What happened

Shares of Inovio Pharmaceuticals (NASDAQ:INO), a red-hot clinical-stage biotech, climbed as much as 37% in early trading on Monday. The stock has since given back a lot of its early gains, but it was still up about 13% at 10:16 a.m. EST.

So what

The bullish move is most likely linked to an SEC filing published on Monday. The filing revealed that Inovio has amended the terms of the at-the-market equity offering agreement it initially created in May of 2018.

The old agreement capped the amount of stock that Inovio could sell in the open market at $200 million. However, the company has since exhausted that total. The amendment that was filed with the SEC today allows the company to sell up to a total of $250 million worth of stock on the open market, or an additional $50 million.

Shadow of a stock market bull on the floor

Image source: Getty Images.

Traders appear to be excited by the news that the company now has the green light to raise even more capital. With shares currently up more than 350% since the start of the year, it certainly appears to be a great time for this company to pad its balance sheet. That's doubly true when you consider that the Dow Jones Industrial Average and S&P 500 have declined by double digits over the same time frame. 

Now what

Inovio ended 2019 with $89.5 million in cash on its books. Adding another $50 million should go a long way toward helping the company continue to fund itself.

Everything appears to be going right for Inovio right now. Last week the company announced that it has accelerated its timeline for the development of its experimental COVID-19 vaccine, and human trials are set to begin in April. The company also announced its plan to produce 1 million doses of its experimental vaccine before the end of 2020 if it is found to be an effective treatment. 

Upsizing its at-the-market agreement right now to take advantage of the recent stock price appreciation looks like a savvy move.

The thing for investors to remember is that Inovio isn't the only company working on a COVID-19 vaccine. While it's possible that Inovio could emerge as the lead husky in the race, there's no way to tell whether its experimental vaccine has any market potential at this time.

In other words, it's important to remember that Inovio remains a highly risky biotechnology stock. For that reason, I'm content to root for its success from the safety of the sidelines.