Coronavirus-related biotechnology stocks rose on Wednesday, even as the major market averages fell sharply.
Inovio's gains were fueled in part by its announcement on Tuesday that it received $71 million in funding from the Department of Defense. Inovio will use the funds to manufacture its Cellectra handheld devices, which can be used to deliver the experimental INO-4800 vaccine directly into people's skin.
Moderna and Sorrento also likely benefited from investors' interest in companies that can potentially profit from helping to end the COVID-19 crisis. Moderna is currently conducting a Phase 2 study of its experimental coronavirus vaccine and plans to begin a Phase 3 study in July. Sorrento, meanwhile, is studying antibodies that it says can neutralize the novel coronavirus.
It's understandable that investors would seek shelter in coronavirus-related biotech stocks on a down day for most of the rest of the stock market, particularly when the major indexes declined primarily due to fears regarding surging COVID-19 case counts.
However, there can be no assurances that Inovio, Sorrento, or Moderna will be successful in their pursuits. More than 100 vaccines and treatments are currently being developed around the world. Competitors include healthcare giants Johnson & Johnson, Pfizer, and AstraZeneca, all of which have significantly more resources to invest in their development efforts. So, while Inovio, Sorrento, and Moderna have delivered solid gains to their investors, they remain relatively high-risk stocks.