Inovio Becomes a Covid-19 Longshot

Of all the novel coronavirus vaccine candidate stocks, I’ve been hardest on Inovio Pharmaceuticals (NASDAQ:INO) and INO stock.

inovio (INO) logo next to pills and face masks

Source: Ascannio /

In March I called it a “sign of the stockopalypse.” In June I even compared it to Theranos, which claimed for years to have something it didn’t.

The truth is I am not a scientist. Even scientists aren’t sure. That’s what clinical trials are for. The negative media swarm has had an effect on Inovio shares. Over the last month their value has been cut nearly in half.

Inovio opens for trade August 20 at $14.30, a market cap of about $2.4 billion. As with other such stocks, there are no fundamentals to base this on. Sales last year came to $4 million.

But is it possible we have this one wrong?

The Bull Case for INO Stock

Since we don’t know what may work, Inovio has as good a chance of being right as anyone.

Inovio whipped up its vaccine candidate, INO-4800, in a matter of hours, after researchers mapped the chemical “spike” on the virus that looks like a little crown, hence the name coronavirus.

The Inovio vaccine is built with DNA that tricks the body into thinking it’s infected. It’s not a weakened form of COVID-19. Inovio’s Phase 1 human trial was considered a success by the company and is now going through peer review. A Phase 2/3 trial is due to start in September.

Inovio says it has lined up partners to produce 100 million units of INO-4800. The government’s “Operation Warp Speed” means it has the cash to move forward and find more partners.

Inovio’s small size means it offers speculators what they most want in a COVID-19 stock, which is action. Those who bought in February and sold in June scored profits of 800%. During March alone Inovio rose from $4/share to $14, then backed down to $6. These are much bigger swings than for Moderna (NASDAQ:MRNA), another vaccine stock, although the direction of the moves mirrors it.

The Bear Case

The bear case for INO stock starts with the fact that CEO Joseph Kim has been riding vaccine promises for a decade but has yet to bring one to market. Inovio’s Phase 1 announcement was short on details. The Inovio candidate is administered by a patented device it calls the Collectra that looks like a nose hair trimmer. People wonder what that’s all about.

Inovio also has failed to win the kind of multi-billion dollar supply contracts, backed by government money, won by AstraZeneca (NYSE:AZN), Novavax (NASDAQ:NVAX), Sanofi (NYSE:SNY), Glaxo SmithKline (NYSE:GSK), Moderna, BioNTech (NASDAQ:BNTX) and Pfizer (NYSE:PFE). This is important because Inovio lacks the scale to mass produce its vaccine, even if it works well.

This means that the results of the new clinical trial are crucial. If Inovio demonstrates safety and better protection than other approaches, it will have a spectacular win.

Anything less and it will be left behind.

The Bottom Line

I didn’t make up the comparison of Inovio to Theranos. That came from short sellers at Citron Research, who issued a report on the company in April.

The plain fact is the Trump Administration has made the race toward a COVID-19 vaccine into a gold rush, populated as much by promoters as scientists. Companies are getting supply contracts based mainly on political connections rather than science. The administration thinks a vaccine will save it and that money can solve the problem.

Money can’t solve the problem. Only science can. We don’t know what will work. You’re speculating no matter which candidate stock you buy. I’m not a speculator which is why I’m not playing the game. If you are one, Inovio is as good a name to play as any.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of the environmental thriller Bridget O’Flynn and the Bear,  available at the Amazon Kindle store. Write him at or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this story. 

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