The coronavirus pandemic has caused carnage in the stock markets, but here and there are companies seeing their shares fly in the face of the panic. One of these companies is Inovio Pharmaceuticals (NASDAQ:INO). The Pennsylvania-based biotech company has seen its stock rise through 2020 on news it is developing a COVID-19 vaccine to combat the coronavirus from China. INO stock spiked after the Mar. 3 announcement that Inovio has accelerated timelines, with plans to begin human trials for the vaccine in April.
That news drove INO to $14.09, a 15-year high for the stock. And at that point, it represented 339% growth since the start of the year.
INO stock has been on a rollercoaster since. Surges have corresponded to a series of press releases outlining new developments on the vaccine front. Not many investment analysts had been following Inovio closely, but those that do have it rated as a consensus buy with a 12-month price target of $12.00. With Inovio increasingly on investors’ radar, is now the time to get in on this stock?
Inovio’s COVID-19 Announcements Driving Sentiment
INO stock had been on a downward slope for the past two-and-a-half years. Between June 2016 and the end of 2019, it lost 59% of its value. In January, we began to see a reversal of that trajectory, and it was tied directly to the coronavirus.
On Jan. 23, the company announced it had been awarded a $9 million grant to develop a vaccine to combat the (then) new coronavirus from China. This kicked off the first wave of interest in INO, with the stock gaining 55% over the next several sessions.
On Mar. 3, a press release triggered a massive spike in Inovio stock. The company detailed its plan to accelerate the time for its COVID-19 vaccine. The new plan was to begin human trials in April, and to have one million doses of the vaccine available by the end of the year. In response, INO rocketed to $14.09 within days, a 221% gain.
INO quickly gave much of that back. However, the announcement on Mar. 12 that the Bill & Melinda Gates Foundation was giving Inovio a $5 million grant to accelerate development of a “proprietary smart device for the intradermal delivery” of the company’s vaccine resulted in another pop for INO.
Bottom Line on INO Stock
My InvestorPlace colleagues are far from convinced that INO can maintain its momentum. Laura Hoy writes “INO stock’s monumental rally simply isn’t worth chasing.” Tezcan Gecgil notes that it’s still not clear how well commercial sales of a proven vaccine — assuming IMO is successful — would translate into profit.
They also point out that Inovio isn’t alone in its pursuit in the market. Pharmaceutical giants like Pfizer (NYSE:PFE) and GlaxoSmithKline (NYSE:GSK) are also working on coronavirus treatments. They may not be in the spotlight the way Inovio is right now, but they represent a more balanced bet.
If the COVID-19 vaccine doesn’t turn out to be a license to print money after all, a big company like Pfizer or GlaxoSmithCline is better positioned. INO stock, on the other hand, was trading below $2.00 just six months ago.
At its last close, INO stock was at $7.22, just over half of the $14.09 it hit on Mar. 6 and with 66% upside compared to those analyst price targets. If you’re determined to catch the Inovio wave, now may be the time to do so. Just keep in mind that the stock’s rapid surge in value is based on a COVID-19 vaccine that is surrounded by uncertainty and facing competition.
Brad Moon has been writing for InvestorPlace.com since 2012. He also writes about stocks for Kiplinger and has been a senior contributor focusing on consumer technology for Forbes since 2015. As of this writing, he did not hold a position in any of the aforementioned securities.