The Low-Hanging Fruit for Covid-19 Vaccines Is Gone for iBio

During the initial phase of the novel coronavirus pandemic, several no-name pharmaceutical companies suddenly found themselves into the limelight. While I’m not trying to disparage iBio (NYSEAMERICAN:IBIO) in any way, I never heard of the company before the crisis. No, I’m not the arbiter of what people should have known about. But I’m pretty confident that few investors outside of biotechnology fans had extensive knowledge about IBIO stock.

A scientist in medical gear peers through a microscope.
Source: Shutterstock

Due to the pandemic, though, that narrative changed. Moreover, IBIO stock skyrocketed in the summer as the White House pushed for a coronavirus vaccine, hopefully before election day. As you can imagine, this sector was filled to the brim with solutions and pivots. But even in this crowded space, iBio stood out because of its FastPharming plant-based protein production process.

Not only that, FastPharming supposedly offered multiple advantages, with the most critical one being the shortening of the timeline to the clinic. Additionally, iBio claims on its website that it can “move a program from gene sequence to protein production in as little as three weeks.”

Well, the company has had more than half a year to prove this concept. Really, this was a way to introduce plant-based vaccine production to the world. And yet, it just couldn’t get it done. Not surprisingly, IBIO stock plummeted. Since early September, shares have gone nowhere, outside of an occasional short-lived spike.

Perusing through various opinions on IBIO stock, it appears that the sentiment has mostly turned negative. It’s understandable. Prior to the crisis, iBio was arguably off most investors’ radar. But the coronavirus presented a clear opportunity for the company, in much the same way that it did for remote work platforms like Zoom Video Communications (NASDAQ:ZM) or Slack Technologies (NYSE:WORK).

It just couldn’t do it, which is a real bummer. Still, if you’re a hardened speculator and a contrarian, not all hope is lost.

IBIO Stock Might Rise as a Therapeutic Play

When you look at the vaccine race, it’s tough not to feel disappointment all around. First, AstraZeneca (NASDAQ:AZN) paused its advanced-stage trial for its vaccine candidate due to a U.K. participant suffering from an unknown illness. Later, Johnson & Johnson (NYSE:JNJ) temporarily halted its trial for a similar reason.

Just from pure probabilities, it would seem unlikely that iBio has the ticket to success. Probably, we’ll never find out. However, what is still on the table is the therapeutic avenue. As you know, President Trump’s own contraction of Covid-19 has brought the limelight again on therapies.

And that’s where iBio’s partnership with Planet Biotechnology to develop Planet’s therapeutic candidate, ACE2-Fc is appealing, at least to the risk-tolerant speculator. I do want to remind readers that yes, this is serious speculation! However, in light of Eli Lilly (NYSE:LLY) running into hiccups with its antibody cocktail, it may open the door at least slightly to IBIO stock. Here’s my quick summary of the iBio-Planet Biotechnology therapeutic candidate:

To provide a very brief background, ACE2 refers to a protein called angiotensin-converting enzyme 2, which is found on the surface of many cell types. Regarding the pandemic, the novel coronavirus’ signature “spike-like” proteins – hence the name “corona” or crown – latches onto ACE2, infecting the underlying cell.

What’s compelling about ACE2-Fc is that this recombinant protein acts as a decoy, binding to the novel coronavirus and blocking infection of healthy cells. Additionally, the fused human immunoglobulin G Fc fragment (Fc) “domain prolongs the life of the protein in circulation.”

Potentially, we have an effective therapy or treatment for Covid-19 which might also provide lasting efficacy. Fundamentally, this is crucial because most Americans will not take a coronavirus vaccine when it first becomes available. Perhaps more eye-opening, one in four don’t want to take a vaccine at all.

Moreover, it’s important to point out that IBIO stock has a reasonably strong direct relationship with new daily coronavirus cases. Between the beginning of March to mid-October, IBIO and daily Covid-19 cases shared a 65.8% correlation coefficient. In other words, as infections increased, so too did IBIO.

IBIO stock vs. Covid-19 cases
Click to Enlarge
Source: Chart by Josh Enomoto

On paper, that bodes well for the underlying company. At the same time, IBIO stock and daily Covid cases registered a 14% correlation coefficient since the beginning of September to mid-October. That is hardly what you would call statistically significant, which makes the bullish argument incredibly risky.

However, if you believe in mainstream media reports, you’ll know that many parts of Europe are experiencing a spike in coronavirus infections. As well, according to our own Centers for Disease Control and Prevention, Covid-19 cases have been accelerating higher since Sep. 8.

If the situation worsens into a second wave at home, the race for therapeutics will be back on. And that could drive up IBIO stock.

Bullish Catalysts Beyond Corona

Typically, when I stick my neck out for these speculative ideas, I find comfort in at least one other InvestorPlace colleague forwarding a similar idea. In this case, that person is none other than Louis Navellier.

As you know, Navellier has made a career guiding investors to some bonkers companies well before they became household names. Further, he’s intrigued with the case for IBIO stock, particularly because the biotech firm offers applications that are relevant outside the pandemic.

That’s a smart approach, something that I didn’t even think about. And here’s where it gets interesting: I believe, as I demonstrated above, that iBio still has relevance for the pandemic. While incredibly risky, this is still a “dumb money” play that offers viability.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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