Please ensure Javascript is enabled for purposes of website accessibility

Why Inovio Stock Soared 83% in June

By Beth McKenna – Jul 7, 2020 at 8:05PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of the COVID-19 vaccine developer have been on fire in 2020. ,

What happened

Inovio Pharmaceuticals (INO -3.39%) stock skyrocketed 82.7% in June, according to data from S&P Global Market Intelligence. The S&P 500 returned 2% last month.

In July, shares of the coronavirus vaccine developer, however, have given back a chunk of last month's gain: Through Tuesday, July 7, they're down nearly 11%, while the broader market has returned just over 3%. That said, in 2020, they're still up more than 600%, while the S&P has returned negative 1.7% so far this year.

Vial labeled "COVID-19 Vaccine" next to a syringe and pills.

Image source: Getty Images.

So what

We can attribute Inovio stock's spectacular performance last month largely to its June 23 announcement that it had received $71 million from the U.S. Department of Defense (DoD) pertaining to its two Cellectra devices, both of which are used to administer its COVID-19 vaccine candidate INO-4800. 

Specifically, the DoD funds are for the ramp up of manufacturing of Cellectra 3PSP smart devices and the purchase of Cellectra 2000 devices. Inovio's press release didn't specify the quantity of Cellestra 2000 devices the DoD is buying. 

Inovio stock soared 41% on the day following the release of the DoD contract news, and continued its powerful rise for two more days. In the three-day period following the news, shares of the biotech rocketed 104%.

Shares are down so far in July because they fell sharply in the two-day period following the company's June 30 announcement of interim phase 1 results for its COVID-19 vaccine candidate. Shares dropped 15% on June 30 and then another nearly 27% on July 1. 

On the positive side, the study's results showed that 94% of the 40 participants "demonstrated overall immune responses at week 6 after two doses of INO-4800," and this dosage "was deemed safe and well-tolerated with no serious adverse events." However, as my colleague Keith Speights reported, investors were concerned because Inovio "didn't provide any details about how many patients produced neutralizing antibodies. These antibodies prevent infection by the novel coronavirus."  

INO Chart

Data by YCharts.

Now what

Inovio plans to begin a phase 2/3 clinical study for INO-4800 this summer assuming it receives the FDA's approval.

Inovio stock, like the stocks of other companies in the race to develop a COVID-19 vaccine, can be expected to continue to be extremely volatile. Only investors comfortable with this fact should invest in this space.

Beth McKenna has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Inovio Pharmaceuticals, Inc. Stock Quote
Inovio Pharmaceuticals, Inc.
INO
$1.71 (-3.39%) $0.06

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.