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Has the Covid Opportunity Been and Gone for Inovio? Oppenheimer Weighs In


Every walk of life has its winners and losers, and this is no different in the land of coronavirus stocks. The term will forever be associated with the pandemic’s peak crisis when several companies set off on being the one to fend off Covid-19. Since the race began in early 2020, several have crossed the finish line and have been raking in the cash (Pfizer (PFE), Moderna (MRNA)) while others such as Novavax (NVAX) still appear poised to catch the gravy train just in time.

For Inovio Pharmaceuticals (INO), however, the prospects of Covid success appear dimmer than ever. The biotech company provided its quarterly business update early this week and the results were weak, which was bad enough. More importantly, investors’ focus naturally turned to the progress of INO-4800 – the company’s DNA Covid-19 vaccine candidate. Or lack of progress, that is. The program has been beset by numerous issues, and now the Phase 3 development (the INNOVATE trial) is being paused, as the company has decided to amend the clinical trial protocol.

The primary endpoint of the trial will be changed “from prevention of virologically confirmed COVID-19 disease to prevention of severe disease due to COVID-19.” Essentially, the vaccine has shown it is not as effective against the Omicron variant as the already available vaccines.

Investors did not like this development, as noted by Oppenheimer’s Hartaj Singh, who says there was “clear disappointment among investors regarding the delay of the INO-4800 COVID-19 vaccine.”

However, while Singh anticipates the commercialization of INO-4800 will be pushed out to 2023E (outside the US), the analyst keeps a positive stance.

“We note that this endpoint is already a secondary endpoint in the ongoing phase 3 and that INO is being prudent in amending the INNOVATE trial, in light of the declining vaccine efficacy (VE) among COVID-19 vaccines due to increasing COVID-19 variants,” the analyst said. “In addition, important pipeline projects such as VGX-3100 (cervical HSIL), INO-3107 (RRP) and INO-5401 (GBM) are moving forward with important catalysts in 2022. We stay bullish.”

Singh is indeed “bullish.” Backing his Outperform (i.e., Buy) rating is a $30 price target (reduced from $35), which suggests shares will still rise by ~865% over the coming year. (To watch Singh’s track record, click here)

Most analysts aren’t quite so optimistic. The consensus view is that this stock is a Moderate Buy, based on 5 Holds and 2 Buys. That said, the average price target remains a bullish one; at $10.83, the figure still implies shares will surge ~248% in the year ahead. (See Inovio stock forecast on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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