What happened?

Shares of iBio (NYSEMKT:IBIO) were up by 6.8% as of 11:38 a.m. EDT after climbing by as much as 19.5% earlier today, following the company's announcement that it has selected its leading COVID-19 vaccine candidate.

So what

iBio had been working on two experimental vaccines, IBIO-200 and IBIO-201. Both performed well in pre-clinical studies, producing antibodies for the SARS-CoV-2 virus that causes COVID-19. Antibodies are proteins that defend healthy cells from pathogens.

But the biotech found that IBIO-201 "induced the production of more anti-spike neutralizing antibodies than IBIO-200 in immunized mice." That is why the company chose IBIO-201 as its leading candidate. The company plans on advancing it to toxicology studies before it reaches the clinical-trial stage. But iBio isn't giving up on IBIO-200; it will continue pre-clinical development for this experimental vaccine.

Doctor holding a glass vial labeled "COVID-19 vaccine coronavirus."

Image source: Getty Images.

Now what 

The race to develop a vaccine for the coronavirus is crowded, with several companies already conducting late-stage studies for their candidates. These include Moderna, AstraZeneca, and Pfizer. With that said, there is a worldwide need for a vaccine, and iBio could still end up launching its vaccine on the market in time to generate healthy revenue. It is also worth noting that iBio has a market cap of just $362.78 million as of this writing.

The company's shares will tend to be more susceptible to upward movements than others with much larger market caps when it announces the progress of its COVID-19 program. But if it fails to impress investors, its stock will crash. iBio rose by as much as 2,470% earlier this year, and it's now up by a more modest (but still impressive) 739.4% year to date. In other words, this biotech stock will remain volatile, and only investors who can stomach the risk should consider initiating a small position in iBio.