In the era of the novel coronavirus pandemic, investors might assume that every biotech firm with a Covid-19 vaccine candidate is a Wall Street darling. Yet, this isn’t the case at all. As we’ll discover, iBio (NYSEAMERICAN:IBIO) isn’t heavily favored, and IBIO stock is under pressure.
But let’s not confuse a low share price with a bad company. Famous investors like Warren Buffett are known for picking up shares of stocks at depressed prices. The idea is to detect a misalignment between a company’s fiscal health and the price of the stock.
No one would claim that iBio is the most well-known company with a coronavirus vaccine candidate right now. But does iBio’s financial position justify the beaten-down IBIO stock price? And if not, then how can traders profit from this opportunity?
IBIO Stock at a Glance
The historical price action of IBIO stock demonstrates how high this stock can fly. Amazingly, IBIO has a 52-week range of 19 cents to $7.45.
That 52-week high was attained in July, during a summer when practically every biotech with a Covid-19 vaccine candidate was enjoying positive attention.
Today, it seems as if iBio’s Covid-19 vaccine candidates, IBIO-200 and IBIO-201, have been unduly ignored. That’s mainly because a handful of other drug makers have usurped all of the media’s attention.
Thus, on Dec. 4, the IBIO share price was trading near the $1.50 level. The deep discount in IBIO stock could turn out to be a major error on the part of sellers and a terrific opportunity for anyone who was waiting patiently on the sidelines to buy shares.
The share-price correction that we’ve witnessed in IBIO stock doesn’t necessarily make sense when we examine iBio’s overall fiscal picture.
Not long ago, iBio reported financial results for the company’s first fiscal quarter. Specifically, this was the three-month period ending on Sept. 30.
During this quarter, iBio selected IBIO-201 as its leading Covid-19-preventing vaccine candidate. Importantly, in August, iBio “announced that IBIO-201 demonstrated an ability to elicit an anti-SARS-CoV-2 immune response in preclinical studies.”
So, how did iBio’s top line look during this time frame? Suffice it to say that the company increased its revenues by approximately 280% on a year-over-year basis.
In addition, iBio held cash and investments in securities totaling roughly $83.5 million as of Sept. 30. That’s a marked improvement compared to the approximately $55.1 million that iBio had in cash and investments in securities as of June 30.
On top of that, for the fiscal year-to-date, iBio increased its staffing by around 21%. That’s a good sign, and not indicative of a company in trouble.
A New Contract
Looking beyond the fiscal stats, it’s also encouraging to see that iBio has recently scored a potentially lucrative contract.
This isn’t specifically related to the company’s Covid-19 vaccine candidates. Rather, it’s a Statement of Work (SOW) under a Master Services Agreement (MSA) with ATB Therapeutics. The objective of the contract is to produce antibody-toxin fusion proteins using iBio’s FastPharming system.
ATB Therapeutics is a pioneering Belgian biopharmaceutical company developing a pipeline of antibody-toxin-bioengineered products targeting cancers.
To be more precise, iBio Chairman and CEO Tom Isett explains that ATB Therapeutics’s “platform technology offers a unique approach for hard-to-treat hematological malignancies and solid tumors.”
Together, Islett continues, the two companies are seeking to “rapidly build a scalable manufacturing process so that [ATB Therapeutics’s] … drug candidates may quickly reach the clinic and begin to realize their potential in oncology.”
iBio wouldn’t have the wherewithal to engage in this venture with ATB Therapeutics if the company was in real trouble. Nor would iBio be able to post its excellent fiscal results.
Therefore, IBIO stock might be down, but judging from the evidence, it appears to be poised for a comeback.
IBIO currently has an “A” rating in my Portfolio Grader.
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.