"Coronavirus." For most of this year, most people have been just focused on the one -- the novel coronavirus dubbed SARS-CoV-19 that has infected the world with a global pandemic of COVID-19. But did you know there are more than just one kind of coronavirus? Did you know the word itself is more of an adjective than a noun?
It's true. "Coronavirus" in fact describes a whole family of viruses typified by their spiky structure that resembles (to some eyes) a "crown," or "corona" -- and as luck would have it, Inovio Pharmaceuticals (INO) may be developing a knack for treating all of them.
Take MERS for example, the "Middle East Respiratory Syndrome" coronavirus that was initially reported in Saudi Arabia in 2012. For years, Inovio has been working on a vaccine to treat MERS-CoV -- INO-4700. It's currently undergoing Phase 1/2a trials, and as H.C. Wainwright analyst Raghuram Selvaraju informs, it's looking quite promising for treating the disease.
"Subjects who received INO-4700 showed 100% binding and 92% neutralizing antibody responses against MERS-CoV after two or three doses," says Selvaraju, and the vaccine has been "well-tolerated, with no vaccine-associated severe adverse events."
But what does any of this have to do with our own COVID-19, you ask?
Here's where things get interesting for investors: Describing how the MERS vaccine works, Selvaraju explains that "INO-4700 targets the MERS-CoV spike (S) glycoprotein, delivered with the intradermal CELLECTRA device" and, as it just so happens, "INO-4800 for COVID-19 utilizes an identical strategy, targeting the SARS-CoV-2 spike protein and utilizing CELLECTRA intradermal delivery." It's therefore possible, concludes the analyst, "that INO-4800 could deliver similar immune responses and safety data in the Phase 1 trial."
And this brings us to INO-4800.
INO-4800 is the vaccine that Inovio began working up 10 weeks ago, to protect people from infection with COVID-19, and as of Tuesday, Inovio has completed enrollment with 40 healthy patients signed up to take the vaccine in a Phase 1 clinical trial. All 40 have already taken their first doses. They'll receive a second injection in a month. By late June, predicts Selvaraju, we should see the first data on "interim immune response and safety results" for the vaccine.
What are the chances the vaccine will "work," and put COVID-19 to bed forever? Selvaraju notes that Inovio already saw "promising immune responses across multiple preclinical models," and the vaccine's similarity to the INO-4700 MERS vaccine suggests that clinical trial results could bear this out. Assuming all goes well, INO-4800 could shift into Phase 2/3 trials as early as "this summer."
So what does this mean for investors in the stock? For better or worse, Selvaraju believes that "COVID-19 could persist in the coming quarters and INO-4800 could be used for vaccination across the globe if successfully developed through the Phase 2/3 study," implying a very large target market indeed.
Given the positive early indications, and the large target market, therefore, the analyst is reducing his "discount rate" (basically, his gauge of how risky the stock is by about 20%), and raising his target price on the stock from $13 to $17 per share. With Inovio shares currently costing less than $13 a share, that works out to a 31% potential profit for buyers today -- and a "buy" rating from Selvaraju. (To watch Selvaraju's track record, click here)
Looking at the consensus breakdown, opinions on Inovio are more split. The bulls come in slightly ahead, with 4 Buys compared to 3 Holds received over the previous three months. The upside potential lands at 11% as a result of its $14.33 average price target. (See Inovio stock analysis on TipRanks)
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