It seems such a long time ago that Inovio Pharmaceuticals (NASDAQ:INO) was considered one of the leaders in the hunt for a COVID-19 vaccine -- but the biotech was left in the dust by peers and many investors have given up on the stock. In the past 12 months, shares of Inovio are down 45% even as the broader market took off. 

However, the company hasn't given up hope to develop an effective vaccine for the coronavirus -- and thanks to recent regulatory developments, it could be a bit closer to this goal. Let's see whether the company is finally ready to turn things around.

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Phase 3 clinical trials in the works

Inovio's potential COVID-19 vaccine, INO-4800, has already produced promising results in clinical trials. The company ran a phase 2 study that enrolled 400 adult participants in the U.S. Its goal was to test INO-4800's safety, tolerability, and immunogenicity (the ability to trigger an immune response). The trial was a success: INO-4800 proved safe, well-tolerated by participants, and immunogenic.

The company likely would have moved on to a phase 3 trial already, but the U.S. Food and Drug Administration (FDA) had other plans. In September 2020, the agency put the phase 3 portion of Inovio's phase 2/3 clinical trial for INO-4800 on hold because of outstanding issues with the company's proprietary device (the Cellectra 2000) for administering the INO-4800.

With the FDA study still on hold, Inovio has turned elsewhere -- seeking and receiving the green light from regulators in other countries to go ahead with its plans. On Sept. 22, the vaccine maker announced that authorities in Mexico had given the OK to begin its phase 3 study. Brazil and the Philippines have given their go-ahead too.

Doctor about to give a shot to a patient.

Image source: Getty Images.

Together with its partner, China-based Advaccine Biopharmaceuticals Suzhou, Inovio is planning to run its phase 3 study in Latin America and Asia. And the company will focus its efforts on countries where vaccines aren't as readily available as they are in the U.S. Successful clinical trials in other countries could translate to regulatory approvals and sales -- at least, in those places.

Additional candidates in the pipeline

Meanwhile, Inovio is working on a rich pipeline of other potential vaccines and therapies in the areas of cancer and infectious disease. And it is partnering with larger drugmakers such as AstraZeneca and Regeneron, which have greater resources -- and also with non-profit organizations like Norway-based Coalition for Epidemic Preparedness Innovations, which promotes the creation of vaccines.

Inovio's most advanced project is VGX-3100, a potential medicine for cervical dysplasia, a human papillomavirus (HPV)-associated precancerous condition. In a phase 2 study, VGX-3100 reduced HPV-related precancerous vulvar lesions in 63% of treated participants. VGX-3100 is currently undergoing a phase 3 trial, and Inovio plans on unveiling some data from this study before the end of the year. There are no FDA-approved treatments for cervical dysplasia, which annually affects 195,000 people in the U.S. and 233,000 people in Europe.

Of course, not all of Inovio's candidates will make it to the market. But the company's pipeline -- including INO-4800 and VGX-3100 -- offer encouragement.

Should you pull the trigger?

Since Inovio's failure to live up to early expectations, especially when compared to some of its peers, it's not surprising that investors decided to look elsewhere. But if the company can now begin to carve out a niche for itself in the global COVID-19 vaccine market, its fortunes could begin to improve. It does not need the success of a Moderna -- which could reach $20 billion in sales this year -- to see its stock take off again.

Yet, a lot can still go wrong. Inovio could encounter more regulatory roadblocks, negative results from clinical trials, and stiff competition. Further, none of its products will make it to the market before the second half of 2022 in the best-case scenario. No matter how exciting its programs are, just one regulatory or clinical setback could sink its stock still further.

That's the reality of clinical-stage biotechs. And given that there are other excellent biotechs at present, I am not convinced it is worth investing in Invio's stock right now. But for those who are comfortable with high levels of risk and volatility, this company might be worth a closer look. 

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.