In 2020, coronavirus vaccine developer Inovio Pharmaceuticals (NASDAQ:INO) has enriched some biotech investors and wreaked havoc for others. It all depends on when you got in on the action.

If you invested $10,000 in the company this time last year, that principal would have grown to over $36,230. However, for those who became Inovio shareholders in mid-July as part of the coronavirus vaccine hype, an investment of $10,000 would be worth just over $4,000 in less about four months. The company has endured several dramatic swings in its stock price over the past 11 months. Can Inovio continue its momentum of wealth creation for early birds and recover losses for investors who were late to the game?

Medicine vials during manufacturing.

Image source: Getty Images.

Finally, some good news

After nearly two months of the U.S. Food and Drug Administration's (FDA) partial clinical hold, the agency has finally given its green light for the phase 2 portion of Inovio's coronavirus vaccine candidate's (INO-4800) study. The company still has to satisfy the FDA's questions regarding its vaccine injector is safe for use in the phase 3 portion. The exact details of why the clinical trial was halted are unknown.

Luckily, Inovio is no longer alone in funding its stalled vaccine's development. The U.S. Department of Defense (DOD) announced it would be fully funding both parts of INO-4800's phase 2/3 investigation. That should give the company some credibility to pave the way for government orders and help ease its expenditures. Year to date, Inovio has spent over $67 million in research and development expenses.

Before investors rejoice, there are still many unresolved issues. As of Nov. 24, INO-4800's phase 1 data has yet to receive validation from a peer-reviewed scientific journal. We still do not know how many participants who took INO-4800 developed neutralizing antibodies against SARS-CoV-2, a critical metric for all coronavirus drugmakers in their clinical studies.  

Another pressing matter is the lack of orders for INO-4800. Even before multiple coronavirus vaccine candidates demonstrated efficacy in late-stage trials, governments worldwide booked more than 5.7 billion pre-orders of them. For example, CureVac (NASDAQ:CVAC), convinced the European Union to order 405 million doses of its experimental vaccine based on just interim phase 1 data. This makes Inovio's lack of pre-emptive orders all the more puzzling.

An unexpected hand 

Lately, however, fortune has been kind to the company and its immunotherapy pipeline. Inovio's immunotherapies use biological agents to elicit the body's own immune system to fight against cancer growth.

Inovio recently announced results from an open-label, phase 1/2 clinical trial involving three immunotherapies plus standard of care (SOC) drugs to treat glioblastoma. Glioblastoma is the deadliest form of brain cancer, with abysmal survival rates. The three experimental therapies are INO-5401, INO-9012, and Libtayo.

In the study, patients who received the triple-combination and SOC immunotherapy in the unmethylated cohort survived for a median of 17.4 months. Methylation refers to a chemical change in the tumor cells' DNA repair protein; patients who are unmethylated are more difficult to treat with chemotherapy. This compares well to historical median survival data for unmethylated and methylated patients who received SOC alone, which stands between 15 and 16 months.

That is undoubtedly promising. Take the case of Novocure (NASDAQ:NVCR), which engineered a device called Optune that applies a gentle electric field to the tumor site in patients with glioblastoma. In 2015, the device quickly advanced to approval for this indication after improving the survival rate of patients who also took SOC by a median of 4.5 months, compared to patients who only received SOC (19.6 months versus 15.2 months) in phase 3 studies. Novocure is now a $12 billion market cap company due to the commercialization of Optune alone.

What's the verdict? 

Inovio has made some progress across its pipelines, but not enough to make the stock a safe bet. For starters, its coronavirus vaccine candidate is falling behind, is missing scientific validation (for the moment), and does not seem to have any meaningful orders on the books. Meanwhile, INO-5401 and INO-9012's clinical study only involved 52 participants and lacks placebo control.

Libtayo, and not Inovio's immunotherapies, may be responsible for any benefit signals as the drug is effective at treating other types of cancer (such as skin cancer). Even if the company advances INO-5401 and INO-9012 to phase 3, it will take several years for the late-stage study to complete, as with any glioblastoma treatment candidates. Due to the deadly nature of glioblastoma, it can be very difficult to recruit patients and coordinate their treatment with experimental drugs. 

For a small-cap, Inovio is already tackling several major medical needs. However, the odds that it achieves near-term profitability by commercializing its experimental products still seem low. For now, Inovio remains a speculative bet for biotech investors.