While both bluebird bio (BLUE -0.34%) and Inovio Pharmaceuticals (INO -5.19%) started out 2016 poorly, the paths of the two biotech stocks have diverged greatly since late January. Bluebird's stock price is down over 30% year to date, but Inovio's shares are up nearly 60%. 

Does Bluebird's beaten-down stock price now make it the better buy? Or does Inovio's positive momentum portend even better days ahead? Here's how these two up-and-coming biotech stocks stack up against each other.

Lead candidates

Bluebird plans on seeking conditional approval in Europe for LentiGlobin based on two ongoing phase 1/2 clinical studies focused on the treatment of transfusion-dependent beta-thalassemia. The company also plans to initiate two other pivotal clinical trials with the goal of obtaining accelerated approval in the U.S. for the indication.

The bigger prize for LentiGlobin, however, is in treating sickle cell disease. Around 288,000 patients worldwide have beta-thalassemia, but an estimated 25 million patients across the world have sickle cell disease. Bluebird currently has a phase 1/2 study of LentiGlobin in progress for treatment of sickle cell disease. Analysts project that between the two indications Bluebird is pursuing, LentiGlobin could hit peak annual sales of up to $4 billion.

Inovio reported positive results in 2015 from a phase 2 study of its lead candidate, cervical dysplasia vaccine VGX-3100. The company is now working with the U.S. Food and Drug Administration and the European Medicines Agency to finalize details on a registrational phase 3 clinical trial. Inovio plans to begin the late-stage study later this year.

The market potential for VGX-3100 should be pretty solid if the vaccine wins regulatory approval. There are around 3.4 million cases of low-grade and high-grade cervical precancers in the U.S. and Europe. Analysts estimate that Inovio's vaccine could reach peak annual sales of around $500 million.

Rest of the pipeline

Bluebird lays claim to another lentiviral-based gene therapy that might not be too far away from regulatory approval. Lenti-D is being evaluated in a phase 2/3 clinical study for treatment of rare genetic disease cerebral adrenoleukodystrophy (CALD). Interim data from that study presented earlier this year was encouraging.

The biotech has one other clinical trial in progress with its partner, Celgene. The phase 1 study of chimeric antigen receptor (CAR T) drug candidate bb2121 is focused on treatment of relapsed/refractory multiple myeloma. Bluebird also has several pre-clinical studies under way.

Inovio has a diverse pipeline lineup, although most of the candidates are only in early stage clinical trials. The company is collaborating with AstraZeneca's MedImmune subsidiary on testing of INO-3112, a combination of VGX-3100 and a DNA-based immune activator, in treating cervical cancer as well as head and neck cancer.Inovio's pipeline also includes three other phase 1 clinical trials for cancer drug candidates.

Anti-viral vaccines make up a core component of Inovio's development program. Inovio has three early stage HIV clinical trials in its pipeline. It is also partnering with other companies on phase 1 studies of hepatitis B  and hepatitis C vaccines. Inovio has attracted U.S. government interest for clinical trials of its experimental Ebola and influenza vaccines.

One pre-clinical candidate in Inovio's pipeline merits special attention. The biotech has emerged as a leader in the race to develop a vaccine for the deadly Zika virus. Inovio's testing in mice and monkeys has been very positive. Human testing of the Zika vaccine is planned to begin later this year.

Financial condition

Bluebird appears to be in great financial shape for a clinical-stage biotech. The company reported cash, cash equivalents, and marketable securities totaling $826.9 million as of March 31. Bluebird thinks that amount will carry it through 2018.

Inovio's cash position doesn't look as good as Bluebird's, but it's not hurting. Inovio reported cash, cash equivalents and short-term investments of $146.8 million at the end of the first quarter. The company believes that its cash stockpile should be enough to fund phase 3 testing of VGX-3100 plus development of other candidates in the pipeline.

Partnerships have helped both biotechs financially. Bluebird received $10 million in the first quarter from Celgene's exercise of an option for bb2121. Meanwhile, Inovio continues to benefit from federal grants for development of its Ebola vaccines as well as AstraZeneca's funding of INO-3112 clinical studies.

Better buy

I like the long-term potential for both of these biotechs. While Bluebird and Inovio face risks common to most clinical-stage biotechs, each company could see considerable success.

If we were just focusing on lead candidates, my pick as the better buy would be Bluebird. That choice is based primarily on the greater market potential for LentiGlobin compared to VGX-3100. However, when the full pipeline is included, the nod goes to Inovio.

If VGX-3100 ultimately wins approval, that bodes well for the chances for INO-3112 -- which could be an even bigger success commercially. The real wild card for Inovio, though, is its Zika vaccine. I won't be surprised if the company's clinical testing in humans goes well. It's quite possible that Inovio could obtain accelerated approval for the vaccine within the next few years. Should that happen, it could be a game changer for the biotech.