It has been quite a volatile 2020 for shares of biotech operator Inovio Pharmaceuticals (NASDAQ:INO). They started at about $3 and quickly soared to $5.30. Selling took the shares back down to $4.30, but they are rebounding past $5 again. Their year-to-date gain is over 56%.
Of course, the main reason for the movement in INO stock is the company’s efforts in finding a vaccine for the coronavirus from China.
Background on Inovio
Back in 2000, J. Joseph Kim and David Weiner founded Inovio, which was a spinoff from the University of Pennsylvania Medical School. The main focus was to leverage DNA delivery systems and antigen sequencing by using a person’s immune responses to treat cancer and infectious diseases.
But like many biotech companies, there have been many struggles, especially with raising capital. Keep in mind that the company has neared bankruptcy several times.
Yet Kim persisted and has somehow moved his company’s trials forward. And yes, the company’s capabilities could prove useful in developing a vaccine for the coronavirus. For example, on Jan. 23, Inovio announced it received an award of up to $9 million from the Coalition for Epidemic Preparedness Innovations (CEPI). This will go toward testing the company’s INO-4800 vaccine.
Then a week later, Inovio formed an alliance with Beijing Advaccine for the development of the INO-4800 vaccine. Here’s what Kim had to say about this:
“Our collaboration with Beijing Advaccine and its Founder, Emeritus Professor Bin Wang from the prestigious Fudan University and China’s premier DNA vaccine expert, will tremendously accelerate our coronavirus vaccine INO-4800 development in China because of its expertise and experience with regulatory authorities and clinical trial management. This collaboration allows us to enter China and deliver our vaccine into the areas where they need it most as soon as possible. Our shared goal is to utilize both company’s expertise in developing vaccines for emerging infectious diseases and hopefully achieve an accelerated regulatory approval for INO-4800.”
Granted, all this is still very much in the nascent stage. What’s more, when it comes to vaccine development, there are many risks. But given the alarming rate of growth of the coronavirus, Inovio should be in a position to fast-track INO-4800.
More Than the Coronavirus
While the fortunes of INO stock will be mostly tied to the coronavirus, it’s still important to keep in mind that the company has a pipeline of other candidates that have big potential.
The treatment that is in the most advanced stages of the approval process is VGX-3100, which is in Phase 3 development. This is targeted at HPV, which is a virus that can lead to cervical cancer.
Besides this, there is a drug in testing for glioblastoma. This is a horrible brain cancer (it was the cause of death for Massachusetts Sen. Edward Kennedy and Arizona Sen. John McCain). Then there are treatments for prostate cancer — which involve a partnership with Bristol-Myers Squibb (NYSE:BMY) — as well as recurrent respiratory papillomatosis (RRP).
The Bottom Line on INO Stock
Because the coronavirus has an incubation period that can last up to two weeks, this means it could be very difficult stop. Thus, a vaccine is likely to be crucial.
But again, Inovio is more than just about vaccines. The company has a pipeline that could lead to other breakthrough treatments during the next couple years. In other words, INO stock looks like an interesting speculation, so long as investors have the stomach for the volatility.
Tom Taulli (@ttaulli) is the author of various books on investing and technology, including Artificial Intelligence Basics, High-Profit IPO Strategies and All About Short Selling. He is also the founder of WebIPO, which was one of the first platforms for public offerings during the 1990s. As of this writing, he did not hold a position in any of the aforementioned securities.