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Inovio: Advaccine Deal Is a Positive but Not a Game Changer, Analyst Says

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Inovio Pharmaceuticals’ (INO) 2020 was a tale of two contrasting halves. Shares skyrocketed during the first 6 months as the small vaccine maker entered the Covid-19 vaccine race and caught a ride on investors’ appetite for coronavirus-focused stocks. However, the year’s second half was marred by disappointment as the company failed to keep up with the pace setters. No doubt, in 2021, investors would like a repeat of last year’s initial surge.

Meanwhile, on Monday, Inovio announced a collaboration and licensing deal for its COVID-19 DNA vaccine candidate INO-4800.

The company has partnered with China-based Advaccine Biopharmaceuticals who will own the exclusive rights to develop, produce and bring to market INO-4800 in Greater China, including Hong Kong, Macao and Taiwan.

In return, Advaccine’s plasmid manufacturing process will be licensed to Inovio for the development of INO-4800. Advaccine will pay Inovio an upfront fee of $3 million and milestone payments totaling $108 million. Inovio will also be eligible to collect royalties equal to a high single-digit percentage of yearly net sales in each region across Greater China.

H.C Wainwright analyst Ram Selvaraju believes the agreement “enables Inovio to monetize the global market potential of INO-4800 and adds an Asian manufacturing partner into its global manufacturing consortium.”

INO-4800 is currently in a Phase 2 trial in China, which is “progressing well, with all 640 subjects dosed for the first vaccination.” The trial has a similar design to the Phase 2 study currently taking place in the U.S.

The progress, however, is not enough of a game changer for Selvaraju to readjust his Inovio model.

The analyst cites “the uncertainty of the commercial outlook for Inovio's vaccine in the context of the current competitive landscape and the trajectory of the global pandemic,” as the reasons why he remains Neutral (i.e. Hold) for now. The analyst has no specific price target in mind. (To watch Selvaraju’s track record, click here)

On the rating front, Selvaraju’s colleagues agree. The consensus among analysts is a Hold, based on 1 Buy and Sell, each, and 5 Holds. However, the average price target is an optimistic one, and at $12.6 could provide investors with returns of 36% over the next 12 months. (See INO stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.