July 26, 2026  ·  Complaint filed July 23, 2026  ·  ded, No. 1:26-cv-00898

Newman News, By David Brunk

Read the filing

Andrews v. Shea Alleges Inovio Board Misled Investors on FDA Approval Path

Proxy Statements Accused of Omitting Critical Risks to INO-3107 BLA

The Verified Shareholder Derivative Complaint alleges that Inovio Pharmaceuticals Inc.’s officers and directors violated federal securities laws by issuing materially misleading proxy statements that omitted critical risks to the company’s lead drug candidate, INO-3107, and its path to FDA approval. The complaint, filed on July 22, 2026, and brought derivatively by shareholder Danny Andrews on behalf of Inovio, targets nine individual defendants—including CEO Jacqueline E. Shea and CFO Peter Kies—accusing them of breaching their fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets. The complaint asserts nine causes of action, including violations of Section 14(a) of the Exchange Act, Rule 10b-5, and Section 20(a) of the Exchange Act, as well as common law claims for breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets (Compl. ¶¶1-9).

The complaint centers on allegations that the defendants repeatedly assured investors of a clear path to accelerated approval for INO-3107, a DNA medicine for recurrent respiratory papillomatosis (RRP), while failing to disclose known risks that ultimately derailed the regulatory timeline. According to the filing, these misrepresentations spanned from October 2023 to December 2025 and were tied to public stock offerings that raised millions in proceeds, including approximately $33.2 million in April 2024 at an offering price of $7.693 per share and $7.692 per warrant, $27.6 million in December 2024 at an offering price of $3.00 per share and warrant, $22.4 million in July 2025 at an offering price of $1.75 per share and warrant, and $25 million in November 2025 (Compl. ¶¶75, 92, 104, 113). The April 2024 Offering included the sale of 2,536,258 shares and 2,135,477 pre-funded warrants, while the December 2024 Offering included 10,000,000 shares and warrants, and the July 2025 Offering included 14,285,715 shares and warrants (Compl. ¶¶75, 92, 104). The complaint alleges that the defendants’ misconduct exposed Inovio to "many millions of dollars" in legal liability and costs, including expenses related to a pending securities action arising from the same alleged misconduct (Compl. ¶197).

On August 9, 2024, following the disclosure of a delay in the Biologics License Application (BLA) submission for INO-3107, H.C. Wainwright cut Inovio’s price target to $12.00 from $15.00, reflecting concerns about the drug’s regulatory prospects (Compl. ¶85). Three days later, on August 12, 2024, Oppenheimer followed suit, cutting its price target to $33.00 from $40.00 (Compl. ¶85). These downgrades coincided with a 3.1% decline in Inovio’s stock price on August 9, 2024, when the company’s shares fell by $0.27 to close at $8.44 per share (Compl. ¶85). The complaint alleges that these analyst actions underscored the materiality of the undisclosed risks and further inflated the company’s stock price, which the defendants allegedly exploited to conduct subsequent offerings at artificially high valuations.

Nine Causes of Action Target Individual Defendants

The complaint asserts the following causes of action against the individual defendants:

