Over the five-year period leading up to 2020, Inovio Pharmaceuticals (NASDAQ:INO) delivered a positive return in just one year: In 2016, Inovio gained a little over 3%. But the story has changed dramatically for the biotech in 2020.

Inovio's shares have skyrocketed more than 600% so far this year. The company has emerged as one of a handful of small drugmakers with promising COVID-19 vaccine candidates. Could buying Inovio stock now make you rich over the next several years?

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Image source: Getty Images.

Inovio's potential

In January, Inovio announced that it had won a $9 million grant from the Coalition for Epidemic Preparedness Innovations to develop a vaccine candidate against novel coronavirus SARS-CoV-2 (then known as 2019-nCoV). It's been a wild ride since then. 

Inovio hopes to begin a phase 2/3 clinical study evaluating its COVID-19 vaccine candidate, INO-4800, this summer. If this study is successful, the biotech would likely be on its way to having a blockbuster on its hands. 

A recent New York Times article quoted Katherine Baicker, dean of the University of Chicago Harris School of Public Policy, as stating that "$150 billion might not be an unreasonable sum" to pay for providing COVID-19 vaccines to the world population. Even if four or five COVID-19 vaccines make it to market, that's a massive potential market for Inovio to split if INO-4800 is one of the winners.

Keep in mind that Inovio's market cap is currently under $4 billion. Its stock would likely quintuple if INO-4800 could pull in around $3 billion annually. That should be easily attainable if the COVID-19 vaccine reaches the market.

There are also other pipeline candidate that could send Inovio's shares much higher. The company's lead candidate, VGX-3100, is being evaluated in phase 3 clinical trials as a treatment for precancerous cervical dysplasia caused by the human papillomavirus (HPV). DNA immunotherapy candidate INO-5401 also appears to be promising in treating glioblastoma multiforme, an aggressive form of brain cancer.

Benchmark analyst Aydin Huseynov estimates that VGX-3100 and INO-5401 could together generate peak annual sales of $1.4 billion. This level of sales could be enough for Inovio stock to more than double even if its COVID-19 vaccine isn't successful. 

Current realities

Now for a reality check. It's still really early for INO-4800. The odds of a vaccine candidate in phase 1 testing going on to win FDA approval is barely over 16%, based on historical data compiled by biopharmaceutical industry trade group BIO. 

What about VGX-3100? The chances of success are better. However, only one out of three drugs targeting cancer that are in phase 3 testing eventually win FDA approval, according to BIO. It's an even bleaker picture for INO-5401: Only around 8% of cancer drugs that make it to phase 2 studies win FDA approval.

Of course, Inovio does have other shots on goal. The company's pipeline includes 12 experimental DNA medicines in clinical development in addition to INO-4800, VGX-3100, and INO-5401. However, Inovio's track record of pipeline success isn't encouraging. In the company's nearly four decades in business, it has yet to win regulatory approval for any drug or vaccine.

Could vs. will

Let's return to the original question: Could buying Inovio stock make you rich? Yes, it could. Success for either INO-4800 or VGX-3100 would almost certainly cause shares to skyrocket.

The much more difficult question to answer is: Will buying Inovio stock make you rich? It's certainly possible. But based on where Inovio's pipeline candidates are in development right now, getting rich from the biotech stock isn't probable.

Inovio's odds of success could improve over time, though. By this time next year, the story for Inovio could be much better. The story could also be much worse. That's what makes Inovio a high-risk yet potentially high-reward stock.