I wrote about iBio (NYSEAMERICAN:IBIO) about a month ago. At that time, I wasn’t optimistic about the short-term outlook for IBIO stock. And that outlook is based on an inability to meet expectations.
The company’s innovative plant-based vaccine development process continues to fall behind on two fronts.
First, there’s iBio’s novel coronavirus vaccine candidate, IBIO-201. iBio made headlines this week by saying it had selected IBIO-201 as the candidate it would bring through the clinical trial stage. But although the company was optimistic about IBIO-201, it is far behind the rest of the leading biotech companies. As an example of how far it is behind, iBio plans to take the candidate through toxicology studies before it brings it to clinical trials.
Another catalyst for iBio is its FastPharming technology. In theory this will allow the company to rapidly mass produce its vaccine candidate. And FastPharming could allow iBio to provide an assist to another biotech company’s vaccine. But despite the promise of the technology, iBio still does not have any partners.
However, in late August, IBIO stock got a boost on yet another front, the therapeutic front. iBio is partnering with Planet Biotechnology to develop an experimental Covid-19 therapeutic. The exclusive agreement gives iBio yet a third opportunity to move into a leadership position in the race to remove the threat caused by the coronavirus.
However the bump in IBIO stock was short lived as it became clear that the partnership is far behind other therapeutic options, such as Gilead Sciences (NASDAQ:GILD) and its antiviral candidate remdesivir.
Traders Like Noise, Investors Want News
Things have been noisy around iBio during the pandemic. It’s no secret that traders react to noise. That’s when stocks tend to get very active. The pandemic has given many first-time investors the time to engage with trading apps like Robinhood. And IBIO stock has been a huge beneficiary.
In fact, if you had bought IBIO stock just a month into the pandemic, you would be sitting on a gain of around 113%. Even if you had bought the stock at the onset of the shelter-in-place orders, you would have about a 35% gain.
But for all its price movement, iBio remains in the penny-stock range. And that’s because for all the headlines it’s grabbing, it’s not making noise.
And that’s my biggest concern about IBIO stock. I agree with Larry Ramer who points out that iBio continues to fall behind its competitors. And that means that the news isn’t likely to turn into the kind of noise that builds momentum.
Time May Be a Friend For IBIO Stock
I have consistently held the position that will be more than one Covid-19 vaccine. As vaccine candidates are advancing through clinical trials, it’s becoming clear that the last three feet will put these vaccines under a lot of scrutiny. That scrutiny gives a company like iBio time on all three fronts.
First, the company could get its vaccine candidate through clinical trials. That success, combined with its FastPharming process, could allow iBio to jump to the head of the line in terms of getting a vaccine produced at scale.
Second, the additional time may allow iBio to find a partner that is willing to use its plant-based process to bring their vaccine candidate to market.
And third, there is still the possibility that there may be no vaccine. In that case, the additional time gives iBio and Planet Biotechnology a chance to bring their therapeutic through clinical trials.
But if all of these outcomes sound like long shots, it’s because they are. And that’s the reason that, for now, it’s best to stay away from IBIO stock.
On the date of publication Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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.