Inovio To Start Phase 2/3 Study Of Covid-19 Candidate In Sept.; Shares Drop 8%

Inovio Pharmaceuticals Inc. plans to initiate Phase 2/3 study trials of INO-4800, its experimental vaccine candidate against the novel coronavirus, in September and produce at least 1 million doses this year.

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The company said that it is in the process of finalizing additional manufacturing partnerships in the US and in Europe to meet the target of providing 100 million doses of its DNA vaccine in 2021. Shares, however dropped 8.3% in Tuesday’s pre-market trading after declining 6.1% at the close on Monday, as investors had expected Inovio (INO) to start mid-late trials before September.

INO-4800 targets the major antigen Spike protein of SARS-CoV-2 virus, which causes COVID-19 disease. Based on what Inovio called “promising” clinical data, the company states that INO-4800 is a COVID-19 vaccine candidate with a unique and highly favorable safety profile, which produces well-balanced immune responses consisting of both neutralizing antibodies and T cells.

“We are very encouraged by the immune responses of our DNA vaccine candidate, INO-4800, and we look forward to beginning our planned Phase 2/3 trials in September upon FDA concurrence,” Inovio CEO Joseph Kim said. “Inovio is razor-focused on achieving additional external funding for scale-up and manufacturing of vaccine doses.”

The US Department of Defense (DoD) awarded Inovio $71 million to support large-scale manufacturing of the company’s proprietary Cellectra and the procurement of other devices that are used to deliver INO-4800 intradermally. The DoD also awarded Ology Bioservices $11.9 million to work with Inovio to manufacture INO-4800 DNA plasmids.

Inovio added that INO-4800 Phase 1 clinical results are now undergoing peer review for publication at a top medical journal.

The value of the stock has this year already ballooned 476% with the majority of analysts staying sidelined on the stock. The Hold consensus shows 5 Holds, 1 Sell and 2 Buys. (See Inovio stock analysis on TipRanks).

Maxim analyst Jason McCarthy last month downgraded the stock to Hold from Buy, citing valuation following the share’s rally.

McCarthy notes that although Phase 1 clinical study data of Inovio’s COVID-19 vaccine candidate has demonstrated to be “positive”, he believes the stock’s stellar year-to-date performance and the potential success of INO-4800 are priced into the shares.

Even as the share price spiked so fast this year, the $22 average analyst price target still indicates 16% upside potential from current levels.