Inovio shares tumble as analysts say COVID-19 vaccine update leaves more questions than answers


Inovio Pharmaceuticals Inc. shares tumbled 22% Tuesday, a day after the company reported a broader-than-expected second-quarter loss and offered a limited update on its COVID-19 vaccine candidate that is currently in clinical trials.

The stock INO,
-22.88%
is still up 343% year-on-year after winning early in the coronavirus pandemic in hopes of its vaccine candidate, INO-4800, one of many in trials around the world. Plymouth Meeting, Inovio, Pennsylvania, is developing DNA-based immunotherapies and vaccines for a variety of diseases, including HPV, but has not yet approved a product for treatment.

The company said it expects to launch a Phase 2/3 trial of INO-4800 in September, and is working to produce production capacity to produce at least 100 million doses by 2021.

Inovio said 38 of 38 patients in its Phase 1 trial achieved general immunological responses, whether through binding antibodies, neutralizing antibodies, or T-cell responses. That compares with 34 of 36 patients in the first update offered in June. The two additional patients killed in June were infected with COVID-19, but were later found to be COVID-free and were added to the data.

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Inovio said it expanded the 40-patient early-stage clinical trial to another 80 participants, 18 years and older. The company also added a lower dose to expand its database on safety and immunogenicity. Data from the Phase 1 trial have been submitted to a medical journal and will be peer reviewed before publication

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Star analysts lowered their stock price target to $ 16 from $ 24 and reiterated a hold rating, saying the figures and conference calls “left us (again) with more questions than answers on several fronts.”

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These include disclosure and public timelines for INO-4800 and the ongoing “high-level characterization of marginally incremental INO-4800 P1 immunogenicity / safety data,” analysts led by Stephen Willey wrote in a note to clients.

“Our reluctance to attribute any INO-4800-related value to our model continues and our previously reduced discount rate (9%) reflects improved perception again: the chance of third-party financing,” the Stifel comment said. “We believe that these persistent questions, coupled with an acceleration of the competitive development landscape (and difficult-to-overcome immunogenicity barriers), are forcing us to reconsider this assumption.”

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Last Monday, the biotechnology company reported a net loss in the second quarter that increased to $ 128.7 million, or 83 cents a share, from a loss of $ 29.4 million, as 30 cents a share, while the ConsS of ConsSe was for a limiting the loss to 17 cents a share. Revenue nearly doubled to $ 267,000, but fell well short of expectations of $ 2.6 million.

Maxim analysts Naureen Quibria and Jason McCarthy, who are also reviewing the stock, took a more exciting view, saying the early results seem stimulating.

Additional support provided to the program is demonstration of immune responses in non-human primates (NHP) 3 months (13 weeks) after vaccination when challenged, indicating the ability of the animals to generate memory responses and thus potential sustainability. of INO-4800, ‘she wrote in a note to customers.

There were only six adverse events, mostly related to the injection site, which proved overwhelming, she wrote. “Important to note, the safety profile of INO-4800 compares favorably with those on the market and other vaccine candidates currently under development for COVID-19,” she wrote.

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Inovio said start-up trials began in China and South Korea and expects to provide data in the fourth quarter. The company has received funding for trials from the Department of Defense ($ 71 million); from Oslo-based The Coalition for Epidemic Preparedness Innovations ($ 17.2 million) and from the Bill & Melinda Gates Foundation ($ 5 million).

Benchmark analyst Aydin Huseynov said he was optimistic about the Phase 2/3 trial and noted that the safety profile was better than that achieved by Moderna Inc.’s MRNA.
-2.78%
45-patient trial.

“We think the safety profile of each vaccine candidate to be administered to millions as well as billions of individuals would be extremely favorable to attract a majority of the population (including the elderly) for a mass vaccination,” the analyst wrote.

Huseynov expects readouts from studies of two other Inovio vaccine candidates, one for cervical dysplasia and one for glioblastoma, which are expected to receive ‘extra attention’ in the fourth quarter, given developments with INO-4800.

The analyst values ​​the stock a buy with a $ 36 price target, or more than double its current price.

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