Inovio Pharmaceuticals (INO 2.17%) was among the first to start clinical trials on a coronavirus vaccine candidate. But the biotech company wasn't among the first to cross the vaccine race finish line. The U.S. Food and Drug Administration (FDA) last fall placed one of Inovio's vaccine trials on a partial clinical hold, and the program fell behind.

Now, Inovio's candidate is in phase 2. The clinical-stage biotech company also is working on a next-generation vaccine. And a recent statement by White House chief medical advisor Dr. Anthony Fauci may mean good news for one of these programs.

Scientists work in front of computers on coronavirus vaccine development.

Image source: Getty Images.

The latest focus

Fauci, who also is director of the National Institute of Allergy and Infectious Diseases, last week testified before a congressional subcommittee about vaccine developers' current focus.

"What we're putting a lot of effort in, is to try and get a more universal vaccine that would cover all different types of variants," Fauci said. "That's the ultimate end game." Fauci referred to overall efforts in the scientific community.

Why is this good news for Inovio? Because Inovio's next-generation vaccine program is working to meet that goal. And if it does, Inovio may finally get its opportunity to shine.

Inovio said during its earnings report last month that it's working on "pan-COVID" vaccine candidates that could protect against current and future variants of concern. Inovio's SynCon gene optimization algorithm examines the sequences of today's variants. Then, with that information, Inovio creates a synthetic spike protein. The idea is this vaccine design could offer broad protection against variants -- even those that haven't yet emerged.

This sounds exciting. But investors will have to be patient. We still need to see preclinical data, and then, if that's promising, clinical data. Any possible victory would be down the road. In fact, it may even come post-pandemic. Now, the big question is whether that may be too late. The answer is "that depends." I'll explain.

Experts say the coronavirus will be around well into the future. So, if Inovio launches a pan-COVID vaccine in a few years, there could be a huge market for it. But here's the problem: If a rival beats Inovio to market with a next-generation vaccine that handles multiple strains, Inovio may have trouble carving out market share.

For instance, Moderna and Pfizer are already working on booster shots to address variants. Moderna even said recently it will have a booster available this fall. If Inovio hopes to stand out with a pan-COVID vaccine, its potential product will have to show that it can handle all strains better than earlier-to-market rivals.

So, what does this mean for investors?

Dr. Fauci's statement is good news for Inovio because it confirms the great need for a pan-COVID vaccine. Such a product could be a game-changer. If Inovio can make it work, the program could be transformative for the company. The company or companies that make pan-COVID vaccines likely will generate billions of dollars in government orders worldwide.

But it's too early to say whether Inovio can win this new vaccine race. It's clear the company doesn't have the upper hand from a timeline perspective. This new program isn't a booster that can gain authorization based on the earlier authorization of a vaccine. The FDA says companies with authorized vaccines don't have to perform huge new trials for a vaccine update or booster. Moderna and Pfizer both fall into this category.

And Inovio's next-generation program is in the early stages. In the coming months, a lot can go right. And a lot can go wrong. Also, it isn't clear when Inovio's original coronavirus candidate may enter the market. All of this means risk is high. And that means, unless you're an aggressive investor, it's still too early to buy shares of this biotech stock. But it is a stock you'll want to keep on your watch list -- possible progress in the next-generation vaccine program could make it a buy in the future.