What happened

Shares of Inovio Pharmaceuticals (INO 2.44%) were sinking 12.2% lower as of 11:16 a.m. EDT on Wednesday. This marked the second consecutive day of steep declines for the stock after Inovio's Q2 update on Monday evening didn't provide as much detail about the clinical results of its COVID-19 vaccine candidate INO-4800 as analysts wanted. 

So what

The core issue for Inovio is the skepticism about just how effective INO-4800 will be in protecting against the coronavirus that causes COVID-19. Inovio announced interim results in June from a phase 1 study of the vaccine candidate. At that time, the company said that 94% of the participants in the early-stage study "demonstrated overall immune responses" six weeks after receiving two doses of INO-4800.

Scientist holding syringe and vaccine bottle

Image source: Getty Images.

In its Q2 update on Monday, Inovio stated that 100% of participants receiving INO-4800 in the phase 1 study have demonstrated immune responses. The company also said that nearly 90% of participants receiving its vaccine candidate "generated strong T cell responses," with 95% of vaccinated participants producing neutralizing and/or binding antibodies after two doses of INO-4800.

All of these numbers are positive, so what is it that analysts don't like? Inovio still hasn't revealed exactly what percentage of trial participants developed neutralizing antibodies that hold the potential to protect against viral infection. 

Now what

There are three key things to watch with Inovio that could be significant catalysts for the biotech stock.

One is the publication of detailed results from the phase 1 study of INO-4800. Inovio said that these results are "now undergoing peer review for publication at a top medical journal."

An even more important milestone, though, is the advancement of INO-4800 into a phase 2/3 clinical study. Inovio said that it expects to begin this study in September.

But arguably the most crucial thing to watch is the company's progress toward securing funding to support its pivotal clinical study of INO-4800. CEO Joseph Kim said in the Q2 conference call that Inovio is "working on getting an external funding to support this large trial."