iBio (NYSEAMERICAN:IBIO) stock is down more than 51% in the last month after a historic bull run.
Readers of this space will know that I am not all that keen on the biotech firm. My advice was to stay away from this stock unless you are interested in day trading. But the window for cashing in your investment is closing.
This is not novel territory for the biotech firm. When the Ebola virus struck in 2014, IBIO stock experienced a similar rally. History is repeating itself, as IBIO stock makes it eventual tumble down to earth.
That’s not to say the company hasn’t had a good run recently. It just means that the time to depart this train has arrived.
IBIO Stock Will Continue to Suffer
There are already several companies in the mix that are working on a vaccine. And several companies are now frontrunners in the race. These include Moderna (NASDAQ:MRNA), Pfizer (NYSE:PFE), BioNTech (NASDAQ:BNTX), and AstraZeneca (NYSE:AZN). All of these companies are in their second or third phases of clinical trials.
Meanwhile, IBIO-201 and IBIO-200 are still at the pre-clinical stage. Time is, unfortunately, not on iBio’s side as the race for the vaccine is already progressing at a rapid pace.
The fact that iBio has not made it to Phase 1 speaks to the fact that it’s a long road ahead for the company. Funding will also dry up. Any positive news will make the stock pop, but there isn’t going to be sustained momentum for shares anytime soon.
Where to Go From Here?
With the prospect of becoming a leading vaccine player becoming more remote with each passing day, investors in iBio may become confused as to where the future of the biotech firm lies.
Well, there are a couple of ways the company can go from this point. But any road it takes has to include its FastPharming System. Through using a plant-based protein production, the platform will make the clinical trial process faster.
A real value play, this is where the money is for iBio investors.
The other big product the company has in its catalog is IBIO-100 for the treatment of fibrotic diseases. The company hasn’t commercialized this treatment as of yet, but it will be a big money-spinner when it does hit the markets.
Pulling the Plug
A spot of bad news for the company recently was that Eastern Capital, one of its most prominent backers, decided to reduce its stake down to 0.6% from more than 5%. A big blow to the company, the news led to a significant drop in share prices.
But you can’t say the news is unexpected. IBIO stock’s rally was purely down to optimism surrounding its IBIO-200 vaccine. However, the markets soon realized that the company is not a viable vaccine candidate. After that, funds started to dry up, and people aborted ship.
It’s also distressing to know that the company ignored its main product line to go after a Covid-19 vaccine.
Keen investors knew from the Ebola episode that the chances of iBio delivering the vaccine were slim. However, since 2015, the company had been on a cash-burning spree on other initiatives. It’s natural stockholders would be peeved with what’s happened over the last six months.
IBIO stock has had its time in the sun. It would be in your best interest to part with shares now and spare yourself of any further losses. The company is not in danger of going under anytime soon.
I am sure a lot of people bought stock from the company under its at-the-market equity distribution program with UBS Securities. An aggregate $72 million is on offer under the program. iBio likely raked in a nice sum under the program before the rally snapped. So they will have some funds to play within the coming quarter.
But the good times are firmly behind them. You will only make losses from this point onward. It’s time to sign off from IBIO stock and load up on the usual suspects in the pharma space.
Disclosure: On the date of publication, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. He has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.