Clinical-stage biotech Inovio Pharmaceuticals (NASDAQ:INO) was an early entrant into the race to develop a successful novel coronavirus vaccine candidate. In 2020, INO stock traders sent this previously unknown name from obscurity to fame. As this price surge transpired, some folks made fortunes along the way.
Has this DNA vaccine specialist peaked too early? The price action of INO stock might lead some folks to believe that the best days are in the past.
Or, we can view this more as an opportunity than as a reason to get shaken out of the trade. Sometimes markets overreact and put negative pressure on a stock like INO based on news that is not all that bad.
It is true that INO-4800, its Covid-19 vaccine candidate, has provided the main catalyst for the ascent in INO stock. And, any setback in the development of INO-4800 is a source of concern. However, not all setbacks are necessarily reasons to jump ship. In fact, sometimes price dips are a gift.
INO Stock at a Glance
One thing that we can say for certain is that it has been a wild ride for INO stock in 2020. Its 52-week range of $2.09 to $33.79 pretty much speaks for itself.
When INO stock peaked in late June, there was buzz on social media that this could be the next millionaire-maker stock. However, when the bullish sentiment cooled off, some traders dumped their shares for a loss.
I don’t view this as the right approach to trading INO stock. If someone chased the INO stock price after it jumped from $12 to $30 in June, there is no need to blame the company.
Instead, the price chasers should look inwards and realize that they bought on hype and then sold when that hype dissipated. Great wealth can be made by owning stocks that people are not hyped up about — just ask Warren Buffett. Without a doubt, INO would fit into that category today.
A Summer to Remember
Back in July, INO stock was riding on cloud nine. Inovio had tested INO-4800 on non-human primates, and the results were highly promising.
The research study found that “The reduced viral loads following exposure to SARS-CoV-2 infection at this timeframe demonstrate an important durable impact mediated by INO-4800.”
This was not only encouraging, but perhaps historic. As Inovio reported, this trial marked “the first time a vaccine protection in non-human primates was reported from memory immune responses as previously reported monkey vaccine challenge studies were conducted at the time near their peak immune responses…”
On top of that, in August, Inovio reported that all participants in a 38-person trial demonstrated overall immune responses. Plus, there were no reported serious adverse events. Overall, both the company and its stakeholders were in celebration mode.
INO Stock Hits a Bump in the Road
Just as stocks do not go up in a straight line, vaccine development does not happen without obstacles and challenges.
Thus, the U.S. Food and Drug Administration notified Inovio that it “has additional questions about the company’s planned Phase 2/3 trial of its COVID-19 vaccine candidate INO-4800,” as reported by Inovio.
Market participants reacted harshly, slamming the INO share price. Risk-tolerant traders should consider the possibility that this was an overreaction.
Just because the Phase 2/3 trial has been put on pause, doesn’t mean that it is tabled permanently. The FDA is giving Inovio a chance to respond to its questions. And if all goes well, the trial could still be in progress in November.
The pause in the clinical trial should not cast too big of a shadow on Inovio and INO-4800. Keep in mind that in terms of research and development, Inovio’s collaborators include some highly regarded institutions. Among these are the University of Texas, the University of Pennsylvania, Laval University, Fudan University and the Wistar Institute.
It is easy to get shaken out of a trade sometimes, especially when there is a bump in the road. In the case of INO stock, however, we do not have to view the bump as a mountain.
Sure, the FDA has questions and Inovio must answer them in order to advance INO-4800. This is part of the process — something biotech companies must do to proceed with innovation. There is no need to give up on Inovio as the story of INO-4800 is still being written.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.