John Steinbeck doesn't come up in too many conversations about biotech stocks. But after an announcement by Inovio Pharmaceuticals (NASDAQ:INO) on Wednesday, I thought about the author's novel, Of Mice and Men.
Inovio released initial results from a pre-clinical test that demonstrated antibody and killer T cell responses in mice that had received the company's experimental Zika virus vaccine. Shares of the biotech promptly shot up 6% on the news.
It was that initial market reaction that brought this line from Of Mice and Men to mind: "His ear heard more than what was said to him." Could investors be hearing more than what Inovio actually said?
About those mice
Inovio's announcement stated that pre-clinical testing of its synthetic Zika virus vaccine had "induced robust and durable immune responses" in mice. The company's DNA-based vaccine was administered to the mice using Inovio's electroporation delivery technology. Electroporation involves applying an electric field so that cells become more permeable, which allows DNA to be introduced to the cells.
According to Inovio, this testing resulted in detection of specific antibodies in the blood of all vaccinated mice. Researchers also found robust T cell responses in the mice. T cells are types of white blood cells that play an important role in the immune system of both mice and humans. The broad T cell response is particularly good news because these cells can help kill the cells that harbor viruses.
Dr. J. Joseph Kim, Inovio's president and CEO, was understandably pleased with the early results. Kim noted how quickly his company had developed its potential Zika vaccine. This rapid progress piggybacked on Inovio's previous experience with dengue and West Nile virus vaccines.
Said and not said
It's not unusual for shares of a development-stage biotech to jump on good news from testing. However, investors should keep in mind what was said and what wasn't said regarding Inovio's results.
Two key words in Inovio's announcement were "potential" and "promise." The biotech referenced the potential for its vaccine to prevent and treat infections from the Zika virus. Dr. Kim mentioned that the vaccine "shows promise as a preventive and treatment."
And while there was plenty of discussion of mice, there won't be any talk of men for a while. Inovio's next step is to test the Zika vaccine on non-human primates. That testing will go on for several months. Phase 1 trials with humans won't begin until late 2016.
Perhaps the most important takeaway from Inovio's results is this: Good news, but it's still very early. Even if the rest of pre-clinical testing on animals goes well, Inovio must have success in phase 1 trials with humans. If that phase 1 testing goes well, the company must demonstrate efficacy in phase 2 (and potentially phase 3, although there's a good chance the company will go for an expedited FDA approval before phase 3 testing). And ultimately, regulatory approval must still be obtained. Everything could work out splendidly, but that's still a lot of "if"s.
Inovio shareholders excited about the latest results also shouldn't overlook the numerous competitors in the hunt to develop their own Zika vaccines. Over 15 companies have contacted the World Health Organization about developing vaccines.
Sanofi (NASDAQ:SNY) appears to be one of the main rivals to watch. The French drugmaker, like Inovio, has worked on other viruses in the flavivirus family, to which Zika belongs. Sanofi developed the first dengue vaccine, and is actively working to evaluate its vaccine technology in preventing and treating Zika.
Both Inovio and Sanofi sound optimistic. Sanofi thinks that lessons learned with its dengue vaccine can help it speed up the process of developing one for the Zika virus. The large pharmaceutical company also has the infrastructure and resources to mount an aggressive challenge to Inovio.
All of this optimism, though, reminds me of another famous literary figure, Robert Burns, who like John Steinbeck, wrote about mice and men. Here are the memorable words from Burns' poem "To A Mouse": "The best laid schemes o' mice an' men / Gang aft a-gley (go often awry)."
For mice and men (and biotechs), even the best-laid plans don't always go as expected.