iBio (NYSEAMERICAN:IBIO) is the third (or maybe the fourth) “vaccine stock” I’ve written about in the last week or so. And there’s good reason the company has the attention of investors. Since July, IBIO stock is up nearly 83%. But that’s just pocket change from the 1,166% gain the stock has made in 2020.
That’s not a misprint. IBIO stock traded at 30 cents a share at the start of the year. As of the market close on August 7, iBio was trading for $3.80. And there are conflicting opinions about whether the high flier has room to go even higher.
The novel coronavirus remains a vexing threat to our public health and our economy. So it’s logical that investors are focused on the progress toward the goal of a vaccine. iBio is one of dozens of companies trying to develop a Covid-19 vaccine. But for iBio, the method they are using to develop a vaccine, and bring a successful candidate to scale is what has held investors’ attention. However, that same technology is what continues to make the stock a speculative play at best.
iBio’s FastPharming technology may truly revolutionize the industry, but for right now, it needs a proof of concept that is slow to develop.
Twice Is Nice
It’s becoming apparent that there will be multiple successful vaccine candidates for the novel coronavirus. And iBio is working with scientists at Texas A&M University to develop two separate vaccine candidates.
The company’s most recent vaccine candidate, IBIO-201 fuses antigens from the virus’ spike protein with iBio’s patented lichenase booster molecule (LicKM). According to the company’s internal documents, adding the LicKM booster to a subunit antigen offers two benefits. First, it’s expected to improve the likelihood of achieving single-dose, prolonged immunity. And second, it should allow increased manufacturing capacity through increased potency.
However, the speed at which other companies are getting their vaccine candidates moving through the clinical trial phase is making iBio’s chances of being successful a long shot.
IBIO Can Lend a Helping Hand
As I mentioned in my prior article on iBio, the company has a proprietary manufacturing platform, FastPharming, which may allow it to assist in bringing vaccine candidates from other companies to scale.
FastPharming is a plant-based process to develop antibodies, other therapeutic proteins and vaccines. By using plants as bioreactors, FastPharming can allow iBio to bypass the traditionally expensive, labor-intensive, cell-line development. This means, in theory, a vaccine could be scaled very quickly. The only requirement is to grow more plants.
That’s the good news. The troublesome news is that, as it relates to a Covid-19 vaccine, none of the leading competitors are signing up with iBio to use their process. Muslim Farooque wrote about how companies with vaccine candidates that are further into clinical trials, such as Moderna (NASDAQ:MRNA), are finding partners to scale up production. Farooque writes, “That makes it imperative for iBio to make some consequential moves now before it loses out on significant contracts.”
I believe some of this is simply due to the idea that the technology, while oozing with potential, is unproven. And when the stakes are as high as they are with Covid-19, nobody wants to be iBio’s proof of concept.
That’s not to discount iBio’s long-term potential. IBIO stock received a boost in late July when it announced a partnership with Brazil-based vaccine manufacturer Bio-Manguinhos/Fiocruz. For its part, Bio-Manguinhos/Fiocruz will invest more than $6 million to bring a new yellow fever vaccine through Phase I clinical trials based on iBio’s green plant production method.
The two companies will then work together to develop the product with IBio’s research and development collaborator, the Fraunhofer USA Center for Molecular Biotechnology (FCMB).
The Path Is Too Narrow for IBIO Stock
I understand the speculative bet on IBIO stock. It was a penny stock to start the year. And despite its phenomenal growth this year, it’s still a penny stock. If, and that’s a big if, the company can become a viable player in the development of a vaccine, the stock could go much higher.
But if the company is not included in the production of a vaccine, then this stock will remain just a story. Plant-based materials are becoming a part of our daily lives. And maybe that will be the case for iBio.
But that’s not a guarantee when it comes to something like vaccine development. Right now, the companies that are in Phase 3 trials are looking to go down other paths. And that means when it comes to IBIO stock, you would be advised to do the same.
Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for Investor Place since 2019. As of this writing, Chris Markoch did not hold a position in any of the aforementioned securities.