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Why Inovio Pharmaceuticals Stock Is Soaring Today

By George Budwell - Updated Jan 30, 2020 at 11:42AM

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Shares got another boost from the ongoing coronavirus outbreak.

What happened

Inovio Pharmaceuticals (INO 5.29%), a pre-revenue synthetic vaccine developer, continued its volatile week today. The biotech's shares were up 11% on nearly five times the average daily volume as of 10:37 a.m. EST on Thursday. 

Inovio's shares are popping in response to a collaboration agreement with Beijing Advaccine Biotechnology to advance the development of INO-4800 in China. INO-4800 is the biotech's experimental vaccine designed to combat the strain of coronavirus, 2019-nCoV, currently ravaging parts of China. It has since spread to over 20 countries across the globe. 

Two people shaking hands over a desk.

Image source: Getty Images.

So what

Earlier this week, Inovio announced that it was awarded a $9 million grant from the Coalition for Epidemic Preparedness Innovations to support the clinical development of INO-4800. This latest collaboration will further this effort by leveraging Advaccine's access to the Chinese market, thereby faciliting the initiation of an early-stage trial. Perhaps most important, this collaboration might attract further grant money for the two companies -- especially with the infection rate for this deadly virus showing clear signs of going parabolic over the last few days.   

Now what

Is this small-cap biotech stock worth buying on this news? Probably not -- at least if you are a long-term investor. The cold hard truth is that this news doesn't really affect Inovio's fundamental picture. By the time INO-4800 progresses through a phase 1 trial, there's a strong probability that this disease threat will have evaporated. So there's little to no chance that INO-4800 will be a major revenue generator for the company. 

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