Shares of Inovio Pharmaceuticals (INO) are under pressure on Monday after Andrew Left's Citron Research said via Twitter that the U.S. Securities and Exchange Commission should "immediately" halt the stock and investigate the company's 3-hour vaccine development claim. Responding to the cautious report, Inovio said Citron "demonstrated a lack of understanding of the science behind DNA medicines." Last week, the company announced an accelerated timeline for developing its DNA vaccine INO-4800 to address COVID-19.
SEC 'SHOULD HALT' INOVIO: Via Twitter, Citron Research said that "SEC should immediately HALT this stock and investigate the ludicrous and dangerous claim that they designed a vaccine in 3 hours. This has been a serial stock promotion for years. This will trade back to $2. Investors have been warned."
REPORT DEMONSTRATES 'LACK OF UNDERSTANDING': Following the cautious report issued on Monday by Citron Research, Inovio stated via Twitter that, "A third-party report [on Monday] demonstrated a lack of understanding of the science behind DNA medicines. Inovio designed a vaccine construct for its coronavirus vaccine within three hours after the viral sequence was publicly available; produced the vaccine at small scale and was in preclinical trials in January - preclinical results were available online in Nature Communications. Inovio expects to move into human trials next month. Based on extensive prior work creating DNA vaccines using our proprietary DNA medicines platform, we are confident that we have a viable approach to address the COVID-19 outbreak. We remain committed to sharing our progress as we advance into the clinic in the coming weeks."
On Monday morning, Inovio also announced that it entered into a second amendment to the At-the-Market equity offering sales agreement dated May 25, 2018 with Stifel for $50M in common stock.
ACCELERATED TIMELINE FOR COVID-19 DNA VACCINE: Last week, Inovio announced an accelerated timeline for developing its DNA vaccine INO-4800 to address COVID-19, the respiratory infection the World Health Organization has designated a Public Health Emergency of International Concern of the highest level. J. Joseph Kim, Inovio's President and CEO, shared this accelerated timeline at the U.S. Coronavirus Task Force meeting at the White House on March 2.
Kim said, "Inovio is the leader in coronavirus vaccine development and the only company with a Phase 2 vaccine for a related coronavirus that causes Middle East Respiratory Syndrome. Using our modern DNA medicines platform, we designed our DNA vaccine INO-4800 in three hours after the publication of the genetic sequence of the novel coronavirus that causes COVID-19." Kim continued, "We immediately began preclinical testing and small-scale manufacture and have already shared robust preclinical data with our public and private partners. We plan to begin human clinical trials in the U.S. in April and soon thereafter in China and South Korea, where the outbreak is impacting the most people. We plan on delivering one million doses by year end with existing resources and capacity. However, we will need additional resources to scale up to make enough doses to help protect Americans from COVID-19 as well as to lead global efforts to curtail this virus."
Commenting on the news, Cantor Fitzgerald analyst Charles Duncan said he views the timeline as "feasible in light of the company's experience developing vaccines in an expeditious manner." Inovio's broad platform experience, including ongoing Phase 3 studies of VGX-3100 in cervical dysplasia, reduces its execution risk, the analyst added.
COVID-19 OUTBREAK: Several research groups and pharmaceutical companies around the world are said to be working on a vaccine as COVID-19 continues to spread. Back in January, Inovio was awarded a grant of up to $9M by the Coalition for Epidemic Preparedness Innovations, or CEPI, to develop a vaccine against COVID-19. This initial CEPI funding would support Inovio's preclinical and clinical development through Phase 1 human testing of INO-4800, its new coronavirus vaccine matched to the outbreak strain. CEPI previously awarded Inovio a grant of up to $56M for the development of vaccines against Lassa fever and Middle East Respiratory Syndrome, also caused by a coronavirus. In a recently published paper in Lancet Infectious Diseases, Inovio's Phase 1 study of its MERS-CoV vaccine demonstrated it was well tolerated and furthermore induced high levels of antibody responses in roughly 95% of subjects, while also generating broad-based T cell responses in nearly 90% of study participants. Inovio's collaborators in this coronavirus vaccine development include the Wistar Institute, VGXI, a fully owned subsidiary of GeneOne Life Science, and Twist Bioscience (TWST).
Other small-to-mid cap publicly traded companies working on coronavirus treatment and testing include Co-Diagnostics (CODX), iBio (IBIO), and NanoViricides (NNVC).
PRICE ACTION: In afternoon trading, shares of Inovio have fallen over 23% to $10.82. The stock was halted earlier on Monday due to volatility. Since January 23 when the company announced it was selected by CEPI to develop a vaccine against the new coronavirus, the stock has jumped almost 200%.