• Count I: Violation of Section 14(a) of the Exchange Act (15 U.S.C. § 78n(a)(1)) and Rule 14a-9 (proxy statements) – against all Individual Defendants (Compl. ¶¶120-139). The complaint alleges that the defendants’ proxy statements were materially false and misleading because they omitted critical risks related to INO-3107’s regulatory path, including the lack of sufficient data to support accelerated approval and manufacturing issues with the CELLECTRA delivery device. The complaint further alleges that the 2025 Proxy Statement failed to disclose that "the Individual Defendants were actively violating the Code of Conduct at the time" (Compl. ¶134).
• Count II: Contribution under Section 10(b) of the Exchange Act, Rule 10b-5, and/or Section 20(a) of the Exchange Act – against Securities Action Defendants (Shea, Kies) (Compl. ¶¶160-169). The complaint alleges that the Securities Action Defendants caused Inovio to issue materially false and misleading statements in its public filings during the relevant period, including statements about INO-3107’s eligibility for accelerated approval. The complaint states that "Inovio has a federal law right of contribution against joint tortfeasors under Rule 10b-5" (Compl. ¶163).
• Count III: Violation of Rule 10b-5 (promulgated under Section 10(b) of the Exchange Act) – against all Defendants (Compl. ¶¶170-175). The complaint alleges that the defendants engaged in a scheme to defraud investors by issuing materially false and misleading statements about INO-3107’s regulatory prospects, including statements that "data from our completed Phase 1/2 clinical trial of INO-3107 for the treatment of RRP can be used to support the submission of a... BLA[] for review under the FDA’s accelerated approval program" (Q3 2023 10-Q, Compl. ¶65). The complaint further alleges that the defendants violated Rule 10b-5 by failing to disclose known risks, including the CELLECTRA manufacturing issues disclosed on August 8, 2024, and the FDA’s ultimate denial of accelerated approval eligibility on December 29, 2025.
• Count IV: Violation of Section 20(a) of the Exchange Act (control person liability) – against all Defendants (Compl. ¶¶176-181). The complaint alleges that the individual defendants exercised control over Inovio’s public statements and filings, including the 2025 Proxy Statement, and are therefore liable as control persons for the company’s violations of federal securities laws. The complaint states that the defendants "had access to non-public adverse information" and "exercised control over the wrongful acts and public statements" (Compl. ¶¶44-45).
• Count V: Breach of fiduciary duties (loyalty, good faith, due care, diligence) – against Individual Defendants (Compl. ¶¶182-187). The complaint alleges that the individual defendants breached their duties of loyalty and good faith by causing Inovio to issue false and misleading statements about the company’s financial and business prospects, including statements regarding INO-3107’s regulatory path. The complaint further alleges that the defendants failed to exercise reasonable supervision over the company’s financial affairs, as required by their roles (Compl. ¶¶47-49). The complaint states that the individual defendants "owed and owe Inovio the highest obligation of good faith, loyalty, and due care" (Compl. ¶176). The complaint also alleges that the defendants violated Inovio’s Code of Business Conduct and Ethics, which requires that "the Company requires honest and accurate recording and reporting of financial and other information... full, fair, accurate, timely, and understandable financial... disclosures" (Compl. ¶39).
• Count VI: Unjust enrichment – against Individual Defendants (Compl. ¶¶188-192). The complaint alleges that the individual defendants were unjustly enriched at the expense of and to the detriment of Inovio, citing their receipt of inflated compensation and stock awards while the company’s stock was artificially inflated. The complaint states, "the Individual Defendants were unjustly enriched at the expense of and to the detriment of Inovio" (Compl. ¶182). In 2025, the individual defendants received the following total compensation: Jacqueline E. Shea, $1,587,155; Peter Kies, $833,684; Simon X. Benito, $117,500; Roger D. Dansey, $72,095; Ann C. Miller, $91,750; Jay P. Shepard, $80,000; David B. Weiner, $52,500; Wendy L. Yarno, $82,500; and Lota S. Zoth, $77,500 (Compl. ¶¶17-26). The complaint further alleges that David B. Weiner received an additional $120,000 annually as Chair of the Scientific Advisory Board, including stock awards, which created a conflict of interest under the Code of Business Conduct (Compl. ¶131).
• Count VII: Abuse of control – against Individual Defendants (Compl. ¶¶193-196). The complaint alleges that the individual defendants abused their control over Inovio by causing the company to issue materially false and misleading statements, including in proxy statements and public filings, to artificially inflate the company’s stock price. The complaint further alleges that the defendants acted in concert to mislead shareholders, stating that "the Individual Defendants initiated a course of conduct to mislead shareholders about the Company’s prospects" (Compl. ¶52). The complaint alleges that the defendants’ misrepresentations allowed them to conduct public offerings at inflated prices, including the April 2024 Offering at $7.693 per share and $7.692 per warrant, the December 2024 Offering at $3.00 per share and warrant, and the July 2025 Offering at $1.75 per share and warrant (Compl. ¶¶75, 92, 104). The complaint also alleges that the defendants violated the Code of Business Conduct, which requires that "you must protect the Company’s assets and ensure their efficient and lawful use" (Compl. ¶41).
• Count VIII: Gross mismanagement – against Individual Defendants (Compl. ¶¶197-201). The complaint alleges that the individual defendants engaged in gross mismanagement by failing to disclose material risks related to INO-3107’s regulatory path, including manufacturing issues with the CELLECTRA delivery device and insufficient clinical data to support accelerated approval. The complaint cites the defendants’ failure to comply with Inovio’s Code of Business Conduct and Ethics, which requires "obeying the law, both in letter and in spirit," as evidence of gross mismanagement (Compl. ¶38). The Code also mandates that "business records and communications often become public, and you should avoid exaggeration, humor or sarcasm, derogatory remarks, guesswork, or inappropriate characterizations of people and companies" (Compl. ¶42). The complaint alleges that the defendants violated these principles by issuing materially false and misleading statements about INO-3107’s regulatory prospects, including statements that "INO-3107 has the potential to be the preferred product of choice for both patients and healthcare providers" (Compl. ¶95).
• Count IX: Waste of corporate assets – against Individual Defendants (Compl. ¶¶202-206). The complaint alleges that the individual defendants wasted corporate assets by causing Inovio to incur significant legal liability and costs, including expenses related to the pending securities action. The complaint further alleges that the defendants wasted corporate assets by approving excessive compensation and stock awards while the company’s financial prospects were misrepresented. The complaint states that Inovio expended "significant sums to rectify the Individual Defendants’ wrongdoing due to the Related Securities Action" (Compl. ¶50). The complaint also alleges that the defendants’ misconduct exposed Inovio to a "liar’s discount, a term applied to the stocks of companies who have been implicated in illegal behavior" (Compl. ¶138). The complaint further alleges that the defendants’ actions violated the Code of Business Conduct, which requires that "you must protect the Company’s assets and ensure their efficient and lawful use" (Compl. ¶41).

