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Speculate on Inovio and Covid-19 Vaccine Developers

After bottoming at $10 earlier this month, investor interest soared in the last week for Inovio Pharmaceuticals (NASDAQ:INO). The company posted a corporate overview on its DNA medicines, increasing buying volume in INO stock.

inovio (INO) logo next to pills and face masks
Source: Ascannio / Shutterstock.com

What did Inovio say about its DNA Medicines?

In Inovio’s investor presentation, the company highlighted its proprietary smart device delivering plasmids. Already, it demonstrated a safe and robust immune response in more than 2,000 patients.

DNA Medicine Lifts INO Stock

The main DNA vaccines highlighted (slide 3) include the INO-4800, a Covid-19 vaccine. This vaccine showed long-term protection against live viruses in non-hospitalized patients 13-weeks after vaccination.

Inovio’s INO-4700 is the first vaccine for Middle East Respiratory Syndrome in Phase 2. This is a highly fatal virus. So, if Inovio continues to post positive developments from the clinical results, biotech investors will continue buying Inovio stock.

In the DNA immunotherapy space, Inovio’s VGX-3100, which treats human papillomavirus (HPV), is in a Phase 2B trial. VGX-3100 is in Phase 3 clinical trials for treating precancerous cervical dysplasia.

Risks to Consider

Chief Executive Officer Joseph Kim boasted on the presentation that none of its vaccine candidates ever have to be frozen. It may have five-year stability and shelf-life dating. But the most important aspect of its prophylactic vaccines is whether they work or not. All Kim could say was that “we will be able to manufacture a global scale of INO-4800. So, assuming we’re successful in the clinic, we will be able to have vaccines available, both domestically, but also globally as well.”

After the strong rally, investors have two choices at this time. If investors are skeptical that Inovio will produce a working vaccine, it may avoid the stock or bet against it. The short float is 31.56%, which is very high. Any good news about the vaccine’s development may send the stock higher. Conversely, investors holding a basket of Covid-19 vaccine developers may consider Inovio, too.

One or more of the vaccine developers may succeed in the coming months. This includes Moderna (NASDAQ:MRNA), BioNTech SE (NASDAQ:BNTX), and AstraZeneca PLC (NYSE:AZN), just to name a few firms. Still, Inovio’s DNA-based vaccine may post results that demonstrate that its subjects get the best protection. Or it, along with some of the other competitors, may post disappointing data.

Price Target for Inovio

On Wall Street, five of the eight analysts are neutral on Inovio’s prospects with a “hold” rating. The average price target is $19. Cautious investors may want to wait for the company to post robust clinical data first before investing in this company.

If Inovio reports positive data and the stock rises, investors miss out. Still, they may pay a higher price for INO stock in exchange for knowing that the company has a viable vaccine ready to go to market.

Well-rounded biotechnology investors will not want to bet big on just one vaccine developer like Inovio. Instead, holding small positions in it alongside BNTX and MRNA stock would lower company risks. Once those companies confirm they have a vaccine, investors may add to their positions later.

Other Advantages

Inovio’s potential vaccine has a few advantages over the competition. It has a long shelf life, which facilitates transport and storage.

In June, the firm received a $71 million contract from the U.S. Department of Defense. The Cellectra 2000 smart device will be used to administer INO-4800 directly into the skin. CEO Dr. Joseph Kim said, “this next generation smart device leverages the efficacy delivery and safety track record of an earlier version that has received CE mark certification and has been used in clinical trials to safely dose more than 2,000 patients in over 7,000 administrations of INOVIO’s DNA medicines.”

By offering the administration of the vaccine at a low cost, Inovio will not burden the health care system. The firm aimed to manufacture 100 million doses. If the company gains approval, then the revenue will start showing up in 2021.

Disclosure: On the date of publication, Chris Lau did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

Chris Lau is a contributing author for InvestorPlace.com and numerous other financial sites. Chris has over 20 years of investing experience in the stock market and runs the Do-It-Yourself Value Investing Marketplace on Seeking Alpha. He shares his stock picks so readers get original insight that helps improve investment returns.

Article printed from InvestorPlace Media, https://investorplace.com/2020/09/speculate-on-ino-stock-covid-19-vaccine-developers/.

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