When the year began, iBio (NYSEAMERICAN:IBIO) stock was languishing at about 30 cents a share. But the emergence of the novel corona virus was transformative for the company. Because of its expertise with vaccine development, IBIO stock drew lots of interest from investors. By July, the shares were fetching more than $6.
But unfortunately, things have cooled down since then. Consider that the stock price is now at $1.90.
So then, what now? It’s important to understand where iBio came from to get a little context for how we got where we are today.
The roots of IBIO go back to 2008. The company’s initial focus was on creating plant-based biologics platform – called FastPharming — for contract development and manufacturing organizations (CDMOs), which helps with the clinical trial process.
But as a public company, IBIO progress has been challenging. Since January 2011, the stock has steadily eroded (the high was $54). For example, when the ebola outbreak occurred in 2014, the company attempted to come up with a vaccine but failed in this endeavor.
A Closer Look at iBio Stock
Fast forward to today: IBIO is developing a vaccine for the COVID-19 disease by using a myriad of adjuvants along with the company’s own lichenase carrier molecule. This essentially leads to a coronavirus subunit a protein called IBIO-201.
The latest update on this came Aug. 10 when the company announced positive results for its preclinical study that involved the testing of mice
“We are encouraged by these pre-clinical data, which demonstrate IBIO-201’s ability to generate an immune response to SARS-CoV-2 sequences and neutralize protein interaction,” said iBio CEO, Tom Isett. “We expect to gain more insight as we complete data analysis of both of our COVID-19 vaccine candidates.”
However, it was not enough to give IBIO stock much of a boost. Why so? The nagging problem is that the company’s development efforts lag those of many others. Consider that a myriad of pharma and biotech companies have vaccines in Phase 3 trials. As for iBio, it is not clear when its own will even begin Phase 1.
Something else to consider: Testing for a vaccine is proving to be tough. This is especially the case since there are multiple large studies ongoing.
For example, Moderna (NASDAQ:MRNA) recently announced it would slowdown its Phase 3 trial, which is targeted for 30,000 people (as of August 28, there were 17,458). The main issue is that there is not enough diversity for the participants, such as from the elderly, people of color and those with underlying health problems.
And MRNA is not the only one with issues. AstraZeneca (NYSE:AZN) has announced a pause as well because of an unexpected illness from a participant in its study.
Bottom Line on IBIO Stock
Then why has IBIO been relatively slow? First of all, the company is small. Last year, there were only 55 employees, according to the 10-K.
Moreover, IBIO is working on a variety of antigen-adjuvant combinations. In other words, the company could be hindered by a lack of focus. Oh, and another red flag is that IBIO has not been able to get the attention of a major pharma company for backing.
Now all this does not imply that IBIO stock is somehow hopeless. When the stock was at higher levels, the company was smart to raise capital in the public markets. In the meantime, IBIO is working on several other interesting vaccine candidates, such as for malaria and anthrax.
The company’s FastPharming also has lots of potential. But as is the case with any early-stage biotech company, investors will need patience.
For the most part, it seems like a long-shot that its efforts for COVID-19 will payoff. So for those looking at an opportunity here, it’s probably best to look at those companies that have scale as well as vaccines in Phase 3 trials, like MRNA or Pfizer (NYSE:PFE).
Tom Taulli (@ttaulli) is an advisor/board member for startups and author of various books and online courses about technology, including Artificial Intelligence Basics, The Robotic Process Automation Handbook and Learn Python Super Fast. He is also the founder of WebIPO, which was one of the first platforms for public offerings during the 1990s.
On the date of publication, Tom Taulli did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
