What happened

Shares of Inovio Pharmaceuticals (INO -3.37%) 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.

So what

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.

Gloved hand holding a vial of blood with a label that says "coronavirus"

Image source: Getty Images.

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. 

Now what

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.