Let's welcome a new publicly traded drug-development company to the Philadelphia region.
Inovio Biomedical Corp., of San Diego, completed its acquisition of VGX Pharmaceuticals Inc., Blue Bell, on Monday. While Inovio will keep its headquarters on the West Coast, its new CEO is Joseph Kim, the cofounder of VGX.
In my book, wherever the CEO goes to sleep at night is where a company is based. And Kim, a former Merck executive, is a Philadelphian.
The all-stock transaction between these two companies, which have been working on a new generation of vaccines, called DNA vaccines, has been percolating for nearly 18 months.
VGX approached Inovio in January 2008 about a "merger of equals" transaction, according to a proxy statement filed with the Securities and Exchange Commission. That July, the two sides said they would combine, but shareholders didn't actually vote on the deal until late May.
Given the Great Cash Squeeze that's been mowing down biotech companies for the last year, it's a minor miracle that Inovio and VGX were able to get to this point.
Started in 1983, Inovio has piled up a deficit of $153 million.
Kim cofounded VGX with University of Pennsylvania vaccine researcher David B. Weiner in December 2000. Since then, VGX has racked up a deficit of $68 million.
Even though Inovio shares closed Wednesday at 69 cents, up 3 cents, any company that's working on vaccines receives a lot of attention right now, thanks to the global outbreak of swine flu.
On a conference call with analysts Tuesday, Kim said that experimental DNA vaccines could give medical professionals new tools in the battle against changing strains of diseases.
"The recent swine flu outbreak may not become the newest influenza pandemic, but it has dramatically captured the world's attention and highlighted the unmet need for vaccines with protective capabilities against evolving strains of the disease," he said.
Still, the company has only enough cash (about $14 million) to operate through the second quarter of 2010.