What happened

Shares of Inovio Pharmaceuticals (NASDAQ:INO) declined on Tuesday after investment bank Roth Capital Partners released a bearish report on the biotechnology company. As of 12:45 p.m. EST, Inovio's stock was down 8.5%.

So what

Roth Capital analyst Jonathan Aschoff slashed his rating on Inovio from neutral to sell. He sees its share price falling more than 30% to $8 amid intensifying competition from the likes of Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA).

A keyboard button labeled Sell

Inovio shareholders could suffer steep losses, according to a Roth Capital analyst. Image source: Getty Images.

In the past week, Pfizer and Moderna have both said their separate coronavirus vaccine candidates could be more than 90% effective at preventing COVID-19. Given these results -- and the fact that their phase 3 studies have progressed to the advanced stages -- both Pfizer and Moderna could soon request emergency use authorization from the U.S. Food and Drug Administration.

Now what

Inovio, meanwhile, is just beginning its Phase 2 study for its experimental COVID-19 vaccine. And with Pfizer and Moderna's clinical trial data setting the bar extremely high, it won't be easy for Inovio's vaccine candidate to compete effectively with these two healthcare giants.

With Inovio's share price up a staggering 289% in 2020 up until today, investors are understandably taking some profits off the table. And should Moderna's and Pfizer's drugs prove to be safe and continue to demonstrate such high efficacy at combating COVID-19, Inovio's stock could continue to sell off in the days and weeks ahead.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.