Like so many novel coronavirus contenders this year, Inovio Pharmaceuticals (NASDAQ:INO) had its share of moments. But more recently, INO stock is crimping investors as the biotechnology company waits on a blessing from the Food & Drug Administration (FDA).
Inovio’s 2020 trajectory is similar to those of many of the smaller players in the Covid-19 vaccine race – its market capitalization is $1.91 billion, putting it in small-cap territory. Earlier this year, INO raced from unheard of, or trading around $5, to story stock, or flirting with $34, as market participants baked hope and optimism and not much else into these smaller vaccine names.
In financial markets, hope doesn’t burn eternal. Over the past 90 days, Inovio shed 43% of its value as it’s become clear that INO-4800, its Covid-19 vaccine candidate, is long on ambition and short on time.
That’s another way of saying that when larger, well-heeled pharmaceutical names, such as Johnson & Johnson (NYSE:JNJ), AstraZeneca (NYSE:AZN) and Eli Lilly and Company (NYSE:LLY), are encountering headwinds in developing a coronavirus vaccine, it’s not surprising smaller, more speculative counterparts are finding the terrain equally rocky.
INO Stock Not Worst Vaccine Name, Not Best, Either
For Inovio, the good news is that it commenced clinical trials on INO-4800. Hey, that’s more than can be said by some of the other competitors in this space, which are still in pre-clinical stages.
The bad news is that the FDA recently halted the Inovio trial. Think about that for a moment. The world is in dire of need of a Covid-19 vaccine and the U.S. is engaged in “Operation Warp Speed” to get a vaccine to market, but here’s a regulator telling Inovio to pump the brakes.
Obviously for investors, that’s an ominous sign because it means Inovio needs two blessings from the FDA. One to restart the INO-4800 trial and another to move onward in the trial process. All of that is rough for Inovio because it was onto something with INO-4800, which has favorable traits including its delivery system and ease of transport.
“INO-4800 is the only nucleic-acid based vaccine that is stable at room temperature for more than a year and does not require to be frozen in transport or for years of storage, which are important factors when implementing mass immunizations to battle the current pandemic,” according to Precision Vaccinations.
Tough Timeline
To be fair to Inovio, and this is relevant to those considering the stock, the FDA did not halt the INO-4800 trial for adverse circumstances. Rather, the regulatory body has questions about the CELLECTRA 2000 delivery device and is giving the company this month to address those concerns.
From there, the FDA has a month to render a decision on whether or not Inovio can get back to its Phase 2/3 trial, meaning an optimistic scenario puts the timeline at early December for resumption of work.
Under normal circumstances, that’s not debilitating, but Moderna (NASDAQ:MRNA) could have a vaccine ready for approval by January, underscoring the time sensitive nature of the Covid-19 vaccine competition. Better late than never may apply here, but best to be early and successful.
For now, Inovio is a coronavirus stock and one beholden to an FDA decision. In better news, the company has a robust pipeline with treatments that targets a variety of cancers, infectious diseases, such as ebola and HIV, and much more. That says INO-4800 isn’t the beginning nor the end of Inovio, but in order for near-term gains to be recognized, the company must find firmer coronavirus vaccine footing.
On the date of publication, Todd Shriber did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Todd Shriber has been an InvestorPlace contributor since 2014.
