iBio Looks Well-Positioned to Succeed

Advertisement

Biotech stocks have been on a roll since the start of the pandemic, and iBio (NYSEAMERICAN:IBIO) stock is no different. The race to the Covid-19 vaccine is at its pinnacle as firms complete the third phase of trials of their shots.

In just the last few weeks, Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) have announced their vaccine candidates are more than 90% effective. While this is great news, there are still 50 experimental vaccines undergoing trials at the moment.

A scientist in medical gear peers through a microscope.

Source: Shutterstock

The biotech firm IBIO has its own Covid-19 vaccine, the IBIO-201, which is still undergoing pre-clinical trials.  The trials of the vaccine are nowhere near complete, but the shot triggered a powerful immunity response when it was tested on mice. Although another company’s vaccine could be approved by the end of November, other recent news has been promising for iBio.

iBio Reported Impressive Q1 Results

After reporting subpar earnings since its founding, iBio reached a turning point in 2020. The recent rally of biotech stocks helped the company enhance its growth strategy and improve its bottom line. The company’s performance this year can be attributed to clinical trials, changes to its leadership team and lucrative licensing agreements. 

In its most recent reported quarter, iBio’s revenue increased $0.3 million year-over-year to $0.4 million, The gain was caused by the two additional customers that the company acquired this year.

However, the firm’s expenses increased last quarter, due to the number of clinical trials that it undertook. For the quarter that ended on Sept. 30, iBio’s research and development costs were $1.8 million, a $0.8 million increase from the same period a year earlier. The spike was largely due to higher personnel costs and the purchase of additional lab equipment. 

iBio also recorded a net loss of $7.5 million last quarter,  compared to a loss of $4.5 million during the same time in 2019. But given its history of less-than-spectacular earnings, the biotech firm has made some major strides this year. iBio may not be a top contender in the race to launch a  Covid-19 vaccine, but IBIO stock is still a worthy investment based on the company’s recent  news.

A Diverse Business

In the last few years, iBio has defined itself as a traditional, contract-manufacturing business. However, the biotech firm is now a diverse and dynamic player in the pharmaceutical sector. In addition to its  vaccine candidate for the coronavirus, the company has a number of other projects in the pipeline.

In August of this year, iBio entered into an agreement with Planet Biotechnology to assist with the production of the latter company’s  therapeutic candidate, ACE2-Fc. This will likely be a lucrative deal for iBio, given the proficiency of the latter’s plant-based production system. The agreement specifies that Planet Biotechnology will receive payments based on the milestones it achieves.

iBio also reported an agreement with Safi BioSolutions to evaluate the use of iBio’s proteins in Safi’s cell-therapy products. This will be done using iBio’s FastPharming system. Nearly a dozen of iBio’s proteins have already proved to be successful. As part of the deal, iBio will invest $1.5 million in Safi’s products.

In other iBio news, the company also added new members to its leadership team. It may not be as successful as its bigger biotech counterparts, but IBIO stock is definitely worth holding onto for the future.

The Bottom Line on IBIO Stock

The successful data reported by Pfizer and Moderna resulted in a mass selloff of IBIO stock last week. But despite the short-term pullback, the fundamentals of iBio’s business remain strong.

Its Covid-19 vaccine could be a bust, but the company has other projects to fall back on. Given that many of these programs are still in their initial stages, it is hard to draw conclusions about iBio now. However, if the biotech firm is able to deliver results, its stock could reach new highs.

Recent news gives investors good reason to put their money into IBIO stock. But it’s worth noting that those who invest in the drug sector have to deal with long waiting periods and a lot of uncertainty. Nevertheless, IBIO stock is a great investment for people with a high tolerance for risk.

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

Divya Premkumar has a finance degree from the University of Houston, Texas. She is a financial writer and analyst who has written stories on various financial topics from investing to personal finance. Divya has been writing for InvestorPlace since 2020.

Divya Premkumar has a finance degree from the University of Houston, Texas. She is a financial writer and analyst who has written stories on various financial topics from investing to personal finance. Divya has been writing for Investor Place since 2020.


Article printed from InvestorPlace Media, https://investorplace.com/2020/11/recent-ibio-news-shows-promise-for-the-future-of-the-company/.

©2024 InvestorPlace Media, LLC