What happened?

Shares of Inovio Pharmaceuticals (INO 7.79%) closed Wednesday's trading session down by 6.8% after dropping by as much as 12.3% earlier in the day, despite the company not reporting any news. However, the biotech stock has been in sell-off mode for the past month (or so), and today is likely a continuation of that trend. 

So what

Inovio's stock went on a tear during the first half of the year -- gaining as much as 860% -- mostly thanks to its efforts to develop a vaccine for COVID-19. But the company's stock plunged after it released interim data from its phase 1 clinical trial for its coronavirus vaccine candidate, INO-4800, on Jun. 30. And although the biotech somewhat recovered from this setback, its shares started dropping again and gave up more than 40% in August. There are several factors fueling these losses for Inovio. 

Five downward pointing arrows on a blackboard.

Image source: Getty Images.

First, the race to develop a vaccine for COVID-19 is intensifying, and several companies have already started phase 3 clinical studies for their candidates. Since Inovio's valuation is, to a large extent, tied to its COVID-19 programs, the fact that some of its peers seem more likely to cross the finish line before it does isn't good news for the company. Second, despite its recent woes, Inovio's stock is still up by an impressive 219.7% year to date (as of this writing). Some investors are likely choosing to cash in on these gains while they still can. 

Now what

Inovio's stock will remain volatile moving forward, but the most important thing for investors is to focus on the progress of its coronavirus program. The company plans on starting a phase 2/3 clinical trial for INO-4800 this month, and pending regulatory approval, Inovio could produce 100 million doses of its candidate in 2021. If that happens, and considering the market for a coronavirus vaccine spans the globe, Inovio should be able to generate some healthy revenue next year. In other words, there is still hope that this biotech can perform well from here on out.