Investors eager to ride the vaccine wave pushed Inovio Pharmeuticals (NASDAQ:INO) into the spotlight in March and INO stock soaring.
Now that several months have passed, shares of the biotech firm calm a bit and declined. This has potential investors wondering if it’s time that they, too, embrace INO stock in case the company’s entry in the novel coronavirus sweepstakes finishes well.
It is a notion worth considering.
A key related question is timing. While the only truly accurate answer comes in hindsight, a couple expected developments may prove helpful.
The Course Through DNA
Inovio is an intriguing company with products taking a different tack than most others. It is not a new company and had products “in the pipeline” before the Covid-19 pandemic. However, Inovio’s experience in these other products positioned it well to play a role in the vaccine race.
That experience is focused on DNA.
Its synthetic nucleic-acid vaccine, which results in changes to the recipient’s DNA, is designed to trigger antibodies to fight Covid-19. Reports state it is more stable to transport and store than other vaccine options.
In addition, since the Inovio’s product is synthetic, it can be produced rapidly and affordably.
Josh Enomoto writes recently in InvestorPlace that Inovio’s process is compelling. He also stresses that Inovio’s process is being tested by regulators and we are awaiting a definitive answer on safety and effectiveness.
Aside from Covid-19, Inovio has other vaccine candidates further along in the trial process. These are targeted to combat HIV, prostate cancer and other cancers, and they also utilize the DNA process.
A Look at INO Stock
Pennsylvania-based Inovio is a former member of the penny stock club, meaning its shares traded for less than $5. In the last 52 weeks, it reached a low of $1.92. The low during 2020 was about $3.
Once it was discovered to be a Covid-19 contender, though, investor excitement pushed it to $33.79. That high was unsustainable and it dropped below $10. Now, INO stock remains volatile. It was trading in the teens and most recently around $17.
The recent bump in INO stock followed an announcement by the company’s CEO, Joseph Kim, that its vaccine candidate INO-4800 would be ready for peer review relatively soon. Kim also indicated human trials on the vaccine could begin later this month upon government approval.
The company has a market cap of about $2.97 billion.
During its second quarter ending June 2020, the company reported revenue of $267,000 compared to $136,000 for the same period in 2019. However, the company’s net loss for the quarter was $128.7 million or 83 cents per basic and diluted share. That compares to a loss of $29.4 million and 30 cents per share for Q2 2019.
The company said convertible bond issue’s derivative liability made the loss more severe. Without that liability, Inovio said the Q2 loss would have been “consistent with the second quarter 2019” and a 20-cent net loss per share.
The Bottom Line on Inovio Pharmaceuticals
As the novel coronavirus death toll surges past 200,000 in the U.S. with no end in sight, Americans are justifiably worried and hope that a safe vaccine is in the works. This is essential to safely resuming economic activities and the “normal” life before Covid.
Savvy investors know they stand to profit if they own shares of companies that are successful in this push.
Is Inovio one of those companies? At this point, it is too early to say.
As a participant in Operation Warp Speed, the federal government’s program to quickly develop a Covid-19 vaccine, clearly Inovio is a contender. The company deserves a serious look by anyone interested in putting money in the coronavirus-pharma space. INO stock is volatile. It has shown it has the fuel to climb quickly. So, if you are interested, then buying on a dip is advisable.
We will know more once INO-4800’s evaluation progresses and more cautious investors should wait.
On the date of publication, Larry Sullivan did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Larry Sullivan is a veteran journalist in Florida who has covered banking and finance for several years. He is a former investing editor at U.S. News & World Report in Washington D.C.