Moderna (NASDAQ:MRNA) was the first maker of a vaccine for the novel coronavirus to enter clinical trials, but fellow clinical-stage biotech Inovio Pharmaceuticals (NASDAQ:INO) is close behind. Inovio, during its earnings call this week, said it recently completed enrollment in a phase 1 trial.

Victory in this race, though, doesn't depend only on which company enters human trials first. It depends on several factors, including the results of the trials, the ability to manufacture enough doses, and the funding for each project.

There are currently more than 70 vaccine candidates in development for COVID-19, the illness caused by the novel coronavirus, according to the World Health Organization. Moderna and Inovio are among the five vaccine makers that have begun human trials.

So, where does Inovio stand? Let's take a close look at its program -- and Moderna's.

A doctor holding a bottle that says COVID-19 Vaccine

Image Source: Getty Images

Inovio

Inovio said its coronavirus vaccine produced strong antibody and T-cell responses in animal studies; now the company hopes to see similar success in humans. Inovio has enrolled 40 healthy volunteers in its phase 1 trial and expects preliminary data on safety and immune response in late June. Participants are receiving two doses of vaccine, four weeks apart. If results are favorable, the company plans to move on to a phase 2/3 efficacy trial this summer upon regulatory approval.

Unlike traditional vaccines that introduce a weakened version of a virus into the body to spur immune response, Inovio focuses on the use of optimized DNA plasmids. Through computer sequencing, these small circles of double-stranded DNA are reorganized to produce a specific immune response in the body. Inovio then delivers these plasmids intradermally or intramuscularly through the company's own hand-held smart device.

As for funding, the Coalition for Epidemic Preparedness Innovations has awarded Inovio more than $17 million for development of the vaccine. The company recently said it would use about $1 million from the grant to support large-scale manufacturing. Inovio plans on producing 1 million doses of the vaccine by the end of the year. And the Department of Defense awarded Ology Bioservices $11.9 million to enable rapid production of Inovio's vaccine. Inovio also received $5 million in funding from the Bill & Melinda Gates Foundation to scale up production of its smart device.

In its recent earnings report, Inovio said its cash resources totaled $270 million, up from $89.5 million in December.

Moderna

The U.S. Food and Drug Administration recently gave Moderna the nod to begin a phase 2 trial of its coronavirus vaccine, and granted the vaccine Fast Track designation. Fast Track is meant to expedite development and review of products that address unmet medical needs.

Moderna's phase 2 study will include 600 participants in two groups according to age -- 18 to 55 and 55 and older. Subjects may receive placebo, or one of two different doses of the vaccine. As in phase 1, the vaccine will be given in two doses 28 days apart. Moderna has completed phase 1 enrollment of 45 healthy adults age 18 to 55 in three dosing groups, and now is expanding the study to enroll six additional groups of older and elderly adults. Phase 1 and phase 2 studies are examining safety, side effects, and the vaccine's ability to induce immune response. The company aims to start a phase 3 study early this summer.

Like Inovio, Moderna isn't working on a traditional vaccine. Moderna's uses messenger RNA (mRNA) to give the body's cells instructions to make proteins that would prevent disease.

When it comes to funding the development of this mRNA vaccine, Moderna is in a strong position. The company has about $2.4 billion to invest, including cash, grants, and awards. The U.S. Department of Health and Human Services recently granted Moderna as much as $483 million, and the company says that would carry the vaccine through regulatory approval and support a scale-up in manufacturing. Moderna is collaborating with Lonza Group for manufacturing, with a goal of eventually producing 1 billion vaccine doses per year.

Is Inovio gaining ground?

Moderna is clearly ahead in this race in terms of funding and the clinical-trial timeline. That means, if all goes smoothly, Moderna may make it to the finish line first. But any small headwind for Moderna could result in Inovio slipping ahead. So, with each positive step in human trials, Inovio is indeed gaining ground.

Now the question is: Does it matter who gets to the finish line first? Beyond the publicity factor, the answer is "no." If one company's vaccine is approved first, but the second or third company to gain approval has a better product, that product will likely rise to the top. And if demand is high, the market will welcome more than one type of vaccine. Many even argue that initial coronavirus vaccines might be like prototypes, eventually improved with further research and studies.

What does all of this mean for biotech investors? Those who already own shares of Inovio or Moderna stock have been greatly rewarded, as the shares have surged 297% and 223%, respectively, since the beginning of the year.

But both come with plenty of risk. These current vaccine trials may tell us whether the companies' technologies actually work in humans. Neither company has yet proven that through a phase 3 trial or the commercialization of a product. Inovio's entire pipeline is based on its DNA technology, while Moderna's pipeline is based on its mRNA technology. And that's why, amid the excitement, investors may want to proceed with caution.