2025 Proxy Statement Accused of Concealing Regulatory Risks

The complaint alleges that the 2025 Proxy Statement, filed April 7, 2025, was materially misleading for failing to disclose that the defendants knew or recklessly disregarded that INO-3107’s Biologics License Application (BLA) was unlikely to receive accelerated approval or priority review from the FDA. The proxy statement proposed an amendment to the 2023 Omnibus Incentive Plan, seeking shareholder approval to add 2,200,000 shares to the plan, increasing the total available shares to approximately 2,224,460 (Compl. ¶130). The plaintiff contends that the proxy statement’s omission of these risks rendered it materially false and misleading under Section 14(a) of the Exchange Act, which prohibits proxy statements from containing “any statement which... is false or misleading with respect to any material fact” (Compl. ¶156).

The complaint alleges that the 2025 Proxy Statement failed to disclose that the individual defendants were actively violating Inovio’s Code of Business Conduct and Ethics at the time. The Code requires honest and accurate recording and reporting of financial and other information, stating, “The Company requires honest and accurate recording and reporting of financial and other information... full, fair, accurate, timely, and understandable financial... disclosures” (Compl. ¶39). The plaintiff contends that the proxy statement violated this principle by omitting material risks related to INO-3107’s regulatory prospects, including the defendants’ knowledge that “the INO-3107 BLA would be unlikely to receive accelerated approval or priority review from the FDA” (Compl. ¶135). The Code also requires employees to "protect the Company’s assets and ensure their efficient and lawful use," a principle the complaint alleges was violated by the defendants’ misrepresentations (Compl. ¶41). The complaint further alleges that the proxy statement failed to disclose that the defendants knew the company’s financial assertions were inaccurate, including statements about INO-3107’s commercial prospects, such as "INO-3107 could be the preferred product for patients and providers, if approved" (Compl. ¶101).

The complaint further alleges that the 2025 Proxy Statement was misleading because it failed to disclose that the board was not adequately exercising its risk oversight responsibilities. The complaint states that the proxy statement omitted material facts about the deficiencies in the CELLECTRA delivery device, delays in the INO-3107 BLA submission, and the overstatement of the drug’s regulatory and commercial prospects (Compl. ¶134). The complaint alleges that these omissions were material because they would have significantly altered the total mix of information available to shareholders voting on the proposed amendment to the incentive plan. The complaint also alleges that the proxy statement failed to disclose that the individual defendants knew the company’s financial assertions were inaccurate and that INO-3107’s regulatory prospects were overstated, including the defendants’ knowledge that "Defendants knew the INO-3107 BLA would be unlikely to receive accelerated approval or priority review from the FDA" (Compl. ¶135). The complaint further alleges that the proxy statement omitted material facts about the defendants’ violations of the Code of Business Conduct, which requires that "a conflict of interest exists when the private interest of an employee interferes with that person’s ability to advance the legitimate interests of the Company" (Compl. ¶40).

