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Inovio stock: Buy, Sell or Hold?



Inovio Pharmaceuticals (NASDAQ: INO) has taken many headlines in recent weeks, most thanks to its commitment in the race to find a vaccine against COVID-19. The company claimed to have released its potential vaccine, INO-4800, just three hours after Chinese scientists publicly published the genetic sequence of the SARS-CoV-2 virus that causes COVID-19. Inovio initiated a Phase 1 clinical trial of this vaccine in early April.

The study initially included 40 volunteers and would test the safety and immunogenicity of the vaccine. Four of the original 40 participants did not complete the study. Three of them tested positive for COVID-19, indicating that they contracted the virus before enrolling in the study. Another participant left the study for reasons “unrelated to safety or tolerability.”

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The company recently reported interim data from this study that did not impress investors (more on that below). As a result, the share has fallen by more than 30% since June 30.

Inovio has still increased by about 477% since the year began. Is it time for investors to sell the company’s shares? Or is the stock worth sticking with – or even buying?

INO Chart

INC data from YCharts

Phase 1 clinical trial results of INO-4800

According to Inovio, the partial results for his Phase 1 clinical trial with INO-4800 were positive. There were no serious side effects to the vaccine. The most common side effect experienced by 10 patients was redness of the skin where the vaccine was administered – but which only guarantees the lowest severity, grade 1. The study thus appeared to indicate that safety is not a major problem. The company also said that 34 of the 36 participants (about 94%) showed an immune response six weeks after receiving INO-4800.

But some important details were missing from Inovio’s published data. Specifically, the company did not share information on how many of the patients produced neutralizing antibodies or T-cell responses. T cells are white blood cells that bind to and kill infected cells.

The lack of material information in Inovio’s press release announcing these results prompted several analysts to downgrade the company’s stock. Roth Capital’s Jonathan Aschoff downgraded the stock from neutral to sell, giving it a $ 11 price target, noting that the information released by Inovio was “very limited.”

Given that Inovio’s shares are worth $ 19.73 apiece, this price would represent a significant disadvantage from its current levels.

Nurse with hand on chin and thoughtful expression on face.

Image source: Getty Images.

Inovio has to do with other complicated factors. Several companies seem to be making a strong step in their quest to develop a vaccine against COVID-19. For example, Pfizer recently released positive data from a phase 1/2 clinical study for its investigative COVID-19 vaccine, BNT162b1, which it is developing in collaboration with Bion Tech. AstraZeneca and Modern has two advanced vaccine candidates who are considered leaders in this race.

But everything may not be lost to Inovio. The company announced that it will join the US government’s Operation Warp Speed ​​program, an initiative aimed at accelerating the development of a vaccine against COVID-19. Inovio’s test vaccine will be part of a non-human primate challenge study (NHP) that tests the effectiveness of several vaccine candidates. Inovio’s participation in this operation can help reverse his accident recently.

Should you acquire Inovio’s shares?

Several other factors can affect Inovio’s future.

First, while Inovio does not currently have any products on the market and does not generate much revenue ($ 1.3 million in the first quarter), it is unlikely to run out of money. The company has landed several lucrative partnerships and contracts with third parties in recent months.

On June 23, the company announced that it had signed a $ 71 million contract with the US Department of Defense (DoD) to scale up the manufacturing of its Cellectra 3PSP smart devices. DoD will also purchase a variety of Inovios Cellectra 2000 devices. Both 3PSP and 2000 administer Inovio’s study COVID-19 vaccine.

Second, only one of Inovio’s many pipeline candidates has begun a Phase 3 clinical trial. The candidate in question is VGX-3100, a potential vaccine against several types of cancer.

Inovio’s results are largely due to the COVID-19 efforts. Given the not-so-great intermediate data from its Phase 1 study – and the fact that other companies are far longer in their efforts to develop a COVID-19 vaccine – it’s hard to put much trust in Inovio’s stock right now .

In short, I think it is best to sell Inovio’s stock. Of course, the company’s shares can recover, but even if they do, there is nothing to say if any other news will cause them to crash again. There is too much uncertainty about this biotech stock right now. It is best to look at how things develop at a safe distance.




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