What's The Deal?
A partnership with Roche might be Inovio's biggest news in the company's history, indicating that Inovio is on track to gainful bounties. In many ways, this partnership was not expected. For the last several months investors had been speculating about a potential Merck partnership or buyout -- adding to a 2004 licensing agreement with Merck -- which then led to Inovio's mid-year rally.
Instead, the vaccine powerhouse Roche saw upside in Inovio's "preclinical" vaccines: INO-5150 for prostate cancer and INO-1800 for hepatitis B. I emphasize the word preclinical because these are two programs in the earliest stages of development, with only animal testing. Roche did not license any of Inovio's more advanced programs such as its cervical dysplasia, HIV, or influenza segments, all of which use synthetic vaccines and electroporation for delivery.
Hopefully, Inovio and Roche will have a long and lucrative relationship. Investors should note that the $11 million received will add to the company's $23.5 million in cash, but larger cash payouts are unlikely to be awarded in the earlier stages of development. With that said, $412.5 million in potential payouts is more than enough to properly develop these two candidates and also limit the amount of dilution in shares of this company.
Overall, I think this is quite the boon for Inovio-- and the possibility does quiet a lot of naysayers. But let's look at two other beneficiaries to this deal.
Sentiment: Strong Buy
The scientific method: a method of procedure that has characterized natural science since the 17th century, consisting in systematic observation, measurement, and experiment, and the formulation, testing, and modification of hypotheses. So, in short, a successful company like Roche isn't blind and stupid.
Thank you Notabadpicker, These facts are true and any rational honest person will see this as encouraging. I will be moving your well written post to the top all day for the new investors to read. We need this quality of posts to counter the ongoing attack from the lying paid bashers we face everyday. Thank you.
Sentiment: Strong Buy