As the novel coronavirus continues to ravage the United States, investors are still looking hard at biotechnology companies like iBio (NYSEAMERICAN:IBIO) with hopes of backing a victor. An honest assessment of IBIO stock shows it is unlikely that the company will carry shareholders to the winner’s circle.
This is not a judgment I enjoy. I’d like nothing more than for this scrappy biotech to land a punch above its weight.
But the odds appear to have lined up against iBio. And unfortunately, that also means holders of IBIO stock are facing the same obstacles to come out near the top – at least – in the global quest for therapeutics and a vaccine to combat Covid-19.
Performance of IBIO Stock
Lately, the track of IBIO stock on a chart heads south like a migratory bird fleeing winter’s chill.
Put another way, the line on this chart is how Americans wish cases of Covid-19 were trending across the country rather than the exponential increases resulting from a wholly inadequate response.
When I wrote about iBio in late September, shares were trading around $2.50. Current prices are hovering around a decidedly more anemic $1.63. This slide in the market is a major disappointment to those “brave” investors who took on the gamble and bought shares of the company.
Of course, $1.63 is a far sight better, of course, than the 52-week low of 5 cents that IBIO stock posted late last year. That was when it looked destined to literally become a penny stock.
The stock’s high point in August of $7.45 looks a distant mirage. Says the brave shareholder, “if only …”
IBIO stock remains as volatile as a mother bear protecting her cub.
Why iBio Remains Interesting
The high-water mark of IBIO stock last summer followed the company’s announcement on Aug. 28 of a partnership with Planet Biotechnology to develop a treatment candidate to use against Covid-19. This project joins iBio’s efforts to craft a vaccine to protect people from catching this deadly coronavirus strain.
This action by the stock confirms that though iBio is a comparatively small company, it maintains a sufficient profile to spike fairly quickly on a positive development related to Covid-19.
In addition, iBio captures investor attention because of FastPharming, which is its unique process to produce therapeutics.
FastPharming uses plants for the mass reproduction of protein therapeutic components. The company says this process can be scaled to make up to 500 million doses. If you spot a hint of agriculture innovation in this description, you would be right. The process was developed in conjunction with Texas A&M University.
In fact, the company operates a 130,000-square foot facility in Bryan, Texas, not far from the university.
Advocates say iBio’s FastPharming system could produce a component faster than traditional systems. However, the leading biotech companies that would need to partner with iBio thus far have been much less interested in FastPharming than investors.
My InvestorPlace colleague Josh Enomoto recently wrote that iBio’s pool of potential partners for a major Covid-19 partnership is shrinking.
“Really, this was a way to introduce plant-based vaccine production to the world,” Enomoto says. “And yet, it just couldn’t get it done.”
Meanwhile, iBio is not alone in this campaign to corral the coronavirus.
The Bottom Line
If you hadn’t heard of iBio before the pandemic, don’t feel bad. It’s a low-profile niche biotech company that has pioneered an interesting concept that appears to have potential. That profile grew as Covid-19 spread. This continues to this day, as Enomoto has found when he tracked the correlation of IBIO stock to pandemic case swings.
But that kind of up-and-down behavior of what remains a penny stock is not suited for the average investor. If you’re a stock speculator, then perhaps IBIO stock may be attractive.
I’ve said before that I wish iBio well, but I don’t think it’s a good investment. The passage of time has not improved its prospects, either.
On the date of publication, Larry Sullivan did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Larry Sullivan is a veteran journalist in Florida who has covered banking and finance for several years. He is a former investing editor at U.S. News & World Report in Washington D.C.