The novel coronavirus pandemic caught iBio (NYSE:IBIO) stock at a good time.
The company just finished building a 130,000-square-foot facility near Texas A&M University to produce proteins when the pandemic began in China.
Originally a licensor of technology, iBio had made the decision to become a commercial protein producer in 2016.
Now iBio is a Covid-19 vaccine company. The transition began in February, through a contract with a Chinese company to produce a vaccine candidate. In March iBio filed four patent applications for Virus-Like Particle (VLP) constructs, which could become vaccine building blocks, and began pre-clinical work at Texas A&M.
The steady drumbeat of news releases has had its effect. The share price exploded in late February from 30 cents to $1.86. They now sit near $1.70.
Hope or Hype
There’s a big difference between what iBio is doing and what companies like Moderna (NASDAQ:MRNA) are up to. Moderna has created a vaccine candidate, which is now undergoing human testing. The iBio platform is designed to scale up manufacturing of a vaccine.
The company says IBIO-200, its first vaccine program, could produce 500 million doses of product each year. It says it has agreements with the Infectious Disease Research Institute (“IDRI”) at the University of Washington supporting the work. IDRI and A&M began collaborating in 2016.
The company calls its production platform FastPharming. It uses an Australian plant, related to tobacco. The plant is grown in vertical farms, then infected with bacteria that induces production of the target protein. The company says this can move a program from gene sequence to protein production in just three weeks.
Thomas Isett, who became the company’s CEO in March, uses marketing-friendly terms to describe what the company is doing. An example is the company’s latest release, describing a second production platform dubbed IBIO-201. The new platform uses a lichenase booster molecule, which the company has dubbed LicKM. This is said to increase manufacturing capacity and boost immune response.
Do They Have It?
IBIO is not creating vaccine candidates. It is positioning itself to quickly scale production of candidates produced by others. This doesn’t mean iBio will make the winning vaccine, just that it is prepared to do so.
The question for investors is the value of this capability. Most of the money in vaccines goes to inventors, not manufacturers. How much goes to whom is subject to business agreements that, in this case, are yet to be negotiated.
But iBio’s news releases have created speculation that, whoever wins the race, it will help them get over the line. Our Louis Navellier wrote in April that iBio’s manufacturing makes it “a unique and worthy bet.” Since he wrote that, the price of the stock has doubled. InvestorPlace’s Josh Enomoto wrote on June 3 that “superior scalability” makes iBio a winner, and that juiced the stock price further.
Other Investorplace writers are more skeptical. David Moedel called it a longshot in March, while Ian Bezek suggested selling “before the hype fades” in May.
The Bottom Line
I don’t know whether iBio will make whatever vaccine works. I also don’t know how much iBio will make from its contract manufacturing work.
Speculating on vaccine winners has become 2020’s version of 2018’s pot stocks. There’s a lot of smoke, a lot of hope, but no certainty of fire anywhere. Maybe iBio has a winning formula. Maybe its manufacturing system can also be used for other vaccines down the road.
But, maybe not. Buying iBio stock is less like buying a lottery ticket than an NBA team tanking to get a top draft choice. You might get a star. You also might get a bust.
Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of the environmental thriller Bridget O’Flynn and the Bear, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this story.
