Biotech-sector companies are a major focus of the trading community as some of them are competing to identify a vaccine for the novel coronavirus. Inovio Pharmaceuticals (NASDAQ:INO) is one of the most prominent competitors, and thus INO stock is heavily traded on a daily basis.
As InvestorPlace contributor Jamie Johnson points out, more than 140 coronavirus vaccines are currently in development. With the company’s flagship vaccine candidate, INO-4800, Inovio was an early entrant into the race and appears to be making steady progress.
Buying shares of INO stock, or any vaccine-candidate biopharmaceutical name for that matter, might feel like betting on a horse race. I’ll certainly grant that there’s a speculative aspect to trading this class of stocks.
Yet, there’s a reason to believe that Inovio is as strong a contender as any. And that reason is connected to none other than the United States government – a powerful market force, to be sure.
A Closer Look at INO Stock
As of midday Aug. 3, INO stock was up approximately 5% for the day. This is not unusual for biopharmaceutial stocks, which are often volatile and are subject to sizable daily price moves.
But don’t think that INO shares are overbought, as they’re nowhere near their 52-week high price of $33.79. Indeed, INO’s crash from the stock’s late-June peak was swift and painful for shareholders.
The bulls have a lot of catching up to do, but bargain hunters should consider giving INO a chance. It takes guts to implement the “buy low, sell high” credo. Yet, this could be a perfect opportunity to put theory into practice with INO stock
A Strong Candidate
Traders like to focus on the flavor of the month, and in the biopharmaceutical domain this seems to be Moderna (NASDAQ:MRNA). There’s certainly nothing wrong with investing in that stock if you choose to do so.
However, traders shouldn’t excessively focus on just one company with a Covid-19 vaccine candidate. If commentators can say that Moderna is making headway in this area, they can also say the same thing about Inovio.
Johnson does a better job of summing up the science behind Inovio’s vaccine candidate than I ever could:
“INO-4800 utilizes DNA that encodes for messenger RNA which encodes the SARS-CoV-2’s S-protein. During Phase 1 of the company’s clinical trials, 34 out of 36 patients developed an immune response. None of the patients had severe reactions to the vaccine, and the only real side effect any of them experienced was redness around the injection site.”
So, in that trial at least, no major safety-related concerns were reported. With such encouraging results, it would makes sense that the government would signal its approval.
Full Speed Ahead
And in fact, that’s exactly what happened. To be more specific, INO-4800 was “selected to participate in a non-human primate (NHP) challenge study” as part of Operation Warp Speed.
That’s the fancy-sounding name given to an important U.S. government initiative. Its intent is to provide a “safe, effective vaccine for Americans by January 2021.” Inclusion in this program is basically the government’s seal of approval for Inovio to advance INO-4800 quickly.
With this feather in its proverbial cap, Inovio hopes to commence a Phase 2/3 efficacy trial during the summer. Regulatory clearance would be required for this to happen. But with INO-4800 being advanced at “warp speed,” it’s hard to imagine that the government will stand in its way.
The Bottom Line on INO Stock
By no means is INO stock a guaranteed moneymaker over the coming weeks. All biopharmaceutical stocks are volatile and risky, and should be handled with caution.
On the other hand, Inovio appears to be a strong vaccine-candidate contender. Even compared to the buzz-worthy Moderna, Inovio looks like a worthy competitor.
And if you needed another reason to own INO stock, perhaps the inclusion in Operation Warp Speed will convince you.
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.