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.
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.
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.