Board’s Risk Oversight Duties

The complaint alleges that the individual defendants breached their fiduciary duties of loyalty, good faith, and due care by failing to disclose material risks in the company’s public filings. The plaintiff contends that the Audit Committee, composed of defendants Simon X. Benito (Chair), Jay P. Shepard, and Lota S. Zoth, failed to fulfill its duties by allowing the company to issue misleading public filings. The Audit Committee Charter, in effect during the relevant period, required the committee to review the company’s financial statements, internal controls, and compliance with legal and regulatory requirements, including Sarbanes-Oxley Section 404 and the Foreign Corrupt Practices Act (Compl. ¶34). The complaint alleges that the Audit Committee must "review the Company’s financial statements, internal controls, and compliance with legal and regulatory requirements" (Compl. ¶34). The complaint further alleges that the Audit Committee defendants faced a substantial likelihood of liability for their failure to ensure accurate and complete disclosures in Inovio’s public filings (Compl. ¶149). Benito, who served as Board Chair since 2003, received total compensation of $117,500 in 2025, while Shepard and Zoth received $80,000 and $77,500, respectively (Compl. ¶¶20, 23, 26).

The complaint further alleges that the board’s failure to disclose known risks violated the Code of Business Conduct and Ethics, which mandates that employees “avoid and remediate any conflicts of interest.” The Code defines a conflict of interest as “when the private interest of an employee interferes with that person’s ability to advance the legitimate interests of the Company” (Compl. ¶40). The plaintiff contends that the board’s approval of the 2025 Proxy Statement, which proposed additional stock awards while omitting material risks, constituted a breach of these duties. The complaint alleges that the defendants’ actions were inconsistent with the Code’s requirement to “obeying the law, both in letter and in spirit,” as the board’s misrepresentations allegedly led to the waste of corporate assets (Compl. ¶38). The Code also requires that "a conflict of interest exists when the private interest of an employee interferes with that person’s ability to advance the legitimate interests of the Company," a principle the complaint alleges was violated by the defendants’ receipt of compensation and stock awards while the company’s stock was artificially inflated (Compl. ¶40). The complaint further alleges that the defendants violated the Code’s requirement to "avoid exaggeration, humor or sarcasm, derogatory remarks, guesswork, or inappropriate characterizations of people and companies" in their public statements (Compl. ¶42).

Alleged Self-Enrichment Through Inflated Compensation and Stock Awards

The complaint alleges that the individual defendants were unjustly enriched at the expense of and to the detriment of Inovio. In 2025, CEO Jacqueline Shea received total compensation of $1,587,155, while CFO Peter Kies received $833,684 (Compl. ¶¶17-18). The complaint highlights a potential conflict of interest involving board member David B. Weiner, who served on the board while receiving $120,000 annually as Chair of the Scientific Advisory Board, including stock awards (Compl. ¶131). The plaintiff alleges that this dual role created a conflict under the Code of Business Conduct, which requires employees to “avoid and remediate any conflicts of interest” (Compl. ¶40). The complaint further alleges that Weiner, who received total compensation of $52,500 in 2025, was incapable of acting independently due to this compensation and his prior role as Chair of the Scientific Advisory Board (Compl. ¶24, ¶145).

The complaint details the total compensation received by each board member in 2025: Simon X. Benito, $117,500; Roger D. Dansey, $72,095; Ann C. Miller, $91,750; Jay P. Shepard, $80,000; Wendy L. Yarno, $82,500; and Lota S. Zoth, $77,500 (Compl. ¶¶20-26). The complaint alleges that the board’s proposal to add 2,200,000 shares to the 2023 Omnibus Incentive Plan was materially misleading because it failed to disclose that the defendants knew the company’s financial assertions were inaccurate and that INO-3107’s regulatory prospects were overstated. The complaint states that the defendants’ misconduct exposed Inovio to a “liar’s discount, a term applied to the stocks of companies who have been implicated in illegal behavior” (Compl. ¶138). The plaintiff contends that the board’s actions resulted in the waste of corporate assets, as the company was forced to expend “many millions of dollars” in legal liability and costs, including expenses related to the pending securities action (Compl. ¶197).

The complaint alleges that the defendants’ misrepresentations artificially inflated Inovio’s stock price, allowing them to sell shares at inflated values. For example, the company conducted a public offering in November 2025, selling 13,158,000 shares at $1.90 per share, raising $25 million in gross proceeds (Compl. ¶113). The complaint alleges that this offering occurred while the stock price was artificially inflated due to the defendants’ misrepresentations, which were not corrected until the FDA’s December 29, 2025, denial of accelerated approval eligibility for INO-3107. Following this disclosure, Inovio’s stock price dropped from $2.29 per share on December 26, 2025, to $1.73 per share on December 29, 2025, a decline of $0.56 per share, or 24.45% (Compl. ¶¶11, 119). The complaint also notes that Inovio’s stock closed at $8.44 per share on August 9, 2024, the day after the company disclosed the BLA delay, representing a 3.1% decline from the previous day’s closing price (Compl. ¶85). The complaint further alleges that the defendants’ misrepresentations violated the Code of Business Conduct, which requires that "you must protect the Company’s assets and ensure their efficient and lawful use" (Compl. ¶41).

