The vaccine race isn’t over, but it might be for Inovio Pharmaceuticals (NASDAQ:INO). Recently, this synthetic DNA-focused biotech company announced that it will be discontinuing it’s Covid-19 vaccine study. Although the company has confirmed it will now focus on a promising booster candidate, INO stock is still falling quickly. This news comes on the heels of Inovio’s first-quarter earnings report and the announcement of its new CEO.
This morning, news of the trial halt sent INO stock plunging. It dropped 20% within the first hour of trading after falling pre-market. Since then, however, it has shown signs of a slight rebound. As of this writing, INO is down more than 25% for the day. There’s plenty of time left for it to continue a turnaround. However, given today’s onslaught of bad news, that doesn’t seem likely.
Let’s take a closer look at what’s going on with Inovio and its shares.
What’s Happening with INO Stock?
Throughout the past year, vaccine news has been the primary catalyst behind INO stock. In June 2021, Inovio shot up on a vaccine partnership update. At the time, even InvestorPlace‘s Louis Navellier called for a bullish play on shares. Later in the year, the stock rose again on another clinical trial update. Since then, though, Inovio has seen no positive updates, sending INO stock on a steady race to the bottom.
It’s easy to see why investors would be nervous about Inovio pulling the plug on its Covid-19 vaccine. The trial has effectively been its only growth driver since 2021. However, it’s also important to examine the company’s perspective. Inovio says that its decision on the trial is a result of “emerging global data” showing “a lower incidence of severe COVID cases, which would lead to an increase in trial size and costs.”
Looking forward, it’s true there may also be a bigger market for boosters than new vaccines. Inovio failed to establish itself as a player in the vaccine race in early 2021, back when it mattered. However, Covid-19 cases are still rising across the globe. Trends point to a new focus on boosters.
That said, while Inovio may produce an effective booster, larger companies may have also already beaten it to the punch. Reuters reports that larger companies like Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) believe most consumers who want to be vaccinated already are. This has prompted them to pivot to prioritizing booster production.
What It Means
Today may just be a bad day for Inovio, but it’s hard to ignore the macroeconomic trends working against it. The company’s Q1 misses on both the top and bottom lines aren’t helping INO stock, either.
True, Inovio did just appoint a new CEO, Dr. Jacqueline Shea. But it takes time for new leadership to become effective. What’s more, changes to any company’s management can tend to create further turbulence for the stock.
The bottom line: None of today’s announcements point in Inovio’s favor. The company may have a chance to benefit from the booster race, but there’s little evidence to suggest it will. All told, investors should look elsewhere for booster plays, even as INO continues to trade at such low levels.
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On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.