Inovio Pharmaceuticals (NASDAQ: INO) It has been making a lot of headlines in the past few weeks, mainly thanks to its participation in the race to find a vaccine for COVID-19. The company claimed to have submitted its potential vaccine, INO-4800, in just three hours after Chinese researchers publicly released the genetic sequence of the SARS-CoV-2 virus that causes COVID-19. Inovio started a phase 1 clinical trial for this vaccine in early April.
The study initially recruited 40 volunteers and was supposed to test the vaccine’s safety and immunogenicity. 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 dropped out of the study for reasons “not related to safety or tolerability.”
The company recently reported provisional data from this study that didn’t impress investors (more on that below). As a result, the shares fell more than 30% since June 30.
Still, Inovio has increased approximately 477% since the year began. Is it time for investors to sell the company’s shares? Or is it worth keeping the shares, or even buying them?
YCharts INO data
INO-4800 Phase 1 Clinical Trial Results
According to Inovio, the provisional results for his phase 1 clinical trial for INO-4800 were positive. There were no serious adverse reactions to the vaccine. The most common adverse reaction, experienced by 10 patients, was redness of the skin where the vaccine was administered, but that only guarantees the lowest level of severity, grade 1. Therefore, the trial seemed to suggest that safety is not a major concern. The company also said that 34 of the 36 participants (approximately 94%) demonstrated an immune response six weeks after receiving INO-4800.
But some key 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 essential information in Inovio’s press release announcing these results led several analysts to downgrade the company’s shares. Roth Capital’s Jonathan Aschoff downgraded neutral to sell, giving it a target price of $ 11 and noting that the data Inovio released was “very limited.”
Given that Inovio’s shares are worth $ 19.73 each in writing, this price would represent a significant disadvantage from their current levels.
Image source: Getty Images.
Inovio is dealing with other complicated factors. Several companies appear to be making solid progress in their quest to develop a vaccine for COVID-19. For example, Pfizer recently published positive data from a phase 1/2 clinical trial for its investigational vaccine COVID-19, BNT162b1, which it is developing in collaboration with BioNTech. AstraZeneca and Modern They have two advanced vaccine candidates who are considered leaders in this career.
However, all is not lost for Inovio. The company announced that it will join the U.S. government’s Operation Warp Speed program, an initiative that seeks to accelerate the development of a vaccine for COVID-19. Inovio’s investigational vaccine will be part of a non-human primate challenge (NHP) study that will evaluate the efficacy of several vaccine candidates. Inovio’s participation in this operation could help change his recent misfortune.
Should you collect Inovio’s shares?
Several other factors could affect Inovio’s future.
First, although Inovio currently has no products on the market and does not generate much income ($ 1.3 million in the first quarter), it is unlikely that it will run out of funds. The company has secured 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 United States Department of Defense (DoD) to expand the manufacturing of its Cellectra 3PSP smart devices. The Department of Defense will also purchase a number of Cellectra 2000 devices from Inovio. Both 3PSP and 2000 administer the COVID-19 vaccine under Inovio research.
Second, only one of the many candidates in Inovio’s portfolio has started a phase 3 clinical trial. The candidate in question is VGX-3100, a potential vaccine for various types of cancer.
Inovio’s performance will depend largely on his COVID-19 efforts. Given the not-so-good interim data from their phase 1 study, and the fact that other companies are far more advanced in their efforts to develop a COVID-19 vaccine, it is difficult to rely too heavily on Inovio stocks at this time. .
In summary, I think it is better to sell Inovio’s shares. Of course, the company’s shares could recover, but even if they do, it is unknown if any other news will cause them to collapse again. There is too much uncertainty surrounding this biotech stock right now. It is better to watch how things unfold from a safe distance.
