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Bear of the Day: Inovio Pharmaceuticals (INO)

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Inovio Pharmaceuticals INO discovers, develops, and delivers a new generation of diseases, called DNA vaccines, focused on cancers and infectious diseases. The company's electroporation DNA delivery technology uses brief, controlled electrical pulses to increase cellular DNA vaccine uptake.

The Latest on INO's COVID-19 Vaccine

Even though Inovio announced its discovery of a coronavirus vaccine during the early days of the pandemic, the company’s R&D efforts have turned out to be a big disappointment.

The FDA halted the phase 3 portion of its clinical study for INO-4800 last year, citing safety concerns with its vaccine injector, and then the company sued its own vaccine contract manufacturer because of a supply dispute.

The last major blow came back in April, when the U.S. government told the company that it wouldn’t fund the final phase of its study due to "the changing environment of COVID-19 with the rapid deployment of vaccines."

All of these delays pushed Inovio way behind top guns like Pfizer PFE and Moderna MRNA in the vaccine race, and it’s now unlikely that INO-4800 will play a role at fighting COVID-19 in the U.S.

Even more, it’s still uncertain when Inovio will generate any significant sales from INO-1800, but it does have more than $500 million in cash on hand, which will provide some sort of financial cushion in the meantime.

Bottom Line

INO is now a Zacks Rank #5 (Strong Sell).

Three analysts have cut their full year earnings outlook over the past 60 days, with Inovio’s bottom line expected to grow only 0.93% year-over-year. Wall Street has slashed its earnings picture for 2022 as well, and next year’s consensus has fallen 64 cents to a loss of $0.82 per share.

Shares have been volatile so far in 2021. Year-to-date, INO is down almost 6% compared to the Nasdaq and S&P 500’s gain of 14% and 16.3%, respectively.

But it’s not all doom and gloom for Inovio. It recently expanded a partnership with Advaccine Biopharmaceuticals Suzhou; the two companies will launch a global phase 3 trial before the end of summer. Plus, recent phase 2 data showed that patients who received its vaccine candidate had good neutralizing antibody and T-cell response levels. Overall, INO-4800 was well tolerated.

Share performance going forward will depend on how well this new trial goes, but because of the stock’s recent unpredictability, it may be best to stay on the sidelines for now.

Investors who are interested in adding a medical stock to their portfolio could consider Acadia Pharmaceuticals ACAD. ACAD, which develops Nuplazid, the first and the only Food and Drug Administration (FDA)-approved treatment for hallucinations and delusions associated with Parkinson’s disease, is a #2 (Buy) on the Zacks Rank, with bottom line growth nearly 30% fir fiscal 2021.

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Pfizer Inc. (PFE) : Free Stock Analysis Report
Moderna, Inc. (MRNA) : Free Stock Analysis Report
Inovio Pharmaceuticals, Inc. (INO) : Free Stock Analysis Report
ACADIA Pharmaceuticals Inc. (ACAD) : Free Stock Analysis Report
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