Shares of Inovio Pharmaceuticals (NASDAQ:INO) were crashing 23.5% lower as of 3:18 p.m. EDT on Friday after plunging as much as 30.5% earlier in the day. The biotech reported its fourth-quarter results after the market closed on Thursday, topping Wall Street consensus revenue estimates but posting a wider-than-expected loss. However, the primary reason behind Inovio's shares falling was that RBC Capital analyst Gregory Renza downgraded the stock to sector perform from outperform.
Inovio's fourth-quarter results really don't matter very much at this point, except for the company's cash position. Thanks to a big boost from stock sales through its at-the-market (ATM) facility, Inovio should have plenty of cash to fund operations at least into 2021.
What about the RBC downgrade? Renza wrote to investors that the attention that Inovio has received resulting from its INO-4800 COVID-19 vaccine program has driven the stock "to reach levels that reflect fair value." He warned against banking on the company's experimental COVID-19 vaccine, though, and views VGX-3100 and other HPV programs as the primary growth driver for the biotech stock.
This take makes sense. Although Inovio is one of the leaders in the race to develop a COVID-19 vaccine, there's a long way to go.
Inovio plans to initiate a phase 1 clinical study evaluating INO-4800 in immunizing against the novel coronavirus that causes COVID-19. The company will also present preliminary results from a couple of phase 2 studies for VGX-3100 in treating vulvar high-grade squamous intraepithelial lesions (HSIL) and anal HSIL this month. Results from a late-stage study of the drug in treating cervical HSIL are expected by late 2020.