Pattern of Misrepresentations Spanning Two Years

The complaint alleges a pattern of misrepresentations spanning from October 2023 to December 2025, during which the defendants touted INO-3107’s eligibility for FDA accelerated approval while omitting critical risks. On October 10, 2023, Inovio issued a press release touting INO-3107’s prospects for accelerated approval, stating that the company had received feedback from the FDA supporting its development plan (Compl. ¶60). On November 9, 2023, Inovio issued a press release reporting its Q3 2023 financial results and operational highlights, which emphasized the company’s focus on streamlining its development plan for INO-3107 (Compl. ¶62). The press release quoted CEO Jacqueline Shea stating that the company was "focus[] on streamlining our development plan to support submission of a BLA for accelerated approval" (Compl. ¶61). The same day, Inovio filed its Q3 2023 10-Q with the SEC, which reiterated the company’s belief that "data from our completed Phase 1/2 clinical trial of INO-3107 for the treatment of RRP can be used to support the submission of a... BLA[] for review under the FDA’s accelerated approval program" (Compl. ¶65).

On January 3, 2024, Inovio announced plans to submit a BLA for INO-3107 in the second half of 2024, with CEO Jacqueline Shea stating that the company had “established a path to submitting a BLA... under the accelerated approval program” (Compl. ¶7, ¶69). The complaint alleges that these statements were materially false and misleading because the defendants failed to disclose known risks, including manufacturing issues with the CELLECTRA delivery device and insufficient clinical data to support accelerated approval. The complaint further alleges that the defendants’ statements were inconsistent with the Code of Business Conduct, which requires that "business records and communications often become public, and you should avoid exaggeration, humor or sarcasm, derogatory remarks, guesswork, or inappropriate characterizations of people and companies" (Compl. ¶42). The complaint also alleges that the defendants violated the Code’s requirement to "obeying the law, both in letter and in spirit," by issuing materially false and misleading statements (Compl. ¶38).

On March 6, 2024, Inovio issued its Q4/FY 2023 press release and filed its 2023 10-K, which continued to tout INO-3107’s regulatory prospects without disclosing the risks that would later derail the BLA submission (Compl. ¶71). On April 18, 2024, Inovio closed its April 2024 Offering, raising approximately $33.2 million through the sale of 2,536,258 shares at $7.693 per share and 2,135,477 pre-funded warrants at $7.692 per warrant (Compl. ¶75). The complaint alleges that this offering occurred while the company’s stock price was artificially inflated due to the defendants’ misrepresentations. On May 13, 2024, Inovio issued its Q1 2024 press release and filed its Q1 2024 10-Q, which again failed to disclose the material risks to INO-3107’s regulatory path (Compl. ¶76).

On August 8, 2024, Inovio disclosed a delay in the BLA submission to mid-2025 due to a “manufacturing issue” with the CELLECTRA device, causing the company’s stock to decline by 3.1%, or $0.27 per share, to a closing price of $8.44 per share (Compl. ¶83, ¶85). The complaint alleges that this disclosure revealed the materiality of the risks that the defendants had previously omitted from their public statements. During the Q2 2024 Earnings Call held the same day, the company detailed the CELLECTRA device manufacturing issue with the disposable administration component (Compl. ¶84). Despite this setback, the defendants continued to mislead investors, with CEO Jacqueline Shea stating in a March 18, 2025, press release that the company was “on the cusp of achieving several long-term goals for our DNA medicines, most importantly the submission of our first BLA” (Compl. ¶96). The complaint alleges that these statements were materially false because the defendants knew or recklessly disregarded that INO-3107’s BLA was unlikely to receive accelerated approval or priority review from the FDA. The complaint also alleges that the defendants violated the Code of Business Conduct by failing to disclose material risks, stating that "the Company requires honest and accurate recording and reporting of financial and other information... full, fair, accurate, timely, and understandable financial... disclosures" (Compl. ¶39).

