As a result, the need for a coronavirus vaccine is becoming more pressing by the day. One of the pioneers of this business is Inovio Pharmaceuticals (NASDAQ: INO). Although it has already returned to 601% since the beginning of the year, I think stocks have the potential to recover even more because of the potential of its vaccine candidate COVID-19.
In search of a vaccine against the coronavirus
The vaccine is called INO-4800 and works by injecting synthetic viral DNA into healthy individuals, causing their body’s immune system to develop against the SARS-CoV-2 virus. Inovio boasts that the vaccine was designed just three hours after the SARS-CoV-2 genome was released in February.
In May, the vaccine produced robust antibody and T-cell responses in mice and guinea pigs and reached the phase 1/2 stage for human trials. At this point, 40 healthy adult volunteers between the ages of 18 and 50 have received INO-4800 to investigate its safety and vaccination potential. Participants received doses of 1 mg or 2 mg four weeks apart.
Last month, a provisional data release indicated that 94% – or 34 of 36 – of healthy volunteers who received INO-4800 demonstrated an immunological response.
While this may initially sound like good news, it’s actually neutral at best. For starters, the body will naturally produce antibodies against any foreign substance, and just because patients have produced antibodies after receiving a vaccine does not mean that the antibodies have a therapeutic effect.
Unfortunately, Inovio did not disclose how many volunteers developed neutralizing antibodies (antibodies that actually block the activity of SARS-CoV-2) after receiving the experimental vaccine. Without this crucial metric, it is impossible to make efficacy claims from clinical trials. However, the company plans to conduct phase 2/3 clinical trials for INO-4800 over the summer, which puts it ahead of nearly 35 reputable competitors.
Why stock is a strong buy
Inovio is a solid buy because of the low bar for approving coronavirus vaccines. Currently, the U.S. Food and Drug Administration requires that COVID-19 experimental vaccines demonstrate a 50% improvement over placebo for marketing. Keep in mind that this is a 50% improvement over a manikin, not a 50% response rate in terms of the development of neutralizing antibodies.
Therefore, for reasons of argument, even if INO-4800 demonstrates that it can immunize 20% of study participants against 2% of patients who took a placebo, then the vaccine would still be approved in the within the current FDA mandate. I think it is more than likely that at least some of the 94% of patients who took INO-4800 and developed an immunological response also experienced a neutralizing antibody response. At the end of the day, a partially working vaccine is better than no vaccine, and can still save countless lives when given to the elderly and immunocompromised.
The market opportunities for a potential COVID-19 vaccine are vast. At an affordable price of $ 100 per injection, a company that markets its vaccine can generate $ 1 billion in revenue by producing 10 million doses. Inovio currently has the capacity to manufacture up to 1 million doses by the end of the year.
With the recent support of the US Department of Defense for the development program of the INO-4800, I think that the rally is far from over for this mid-cap company of $ 3.7 billion. Therefore, growing investors in the biotechnology industry should definitely have Inovio in their portfolios.