Skeptics might deride a comparison of Inovio Pharmaceuticals, Inc. (NASDAQ:INO) and Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) as an exercise in finding the biggest loser. Both companies continue to post huge net losses every quarter, and their stocks are down by at least 30% over the last 12 months.

But losing money and experiencing stock volatility are to be expected with clinical-stage biotechs. The more important thing to look at with these biotechs is their potential -- and how realistic their prospects are. With that in mind, here's how Inovio and Achillion stack up against each other.

Two scientists standing side by side in lab with test tubes and beakers in front of them

Image source: Getty Images.

The case for Inovio

Inovio has plenty of irons in the fire for such a small biotech. The company's lead pipeline candidate is VGX-3100, an immunotherapy that's being evaluated in a phase 3 clinical study targeting treatment of cervical dysplasia caused by human papillomavirus (HPV). Inovio is also conducting a phase 2 clinical trial of VGX-3100 in treating vulvar dysplasia.

We won't know how successful the immunotherapy will be in the phase 3 study until at least the second half of 2019. There has already been some interest in VGX-3100, though, with ApolloBio forking over $23 million for commercialization rights for the drug in the Greater China market.

Inovio's pipeline also includes a couple of other immunotherapies. INO-5401 is being evaluated in phase 2 clinical studies for the treatment of brain cancer and bladder cancer. AstraZeneca's MedImmune subsidiary owns the rights to MEDI0457 -- a combination of VGX-3100 and a DNA-based immune activator encoded for interleukin-12 (IL-12), which plays a key role in the body's immune responses. MEDI0457 is in phase 2 testing targeting treatment of head and neck cancer and cervical cancer. 

In addition, Inovio claims several early stage clinical programs. DNA immunotherapies INO-5150 and INO-1800 are in phase 1 studies for the treatment of prostate cancer and hepatitis B, respectively. The company also has multiple antiviral therapies in early development, including experimental vaccines for the Ebola and Zika viruses. 

Why should investors consider buying Inovio? The biotech's market cap currently stands below $400 million. Success for any of its programs could make the company worth a lot more than it is now. And with a late-stage candidate plus multiple candidates in phase 2 testing and a broad array of early stage programs, Inovio has plenty of paths to success.

The case for Achillion

Achillion Pharmaceuticals has three pipeline candidates, all of which target rare diseases. The biotech's lead candidate is ACH-4471, a drug that inhibits Factor D -- an enzyme involved in immune system responses. Achillion is evaluating ACH-4471 in two rare diseases: C3 glomerulopathy (C3G) and paroxysmal nocturnal hemoglobinuria (PNH).

C3G is actually a group of similar conditions that cause kidney malfunction. Only one or two per million people in the world experience the disease. PNH is a stem cell disorder characterized by anemia, blood clots, and bone marrow failure. It occurs in no more than 9 out of 100,000 individuals. 

Achillion's other pipeline programs are also Factor D inhibitors targeting treatment of these two diseases. ACH-5228 recently completed a phase 1 clinical study. A phase 1 study of ACH-5548 began recently. Results from both studies are expected to be announced in Q4 of 2018. 

The big news for Achillion, though, will come from its phase 2 studies featuring ACH-4471. Interim data from a 14-day proof-of-concept phase 2 study in treating C3G should be available in the third quarter of this year. Interim data from a 12-month phase 2 study evaluating ACH-4771 in treating C3G and from a phase 2 study targeting PNH should be announced in Q4. 

Achillion received some good news for ACH-4771 earlier this year. The drug won a positive opinion from the European Medicines Agency Committee for Orphan Medicinal Products for orphan status in treating C3G. That news was enough to give Achillion's shares a nice spark.

What's the primary argument for buying Achillion stock?  The company's market opportunity is solid. There are currently no approved treatments for C3G. And while treatments exist for PNH, up to 40% of patients don't have a good experience with the current standard of care. If ACH-4471 is successful in clinical studies, Achillion stock will likely soar. 

Better buy

My view is that Inovio is the better pick right now. Inovio has more shots at goal than Achillion has because of its deeper pipeline. The company's risk level is arguably a little lower as well since its lead candidate is at a later stage of development than Achillion's.

However, I don't recommend either of these stocks at this point. Clinical-stage biotech stocks are hit or miss. You can win big -- or you can lose big. I think it's too early to have a good sense of whether Inovio and Achillion will be big winners or big losers. 

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.