Inovio Pharmaceuticals Inc (NASDAQ: INO)
Setting up for next weeks trading, investors may be looking at some opportunities to grab hold of a stock that has been unfairly depressed during the past two weeks.
Inovio is one of those companies that has gotten so ridiculously cheap that it deserves some attention. So, before I settle in to make some Vienna beef hot dogs and watch the action out of Chicago, let me set the table for next week. And yes, I do use the bright green relish.
Inovio at Six Bucks Is A Steal
Inovio Pharmaceuticals is a major player that is trading like a penny stock. For the past few months, Inovio has continued to deliver investors solid news and updates about the progressions at the company. INO has been in the news for its ability to quickly and precisely develop promising treatments and vaccines for both virus and infectious disease.
INO was the first on the scene to develop an experimental vaccine to treat the Zika virus and the first company to test the vaccine on human subjects. I have never, in my history of covering biotech stocks, witnessed a company that has been able to identify, produce, and test a vaccine in a human trial faster than INO has done.
In a matter of months, INO accomplished what ordinarily takes years for both large and small biotech companies to develop. And, to have the FDA approve the vaccine for human trials is just as impressive. INO uses DNA-based technology to develop targeted therapeutic treatments to both treat and cure infectious disease and specific types of cancer.
Specific to Zika, a preliminary study of the INO DNA vaccine delivered with its proprietary electroporation equipment resulted in seroconversion, which is the creation of detectable and specific antibodies in the blood to target the virus, being apparent in all of the vaccinated subjects. The vaccine generated robust and broad t-cell responses, using comparisons to the standardized ELISPOT assay as a measurement. INO is the only company to have demonstrated meaningful seroconversion in test subjects.
How Low Is INO?
INO was beaten unmercifully below the $6.00 level before rebounding higher by 6% on Friday. Just a few weeks ago, the stock was trading north of $10.00 a share.
INO at these low prices is ludicrous, especially if an investor takes a quick look at the actual data being presented and published by the company. The stock tanked after the FDA requested some additional data about its electroporation device. Okay, I get it – the FDA needs some more data about some of the disposable parts of a device. But the FDA never made an iota of reference to the clinical data presented by INO. Further, while investors continue to indiscriminately pounce on INO, they should at least be willing to pay more attention to the actual data than to the device headline. For every seller, there is a buyer. And, in my opinion, the buy side is getting a better deal.
The Reasons That INO Will Rebound
I may have laid out a brief and rambling case as to why INO is ridiculously cheap at these levels, so let me fortify my argument.
First, INO is currently possessing so much potential that large pharma should be nervous. INO is on the verge of developing the most comprehensive immuno-oncology platform in the industry. Additionally, the results that INO has published thus far do not include much of their focus into combination therapies, using checkpoint inhibitors, and immune activators. They are one of the first to build a drug cocktail using IL-12 and can emerge a leader in the industry in advancing these potent combinations.
Second point – the treatments work! INO has demonstrated therapeutic response in a range of 60% to 100% of patient’s treated. If you are looking to be impressed by some data, read my article highlighting the enormous amount of positive data that has been peer reviewed and published by INO or by respected medical journals. I don’t want to be redundant in my articles, but my 5 Reasons To Buy Inovio provides some detailed analysis about each of their trials. So, please follow the link once you are done reading here.
To price INO at these levels is simply a market miscalculation; the stock is primed to recover. And when it does, I expect a quick ascent to levels more appropriate for a company in late stage clinical development.
Third – and I will keep it short – INO was beaten down for the sole reason that the FDA requested some information about disposable pieces on a device. The science is not, nor has it ever been, in question.
Delays Are Frustrating, But Part Of The Game
Whether investors like it or not, delays are a common denominator in the biotech industry. If a company is cutting edge and a pioneer of technology, investors need to expect a more thorough and detailed FDA.
While INO may be further impacted with year-end selling strategies contributing to the decline, investors should not lose focus on the real issues at INO. INO is one of those rare biotech companies that is well funded, in a late stage trial, and has partnership opportunities on several current and future trials.
INO and its management are regularly being praised by industry professionals, and the technology at INO is not being overlooked by the medical community. Too bad that the science professionals can not set appropriate pricing for emerging biotech companies. Instead, traders and algorithms are set to follow the momentum of trade, making a market so that human hands become a very small part of the trading decision.
Once the momentum shifts, the algorithms will send INO higher, and there is no reason that it should not be at least double from current levels. But, to be conservative, I expect INO to trade at only $7.00 a share by the end of next week, still higher by over 10%.
The election might make things crazy for a few days, and investors should be ready to pounce on stocks that have been unfairly treated due to the political rhetoric.
INO might be one of those to get pulled down in a sell-off, but, if the market rallies on election results, INO will likely follow the trend higher.
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