What happened

Shares of Inovio Pharmaceuticals (NASDAQ:INO) tumbled as much as 18% today as investors try to figure out exactly how the business fits in with global efforts to combat the coronavirus pandemic. After becoming one of the faces of early efforts to develop a vaccine, the stock has fallen by more than half since its peak earlier this month. 

It appears investors are coming to grips with the long odds facing the company, which has never successfully developed nor commercialized a drug product. Inovio Pharmaceuticals could still bring a viable SARS-CoV-2 vaccine to market, but it will take another year or so in a best case scenario.

As of 3:45 p.m. EDT, the pharma stock had settled to a 13.2% loss.

A scientist with a dejected look on his face.

Image source: Getty Images.

So what

Inovio Pharmaceuticals hasn't been shy about touting its efforts to develop a SARS-CoV-2 vaccine. Scientists at the company designed a vaccine hours after receiving the viral genome. Of course, designing a vaccine is the easy part. Designing one that works and has been proven safe and effective in clinical trials is the difficult part.

Investors shouldn't forget that clinical trials are still a bottleneck to drug development -- there are limits to how quickly they can be completed. There's also the risk that a moderately effective vaccine triggers an immune response that makes infections worse. And then there's the tidal wave of other companies developing and testing their own vaccines, from fellow development-stage pharma companies such as Moderna to global vaccine leaders such as Sanofi

Now what

Unlike outbreaks of SARS and MERS, which were contained and allowed to fade from memory, the world will probably need a vaccine to protect against COVID-19 in the next few years. That said, it's more likely that scientists discover a drug or combinations of drugs that make cases less severe in the short run, which could make a vaccine a little less urgent. Will Inovio Pharmaceuticals really be one of the companies that finds success? It's possible, but investors have their doubts.