Since news of the coronavirus outbreak emerged, in contrast to the sell-off in the broader market, companies associated with the COVID-19 space have seen valuations significantly increase.
This week, the baton was handed over to Inovio Pharmaceuticals (INO). Shares of the infectious disease warrior have shot up nearly 130% this week, following the announcement of development timelines for its COVID-19 vaccine (INO-4800) using its DNA vaccine platform.
Inovio’s COVID-19 vaccine, INO-4800, was developed in just 3 hours once the COVID-19 sequence was deposited in data banks for public access. This, according to Maxim’s Jason McCarthy, is testament to the company’s ability to react speedily and efficiently to an emergency situation.
Inovio is a regular recipient of grants for the development of infectious disease vaccines. CEPI (the Coalition for Epidemic Preparedness Innovations), awarded Inovio a $9 million grant in February to advance development of a COVID-19 vaccine. This is on top of previous grants Inovio has received do develop candidates against arenavirus Lassa Fever and coronavirus Middle Eastern Respiratory Syndrome (MERS). The company was also called upon to develop a vaccine for the 2016 Zika outbreak. The work was supported with up to $56 million in grants from CEPI.
As of now, preclinical studies for the vaccine are ongoing, in tandem with immune responses generated in animal models. The human trial designs are being finalized, with 3000 human trial doses prepared for clinical studies in the US, South Korea, and China. Human trials will begin in April on 30 healthy volunteers in the US, China and South Korea shortly after. By the fall, the trial results will be published and by the end of the year, 1 million doses of INO-4800 COVID-19 DNA vaccines should be ready for additional trials or emergency use.
While McCarthy notes that Inovio “may have the best vaccine option for COVID-19,” the stock’s recent surge has left the analyst’s price target in the dust. McCarthy’s Buy rating is accompanied by a $6 price target, which from current levels, indicates downside of nearly 40%. (To watch McCarthy’s track record, click here)
Subsequently, H.C. Wainwright’s Ram Selvaraju reaffirmed his “buy” rating on Inovio shares. The analyst’s $13 price target implies a surge of 32% from Today’s close. It’s also the highest Inovio price target on Wall Street.
Selvaraju opined, “We find it impressive that Inovio first designed INO-4800 on January 10, within three hours of receiving the viral genetic sequence, and managed to complete preclinical studies and manufacture 3,000 human trial doses in roughly three months […] we believe INO-4800 could be ready for a Phase 2 trial and available for emergency use by the end of 2020. Inovio’s DNA-based medicines do not need cold chain logistics, can be stored at room temperature for one year, and at 37°C for one week. The company’s proprietary injection device is battery-operated and highly portable. Therefore, INO-4800 could be easily transported and deployed anywhere around the globe, in our view.”
Overall, TipRanks analysis of 7 analyst ratings shows a consensus Strong Buy rating. However, the average price target among these analysts stands at $9.43, which is about 4% lower than its current value. This is most likely a result of this week’s quick surge and analysts’ inability to turnaround new price targets so quickly. (See Inovio stock analysis on TipRanks)