The complaint further alleges that the defendants violated SEC Item 303, which requires companies to disclose known trends or uncertainties that are reasonably likely to have a material impact on financial condition or results of operations. The complaint states that the defendants failed to disclose the lack of sufficient data to support INO-3107’s eligibility for accelerated approval, as well as the manufacturing issues with the CELLECTRA device, in Inovio’s public filings (Compl. ¶115). For example, the Q3 2023 10-Q stated that “data from our completed Phase 1/2 clinical trial of INO-3107 for the treatment of RRP can be used to support the submission of a... BLA[] for review under the FDA’s accelerated approval program,” while failing to disclose the risks that ultimately led to the FDA’s denial of accelerated approval (Compl. ¶65). The complaint alleges that the defendants’ failure to disclose these risks violated the Code’s requirement to "avoid and remediate any conflicts of interest," as the defendants’ personal interests in maintaining the company’s stock price allegedly interfered with their duty to advance the legitimate interests of Inovio (Compl. ¶40).

On November 14, 2024, Inovio issued its Q3 2024 press release and filed its Q3 2024 10-Q, which continued to downplay the risks to INO-3107’s regulatory path (Compl. ¶89). The complaint alleges that these filings contained generic, boilerplate risk warnings while omitting material information about the CELLECTRA manufacturing issues and the lack of sufficient data to support accelerated approval (Compl. ¶90). On December 16, 2024, Inovio closed its December 2024 Offering, raising $27.6 million through the sale of 10,000,000 shares and warrants at $3.00 per share and warrant (Compl. ¶92). The complaint alleges that this offering occurred while the company’s stock price was still artificially inflated due to the defendants’ misrepresentations.

On January 9, 2025, Inovio issued a press release outlining its 2025 milestones, which included the planned BLA submission for INO-3107 (Compl. ¶93). On February 12, 2025, the company issued a press release on Phase 1/2 trial data for INO-3107, which showed that 81% of patients (26/32) experienced a reduction of at least one surgery at Year 1 post-treatment, and 91% of evaluable patients (21/23) experienced a reduction of at least one surgery at Year 2 (Compl. ¶94, ¶111). The data also showed a 78% reduction in mean annual surgeries at Year 2 compared to the year pre-treatment, with mean annual surgeries declining from 4.1 (n=32) to 0.9 (n=28) (Compl. ¶111). Despite these positive results, the complaint alleges that the defendants failed to disclose that the data was insufficient to support accelerated approval, as the FDA ultimately determined on December 29, 2025 (Compl. ¶119). The press release quoted CEO Jacqueline Shea stating that "INO-3107 has the potential to be the preferred product of choice for both patients and healthcare providers" (Compl. ¶95). The complaint alleges that this statement was materially misleading because it overstated the drug’s commercial prospects in light of the undisclosed regulatory risks.

On March 18, 2025, Inovio issued its Q4/FY 2024 press release and filed its 2024 10-K, which again failed to disclose the material risks to INO-3107’s regulatory path (Compl. ¶97). On April 7, 2025, the company filed its 2025 Proxy Statement, which proposed adding 2,200,000 shares to the 2023 Omnibus Incentive Plan (Compl. ¶128). The complaint alleges that this proxy statement was materially misleading because it failed to disclose that the defendants knew the company’s financial assertions were inaccurate and that INO-3107’s regulatory prospects were overstated (Compl. ¶135). On May 13, 2025, Inovio issued its Q1 2025 press release and filed its Q1 2025 10-Q, which continued to tout the company’s progress without disclosing the material risks (Compl. ¶100).

On July 7, 2025, Inovio closed its July 2025 Offering, raising $22.4 million through the sale of 14,285,715 shares and warrants at $1.75 per share and warrant (Compl. ¶104). The complaint alleges that this offering occurred while the company’s stock price was still artificially inflated due to the defendants’ misrepresentations. On August 12, 2025, Inovio issued its Q2 2025 press release and filed its Q2 2025 10-Q, which again failed to disclose the material risks to INO-3107’s regulatory path (Compl. ¶105). On August 26, 2025, the company issued a press release announcing that it had reached an agreement with the FDA to begin a rolling submission of the INO-3107 BLA (Compl. ¶108). The complaint alleges that this statement was materially misleading because it failed to disclose that the company lacked sufficient data to support accelerated approval. On November 3, 2025, Inovio completed the rolling submission of the INO-3107 BLA (Compl. ¶109).

