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Turn Out the Lights on iBio’s Covid-19 Vaccine Party

Todd Shriber

The race to develop a vaccine to fight the novel coronavirus is like any other competition. There are going to be winners and losers. It appears iBio (NYSEAMERICAN:IBIO) will be in the latter the camp despite the fact that IBIO stock is up 691% this year.

A scientist in medical gear peers through a microscope.
A scientist in medical gear peers through a microscope.

Source: Shutterstock

On balance, a 691% gain in less than nine months is nothing to scoff at. Nor is a 56.42% drop over the past month and the fact that IBIO stock needs to more than triple to return to its 52-week high. Still, the prize in the Covid-19 vaccine competition is too compelling to ignore and as a result, iBio isn’t throwing in the towel despite facing plenty of stiff competition.

The company is less than a month removed from its most recent update on its IBIO-201 antigen-adjuvant combinations – the iBio quest for a Covid-19 vaccine – and while that was good for a quick pick-me-up for the stock, it wasn’t sustainable.

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“We are encouraged by these pre-clinical data, which demonstrate IBIO-201’s ability to generate an immune response to SARS-CoV-2 sequences and neutralize protein interaction,” iBio CEO Tom Isett said in a statement. “We expect to gain more insight as we complete data analysis of both of our COVID-19 vaccine candidates.”

Why iBio Stock Will Keep Struggling

The statement about iBio collecting pre-clinical data on IBIO-201 wouldn’t be bad news under normal circumstances, but the fight against Covid-19 isn’t normal.

The U.S. is more than six months into fighting the pandemic and the fact is, the credible players in the vaccine race are in Phase 2 clinical trials and some could file approval for their wares later this year.

Bottom line: iBio is well behind the eight ball here and it’s trailing companies with deeper pockets, such as Moderna (NASDAQ:MRNA), Pfizer (NYSE:PFE), BioNTech (NASDAQ:BNTX) and AstraZeneca (NYSE:AZN).

The other issue with iBio is that it’s working on multiple antigen-adjuvant combinations. Ten to be exact, as noted in the aforementioned press statement. One has advanced to pre-clinical trials on mice while rivals are commencing or nearing human trials. That lack of focus is part of the problem with iBio because markets can interpret it as throwing pasta at a wall and hoping something will stick.

At best, it’s an unconventional approach, particularly given the time constraints surrounding coronavirus vaccine development. As the New England Journal of Medicine points out, it’s not unusual for master protocols to “involve one or more interventions in multiple diseases or a single disease,” but it is rare for a company to test five, six or 10 therapies for a disease at the same time.


Another Pandemic Disappointment

iBio has been down this road before, rallying during the ebola pandemic of 2014 only to fall flat because it was unable to bring a vaccine to market. The silver lining there is that the company shows survivability even though it has a reputation of tantalizing then disappointing investors on the back of pandemic news.

Prior to Covid-19, iBio’s primary therapeutic candidate is IBIO-CFB03 for the treatment of systemic scleroderma, idiopathic pulmonary fibrosis, and other fibrotic diseases. So, the cupboard isn’t totally bare here and it may have up to $80 million in cash, pending the final tally of recent capital raises.

Over the near term, however, those aren’t catalysts for the stock. Something positive tied to a Covid-19 vaccine is. But this competition is entering the fourth quarter and the deficit iBio is facing is nearly insurmountable.

There might be something to see here after markets reconcile the company’s coronavirus failings. Until then, investors wanting vaccine upside should look elsewhere.

On the date of publication, Todd Shriber did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.

Todd Shriber has been an InvestorPlace contributor since 2014.

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