In my article published a couple of months ago, I suggested playing the waiting game with iBio (NYSE:IBIO) I expressed concerns about its inability to make any consequential progress towards securing major contracts. Nothing much has changed for the company since then, leading me to believe that IBIO stock does not have too much time left as a major Covid-19 play.
The company recently reported positive pre-clinical results for the trials of its Covid-19 vaccine candidate, IBIO-201. However, the tests were conducted on mice, and iBio has not yet announced when the candidate will be tested on humans. Consequently, IBIO stock is a purely speculative play at this stage.
Moving at a Snail’s Pace
According to the Regulatory Affairs Professionals Society (RAPS) website, there are currently 42 coronavirus vaccine candidates in development. Out of these candidates, 17 are in the preclinical stages, while the rest are in Phase 1 testing or later. iBio’s candidate is now progressing towards Phase 1 clinical trials, putting it among the least advanced contenders.
The race for a coronavirus vaccine has prompted the formation of an unprecedented number of public/private partnerships. The most prominent of these is Operation Warp Speed (OWS), a collaboration between the U.S. government and other key public and private entities. These entities, including the most promising biotech companies, are working to develop a Covid-19 vaccine much more quickly than any vaccine has ever been created before.
The top candidates have the backing of multiple key organizations. For example, biotech giant Moderna (NASDAQ:MRNA) secured $483 million from the American government. The company is conducting Phase 3 trials of its vaccine candidate.
iBio collaborated with the Infectious Disease Research Institute (IDRI) on the preclinical development of its vaccine candidate. Moreover, it announced a partnership with Beijing CC-Pharming for the testing of its vaccine.
However, no major organization is funding the development of iBio’s vaccine candidate, so it has had to spend a great deal of its own cash to develop it. The firm had only$10 million of cash at the end of its first quarter, and it spent $1 million on R&D in Q1. Its competitor, Moderna, spent over $115 million on R&D in the same period.
The Challenges for iBio
There’s no denying iBio’s potential. It has several vaccine candidates targeting the most menacing diseases, including malaria, H1N1, and anthrax. And its FastPharming technology enables it to quickly produce tens of millions doses of vaccines and obtain manufacturing deals from other companies.
However, all its vaccine candidates are still in pre-clinical trials, and their outlook is uncertain. Even the latest results of IBIO-201’s preclinical trials left investors craving more information. Therefore, it will be a long time before IBIO’s vaccine candidates reach the market.
The company’s FastPharming technology currently is the key for IBIO stock. It uses plants as bioreactors to quickly produce large quantities of vaccines and biological medicines, enabling the company to avoid the costly and labor-intensive development of cells. However, iBio has not yet signed a major contract to produce any potential Covid-19 vaccines.
The Bottom Line on IBIO Stock
Things aren’t looking too great for iBio as we head into the homestretch of the year. The time for talk is done, and iBio needs to deliver on several fronts to attract investors.
The company, however, seems to be moving at a remarkably slow pace so far, enabling its competitors in the COVID-19-vaccine race to pull ahead of it at this stage. Therefore, it would be plausible to assume that it’s virtually out of the race. As a result, it’s best to avoid IBIO stock.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article.
