It’s safe to say that prior to the current outbreak of coronavirus, few people had heard of the pharmaceutical companies that have been generating headlines since the health crisis began. One such organization is iBio (NYSEAMERICAN:IBIO).
Known for its proprietary technology called FastPharming, this innovation involves plant-based protein production. According to iBio’s website, FastPharming can move from gene sequencing from protein production in approximately three weeks. This has huge implications for IBIO stock.
At time of writing, global coronavirus cases have exploded to over 114,000, with 4,027 deaths. As I’ve mentioned before, you don’t necessarily need to pay attention to this figure. By the time you read this, the tally will have jumped even higher. But the biggest point for IBIO stock is that outside of China, the respiratory disease COVID-19 appears to have spiraled out of control.
One of the paradigm-shattering shockwaves that occurred was in Italy. Their government announced a complete nationwide shutdown. This involves closing schools and universities until April 3, and suspending all sporting events, including soccer matches.
Further, South Korea and Iran have suffered a rapid contagion over the last few weeks, demonstrating the acceleration of the coronavirus. France, Spain and Germany each have at least 1,200 cases. Unless a miracle occurs, the U.S. will soon hit the four-digit mark. While this doesn’t help soothe fears, cynically, the negative development is a plus for IBIO stock.
At the same time, I appreciate the cautious tone that others have cited. As my InvestorPlace colleague Chris Markoch stated, buying a COVID-19 related name like Co-Diagnostics (NASDAQ:CODX) features a short time window. It’s a get-in-and-get-out stock play.
But what if IBIO stock has a longer investing pathway?
Italy Provides a Coronavirus Framework
If anybody thinks that we can contain the coronavirus better than other nations, I believe they’re being overly optimistic. From my analysis, Italy may offer an accurate framework for what we can expect in the United States.
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I noticed that since both countries reported at least 70 coronavirus cases, their case growth has accelerated at similar rates, albeit at different thresholds. Between the third and eighth day since breaching 70 cases, Italy’s growth rate was 39%, whereas the U.S. growth rate was 32.7%.
As you can see from this chart, the spread between Italian and U.S. cases doesn’t waver much. If this trend stays consistent, we can model out that by Mar. 17, we should have close to 4,600 cases.
Before it gets close to that figure, though, you’d imagine that the federal government will throw everything at the virus. So, while IBIO stock has obvious competition, this is a rapidly evolving situation. It’s not inconceivable that smaller, more streamlined pharmaceuticals may offer viable solutions.
A Worsening Crisis Benefits IBIO Stock
Of course, if the crisis in the U.S. devolves to a worse situation than other stricken nations, the thesis for IBIO stock will improve considerably. But is that a likely scenario? I wouldn’t discount it.
Interestingly, of the worst-hit nations — China, Italy, South Korea, and Iran — after they exceeded at least 58 cases, their infection rate took on similar trajectories. In fact, China went off the chart, with total cases there nearing 81,000. But by the ninth day since breaching 58 cases, all countries have registered at least 1,700 cases, except the U.S.
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I don’t expect this to last much longer.
First, we still don’t have adequate testing measures. Surely many more are sick than we realize. Further, due to the asymptomatic nature of the coronavirus, people could be unwittingly spreading the disease.
Second, impacted countries have imposed draconian measures to stem the tide. On January 23, China’s government locked down Hubei province, the disease’s epicenter. On February 22, Italy imposed a regional lockdown before recently shuttering their nation entirely. Other countries performed similar protocols, beginning with testing to assess the situation.
Yet with all that, the coronavirus has devolved into a pandemic. So yes, the worst is still to come. Again, that’s not personally comforting, unless you happen to own plenty of IBIO stock.
The Great Unknown
Finally, here’s one more thing to think about. According to CNBC, a woman working as a tour-guide in Japan tested positive for the coronavirus for a second time. To me, that raises extremely uncomfortable questions, with the primary one being this: if we clamp down on the virus, there’s a chance of microbiological aftershocks.
It’s a nightmare scenario that I hope won’t happen. Still, considering the cynical case for IBIO stock, I can’t help but wonder if that won’t help mitigate the competition element against shares. With how COVID-19 has progressed, it’s entirely possible that many pharmaceuticals can swing and miss.
Now, I’m not suggesting that investors go all-in on iBio. No matter what, it’s a very speculative trade. If you don’t believe me, check out it’s going nowhere chart over the last few years. That said, if you want to gamble, you might have a longer window than you think.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he did not hold a position in any of the aforementioned securities.
