Inovio Pharmaceuticals Inc. (NASDAQ: INO) shares dipped on Wednesday after the company said that it was taking measures to cut costs and its overall burn rate. When a company says it is cutting costs, one thing it can mean is that the firm is in for a rough road ahead.

Inovio said that it has sharpened its corporate strategy to focus on the commercial development of its late-stage HPV assets and reallocate capital to develop fast-to-market product candidates.

Inovio has cut selected early-stage research and development programs and discontinued further development of its Phase 1/2 study in advanced bladder cancer, while reducing its annual burn rate by 25% and its workforce by 28%.

It’s important to note that Inovio’s partner-funded programs will be unaffected by the realignment, including MEDI0457 in HPV-related cancers with AstraZeneca; Lassa and MERS vaccine programs with CEPI; the Bill & Melinda Gates Foundation-funded Zika dMAb clinical development program; and Inovio’s commercial intra-dermal 3PSP delivery device development funded by Medical CBRN Defense Consortium.

Looking on the balance sheet as of the March quarter, the company has roughly $128 million in cash, cash equivalents and short-term investments. This makes up about 44% of Inovio’s market cap of $294 million (prior to the stock move).

Dr. J. Joseph Kim, Inovio’s president and CEO, commented:

From a position of strength with a healthy balance sheet and a 200-person team, Inovio sharpened its focus to create a more efficient organization with greater financial flexibility and a longer runway. With a refined strategy, Inovio will continue to advance our later-stage HPV programs while devoting more resources to develop fast-to-market product candidates such as GBM, RRP and dBTEs. We continue to expect near-term value drivers in the second half of this year that include interim data from Phase 2 studies targeting HPV-related vulvar and anal dysplasia and from our Phase 2 GBM study. We also anticipate the potential for significant new partnerships as our technology continues to attract attention from U.S. and international markets.

Shares of Inovio traded down about 12% on Wednesday at $2.64, in a 52-week range of $2.15 to $6.30. The consensus price target is $10.25.

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