Biotech Innovator IBIO Is Down, but Not Out for the Long Term

The novel coronavirus pandemic is the story of 2020. On the investment side? There have been many developments including a stock market crash, the explosion of electric car stocks, and the collapse of the oil and gas industry. But one of the biggest stories of 2020 is a direct result of the pandemic: the boom in biotech stocks as companies scrambled to create a coronavirus vaccine. iBio (NYSEAMERICAN:IBIO) was one of those promising companies. At one point this summer, IBIO stock was up over 2,189%. That kind of growth makes investors giddy.

A scientist in medical gear peers through a microscope.
Source: Shutterstock

Quadruple-digit growth is also a warning sign, and sure enough, IBIO stock has dropped significantly from those towering heights. Anyone who bought IBIO in July is nursing their wounds right now.

IBIO has been left behind in the coronavirus vaccine race. However, even at their current levels — trading in the $1.50 range — IBIO shares are still up over 450% in 2020, after starting the year as a penny stock. Those focused purely on iBio as a coronavirus vaccine stock are missing the bigger picture.

2020 Is History Repeating for iBio Stock

The spikes in IBIO stock in 2020 have been impressive. At the end of February, IBIO shares gained 642% in just two sessions. In mid-July, IBIO jumped 191% over the course of a week.

However, the company’s stock has a history of these dramatic spikes — and just as rapid declines. At the end of 2010 and into 2011, IBIO put together a three month run that saw shares gain 153%. In October 2014, IBIO shares shot up 334% in a week.

In 2011, the surge was in response to news the company had a Phase I H1N1 vaccine in the pipeline. The catalyst in 2014 was the company’s involvement in the production of an experimental Ebola drug. Neither of these efforts made it into commercial production.

There are several ways you could interpret this. The pessimist might say that iBio has a history of swinging for the fence and missing. Its coronavirus vaccine candidate is looking to be a continuation of this pattern.

I prefer to take the long-term point of view. The company may not yet have hit a home run and delivered a breakthrough product. But as we move forward through these different health crises (and potential crises), the company’s FastPharming technology is increasingly in the spotlight.

FastPharming Is the Real Bet

IBIO’s efforts to develop its own vaccines and drugs may have failed to land — so far. But this biotech company’s crown jewel is its technology. Specifically FastPharming.

The company built its 130,000 square foot FastPharming facility in Texas with funding from DARPA (the Defense Advanced Research Projects Agency). FastPharming uses plant-based production to rapidly produce biologics — including vaccines. The facility features automated hydroponics, vertical farming systems, and can rapidly scale-up to commercial production volume. 

FastPharming is mature technology that iBio can use to partner with other biotech and biopharma companies. For example, iBio recently signed an agreement with Safi Biosolutions. Safi will be evaluating the use of iBio’s FastPharming system in the bioprocessing of Safi’s blood cell therapy products.

Bottom Line on iBio

At this point, the market is looking at iBio as an also-ran. It fell behind in the race to be first to market with a coronavirus vaccine. That effort was the sole factor for the dramatic spike in its stock through the year. They’ve moved on.

Investment analysts that even cover iBio are few and far between — CNN Business and the Wall Street Journal both have just one. For what it’s worth, that analyst has IBIO stock rated as a “buy” with a $2 price target.

I’m looking at long-term growth potential, and I think IBIO stock has it. With the excitement over the company’s coronavirus candidate dying down and iBio shares in a slump, now might be the time to think about adding it to your portfolio.

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. 

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