project Manager:
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[***]
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[***]
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[***]
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Primary Project Manager:
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Alternate Project Manager:
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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A.
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Statement of Work (SOW): The SOW, Appendix A, describes the scope of activities that will be undertaken by the Awardee to achieve the objective.
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B.
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Recommendations for Modifications: At any time during the term of this Agreement, progress or results may indicate that a change in the SOW would be beneficial to the project objectives. Recommendations for modifications, including justifications to support any changes to the SOW, will be documented in a letter and submitted by Awardee to the GPM with a copy to the OTAO. This letter will detail the technical, chronological and financial impact, if any, of the proposed modification to the project. Any resultant modification is subject to the mutual agreement of the Parties. The Government is not obligated to pay for additional or revised costs unless and until this Agreement is formally revised by the OTAO and made part of this Agreement. Any modification to this Agreement to account for recommended changes in the SOW or Payable Milestones will be considered a supplemental agreement.
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C.
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Review of Recommendations: The OTAO will be responsible for the review and verification of any recommendations to revise or otherwise modify the Agreement, the SOW, the milestone payments, or other proposed changes to the terms and conditions of this Agreement.
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D.
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Minor Modifications: The Government may make minor or administrative Agreement modifications unilaterally (e.g., changes in the paying office or appropriation data, changes to Awardee personnel proposed by Awardee, etc.).
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E.
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Amending the Agreement: The Government will be responsible for effecting all modifications to this Agreement, with the concurrence of the Awardee for modifications that are not minor or administrative. Administrative and material matters under this Agreement will be referred to OTAO.
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F.
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Modification Communications: No other communications, whether oral or in writing, that purport to change this Agreement are valid.
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G.
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Government Property: If applicable, terms and conditions applicable to Government Property shall be incorporated through Appendix D.
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G.
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WIDE AREA WORKFLOW PAYMENT INSTRUCTIONS (MAY 2013)
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Field Name in WAWF
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Data to be entered in WAWF
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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9.
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WAWF point of contact.
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A.
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Weekly Teleconferences and Communication
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B.
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Quarterly Progress Reports
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C.
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Quarterly Financial Status Report
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D.
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Expenditure Forecasts
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E.
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Final report
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F.
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Ad Hoc Meetings
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G.
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Patents - Reporting of Subject Inventions
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8.
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Miscellaneous Data Submissions
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J.
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Work Breakdown Structure
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K.
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Integrated Master Schedule
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L.
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Incident Report.
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M.
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Quality Agreement.
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(i)
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Definitions
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i.
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The Awardee shall provide to the Government all data, including top- line summaries and key conclusions from all studies, supporting the regulatory filing and commercial approval to the extent that such data, summaries, and conclusions are funded under this Agreement. In addition, the Awardee will offer the Government the opportunity to review and provide comments on a final draft of regulatory submissions which include data funded under this Agreement. The Government will review any such submissions promptly upon receipt. The Awardee shall reasonably consider any comments provided by the Government, and prior to submission shall provide notification to the Government of any additional edits or revisions. The Awardee shall keep the Government reasonably apprised of planned FDA meetings and post-meeting outcomes relating to activities funded under this Agreement.
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ii.
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Communications. The Awardee shall provide the Government with all communications and summaries thereof, both formal and informal, to or from FDA regarding the regulatory submissions subject to this Agreement and ensure that the Government representatives are invited to participate in any formal Sponsor meetings with the FDA. The Awardee shall use its best efforts to ensure that the Government representatives are invited to participate in any informal Sponsor meetings with the FDA so long as the Awardee has 48 hour advance notice of such Sponsor meeting from the FDA prior to the scheduled meeting time.
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iii.
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Non-compliance with section (C)(1)(i) or (C)(1)(ii) may result in termination of the agreement.
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i.
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if this agreement is terminated for nonperformance; or
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ii.
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the Contractor gives notice, required to be submitted to the Government no later than 30 business days, of any formal management decision to terminate this product development effort pre-market or to file for Federal bankruptcy protection.
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i.
