Biotech stocks continue to experience peaks and valleys as the novel coronavirus pandemic rages on. And iBio (NYSEAMERICAN:IBIO) stock is also experiencing the shocks of the Covid-19-induced frenzy gripping the markets.
Shares are still up 98% in six months. But there was a time when the stock was up 400% this year. So, we see some well-deserved correction.
But that kind of volatility is excellent for a day trader — one who knows when to enter and exit a position in expert fashion. But investors in for the long haul will be wary of pouring capital in a vaccine also-ran, especially when there are more established names for the taking.
However, considering that clinal trial data will be available in the forthcoming quarters, the stock is likely to gain handily in the upcoming quarters.
Depending on what kind of investor you are, iBio stock will interest you. If you have the ninja quickness of an experienced day trader, then perhaps this is the company for you. If you value fundamental strength, then maybe you should check some deep value trades that we’ve been covering.
Time Is Running Out for IBIO stock
It seems like an understatement to suggest that the race for a Covid-19 vaccine is proceeding at full pelt. Moderna (NASDAQ:MRNA), Pfizer (NYSE:PFE), Johnson & Johnson (NYSE:JNJ), and the University of Oxford, in collaboration with the biopharmaceutical company AstraZeneca (NASDAQ:AZN), are all in Phase 3 clinical trials.
Meanwhile, IBIO-201 and IBIO-200 remain in the preclinical stage. Not great news, considering the company has never brought a commercial vaccine to the markets. The only thing going for it is its FastPharming technology, which other biotech firms can use to commercialize their vaccines. That’s not to say the company cannot come up with a Covid-19 vaccine.
But, ultimately, speed matters in this race.
Breaking Support
InvestorPlace‘s Ian Cooper succinctly told readers to trade the stock before the 400% surge from June onwards. However, he is now advocating avoiding the stock altogether and for a valid reason. Firstly, the substantial price gains have already been had. The streak snapped why back in July, as the stock slowly started to crater before eventually settling around $2 a pop, which has served as support as way back as July.
Although iBio stock shot up to $6.41 per share, and there was support around the $4.50 mark, the fact that shares dipped below the critical technical level of $2 makes for a brief period in August tells you that it is a tough ask for the stock to go up past $2 again.
How to Play iBio
Retail investors are slowly losing their patience with iBio stock. They want some concrete results, or else the rally may not last long. That’s not to say that the company did not have a fun run. As a pure spec play, it brought in a lot of moolah to invest for savvy investors.
And it might still do so, as the race for a Covid-19 vaccine is not over.
There are several companies earmarked for the dissemination of the drug. That will include companies that didn’t make the final cut for Operation Warp Speed, or OWS, the U.S. administration’s attempt to expedite vaccines, therapeutics, and diagnostics that will help end the Covid-19 crisis.
So, even though the company is late to the party, it doesn’t mean that its research is useless. Its vaccine candidate will eventually gather some attention once it gets past the clinical trial stage. Dr. Anthony Fauci of the White House Coronavirus Task Force has said that the general public may not get their hands on the vaccine till way into 2021. That is how large the need for the drug is. So, the U.S. and countries all over the world need the vaccine at their disposal, at the earliest.
That means if iBio’s products are FDA approved, you will see large orders placed for them as well.
The Bottom Line
Look out for news surrounding the clinical trials in the forthcoming quarters. Those will be the triggers to get back into the stock. FastPharming technology is the company’s best bet at a long-term story. But with limited cash, it’s up in the air how much money it can bring in, considering the capex required to grow this segment.
The situation for iBio remains the same. If you are into day trading, you can reap profits in the short term, but if you are in it for the long haul, maybe it’s best to pick up shares that are now emerging as frontrunners in the Covid-19 race.
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. Faizan 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.