On November 10, 2025, Inovio issued its Q3 2025 financial results press release and filed its Q3 2025 10-Q, which again failed to disclose the material risks to INO-3107’s regulatory path (Compl. ¶¶110-111). The press release highlighted the clinical data for INO-3107, stating that "INO-3107 could be the preferred product for patients and providers, if approved" (Compl. ¶101). The complaint alleges that this statement was materially misleading because it overstated the drug’s commercial prospects in light of the undisclosed regulatory risks. On November 12, 2025, Inovio closed an underwritten public offering, selling 13,158,000 shares at $1.90 per share and raising $25 million in gross proceeds (Compl. ¶113). The complaint alleges that this offering occurred while the company’s stock price was still artificially inflated due to the defendants’ misrepresentations.

FDA Denial Triggers Stock Plunge

On December 29, 2025, Inovio issued a press release revealing that the FDA had denied the company’s request for accelerated approval eligibility for INO-3107 and accepted the BLA on a standard review timeline (Compl. ¶119). The complaint alleges that this disclosure revealed the materiality of the risks that the defendants had omitted from their public statements, including the lack of sufficient data to support accelerated approval and the manufacturing issues with the CELLECTRA device. Following this disclosure, Inovio’s stock price dropped from $2.29 per share on December 26, 2025, to $1.73 per share on December 29, 2025, a decline of $0.56 per share, or 24.45% (Compl. ¶¶11, 119). The complaint alleges that this stock plunge reflected the market’s reassessment of INO-3107’s regulatory prospects in light of the newly disclosed risks. The complaint further alleges that the defendants’ misrepresentations violated the Code of Business Conduct, which requires that "the Company requires honest and accurate recording and reporting of financial and other information... full, fair, accurate, timely, and understandable financial... disclosures" (Compl. ¶39).

The complaint alleges that the defendants’ misconduct exposed Inovio to significant legal liability and costs, including expenses related to the pending securities action. The complaint states that the company was forced to expend "many millions of dollars" to rectify the defendants’ wrongdoing (Compl. ¶197). The complaint further alleges that the defendants’ actions violated the Code’s requirement to "protect the Company’s assets and ensure their efficient and lawful use" (Compl. ¶41). The complaint also alleges that the defendants’ misrepresentations resulted in the waste of corporate assets, as the company’s stock price was artificially inflated by the defendants’ misstatements, leading to a "liar’s discount" when the truth was ultimately revealed (Compl. ¶138).

Analyst Downgrades and Stock Price Declines

The complaint alleges that the defendants’ misrepresentations led to analyst downgrades and significant stock price declines. On August 9, 2024, following the disclosure of the BLA delay, H.C. Wainwright cut Inovio’s price target to $12.00 from $15.00, while Oppenheimer cut its price target to $33.00 from $40.00 on August 12, 2024 (Compl. ¶85). The complaint alleges that these downgrades reflected the market’s reassessment of INO-3107’s regulatory prospects in light of the disclosed risks. The complaint further alleges that the defendants’ misstatements and omissions kept Inovio’s stock artificially inflated after August 9, 2024, as the company continued to tout the drug’s prospects without disclosing the full extent of the risks (Compl. ¶86). The complaint also notes that the defendants’ misrepresentations were inconsistent with the Code’s requirement to "obeying the law, both in letter and in spirit," as the defendants allegedly violated federal securities laws by issuing materially false and misleading statements (Compl. ¶38).

The complaint highlights the clinical data for INO-3107, which showed that 81% of patients (26/32) experienced a reduction of at least one surgery at Year 1 post-treatment, and 91% of evaluable patients (21/23) experienced a reduction of at least one surgery at Year 2 (Compl. ¶111). The data also showed a 78% reduction in mean annual surgeries at Year 2 compared to the year pre-treatment, with mean annual surgeries declining from 4.1 (n=32) to 0.9 (n=28) (Compl. ¶111). Despite these positive results, the complaint alleges that the defendants failed to disclose that the data was insufficient to support accelerated approval, as the FDA ultimately determined on December 29, 2025 (Compl. ¶119). The complaint also alleges that the defendants’ statements about INO-3107’s commercial prospects were materially misleading, including statements that "INO-3107 has the potential to be the preferred product of choice for both patients and healthcare providers" and "INO-3107 could be the preferred product for patients and providers, if approved" (Compl. ¶¶95, 101). The complaint alleges that these statements violated the Code’s requirement to "avoid exaggeration, humor or sarcasm, derogatory remarks, guesswork, or inappropriate characterizations of people and companies" (Compl. ¶42).

