Inovio withdraws from 20-year high, as lifelong bull says he’s ‘less palatable’ after recent rally

Shares of Inovio Pharmaceuticals Inc. rebounded to a 20-year high in high volumes on Friday, erasing a previous sharp loss, after a longtime bull downgraded the Pennsylvania-based biotech company, and later that the company disclosed some terms of the funding agreement with the US Department of Defense announced earlier this week on Thursday night.

Inovio’s stock INO,
It has skyrocketed this year with high hopes for its experimental vaccine COVID-19, which is currently being tested in a phase 1 clinical trial. The rally accelerated this week, after the company announced that it received $ 71 million in funding from the Department of Defense to support the manufacture of a portable device that delivers the candidate vaccine.

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The stock has more than doubled in the past four days, up 119%, to close on Thursday at the highest price since September 2000. It had increased more than 9 times (up to 847%) from the year to on Thursday, while the iShares Nasdaq Biotechnology IBB exchange-traded fund,
it had advanced 14.4% and the S&P 500 SPX index,
it had dropped 4.6%.

Inovio is expected to announce preliminary safety and immunogenicity data from its COVID-19 vaccine candidate trial by the end of the month.

The stock closed Friday with a 4.1% drop to $ 29.98, reducing previous losses by as much as 21.3%. The stock was briefly traded in positive territory during parts of the session. Trading volume increased to 149.8 million shares, enough to make it the fourth most active share listed on the Nasdaq market, and already well above the full-day average of approximately 35.1 million shares, according to FactSet.

Stifel Nicolaus analyst Stephan Willey downgraded his rating to hold after having been buying for at least the past 3.5 years. He said the risk versus reward scenario for investors “seems less acceptable” at current prices.

Although he raised his stock price target to $ 24 from $ 19, his new target was approximately 20% below Friday’s closing price.

“While acknowledging the ratings of the peer-to-peer COVID-19 vaccine companies would suggest that we are potentially leaving a significant advantage on the table, if promising immunogenicity data (ie, a strong neutralizing antibody response) materialized and a large Control written by the government, we also believe that any potential downside risk in the absence of the aforementioned events is equally significant, “Willey wrote in a note to clients.

Willey said he is not concerned with the safety and tolerability of the experimental Inovio vaccine, but the response data may require additional follow-up.

Separately, the company said in an 8-K filing with the Securities and Exchange Commission filed Thursday night that, under the agreement with the Department of Defense, it will not offer, sell or provide the production model of its device. Cellectra 3PSP prototype laptop to any other entity at a price lower than that offered to the Department of Defense.

And if Inovio develops a commercialized version of the prototype with similar capabilities but at a lower price, you should inform the Department of Defense of the product and the price differences.

The Department of Defense could suspend or terminate the agreement, if Inovio does not comply with its provisions.