Inovio Pharmaceuticals (NASDAQ:INO) seemed like it could make millionaires out of many average investors -- and fast -- earlier this year. The clinical-stage biotech company soared 718% from the start of 2020 through its high point in July. Why? Inovio was among the first companies to begin testing a coronavirus vaccine candidate in human trials, and was early to report trial data. As a result, the company found itself among the early leaders of the coronavirus vaccine race.

A lot has happened since then, and it hasn't all been good news. Inovio's stock has suffered a 52% decline from its July peak. So is Inovio still a stock that could turn a thousand-dollar investment into a million? Let's take a closer look.

A man wearing a denim shirt holds out a handful of $100 bills.

Image source: Getty Images.

The beginning wasn't pretty

Inovio's troubles actually began after it reported interim phase 1 data from its vaccine candidate's clinical trials in June. The results weren't bad. The problem was that investors wanted more detail about neutralizing antibody levels in trial participants. Neutralizing antibodies are important because they do the work of blocking future infection. Therefore, achieving the antibody levels needed to achieve immunity is key in developing an effective vaccine. Inovio first reported that 94% of participants showed an immune response involving binding and neutralizing antibody activity, as well as a T-cell response. Shares slipped by 27% following the news. Investors were disappointed because Inovio didn't provide more particular data, unlike its competitors. Rival Moderna (NASDAQ:MRNA), for example, provided neutralizing antibody level information in comparison to those found in recovered coronavirus patients. Moderna was able to make the important distinction that its coronavirus vaccine candidate created antibody levels at or above those in recovered patients. Unfortunately, Inovio failed to match that communication standard.

100% immune response

During Inovio's August earnings report, the company offered an update, reporting that 100% of phase 1 participants developed an immune response according to the measures mentioned above. Inovio also announced that paper with full results would soon be published in a medical journal. A possible publication that shows specific neutralizing antibody data and high antibody levels post-vaccination might give the stock a lift.

But another issue is likely to hold back a major rally. The U.S. Food and Drug Administration (FDA) recently put the brakes -- at least temporarily -- on Inovio's upcoming phase 2/3 trial. The FDA has additional questions about the trial and the Cellectra device used to deliver the investigational vaccine. Cellectra is Inovio's proprietary smart device, which opens small pores in the skin and delivers Inovio's coronavirus vaccine candidate through an electrical pulse.

Inovio has said that it plans on answering the regulatory agency's questions this month. The FDA will then have 30 days to respond. At that point, Inovio will know whether it can start its late-stage trial.

There are two bright spots here. First, this "partial clinical hold" isn't due to adverse events in the ongoing phase 1 trial. That trial can continue. And second, the hold doesn't affect Inovio's other clinical programs. The company has 15 projects in the pipeline between phase 1 and phase 3. These include treatments for prostate cancer and an aggressive brain cancer, glioblastoma multiforme (GBM), as well as infectious diseases like Middle East Respiratory Syndrome (MERS).

Betting on the coronavirus vaccine program

In spite of these positives,, the shares may stagnate or suffer until the phase 2/3 investigational coronavirus vaccine trial situation is resolved. News from that program has guided the stock higher and lower this year, depending on the day. Many investors who jumped on the Inovio train are betting wholly on the success of the potential coronavirus vaccine and a collective positive market response.

There are two reasons why I'd still be worried about the company's shares, even if the FDA issues a positive decision regarding the phase 2/3 trial start date. This delay has pushed Inovio further behind in the coronavirus vaccine race. There is room for more than one vaccine maker, considering worldwide need for a vaccine. But from a timeline perspective, many of the current players may be ready to serve that need before Inovio. There are 11 rival programs in ongoing phase 3 studies. Big pharma Pfizer (NYSE:PFE) and its biotech partner, BioNTech (NASDAQ:BNTX), for example, recently announced that they expect a phase 3 data readout by the end of the month, and that their vaccine candidate is under rolling review in Europe.

A second concern is funding. Inovio has said that it plans to move forward with its phase 2/3 trial dependent upon the FDA's decision and "subject to the receipt of external funding to conduct the trial." Inovio has already announced $110 million in funding from private organizations and the U.S. government. That compares to billions that the U.S. government has invested in clinical-stage biotech rivals, including Moderna and Novavax (NASDAQ:NVAX). This difference in funding levels and Inovio's recent comments cast doubt on the company's ability to afford a late-stage trial.

Time for the math

Now, let's turn back to our question: Can Inovio make you a millionaire? Let's do some simple math. Analysts' highest 12-month price target is $25. Let's imagine that we want that price to trigger your millionaire status. Well, you would have to buy 40,000 shares at the current price of about $12.50 as of Oct. 6. That's a whopping $500,000 investment. Considering the uncertainty surrounding Inovio's late-stage trial, that investment is unrealistic for most and far too risky.

Could Inovio still make you a millionaire down the road? This would mean investing in Inovio with an eye towards its entire pipeline. That's typically a better strategy than betting on just one treatment program.

Today, it's too early to answer that question. Only the outcome of Inovio's vaccine program can offer us some direction. If the outcome is positive or if the company's shares rebound after a slew of negative news, that would be a good sign for Inovio. And at that point, we may know whether Inovio's shares had their 15 minutes of fame this year -- or whether the biotech company can offer investors true long-term gains.