Developing innovative products is an excellent way for a company to become successful, and that's what Inovio Pharmaceuticals (INO 3.62%) is looking to do. This small-cap biotech focuses on DNA-based vaccines and treatment for cancers and infectious diseases.

However, some things matter more to investors than an ambitious vision, including actual results. And in that regard, Inovio Pharmaceuticals hasn't been impressive over the past few years. Is there any hope left for the company? Let's look at one reason Inovio could be an exciting contrarian buy, and one reason to stay away.

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Green flag: A rich pipeline

Small-cap biotechs need promising pipeline programs to attract attention. In this department, Inovio Pharmaceuticals doesn't disappoint. The company currently boasts around 10 pipeline candidates, including some vaccines or treatments targeting Ebola, prostate cancer, and COVID-19.

True, larger biotechs often have substantially more than that, but for one the size of Inovio, that's a relatively impressive number. To be clear, having more pipeline candidates has both pros and cons. One of the perks is that since many programs never make it to the market, those companies with multiple candidates have a higher chance of eventually getting one across all the regulatory hurdles in its path.

One potential drawback is funding. Small-cap biotechs typically don't generate much revenue, and tend to be unprofitable. What little funds they can generate are sometimes better spent laser-focusing on a couple of exciting products. However, Inovio Pharmaceuticals has managed to partner with various third parties, often with big pockets, that could help it somewhat in dealing with potential funding issues.

The company's partners for some of its programs include major drugmakers such as AstraZeneca and Regeneron Pharmaceuticals. Another is the Norway-based Coalition for Epidemic Preparedness Innovations, a nonprofit organization that receives donations to help fund the development of vaccines against infectious diseases.

That's why at first glance, Inovio's pipeline certainly looks more attractive than those of many other smaller biotechs.

Red flag: Inovio's leading products

Although Inovio's pipeline looks exciting at first, the company seems very far from launching any of its products on the market. Its leading candidate is INO-4800, a potential COVID-19 vaccine. Inovio was once a leader in the race to develop an effective vaccine, but it has fallen far behind.

Right now, the company is targeting the booster market with INO-4800. But there are already plenty of players in this space, including Moderna and Pfizer. Other companies are also looking to enter this market, and seem to be in a better position than Inovio Pharmaceuticals; this group includes Novavax.

By the time INO-4800 earns approval -- if it does -- demand for COVID-19 vaccines will almost certainly have dropped. After all, that's partly why vaccine leaders such as Moderna and Novavax are struggling this year; they currently generate revenue from their COVID-19 vaccines, and the long-term prospects of this market look uncertain. That doesn't sound good for INO-4800.

Inovio's other leading candidate is VGX-3100, a potential DNA vaccine targeting an HPV-associated precancerous condition called cervical dysplasia. The company initially hoped to apply for approval for VGX-3100 next year, but health industry regulators in the U.S. said Inovio's current late-stage study for the product would not be sufficient to support an application.

In other words, Inovio Pharmaceuticals will have to run yet another study for VGX-3100 before submitting a regulatory application. Assuming the company's new study starts early next year, lasts one year, and delivers solid results, we shouldn't expect the candidate to be commercialized before mid-2024 -- and that's an optimistic estimate.

It's best to look elsewhere

Inovio Pharmaceuticals' pipeline is not enough to warrant an investment, and the company's two leading candidates don't inspire confidence. That leaves the company with uncertain long-term prospects. Even at a price of $2.17 each, the company's shares look too expensive. Consider putting your money in other promising biotech stocks instead.