The race for a vaccine to address the spread of the novel coronavirus has put pharmaceutical-sector traders into a bona-fide frenzy. For a prime example of this, check out the price action in Inovio (NASDAQ:INO). The price of INO stock has bounced around like a pinball since late February.
It has gone from $4 and change to the $14 level, then fell and recovered above $14 twice. It’s enough to make a risk-averse investor seasick, but these aren’t ordinary times and INO is no ordinary stock.
On a technical level, the upward momentum is there, but so is the heightened volatility. And on a fundamental level, investors need to examine the company’s financial data and its approach to vaccine development.
With that information, you’ll be better equipped to make a decision as to whether you really want to get on this wild ride.
Gauging the Vaccine Timeline
As reported by the World Health Organization, there are over 70 vaccine candidates under development for Covid-19, the disease caused by the novel coronavirus. Inovio is among the contenders. During a recent earnings call, the company claimed to have completed its enrollment in a Covid-19 vaccine phase 1 trial.
Perhaps you’re betting on INO stock because you believe that Inovio will win the race to develop a Covid-19 vaccine. That’s a real gamble considering how many vaccine candidates already exist.
On the other hand, only five Covid-19 vaccine makers have started human trials. That narrows the field down considerably, and Inovio is on that much shorter list.
Not to turn this into a horse race, but Inovio seems to be making good progress towards a vaccine. The company reported that Inovio’s vaccine candidate produced strong T-cell and antibody responses when it was tested on animals.
Whether you choose to believe the company’s timetable for vaccine development is up to you. Inovio asserts that it’s “expediting the development of INO-4800 against COVID-19 and is planning to have 1 million doses of INO-4800 by the end of 2020.”
A Big Price-Target Raise
Is that ad copy, sincere but wishful thinking or a realistic timeline? The investing community won’t know, unfortunately, until more data comes in.
It can be said with confidence, however, that Inovio has a solid track record of solutions/treatments for infectious diseases as well as cancers and the human papillomavirus (HPV).
Concerning infectious-disease solutions in particular, Inovio employed its DNA-centered technology to address MERS — Middle East Respiratory Syndrome, a type of viral respiratory illness.
Inovio’s INO-4700 was the first MERS vaccine to get to the Phase 2 clinical testing phase. Through this and other firsts, Inovio has earned its reputation as a responsive provider of DNA-based solutions.
Citing not only the INO-4800 Covid-19 vaccine candidate but also Inovio’s INO-4700 MERS vaccine candidate, Maxim analyst Jason McCarthy expressed a bullish outlook for INO stock.
To be more specific, McCarthy reiterated his “buy” rating on the stock. He also increased his price objective on INO stock from $12 to $18. That’s a hefty price-target increase of 50%.
It might require a leap of faith to expect that much upside for the stock, though. Keep in mind that for Inovio’s first quarter, the company reported disappointing revenues of $1.3 million. That’s nearly 53% less than the revenues reported during the same quarter of the previous year.
That’s also significantly less than the $1.91 million in quarterly revenues that Wall Street was anticipating. Long-leaning INO stock traders should hope to see a better fiscal performance in the next go-round.
The Takeaway on INO Stock
Whether you like the prospects of INO stock or not, it’s impossible to deny that for now at least, the buyers are in control. And if you can handle volatility and believe in Inovio’s DNA-based solutions, this stock might be worth your capital.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets. As of this writing, David Moadel did not hold a position in any of the aforementioned securities.
