In the frenzied race to be first to the finish line with a successful novel coronavirus vaccine candidate, several names have risen to the top. These include Moderna (NASDAQ:MRNA), Novavax (NASDAQ:NVAX) and iBio (NYSEAMERICAN:IBIO). Among them, IBIO stock presents a strong value proposition.
You might be surprised to see the word “value” associated with any of these biotechnology names. After all, these so-called coronavirus stocks have jumped in recent months. However, the air has been let out of the IBIO stock price, indicating the possibility of a comparative bargain.
All of these stocks might be a good value, actually. It’s entirely possible that all three of them will spike even if just one of them discovers a successful Covid-19 vaccine. That’s known as the sympathy effect, wherein an entire sector of stocks can all rise together when one of them increases in price.
Nevertheless, it’s usually advisable to concentrate on biotech companies that are making good progress. On that count, iBio’s recent news should offer encouragement to the company’s shareholders.
A Closer Look at IBIO Stock
At the beginning of this year, IBIO stock was classified as a penny stock. That’s a designation given by the U.S. Securities and Exchange Commission to stocks trading under $5 per share.
Like it or not, you probably won’t get another chance to own IBIO shares at 30 cents or even 60 cents. Those days are in the rear-view mirror. In late February, the bulls pushes IBIO stock above $2. Then, in late July, the stock briefly traded at its 52-week high price of $7.45.
If you didn’t get in at the $2 level, you might have another shot at it. On Aug. 14, IBIO closed at $2.60. Momentum-focused traders would probably conclude that the trend is now towards the downside.
On the other hand, investors can view this price dip as an opportunity to start buying the shares at a more favorable price point. After all, this is the same company that it was when IBIO was $7.45. If anyone liked the stock at that price, then they should absolutely love it at $2 and change.
From Russia, with Love
The share-price downturn in IBIO stock turned nasty during the past few trading sessions, and the company itself isn’t really to blame for this. In fact, the apparently negative catalyst didn’t even stem from anything that happened in the United States.
Rather, it was news from Russia that evidently spooked IBIO shareholders. To be specific, Russian President Vladimir Putin claimed that his country has registered the first Covid-19 vaccine in the world.
There’s no sympathy effect here since iBio wouldn’t likely derive much benefit from a successful Russian Covid-19 vaccine. But was it an overreaction for some IBIO stockholders to dump their shares?
Stay Calm and Stay Invested
Perhaps they were impressed and/or intimidated by Putin’s declaration, “I hope we can start a massive release of this vaccine soon.” The problem here is that the rest of the world has yet to verify the results of the putative vaccine, which was developed at the Gamaleya Institute for Epidemiology and Microbiology in Moscow.
Meanwhile, iBio is moving full steam ahead in its highly rigorous, fully compliant and regulated preclinical trials. Indeed, iBio just released data demonstrating Covid-19 vaccine candidate “IBIO-201’s ability to generate an immune response to SARS-CoV-2 sequences and neutralize protein interaction,” in the words of CEO and Chairman Tom Isett.
iBio will continue its testing in collaboration with the laboratories of the Texas A&M University System. With that, investors should stay focused on the hard scientific data rather than let bluster and braggadocio sway their opinions on this solid biotech name.
The Bottom Line
When markets overreact, that’s your cue to take positions in companies that are making consistent progress. IBIO stock’s value proposition just got better because of an overreaction, and that’s great news for biotech-sector dip buyers everywhere.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.