Big drugmakers tend to receive the most publicity about their efforts to develop a COVID-19 vaccine. However, there are quite a few smaller biotechs that are also in the hunt. Several of them have seen their share prices soar this year as investors became excited about their coronavirus programs.

Two biotech stocks that certainly fall into that group are Inovio Pharmaceuticals (NASDAQ:INO) and VBI Vaccines (NASDAQ:VBIV). Inovio's shares are up 259% year to date after rising as much as 860% at one point. VBI Vaccines stock is up 109% after jumping as high as 347% in July.

Which of these coronavirus stocks is the better pick now? Here's how Inovio and VBI stack up against each other.

Gloved hands holding syringe and needle in vaccine bottle

Image source: Getty Images.

The case for Inovio

Inovio got off to a fast start earlier this year with the development of COVID-19 vaccine candidate INO-4800. The company began phase 1 clinical testing of the experimental vaccine in April and announced positive preliminary results from that study on June 30. 

The biotech's management team had hoped to begin a phase 2/3 study of INO-4800 in September. However, the U.S. Food and Drug Administration (FDA) placed a partial clinical hold on the clinical trial because it had additional questions about the vaccine candidate and the CELLECTRA 2000 deliver device to be used in the study.

Still, Inovio remains optimistic that it will be able to satisfactorily answer the FDA's questions and initiate the planned clinical trial of INO-4800. The company also has stated that it expects to secure external funding for its COVID-19 vaccine program. 

INO-4800 isn't Inovio's lead pipeline candidate, though. The biotech is currently evaluating VGX-3100 in a late-stage study for treating human papillomavirus (HPV)-related pre-cancerous cervical dysplasia. Results from this study are expected to be announced before year-end. Inovio is also evaluating the experimental drug in phase 2 studies targeting precancerous vulvar and anal dysplasia. 

AstraZeneca is conducting phase 2 studies of another candidate developed by Inovio, MEDI0457, in treating HPV-related types of cancer. Inovio's pipeline also includes two other experimental immunotherapies targeting cancer plus six other clinical-stage programs targeting infectious diseases.

The case for VBI Vaccines

VBI Vaccines announced encouraging preclinical data for its coronavirus vaccine program on Aug. 26, 2020. Based on this data, the company selected to lead candidates, VBI-2901 and VBI-2902, to advance into a phase 1/2 clinical study. VBI expects to begin this study before the end of the year.

Even before selecting these two lead candidates, VBI's COVID-19 program was attracting attention. Earlier in August, the Canadian government's Strategic Innovation Fund awarded VBI's Canadian subsidiary, Variation Biotechnologies, up to 56 million in Canadian dollars (around US$42 million) to support the development of VBI's coronavirus vaccine program through phase 2 clinical testing. 

Unlike Inovio, VBI Vaccines already has an approved product. The only catch is that product, hepatitis B vaccine Sci-B-Vac, is only approved in Israel at this point. However, VBI expects to begin regulatory filings for the hep-B vaccine in the U.S., Europe, and Canada over the next few months. 

VBI thinks that it could have a functional cure for hepatitis B with therapeutic candidate VBI-2601. The company is currently evaluating the experimental immunotherapy in a phase 1b/2a study. 

The biotech's pipeline includes cytomegalovirus vaccine candidate VBI-1501, which has completed phase 1 testing, along with a Zika vaccine candidate in preclinical testing. VBI is also exploring a potential pivotal late-stage study of immunotherapy candidate VBI-1901 in treating glioblastoma multiforme, an aggressive type of brain cancer. 

Better coronavirus stock?

My personal view is that neither of these stocks is a great pick at this point. Both companies are unprofitable and face significant risks for their respective pipeline candidates.

Having said that, I think that Inovio could be more likely to deliver higher returns over the next few months. If the biotech is able to satisfactorily address the FDA's questions, it should receive a green light to advance INO-4800 into phase 2/3 clinical testing. I think that would send short-sellers heading for the hills and potentially lead to a short squeeze scenario for Inovio.

Again, though, Inovio (like VBI Vaccines) is a risky biotech stock that isn't suitable for most investors. There's no guarantee that its COVID-19 program or any of its other pipeline candidates will be successful.