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Here's Why Inovio Pharmaceuticals Jumped Higher Today

By Brian Orelli, PhD - Jan 24, 2020 at 1:25PM

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The company is developing a vaccine against the 2019-nCoV coronavirus.

What happened

Shares of Inovio Pharmaceuticals (INO -5.03%) are up 14.8% at 12:29 p.m. EST after the company was awarded a grant of up to $9 million from the Coalition for Epidemic Preparedness Innovations (CEPI) to develop a vaccine against the 2019-nCoV coronavirus that's spreading across the globe.

So what

The grant will support preclinical work and a phase 1 clinical trial for the vaccine Inovio is calling INO-4800. The company didn't say how much additional preclinical work it still needs to do, so it's unclear how quickly the vaccine might move into the clinic.

The biotech has some experience working on coronavirus vaccines, having developed INO-4700, a vaccine for Middle East Respiratory Syndrome (MERS) that's caused by a different coronavirus. The company was previously awarded a grant of up to $56 million from CEPI to fund the development of INO-4700 and a vaccine against Lassa fever.

People with face masks on the sidewalk

Image source: Getty Images.

Now what

Investors should be careful about ascribing too much value to Inovio's grant and its plans to develop a vaccine against 2019-nCoV. While a vaccine appears to be needed now, it isn't clear how big the outbreak will eventually become. MERS has largely been limited to the Middle East, limiting the potential market for the vaccine.

It's also likely to take a while to develop a vaccine and get it on the market. CEPI funded the development of INO-4700 in April 2018, and 21 months later, Inovio has gotten through phase 1 development, but is still in the process of setting up a phase 2 clinical trial for the vaccine.

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