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Image Source: Inovio Pharmaceuticals

For Inovio Pharmaceuticals (NASDAQ:INO) shareholders, 2015 might be one of those years you'd rather forget. Shares of the biotech have been beaten down for most of the year. While there were some positive developments in 2015, Inovio has seen its fair share of negative ones also. Here are three of the worst headlines for the immunotherapy-focused company over the last 12 months.

1. Dilution blues
When a small biotech needs to raise cash, it has only a few options available. One of those is to sell more shares via a secondary public offering. This approach has its good and bad points, though. The good is getting that vital funding. The bad is that the move dilutes the value of the shares already on the market, typically driving the stock price lower.

Inovio experienced both this year. On April 29, the biotech announced plans for a public offering. The next day, Inovio provided the price for that stock sale -- a level nearly 19% below the previous day's closing price. It was no surprise that shares plunged on the news.

On the other hand, Inovio's action generated over $82 million to help fund continued development of its pipeline. That puts the biotech in good shape to continue operations for a long time to come. 

2. Washington warnings
Although Inovio doesn't have a product on the market yet, that's definitely the company's goal. And, like plenty of other drugmakers, it hopes to generate nice profits when that day comes. An announcement on Sept. 21 by Democratic presidential candidate Hillary Clinton cast some doubts on future profit margins for the entire industry.

Former Secretary of State Clinton announced that she would "demand a stop to excessive profiteering," and unveiled a plan to control rising drug costs. Her outline included plenty of provisions that were worrisome for pharmaceutical companies, including allowing Americans to buy drugs from other countries with lower pricing, and giving Medicare more power to bargain with drugmakers. 

This news sent most biotech stocks reeling. Inovio's shares didn't overcome the downward pull, falling nearly 30% over the next couple of weeks following the release of Clinton's plan.

3. The invisible headline
There's one story that really hasn't made the headlines (at least not yet), but is potentially bad news for Inovio. The percentage of shares outstanding that have been sold short has been at high levels during the fourth quarter, even though the biotech hasn't really had any negative news to report. This short-selling reflects a definitive negativity among a group of investors.

Why are some so bearish on Inovio? It could be simply due to the inherent risk associated with a speculative biotech. Another possibility is that some investors anticipate a broader decline in the market that will cause smaller stocks like Inovio to feel the pain more than others.

Better days ahead?
Inovio shouldn't have to issue additional stock anytime soon. It's possible that fears about potential new government regulations on drug pricing are overblown. And short-sellers' pessimism can be proven wrong. Or, of course, any or all of 2015's negative stories could carry over into the new year. However, there are at least a few potential bright spots that could make 2016 a better year for Inovio.

One to particularly look out for relates to the small biotech's partnership with AstraZeneca (NYSE:AZN). The big drugmaker bought exclusive rights to Inovio's human papillomavirus (HPV) vaccine, INO-3112, earlier this year. AstraZeneca plans to test the vaccine with cancer drugs in its own pipeline. This partnership could prove lucrative over the long run for Inovio, with potential milestone payments of up to $700 million.

Whether 2016 brings good news or bad news, one thing seems likely: Inovio will stay in the headlines.

 

Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.