Please ensure Javascript is enabled for purposes of website accessibility

Why Inovio Pharmaceuticals Is Plunging Today

By Zhiyuan Sun – Aug 10, 2021 at 2:22PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Solid business developments did not please investors.

What Happened?

Shares of coronavirus vaccine developer Inovio Pharmaceuticals (INO 5.70%) are down 11% to $8.50 apiece as of 10:30 a.m. EDT. The company reported second-quarter earnings after markets closed on Monday. Among other things, Inovio plans to launch phase 3 clinical trials for its DNA coronavirus vaccine candidate INO-4800. In addition, the company is partnering with Sinovac Biotechnology and Advaccine to investigate the potential of INO-4800 as a booster shot. 

Getting a coronavirus vaccine at the drive-thru.

Image source: Getty Images.

So What

The small-cap biotech is making good progress. However, the issue of INO-4800 meeting regulatory guidelines in the U.S. remains unresolved. In April, the government pulled the funding for the study, citing the ample availability of other already approved vaccines. In addition, its U.S. study is still facing a clinical study hold by the Food and Drug Administration pending more safety information on its vaccine delivery device. 

Now What

Inovio was among the first biotech companies to design a prototype of a coronavirus vaccine when the deadly virus spread across the world last February. But since then, it has fallen far behind its peers like Pfizer and Moderna. A series of company-specific delays also did not help resolve the situation. It is unlikely that the company could finish its study and seek regulatory clearance before the world's vaccination campaign completes. 

Keep in mind that Inovio has no product revenue. To stay afloat, it has been issuing stock for much of last year. Its shares outstanding doubled to 202.41 million during that period. That and its diminishing coronavirus vaccine prospects should lead investors to think twice before opening a stake in the biotech

Zhiyuan Sun has no position in any of the stocks mentioned. The Motley Fool recommends Moderna Inc. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Nearly 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Inovio Pharmaceuticals Stock Quote
Inovio Pharmaceuticals
$2.04 (5.70%) $0.11
Pfizer Stock Quote
$50.13 (1.29%) $0.64
Moderna Stock Quote
$175.91 (1.59%) $2.76

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.