Even after dipping into bear market territory last week, the stock market continues to fall due to fears surrounding the COVID-19 outbreak. On Monday, the S&P 500 fell by 12%, its biggest one-day drop since 1987. Meanwhile, the Dow Jones plunged by 13% that day. What's more, there's no telling how long the pandemic will last, with U.S. President Donald Trump recently warning that a full-blown recession may be on the horizon. 

Despite all this chaos, though, some stocks have performed well and have generated quite a buzz. One of these stocks is Inovio Pharmaceuticals (INO 2.81%), a biotech company that focuses on developing DNA medicines to treat cancers and infectious diseases. It's worth investigating why Inovio has made so many headlines of late, and whether investors should consider buying shares of the company now.

A doctor administers a vaccine to someone's arm

Image Source: Getty Images

Inovio is racing to develop a vaccine for COVID-19

The obvious reason why Inovio is making a lot of noise recently is that the company is in the race to bring a vaccine for COVID-19 to market. The company famously claimed that on Jan. 10, it created a vaccine for the rapidly spreading disease in a mere three hours after the genetic sequence of the SARS-CoV-2 virus that causes the disease was made public by Chinese researchers on the same day.  

Inovio then announced a series of moves in its quest to continue the development of this vaccine -- dubbed INO-4800 -- as fast as possible. On Jan. 23, the company said it received a grant from the Coalition for Epidemic Preparedness Innovations (CEPI). The grant of up to $9 million is intended to help the company advance through the preclinical and clinical stages of the development process for INO-4800, through phase 1 human testing. 

On March 3, Inovio announced it was accelerating the timeline for the development process, and that it intended to start human clinical trials in April. Then on March 12, Inovio disclosed it received a $5 million grant from the Bill & Melinda Gates Foundation to accelerate the testing and scale-up of Cellectra 3PSP, a smart device for the intradermal delivery of INO-4800. 

Year to date, shares of the biotech company are up by 123.6%, a performance it owes to its efforts to develop a vaccine for COVID-19. Meanwhile, the S&P 500 has fallen by 25% over the same period.

INO Stock vs. SS&P 500

Image Source: YCharts

Inovio isn't ahead of its competitors in the battle against COVID-19

Though Inovio's efforts to develop a vaccine for COVID-19 seem to be going relatively well, the company is trailing some of its peers.

Moderna (MRNA -3.00%) also developed a vaccine for COVID-19 that started a phase 1 clinical trial on Monday. The trial in question is led by the National Institutes of Health (NIH), and it involves 45 healthy adult volunteers. Each volunteer will be given two doses of the vaccine 28 days apart. The goal of the trial is to test the safety of the potential vaccine, its ability to provoke an immune response in the body, as well as the amount of the vaccine that causes expected side effects. Moderna is ahead of Inovio in the development of a vaccine for COVID-19 since it has already started a phase 1 clinical trial, whereas Inovio has yet to reach that milestone. 

Inovio's pipeline

Inovio currently doesn't have any products on the market, but the company's pipeline includes INO-5151, a potential treatment for prostate cancer that is presently in phase 2 testing. Other products in the company's pipeline include VGX-3100, which is being investigated as a potential treatment for cancers and precancers caused by human papillomavirus (HPV), and MEDI0457, a possible treatment for head and neck cancer. 

Inovio is currently not profitable. For the fiscal year 2019, the company reported total revenue of $4.1 million, which was generated from collaboration arrangements. Inovio's loss from operations was $111.1 million, and its net loss was $119.4 million. Inovio had $89.5 million in cash, cash equivalents, and short-term investments at the end of its fiscal year. 

A risky stock

Despite Inovio's attempts to develop a vaccine for COVID-19 -- and its strong performance on the market year to date -- investors had better stay away from this biotech stock. There is no guarantee that the company will lead its development of a vaccine for COVID-19 to completion (it could fail clinical trial or run into regulatory roadblocks), and even if it does, other companies could do so faster.

Furthermore, Inovio currently has no products on the market, and probably won't have any within at least a year. For those reasons, Inovio seems like a highly speculative play at this point, and investors looking to buy shares of biotech companies should look elsewhere.