iBio (NYSEAMERICAN:IBIO) is one of many biotechs that benefited from the hype surrounding a potential novel coronavirus vaccine in February. During the first five months of the year, IBIO stock shot up a massive 333.73%. However, the stock is up a relatively modest 73% since May.
The declining enthusiasm surrounding the stock is due to the slow progress in its Covid-19 vaccine development. Additionally, it has also failed to secure significant manufacturing contracts in scaling production with its FastPharming technology. Therefore, iBio stock continues to be a purely speculative play.
One of the positives for iBio investors is its recent manufacturing deal with Planet Biotechnology. This deal comes at an ideal time for iBio, which needed such a contract to bolster investor confidence. However, apart from that, its more of the same since my previous article.
At this point, iBio has a lot of ground to make up before it can be considered a buy.
It’s Way Behind the Competition
Biotech giants such as Pfizer (NYSE:PFE), BioNTech (NASDAQ:BNTX) and Moderna (NASDAQ:MRNA) are on track to release their respective vaccine candidates by the end of 2020 or early 2021.
Pfizer and BioNTech have recently secured approval from the German research institute, Paul-Ehrlich-Institut, to conduct Phase 2/3 clinical trials of their Covid-19 vaccine candidates. Additionally, Moderna also announced that its final stage vaccine trial of 30,000 patients has already secured 40% enrollments.
AstraZeneca (NYSE:AZN) and the University of Oxford have also secured similar enrollments for their Phase 3 trials. Despite the president’s fast-tracking production of the Covid-19 vaccines, nine biopharma CEOs have assured that safety and efficacy will not be compromised.
On the flipside, iBio’s vaccine candidates are still in the early testing phase and human testing is in the pipeline. The IBIO-200 program is almost six months old, and there is still no confirmation of human trials so far. Therefore, it wouldn’t be wrong to say that the company is virtually out of the coronavirus vaccine race.
Uncertain Financial Situation
iBio’s financial flexibility is uncertain at this point. It announced in June that it had an agreement with UBS Securities to sell up to $45 million of its stock. The agreement was then amended to take that figure up to $72 million. Additionally, cash in hand after the first quarter was $10 million.
With the initiation of IBIO-200/201 programs, you would expect cash burn to be higher than the $3 million in the previous quarter. Additionally, it hasn’t received any funding from third parties, which further complicates its position.
A Word on the Planet Biotechnology Deal
Last month, iBio struck a deal with therapeutics company, Planet Biotechnology, in scaling production of its Covid-19 therapeutic candidate, called ACE2-Fc. ACE2-Fc will reduce the chances of a “viral escape” and act as a neutralizing antibody against the virus.
“We see tremendous opportunity in our partnership with Planet to develop this novel immunoadhesin molecule as potential COVID-19 disease treatment,” stated Tom Isett, CEO of iBio.
iBio’s FastPharming platform can effectively scale up production of the molecule using its plant-based systems. Under the agreement, the company has exclusive rights to manufacture Planet’s ACE2-Fc. Additionally, it will receive pre-specified payments based on the completion of developmental milestones.
Final Word on IBIO Stock
Investing in IBIO stock as coronavirus vaccine play is foolish.
The company’s vaccine is still in the preclinical stage, and recent results weren’t too impressive. This is mainly because the testing was performed on mice without any updates about human testing.
However, its FastPharming has a lot of potential, and should be its primary focus going forward.
At this time, though, it is tough to consider IBIO stock anything more than a speculative bet.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
