The race is on. Multiple drugmakers are rushing to test experimental antiviral drugs and vaccines that could treat or prevent the coronavirus and the disease that it causes, COVID-19. It's too early to know which companies will be successful, but a few of them appear to have promising coronavirus programs.

Two small biotechs that especially stand out are Inovio Pharmaceuticals (INO 0.36%) and Novavax (NVAX 2.31%). Which of these stocks is the better pick for investors? Here's how Inovio and Novavax compare.

Scientist wearing a mask and safety glasses holding a vial of blood with a label printed on the vial stating coronavirus

Image source: Getty Images.

Coronavirus programs

Inovio CEO Joseph Kim said that the company designed DNA vaccine INO-4800 in just three hours after the genetic sequence of the novel coronavirus that causes COVID-19 was published. This rapid response underscored the company's prioritization of targeting COVID-19.

It also highlighted the fact that Inovio isn't new to the game of battling coronaviruses. The biotech was the first to conduct phase 1 clinical studies in humans evaluating a vaccine for MERS-CoV, a coronavirus that's similar in structure to the novel coronavirus that causes COVID-19.

Inovio began preclinical testing of INO-4800 in January. The company announced on March 3 that it's accelerating the timeline for its COVID-19 vaccine program and now expects to begin evaluating the vaccine in humans in April. Inovio is also gearing up to be able to produce 1 million doses of the vaccine by the end of 2020.

Novavax is also no stranger to coronavirus vaccine development. The biotech has developed vaccines for MERS-CoV and SARS that demonstrated 100% protection in preclinical studies. This previous research gave Novavax a platform that enabled it to move quickly when the novel coronavirus threat emerged.

The company is currently evaluating several nanoparticle-based COVID-19 vaccines in preclinical tests to determine the best one to advance to testing in humans. Novavax announced on Feb. 26 that it plans to initiate a phase 1 clinical study of the selected COVID-19 vaccine in either May or June. 

Other pipeline candidates

Inovio's lead pipeline candidate is VGX-3100, an immunotherapy that's being evaluated in a phase 3 clinical study for treating cervical high-grade squamous intraepithelial lesions (HSIL) caused by human papillomavirus (HPV). The biotech plans to announce initial results from this late-stage study in late 2020 with the full study likely wrapping up in the first half of 2021. VGX-3100 is also being evaluated in phase 2 studies targeting vulvar HSIL and anal HSIL.

The company's pipeline also includes four other experimental drugs in phase 2 studies:

  • Inovio expects to begin a phase 1/2 study in the first half of this year of INO-3107 in treating recurrent respiratory papillomatosis (RRP), a rare disease where HPV causes tumors to grow in the respiratory tract.
  • It plans to report 12- and 18-month overall survival data later this year from a phase 2 study of INO-5401 in treating glioblastoma multiforme (GBM), an aggressive type of brain cancer.
  • Inovio's partner AstraZeneca should report results this year from MEDI-0457 in treating head and neck cancer.
  • INO-5051 is in a phase 2 study targeting prostate cancer.

In addition, Inovio claims several vaccine programs in clinical development. Three of these programs use glycoprotein antigens targeting Ebola, Lassa fever, and Zika. Another experimental vaccine targets HIV. And, as mentioned earlier, the biotech has a vaccine candidate that targets MERS.

Meanwhile, Novavax should report results from a phase 3 study of nanoparticle-based influenza vaccine NanoFlu within the next few weeks. The vaccine has demonstrated promising results in earlier clinical studies and could prove to be more effective than other flu vaccines on the market.

In 2019, the company's ResVax vaccine failed to meet its primary endpoint in a phase 3 clinical study in preventing respiratory syncytial virus (RSV) lower respiratory tract infection (LRTI) in infants through maternal immunization. However, Novavax identified other promising data in the study that leaves a pathway to approval open for the vaccine. The biotech will likely have to conduct another late-stage study for ResVax, though.

Like Inovio, Novavax also has an experimental Ebola vaccine in its pipeline. The company reported encouraging results from a phase 1 study of the vaccine in 2015 but has focused more heavily on other areas of development in recent years. 

Financial position

As of Sept. 30, 2019, Inovio's cash, cash equivalents, and short-term investments totaled $93.8 million. Novavax's cash position stood at nearly $71.2 million as of the same date. Both companies continue to post significant net losses. It seems likely that Inovio and Novavax will both have to raise additional capital in the near future.

Better pick

There's no way to know for sure which of these biotech stocks will be the bigger winner over the long run. If I had to pick just one of them, though, it would be Novavax.

Inovio does appear to have a slight lead with its coronavirus program. However, Novavax has a major catalyst coming up in a matter of weeks with the announcement of results for NanoFlu. My view is that Novavax has a reasonable chance of getting a product on the market much sooner than Inovio does. 

Keep in mind, though, that both of these stocks are very risky. Their experimental COVID-19 vaccines and their other pipeline candidates could flop in clinical studies. While I think Novavax has the edge right now, it's best to be very cautious when investing in clinical-stage biotechs.