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shall transfer possession, ownership and sponsorship or holdership of any Regulatory Application submitted solely for approval of the Technology (including any associated expedited review designation, priority review voucher, or marketing exclusivity eligibility or award), regulatory correspondence, and supporting regulatory information related to the Technology to the Government or its designee;
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ii.
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shall provide DoD or its designee with a letter (“Reference Letter”) providing permission to reference any Regulatory Application submitted to the FDA for a combination drug-device product that includes the Technology;
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iii.
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shall inform FDA of the transfer of sponsorship or holdership of the Regulatory Application transferred under section (c)(i) above or the Reference Letter issued under section (c)(ii) above; and
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iv.
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shall negotiate in good faith a non-exclusive license, at customary industry rates and under reasonable terms and conditions, to any patent, copyright or other intellectual property owned or controlled by the Awardee, developed prior to or outside the scope of this agreement, or any technical data that is necessary for the Government to pursue commercialization of this technology with a third party for sale to the Government or otherwise.
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ITEM NO
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SUPPLIES/SERVICES
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QUANTITY
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UNIT
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UNIT PRICE
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AMOUNT
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1
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$[***]
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ITEM NO
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SUPPLIES/SERVICES
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QUANTITY
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UNIT
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UNIT PRICE
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AMOUNT
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[***]
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[***]
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[***]
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$[***]
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$[***]
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CLIN INSPECT AT
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INSPECT BY
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ACCEPT AT
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ACCEPT BY
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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CLIN
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DELIVERY DATE QUANTITY SHIP TO ADDRESS DODAAC / CAGE
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ACRN
[***]
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CLIN/SLIN
[***]
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CIN
[***]
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AMOUNT
$[***]
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[***]
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[***]
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$[***]
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[***]
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[***]
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$[***]
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[***]
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[***]
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$[***]
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[***]
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[***]
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$[***]
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52.203-12
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Limitation On Payments To Influence Certain Federal Transactions
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52.204-19
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Incorporation by Reference of Representations and Certifications.
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52.204-21
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Basic Safeguarding of Covered Contractor Information Systems
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52.204-23
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Prohibition on Contracting for Hardware, Software, and Services Developed or Provided by Kaspersky Lab and Other Covered Entities.
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52.204-25
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Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment.
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52.209-10
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Prohibition on Contracting With Inverted Domestic Corporations
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252.204-7015
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Notice of Authorized Disclosure of Information for Litigation MAY 2016 Support
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252.209-7004
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Subcontracting With Firms That Are Owned or Controlled By MAY 2019
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The Government of a Country that is a State Sponsor of
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Terrorism
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252.211-7003
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Item Unique Identification and Valuation MAR 2016
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252.211-7005
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Substitutions for Military or Federal Specifications and NOV 2005
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Standards
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252.217-7027
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Contract Definitization DEC 2012
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252.217-7028
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Over And Above Work DEC 1991
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252.222-7006
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Restrictions on the Use of Mandatory Arbitration Agreements DEC 2010
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252.225-7012
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Preference For Certain Domestic Commodities DEC 2017
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252.225-7025
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Restriction on Acquisition of Forgings DEC 2009
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252.225-7041
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Correspondence in English JUN 1997
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252.225-7048
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Export-Controlled Items JUN 2013
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252.232-7010
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Levies on Contract Payments DEC 2006
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252.232-7017
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Accelerating Payments to Small Business Subcontractors-- APR 2020
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Prohibition on Fees and Consideration
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252.243-7001
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Pricing Of Contract Modifications DEC 1991
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252.243-7002
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Requests for Equitable Adjustment DEC 2012
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252.244-7000
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Subcontracts for Commercial Items JUN 2013
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(e)
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Definitions. The clause at FAR 52.202-1, Definitions, is incorporated herein by reference.
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(g)
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Invoice.
