Inovio Pharmaceuticals (NASDAQ:INO) is in the hot seat right now. Not so long ago, INO stock was one of the hottest names out there as pharmaceutical companies race to find a vaccine for the novel coronavirus.
But that was before other companies inched closer to getting a vaccine approved for mass distribution. Dr. Anthony Fauci, the nation’s top infectious disease expert, says people may be able to start getting an approved vaccine by the end of the year.
Meanwhile, Inovio’s vaccine candidate was placed on a partial clinical hold in September after the Food and Drug Administration (FDA) announced it had additional questions about the INO drug. The hold was lifted on Nov. 16.
Following the initial announcement of the hold, INO stock fell 29%, hitting a low of $8.26 on Nov. 9. Some investors lost confidence that Inovio’s vaccine candidate, INO-4800, will be a winner.
Were they right?
A Status Update on INO Stock
Inovio reported its earnings for the third quarter on Nov. 9. In that, it announced that the company responded to the FDA’s questions on INO-4800 and that it expected a response from the government this month.
Inovio CEO Joseph Kim did his best to put the FDA issue in a positive light when speaking to analysts after the earnings release:
“I would like to remind everyone of two important points. First, the partial clinical hold does not impact the advancement of INOVIO’s other product candidates in development nor the completion of the ongoing expanded Phase 1 clinical trials for INO-4800 in the U.S. Secondly, the FDA’s questions were not related to the occurrence of any adverse events relate – related to our INO-4800 Phase 1 study. … Our expanded Phase 1 clinical trials in the U.S. is ongoing. In addition, our trials in South Korea and China are being conducted with our collaborators, IVI and a vaccine, respectively, and are progressing well.”
Meanwhile, Inovio reported net income for the third quarter of $19.2 million, versus a loss in the third quarter a year ago. Net income was 11 cents per share, and losses adjusted for non-recurring gains were 22 cents per share. Analysts had expected a loss of 18 cents per share.
Revenue was $236,200 for the period.
What Sets Inovio Apart
Unlike some companies working on a coronavirus vaccine, Inovio has been in the vaccine business for years. It has worked on everything from the flu to treating cancer patients.
One of its best, more interesting innovations is its proprietary delivery method for vaccines, known as CELLECTRA.
CELLECTRA is used in place of an old-fashioned syringe for drug delivery. Instead, it uses an electrical charge to open small pores in the cell and allow plasmids to enter.
The idea is that opening pores in the cell is a more efficient and effective way to deliver a vaccine. And because CELLECTRA is proprietary, Inovio stands to earn a lot of money as medical providers purchase it.
INO-4800 Has Promise
Inovio’s Covid-19 candidate, INO-4800, can’t be written off. Inovio develops medical solutions and treatments based on DNA science, and its vaccine candidate was one of the most promising ideas in the Covid-19 space earlier this year.
Its trial earlier this year showed immune responses in non-human primates. In addition, in August the company reported that all participants in a 38-person trial showed overall immune responses.
H.C. Wainwright analyst Ram Selvaraju suggested in a recent research note that Inovio’s vaccine candidate still has a future. He predicted that INO-4800 will start its next phase of trials by the end of the year, just as Covid-19 cases are peaking again. “We believe the first approved COVID-19 vaccine may enter the market in early 2021, but that does not obviate the need to develop other COVID-19 vaccine candidates,” he wrote.
As it turns out, both Kim and Selvaraju were correct in their optimism. On Nov. 16, Inovio announced that the FDA had lifted the clinical hold and allowed for Phase 2 to begin.
The Bottom Line
INO-4800 could be huge for Inovio, but it would also be a mistake for investors to think that the company’s fortunes are tied only to a single drug.
Inovio’s body of work, including its CELLECTRA delivery method, make INO stock interesting on its own. And the recent clearance from the FDA to proceed with INO-4800 could very well take INO stock to the next level and turbocharge returns.
Inovio stock has an “A” grade and a “strong buy” recommendation in my Portfolio Grader right now.
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.