Carried by enthusiasm for novel coronavirus vaccines, Inovio Pharmaceuticals (NASDAQ:INO) soared in the summer but INO stock has since settled about two-thirds lower.
The company grabbed some of the spotlight as its anti-coronavirus entry began a clinical trial.
The dominant pharma names consolidate their lead over the vaccine development pack.
Investors who wagered that Inovio might join the big boys in the vaccine winner’s circle may come up short.
INO Stock Loses Altitude
Inovio is a Pennsylvania-based small-cap biotech company that was founded in 1979. Summaries describe the company as one focused on developing synthetic DNA products for treatment of infectious diseases and cancer.
INO stock has been on a volatile carnival ride.
Until the pandemic, the company – at around $2 per share – was a solid member of the notorious penny-stock club. In March, however, Inovio spiked and briefly hovered around $15. Following that quick trip, INO stock found a floor around $5. The stock then began a climb to its 52-week high of $33.79 on June 26. The volatility continued as shares descended to current levels around $10.
Traders who play price swings scored if they timed their departure correctly. Even investors who bought at the start of 2020 would see gains if they sold now.
For now, at least, it looks as if the market has evaluated Inovio and found it wanting.
Performance Hits a Flat Note
Inovio’s third-quarter results weren’t anything to write home about.
For the three months ending Sept. 30, the company posted a net loss of $43.1 million or 26 cents per share. During the same period a year ago, it posted a net loss of $23.1 million or 25 cents per diluted share.
Inovio said its Q3 revenue totaled $236,000. This was a significant drop from the $867,000 the company posted in the same period in 2019.
Much of the third-quarter report reviewed Inovio’s product development, which includes its Covid-19 vaccine candidate as well as a potential treatment for brain cancer. Federal regulators paused the Phase 1 trial of Inovio’s vaccine candidate and requested more information. The company says it provided the information to the FDA, but didn’t specify what it covered. CEO J. Joseph Kim did say “the partial clinical hold is not related to adverse events.”
The financial details of Inovio’s third-quarter performance were tucked far down into the earnings report. This was fitting considered the numbers.
Making the List
INO stock recently made a list of four pharma stocks that aren’t worth their 2020 gains that was published by InvestorPlace on Dec. 1.
Additionally, citing the 65% drop in INO stock, my colleague Joel Baglole says, “The drop has been due to the growing realization that Inovio’s vaccine candidate is not likely to make it to market, as well as a number of other problems afflicting the company.”
Moreover, Inovio has no orders for its vaccine. Its Covid-19 vaccine candidate was not included in the Operation Warp Speed development program.
Other pharma companies cited by Baglole were Regeneron Pharmaceuticals (NASDAQ:REGN), Abbvie (NYSE:ABBV) and Novavax (NASDAQ:NVAX).
The Bottom Line
In my last article about Inovio on Sept. 24, I concluded INO stock may well be a worth a gamble by coronavirus-pharma investors. It wasn’t a ringing endorsement. In part, it was based on the company’s vaccine candidate being easier to store and administer than those now on the cusp of approval.
And now it seems chances are diminishing that Inovio’s candidate, INO-4800, will make be realized.
Should investors put their money behind the company now? Although impossible to know for sure, it sure looks as if INO stock is best left to traders who play price swings of low-cost stocks. Long-term investors should look elsewhere.
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.