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(ii)
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Invoice date and number;
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(iii)
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Contract number, line item number and, if applicable, the order number;
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(iv)
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Description, quantity, unit of measure, unit price and extended price of the items delivered;
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(vi)
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Terms of any discount for prompt payment offered;
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(vii)
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Name and address of official to whom payment is to be sent;
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(viii)
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Name, title, and phone number of person to notify in event of defective invoice; and
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(x)
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Electronic funds transfer (EFT) banking information.
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(C)
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EFT banking information is not required if the Government waived the requirement to pay by EFT.
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(i)
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Payment.--
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(B)
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Affected contract number and delivery order number, if applicable;
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(C)
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Affected line item or subline item, if applicable; and
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(D)
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Contractor point of contact.
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(ii)
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Provide a copy of the remittance and supporting documentation to the Contracting Officer.
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(6)
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Interest.
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(iii)
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Final decisions. The Contracting Officer will issue a final decision as required by 33.211 if--
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(v)
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Amounts shall be due at the earliest of the following dates:
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(k)
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Taxes. The contract price includes all applicable Federal, State, and local taxes and duties.
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(t)
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Reserved.
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(u)
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Unauthorized Obligations.
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(iii)
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Any such clause is deemed to be stricken from the EULA, TOS, or similar legal instrument or agreement.
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(d)
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Comptroller General Examination of Record. The Contractor shall comply with the provisions of this paragraph
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(vi)
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52.222-21, Prohibition of Segregated Facilities (Apr 2015).
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(vii)
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52.222-26, Equal Opportunity (Sep 2016) (E.O. 11246).
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(viii)
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52.222-35, Equal Opportunity for Veterans (JUN 2020) (38 U.S.C. 4212).
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(ix)
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52.222-36, Equal Opportunity for Workers with Disabilities (JUN 2020) (29 U.S.C. 793).
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(x)
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52.222-37, Employment Reports on Veterans (JUN 2020) (38 U.S.C. 4212).
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(xii)
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52.222-41, Service Contract Labor Standards (Aug 2018), (41 U.S.C. chapter 67).
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(xiii)
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(A) 52.222-50, Combating Trafficking in Persons (JAN 2019) (22 U.S.C. chapter 78 and E.O. 13627).
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(xvi)
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52.222-54, Employment Eligibility Verification (Oct 2015) (E. O. 12989).
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(xvii)
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52.222-55, Minimum Wages Under Executive Order 13658 (Dec 2015) (E.O. 13658).
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(xviii)
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52.222-62, Paid Sick Leave Under Executive Order 13706 (Jan 2017) (E.O. 13706).
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(xix)
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(A) 52.224-3, Privacy Training (Jan 2017) (5 U.S.C. 552a).
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(c)
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WAWF access. To access WAWF, the Contractor shall—
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(i)
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For cost-type line items, including labor-hour or time-and-materials, submit a cost voucher.
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(ii)
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For fixed price line items—
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(iii)
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For customary progress payments based on costs incurred, submit a progress payment request.
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(iv)
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For performance based payments, submit a performance based payment request.
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(v)
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For commercial item financing, submit a commercial item financing request.
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Field Name in WAWF
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Data to be entered in WAWF
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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(5)
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Receiving report. The Contractor shall ensure a receiving report meets the requirements of DFARS Appendix F.
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(g)
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WAWF point of contact.
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(2)
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Contact the WAWF helpdesk at 866-618-5988, if assistance is needed.
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1.
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I have reviewed this quarterly report on Form 10-Q of Inovio Pharmaceuticals, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date:
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August 10, 2020
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/s/ J. JOSEPH KIM
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J. Joseph Kim
President, Chief Executive Officer and Director (Principal Executive Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of Inovio Pharmaceuticals, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date:
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August 10, 2020
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/s/ PETER KIES
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Peter Kies
Chief Financial Officer (Principal Financial and Accounting Officer)
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Date:
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August 10, 2020
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/s/ J. JOSEPH KIM
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J. Joseph Kim
President, Chief Executive Officer and Director
(Principal Executive Officer)
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Date:
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August 10, 2020
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/s/ PETER KIES
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Peter Kies
Chief Financial Officer
(Principal Financial and Accounting Officer)
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