In the race for a novel coronavirus vaccine, iBio (NYSEAMERICAN:IBIO) was always a longshot. And with news that a big biotech company took an important step closer to getting an approved vaccine candidate, the odds got a little longer. Not surprisingly, IBIO stock dipped over 6% on the news.
This just reinforces the primary problem that I had with iBio when I last wrote about the company. The stock may be priced attractively for speculative investors. But ultimately, if you’re going to buy IBIO stock you have to believe the company is going to bring a product to market. So far, it has been unable to do that. And without a candidate in clinical trials, it looks like the company will come up short in the race for a Covid-19 vaccine.
The Field Is Getting Narrow
On July 1, Pfizer (NYSE:PFE) and BioNTEch (NASDAQ:BNTX) announced encouraging results from early clinical trials on a Covid-19 vaccine candidate. The results, which have not been peer reviewed, promoted immune responses in healthy patients. It did, however, cause fever and other side effects at higher doses.
You’ll notice that iBio is not named in that paragraph. And that’s the inherent problem of betting on any of the companies that are in this competition. When the federal government picked the companies that it felt had the best shot of producing a successful vaccine candidate, iBio was not on the list.
Moderna (NASDAQ:MRNA) is further down the road. Now with the results from Pfizer in, and with other vaccine candidates like getting ready to start clinical trials, time doesn’t appear to be on iBio’s side.
iBio May Still Get a Piece of the Action
The solid selling point for iBio was its plant-based process that, in theory, would make a vaccine easier to get to scale. This was one of three catalysts that Alex Sirois wrote about. The company’s FastPharming technology could be used in the mass production of a vaccine from another company. In fact, while the company’s unique process drew attention as a possible vaccine candidate, it is much more likely to assist in mass production.
Of course, there is a risk that there won’t be a vaccine of any kind. But those concerns seem to be fading, and that means IBIO stock may get a boost in the next few quarters as companies scale up to deliver a vaccine.
The Pipeline Seems a Long Way Off
When I last looked at iBio, I outlined two exciting partnerships that the company entered into in December. The company joined the Advanced Regenerative Manufacturing Institute (ARMI). They will be using their expertise to advance the development of next-generation processes for organ and tissue manufacturing. The company is also collaborating with EdgePoint AI, on TrustPoint Fabric, an artificial intelligence blockchain-driven vision system.
As exciting as these opportunities may be, they won’t be generating revenue anytime soon. That means investors looking to justify the stock’s nearly 200% gain for the year are putting all their eggs in whatever role iBio will play in producing a Covid-19 vaccine.
Buying IBIO Stock Is Likely a Trip to Nowhere
I don’t fault iBio for the tremendous stock growth during the year. The company is trying to create a vaccine. And while the federal government dismissed iBio as a serious candidate a while ago, that hasn’t stopped some investors from buying on the news.
But in the short term this does not look like it will end well. iBio is a penny stock and has been for quite some time. If you’re not taking the time to ask yourself why, that’s not iBio’s problem. Without a vaccine for Covid-19 in its arsenal, iBio’s 15 minutes are just about up.
Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019. As of this writing, Chris Markoch did not hold a position in any of the aforementioned securities.
