Despite its very small market capitalization of just $111 million, iBio (NYSE:IBIO) is getting lots of investor attention. IBIO stock shot up 24% on April 27 when the company announced that it could manufacture nearly 500 million of Covid-19 vaccines at its Texas site.
In fact, iBio has joined a group of stocks that already at least doubled so far this year as investors bet on treatments for the novel coronavirus.
Moderna (NASDAQ:MRNA), Novavax (NASDAQ:NVAX) and Inovio (NASDAQ:INO) are all sharply higher as well, as the mere mention of “Covid-19 clinical treatments” draws investor interest.
IBIO Stock Up on Vaccine Capacity
Last month, iBio said estimated that its FastPharming Facility had a 500 million dose capacity for its possible Covid-19 vaccine. iBio, a biologics contract manufacturing organization and biotechnology company, is a member of the National Institute for Innovation in Manufacturing Biopharmaceuticals. This institute is one of 14 in the Manufacturing USA Network.
iBio’s co-chairman and CEO, Tom Isett, said that the scalability of making about 500 million doses “links directly to the modular technology behind our FastPharming Manufacturing System, which uses a relative of the tobacco plant as the ‘bioreactor’ to produce biopharmaceuticals.”
The company may achieve scalability by simply planting more plants in its 130,000-square-foot facility.
On April 9, iBio announced that it expanded its vaccine collaboration to include the Infectious Disease Research Institute (IDRI). IDRI will support pre-clinical development and give clinical trial oversight. iBio will give the process development and manufacturing capabilities to IDRI. And since IDRI has a novel adjuvant in the Covid-19 vaccine development, iBio will supply such services for that, too.
In March, the company said it created a SARS-CoV-2 Virus-Like Particle-based construct. It only took the company a few weeks, thanks to its FastPharming System. This works by producing nanoparticles in plants and then purifying them. Scientists may then obtain research quantities of product.
And because of the high-quality material, the product is readily scalable for use in clinical trials. iBio can produce the material for commercial use, too. Isett said that “the tightly controlled particle size allows for uniform antigen display, which should translate to a consistent dose response and a highly efficient production process, facilitating a ramp-up to tens of millions of doses if we are successful in the clinic.”
iBio originally built FastPharming in 2010, when it received funding from the Defense Advanced Research Projects Agency. Its factory has automated hydroponics and a vertical farming system. That production design allows the company to produce a product at such a fast pace.
Headwinds Ahead for iBio
Investors should not ignore more than five warning flags from Stock Rover on iBio. For example, the company posted negative cash flow for several years in the last decade. It also posted cumulative negative earnings of $1.36. And given the hype of Covid-19 drug manufacturing against hope, the stock has high volatility.
If iBio did not soar to the $3 range in March 2020, the company would have reverse stock split. At a price of 25 cents per share, the Nasdaq exchange would have issued a non-compliance warning about its share price. So, if selling pressure resumes, iBio may need to review its reverse stock splitting requirement. That would seriously hurt its stock.
The Bottom Line on IBIO Stock
IBIO is a highly volatile trade whose fundamentals are not yet proven to drive revenue higher. But if the company gets a product in need of mass production, investors will get rewarded in a big way. It would move into the micro-capitalization range as it doubled or tripled in value.
Disclosure: As of this writing, the author did not hold a position in any of the aforementioned securities.