Some of the biggest winners of 2020 so far have been small biotechs that are developing COVID-19 vaccine candidates. Shares of Inovio Pharmaceuticals (NASDAQ:INO), for example, have soared well over 500% year to date. Vaxart (NASDAQ:VXRT) stock is up more than 3,000%.

Some investors seeking to reap huge rewards are keeping their eyes on these biotech stocks. But which is the better pick going forward -- Inovio or Vaxart? 

Red model of coronavirus on top of $100 bills

Image source: Getty Images.

The case for Inovio

Inovio stands among a group of 25 organizations with experimental COVID-19 vaccines in clinical testing. The company's INO-4800 is a DNA vaccine that doesn't have to be frozen for transport or storage and is stable at room temperature for over a year.

On June 30, Inovio announced interim results from a phase 1 study of INO-4800. The company stated that 94% of the participants in the early stage trial "demonstrated overall immune responses at Week 6 after two doses of INO-4800." It also said that the experimental vaccine was "safe and well-tolerated." All adverse events reported in the study were grade 1 in severity (mild). Inovio hopes to advance INO-4800 to phase 2/3 testing later this summer pending a green light from the FDA.

The U.S. government's Operation Warp Speed, an initiative to accelerate the development of COVID-19 vaccines, selected INO-4800 to be part of a non-human primate (NHP) challenge study in late June. Also, the U.S. Department of Defense awarded Inovio $71 million in funding to support the manufacturing of its device used to deliver INO-4800 into the skin.

Before the novel coronavirus outbreak, Inovio's most talked-about pipeline candidate was VGX-3100. The experimental drug is in phase 3 testing targeting pre-cancerous cervical dysplasia caused by human papillomavirus (HPV). Inovio is also evaluating VGX-3100 in phase 2 studies targeting HPV-related pre-cancerous vulvar and anal dysplasia.

Inovio has two other HPV-related drug candidates in phase 2 testing. INO-3107 targets recurrent respiratory papillomatosis, a disease where tumors grow in the respiratory tract. AstraZeneca is evaluating MEDI-0457 in treating several types of HPV-related cancers. Inovio also has two phase 2 programs that aren't related to HPV -- INO-5401 for treating an aggressive type of brain cancer and INO-5151 targeting prostate cancer. 

In addition, Inovio's pipeline includes five experimental vaccines other than INO-4800. The most advanced candidates are HIV vaccine PENNVAX-GP and MERS vaccine INO-4700, both of which are in phase 2 testing.

Inovio is in a pretty good financial position for a clinical-stage biotech. Its cash, cash equivalents, and short-term investments totaled $270 million at the end of March. Since then, the company raised net proceeds of $121.7 million through an at-the-market stock offering. 

The case for Vaxart

Vaxart doesn't have any pipeline candidates in clinical testing yet. However, the biotech's oral COVID-19 vaccine candidate was selected by Operation Warp Speed in June to participate in a non-human primate challenge study. Vaxart is gearing up to hopefully begin a phase 1 study of the experimental oral vaccine later this year. 

The biotech's oral tablet vaccine candidates are designed to produce immune system responses in mucous tissues as well as system immune responses. Vaxart thinks that this approach could be well-suited for immunization against SARS-CoV-2, the novel coronavirus that causes COVID-19, since it's primarily transmitted through particles that enter the nose, mouth, and eyes.

Like Inovio's INO-4800, Vaxart's oral tablet vaccine can be stored at room temperature. The tablets should also be easier to transport and store, as well as more convenient to administer, than injectable vaccines.  

What about the rest of Vaxart's pipeline? The company completed a phase 2 proof-of-concept efficacy study for its oral flu vaccine against one influenza strain. It also completed a phase 1 study of an oral norovirus vaccine candidate. Results from preclinical testing of an experimental universal influenza vaccine undertaken in collaboration with Johnson & Johnson should soon be available. 

Vaxart is looking for partners to advance several of its candidates, including its experimental coronavirus, norovirus, and seasonal flu vaccines. The company could use the financial assistance. It reported cash and cash equivalents of $29.9 million at the end of the first quarter. Since then, it has also raised around $90 million in gross proceeds through an at-the-market facility. 

Better coronavirus stock

I find Vaxart's oral vaccine approach fascinating and hope it's successful. But the decision between these two stocks is a pretty easy one. Inovio has a larger and more advanced pipeline. The company has a lot more cash. Inovio is the better coronavirus stock right now -- and the better stock overall.

Having said that, my personal view is that both of these stocks are too risky for most investors to buy at this point. Should Inovio report encouraging data from its late-stage study of VGX-3100 or advance INO-4800 to phase 3 testing, I'd seriously reconsider. For now, though, Inovio and Vaxart remain stocks to keep on your radar screen.