Is Inovio Pharmaceuticals Really Just the Next Theranos?

Inovio Pharmaceuticals (NASDAQ:INO) stock has skyrocketed in 2020 over hopes for its novel coronavirus vaccine candidate, INO-4800. Shares were due to open June 1 at over $15, up from $3 at the start of the year, a market cap of $2.3 billion. But INO stock remains a scientific crapshoot.

Is INO Stock Really Just the Next Theranos?

Source: Ascannio /

INO-4800 is still going through pre-clinical tests. Moderna (NASDAQ:MRNA), by contrast, is already beginning a Phase 3 trial.

Citron Research, whose reports often endorse short sales, called Inovio “the COVID-19 version of Theranos” in late April. The headline referred to a testing company that claimed it could conduct multiple tests on a single drop of blood but couldn’t.

If you buy Inovio today you’re betting that both their drug discovery method, and their vaccine, are going to work.

Do They Have It?

Inovio’s work is backed by the Bill and Melinda Gates Foundation. It said in early April it had Food and Drug Administration approval to start its pre-clinical trial. The work is also backed by CEPI, the Norway-based vaccine group.

But Inovio is not alone in this. Gates has pushed 15 companies to share research into the virus. The Inovio work is one of seven projects being funded by the foundation. CEPI, meanwhile, is highlighting its work with Novavax (NASDAQ:NVAX) whose NVX-CoV2373 is now beginning clinical trials.

“If any of these compounds are shown to be effective against COVID-19, it dramatically accelerates the path to product approval and scale up,” wrote Gates Foundation CEO Mark Suzman. If you have a promising therapy, in other words, you’re going to get money.

Is It All A Dream?

Inovio’s vaccine is delivered through an electric device called Cellectra, which uses electricity to get it into a cell after injection. In May, Inovio released a paper in Nature Communications claiming INO-4800 “elicited strong binding and neutralizing antibody responses in addition to high-level T cell responses in mice and guinea pigs.”

Senior vice president Kate Broderick told 60 Minutes that Inovio’s vaccine candidate was developed in just three hours, using a computer algorithm that isn’t mentioned in any of its Securities and Exchange Commission filings.

This is what raised the hackles of Citron. It said Inovio has been around for 40 years but has failed to bring anything to market. It accused the company of delivering press releases for scary diseases, followed by dilutive stock offerings and insider sales.

Inovio CEO J. Joseph Kim admits it will take more funding for his company to reach the market. But he said a Phase 2/3 efficacy trial for INO-4800 should start in July, yielding data in about a year. If emergency approval is available sooner than that, based on preliminary data, Inovio will seek it.

Beyond Covid-19, Inovio is also working with Regeneron (NASDAQ:REGN) on a treatment for Glioblastoma, the brain cancer that killed Sen. Edward Kennedy and Sen. John McCain. Its INO-5401, combined with a Regeneron drug called Libtayo, has kept patients with the condition alive for a full year.

The Bottom Line on INO Stock

If you’re not a scientist it’s impossible to evaluate the approach of any Covid-19 vaccine candidate, including Inovio.

Even if you are a scientist, you’re guessing at this point.

If you’re buying INO stock today, you’re not looking at its charts or its first-quarter results, which were disappointing. You’re guessing that INO-4800 works.

If you’re a trader, you can play the momentum with charts. If you’re a speculator, you can throw some money at this and hope. I hope you’re right. Its preliminary research does show promise.

But Inovio is not an investment at this point.

Dana Blankenhorn has been a financial journalist since 1978. His latest book is Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, essays on technology available at the Amazon Kindle store. Follow him on Twitter at @danablankenhorn. As of this writing, he did not hold a position in any of the aforementioned securities.

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