IBio (NYSE:IBIO) is a popular biotech penny stock that has benefited from its exposure to coronavirus treatments, gaining 647% year-to-date. However, with sluggish progress with its Covid-19 vaccine, IBIO stock struggled of late. Hence, with its vaccine candidates still in pre-clinical stages, IBIO is virtually out of the Covid-19 vaccine race.
The problem for IBIO is two-fold. The first is its Covid-19 vaccine candidate, which lags far behind the competition. The second is perhaps an even more significant blow; its inability to gain traction with its manufacturing technology.
Most investors were banking on its FastPharming technology to have a disruptive effect on biopharma manufacturing. However, it hasn’t been the case so far, as it continues to struggle in inking notable deals. Hence, IBIO continues to be a purely speculative play.
Covid-19 Vaccine Progress
IBIO pre-clinical results left a lot to be desired. Though its vaccine candidate, the IBIO-200, elicited immune responses, the results were panned for the lack of human testing. The company recently announced that it was going with IBIO-201 over IBIO-200 as its leading Covid-19 vaccine candidate.
“While IBIO-201 produced significantly higher anti-spike neutralizing antibody titers than IBIO-200, we are still encouraged by the potential of IBIO-200,” stated Tom Isett, Chairman & CEO of IBIO. The company plans to conduct more focused studies on both candidates in advancing toxicology studies.
The recent updates are far from what investors were hoping for at this stage. Advanced studies are way off as the company is still assessing which of its candidates has the most potential. There are over 25 vaccine candidates in clinical studies as per the Covid-19 vaccine tracker.
IBIO’s licensing deal with Planet Biotechnology for a potential treatment for Covid-19 is interesting. However, its problem is the same as it is still in the pre-clinical stage.
IBIO, a Plasma Company?
On August 23, the FDA greenlit the use of convalescent plasma for hospitalized patients with the coronavirus. Additionally, it has also allowed companies to use convalescent plasma for investigational new drug applications in September. As a result, many companies specializing in plasma-based solutions witnessed a sharp increase in their stock prices. After the news broke, IBIO stock jumped 30% the following day.
That comes as a surprise, mainly because the company’s primary business is in plant-based vaccines. It makes proteins in plants that are also found in plasma and can be made recombinantly. Back in 2011, the company made two proteins which one can find in human plasma. However, it’s a bit far-fetched to say that IBIO could benefit from the FDA’s approval of convalescent plasma for Covid-19. The company hasn’t mentioned anything regarding the development so far, which further strengthens the argument.
Personally, what is most disappointing about the company has been its inability to leverage its FastPharming technology. A few months ago, I was excited about this new manufacturing technology and its ability to disrupt the industry. I felt that IBIO would ink several deals on the manufacturing front, even if its Covid-19 vaccine failed.
However, it hasn’t been the case so far as the company struggles to land meaningful contracts. It recently announced a deal with Safi Biosolutions and Planet Biotechnology previously. However, such deals are relatively minuscule in comparison to initial expectations.
Final Word on IBIO Stock
IBIO stock is in a rough spot currently, and it’s unclear when things will improve. Its investors need more information regarding its clinical trials and a time frame when the vaccine could be complete. So far, there has been minimal information, which is enough to write off the company in the Covid-19 race. Its FastPharming technology has also been disappointing so far, which was its ace in the hole. Hence, avoid IBIO stock for now.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in 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. He does not directly own the securities mentioned above.
