This time last year, shares of Inovio Pharmaceuticals (INO) were on the up. The small biotech was swimming in the big pool, building momentum as one of the companies on the frontline of the Covid-19 battle. Hopes were pinned on the potential of Inovio’s DNA Covid-19 vaccine candidate, INO-4800, and investors signed up for the ride.
However, the company has failed to live up to the early promise and one setback has followed another. In the meantime, other vaccines advanced, several gained EUAs from the FDA and have become available to the public. All the while, INO shares have been on the back foot.
There was more bad news last week. As a result of vaccines’ availability, the U.S. government will now not fund the Phase 3 segment of the INNOVATE study evaluating INO-4800, amounting to another blow for Inovio.
Looking at the positives, H.C. Wainwright analyst Ram Selvaraju noted that the DoD decision “does not reflect the safety and efficacy of INO-4800 seen thus far and does not affect Inovio’s commitment to advancing INO-4800 into pivotal trials.”
The DoD will continue to fund the on-going Phase 2 segment and Inovio intends to move forward to Phase 3 testing outside the U.S.
Selvaraju thinks the company might choose countries where it already has partners, such as China, or where the coronavirus crisis is still acute and where it will be easy to enroll participants – for example, in Brazil and India.
These also fit the bill as countries with hot weather, where the need for ultra-cold storage – a requirement for other Covid-19 vaccines – does not apply to Inovio’s offering, which can be kept at room temperature for more than a year.
“While the Phase 3 U.S. government funding halt is a setback,” the 5-star analyst summed up, “Inovio has ample capital to move INO-4800 through the Phase 3 segment of the pivotal program, in our view.”
Overall, however, Selvaraju stays on the sidelines with a Neutral (i.e. Hold) rating on INO stock and cites “market valuation and volatility” as the reasons why he has no fixed price target in mind. (To watch Selvaraju’s track record, click here)
On the other hand, the Street’s average price target remains a bullish one; at $16.6, the forecast is for one-year gains of 139%. The stock qualifies with a Moderate Buy consensus rating, based on 2 Buys and 4 Holds. (See Inovio stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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