Maxim Reaffirms Buy On Inovio Pharmaceuticals Ahead Of VGX-3100 Phase 2 Trial Results


In a research report issued yesterday, Maxim Group analyst Jason Kolbert reaffirmed a Buy rating on Inovio Pharmaceuticals (INO) with an $18 price target, which represents 86% upside to the current share price. 

Kolbert commented: “Novio has reviewed in detail the rationale behind VGX-3100 SynCon immunotherapy. Recall that this therapy is designed to arrest the progression of HPV-triggered pre-cancers and cancers. It is delivered with its CELLECTRA electroporation device, achieved best-in-class T-cell immune responses that generated a strong killing effect against cells targeted by this therapeutic vaccine. The key question that investors now face is will the T-cell responses be predictive of the trial outcome. We do believe there should be a correlation, however we cannot assure with any certainty that the trial results will be positive. We have to see the data”.

The analyst added, “Good data will lead to a large pivotal trial. We would expect an increase in valuation in proportion to how good the data is, based on P-values around the primary endpoint. If the data is bad and misses the primary and secondary endpoints, we would expect a pullback in the stock to a threshold level. We believe that based on the broad pipeline and the collaborations (especially with Roche: RHHBY-$37.4-NR) that a floor valuation will be established at a modest premium to cash (1.5x to 2.0x). If the data is mixed we would expect it to be a question around clinical trial design, so that with a different trial structure or dosing regimen, that the trial would succeed. In this scenario we would expect the stock to trade at 2x-3x cash value. We have recently adjusted our model for the 4:1 reverse stock split which establishes a new price target of $18.00 per share. Our price target assumes a positive outcome of the current PII trial. Risk adverse investors should be aware we can-not predict the outcome of a binary event”.

According to TipRanks.com, which measures analysts and bloggers success rate based on how their calls perform, analyst Jason Kolbert currently has a one-year average return of 6.7% and an 54% success rate. Kolbert has a 23.8% average return when recommending INO, and is ranked #705 out of 3217 analysts.

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