When it comes to a vaccine for the novel coronavirus, iBio (NYSEAMERICAN:IBIO) is coming up short. But as a biotechnology innovator, IBIO stock remains in the game.
The company’s profile grew during 2020 as investors sought alternatives to the established pharmaceutical companies. The thinking was that one or two of these smaller, lesser-known companies might break through with a pandemic treatment. This success would then reward early investors.
It’s no surprise, though, that the leaders in getting Covid-19 vaccine candidates to government regulators are the established pharma firms after all.
This could mean it’s time for iBio investors to look elsewhere.
Let’s Look at IBIO Stock
The history of IBIO stock is marked by volatility. Shares fluctuated widely over the last year, as pandemic-induced enthusiasm pushed prices to impressive-but-brief spikes.
Currently, the stock is trading around $1.25 per share. Its 52-week high is $7.45, while the low for the same period is 19 cents. Aside from the remarkable surge in July, IBIO spent much of the year in the $1 and $2 range. That’s not too bad, I suppose, compared to the range of 20 and 30 cents seen prior to March, when vaccine hunters began roaming.
iBio has a market cap of about $225 million.
Last month, iBio announced its first-quarter results for the three months ending Sept. 30. The company said it lost $7.5 million or 5 cents per share. This compares to a $4.5 million loss (21 cents per share) during the same period in 2019.
Chairman and CEO Tom Isett says the company made “tremendous strides” in its planned conversion from “a modestly performing contract manufacturer into a dynamic, diversified innovative biotechnology company.”
Two schools of thought evolved regarding the company. One was to buy shares as a risky potential vaccine play. The long odds were part of the appeal. The other was to think of it as a risky biotech firm with a cool niche on the horizon.
Now it seems the short-term vaccine play may well have played out. The dominant pharma companies are consolidating positions in the Covid-19 arena. While more vaccine candidates are expected to receive approval from regulators, the odds appear against iBio’s entry being one of them.
Nevertheless, the company is intent on continuing work on its vaccine candidate. This long-shot focus could pay off if other contenders hit a rough patch.
The Company’s Niche
Meanwhile, iBio has one thing that sets it apart from other biotechnology firms. FastPharming, a production process that uses plants, was developed at the company’s 130,000-square-foot facility in Bryan, Texas. With this center, iBio is ready for partners and customers. This process looks promising and holds the key for the company’s eventual success.
“FastPharming uses plant-based production to rapidly produce biologics – including vaccines,” Louis Navellier wrote recently in InvestorPlace. “The facility features automated hydroponics, vertical farming systems, and can rapidly scale-up to commercial production volume.”
He describes iBio as down but not out for the long term because of the FastPharming technology.
Another InvestorPlace colleague, Chris Markoch, recently wrote a very interesting piece about the roots of iBio’s technology and the role of the federal Defense Advanced Research Projects Agency in its creation. His summary indicates there may yet be role for iBio, either in the current pandemic or in other public health situations.
The Bottom Line on iBio
Previously, I wrote that IBIO stock was a play on a small company with an interesting technology that has not proven its viability as an investment. This assessment has not changed.
In the wake of the Covid-19 pandemic and last summer’s surge in share price, the company has gone all-in on making a vaccine candidate. iBio’s leaders want the firm to go from contract manufacturer to a coronavirus vaccine contender. Is this strategy the result of too much enthusiasm for the vaccine sweepstakes? Will this route take iBio too close to the sun?
The FastPharming contract business is stable revenue for iBio. If it turns away from that, IBIO stock will go from risky speculation to a one-horse gamble. Investors who own iBio shares will want to watch closely and potential investors should be very, very wary.
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.