The complaint further alleges that the defendants’ misrepresentations violated SEC Item 303, which requires companies to disclose known trends or uncertainties that are reasonably likely to have a material impact on financial condition or results of operations. The complaint states that the defendants failed to disclose the lack of sufficient data to support INO-3107’s eligibility for accelerated approval, as well as the manufacturing issues with the CELLECTRA device, in Inovio’s public filings (Compl. ¶115). The complaint alleges that the defendants’ failure to disclose these risks violated the Code’s requirement to "avoid and remediate any conflicts of interest," as the defendants’ personal interests in maintaining the company’s stock price allegedly interfered with their duty to advance the legitimate interests of Inovio (Compl. ¶40). The complaint also alleges that the defendants violated the Code’s requirement to "protect the Company’s assets and ensure their efficient and lawful use" by causing the company to incur significant legal liability and costs (Compl. ¶41).

Demand Futility and Board Composition

The complaint alleges that demand on the board was futile because a majority of the directors faced a substantial likelihood of liability for the alleged misconduct. At the commencement of the action, the board consisted of eight individuals, all named as defendants: Jacqueline Shea, Peter Kies, Simon Benito, Roger Dansey, Ann Miller, Jay Shepard, David B. Weiner, and Wendy Yarno (Compl. ¶140). The plaintiff contends that demand was excused because the board was incapable of impartially evaluating a demand due to the defendants’ alleged breaches of fiduciary duty. The complaint alleges that the individual defendants "initiated a course of conduct to mislead shareholders about the Company’s prospects" and conspired to "disguise their violations of law and to misrepresent the Company’s prospects" (Compl. ¶¶52-53).

The complaint specifically alleges that CEO Jacqueline Shea was incapable of acting independently due to her role as CEO and primary income source from Inovio, which paid her $1,587,155 in total compensation in 2025 (Compl. ¶144, ¶17). The complaint further alleges that David B. Weiner was conflicted due to compensation received as Chair of the Scientific Advisory Board, including $120,000 annually and stock awards, and his total compensation of $52,500 in 2025 (Compl. ¶145, ¶131, ¶24). The complaint states that Weiner was incapable of acting independently because "Defendant Weiner was receiving compensation from the Company as Chair of the Scientific Advisory Board, including stock awards, and was therefore incapable of acting independently" (Compl. ¶145).

The complaint also alleges that the Audit Committee defendants—Benito, Shepard, and Zoth—faced a likelihood of liability for allowing the company to issue misleading public filings, including the 2025 Proxy Statement and quarterly reports (Compl. ¶149). Benito, who received $117,500 in total compensation in 2025, served as Board Chair since 2003, while Shepard and Zoth received $80,000 and $77,500, respectively (Compl. ¶¶20, 23, 26). The complaint alleges that the Audit Committee failed to fulfill its duties under the Audit Committee Charter, which required the committee to "review the Company’s financial statements, internal controls, and compliance with legal and regulatory requirements" (Compl. ¶34). The complaint further alleges that the Audit Committee defendants were aware of the material risks to INO-3107’s regulatory path but failed to disclose them in the company’s public filings, including the 2025 Proxy Statement (Compl. ¶149).

The complaint alleges that the individual defendants acted in concert to mislead shareholders, stating that they “initiated a course of conduct to mislead shareholders about the Company’s prospects” (Compl. ¶52). The complaint further alleges that the defendants conspired to disguise their violations of law and misrepresent the company’s prospects, with the purpose of the conspiracy being to “disguise their violations of law and to misrepresent the Company’s prospects” (Compl. ¶53). The complaint alleges that the defendants caused Inovio to release improper statements and substantially assisted in each other’s wrongdoing with knowledge of the primary wrongdoing (Compl. ¶¶54-55). The complaint also alleges that the defendants breached their duty of loyalty by failing to disclose material risks, stating that "the Individual Defendants owed and owe Inovio the highest obligation of good faith, loyalty, and due care" (Compl. ¶176). The complaint further alleges that the defendants violated the Code of Business Conduct, which requires that "the Company requires honest and accurate recording and reporting of financial and other information... full, fair, accurate, timely, and understandable financial... disclosures" (Compl. ¶39).

The allegations in the complaint are unproven, and no defendant has yet responded to the claims.

The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.

David Brunk is a civil litigation attorney. He can be reached at david@newmanbrunk.com.