Things are looking up for flu sufferers and for shares of Inovio Pharmaceuticals (INO), after the Plymouth Meeting, Penn.-based firm boasted yesterday that its experimental vaccine protected lab animals from every known strain of deadly influenza. Inovio’s stock has gained 16% this week on hopes for a universal flu shot that will free epidemiologists from guessing which strains to put in each season’s vaccine. At a recent 5 bucks, the little company’s valued at less than half a billion dollars-reflecting the need for several years of clinical trials, and additional cash, before Inovio might see the first of its products on the market.
The appeal of a broadly-protective flu vaccine will be obvious to anyone who got sick this year after getting a vaccine that was only 30% effective against the flu strain that became prevalent. Inovio researchers have worked for years to develop vaccines that use fragments of DNA, instead of crippled viruses, to trigger protective immunity against scourges like the flu, Zika or even cancer. Tuesday’s press release from the company drew attention to a study published in the medical journal Vaccine, which reported that Inovio’s synthetic vaccine protected several species of lab animals from “all major deadly strains of H1 influenza viruses from the last 100 years, including the virus that caused the “Spanish Flu” in 1918.”
Delivering DNA vaccines isn’t a cinch, so the company has also had to pioneer technologies like electroporation, which zaps a vaccine through the skin but can leave a rash. Still, Inovio has a range of DNA vaccines in early phase human trials, including potential treatments for HPV-caused cervical lesions, HIV, hepatitis or cancers that resist even the latest immunotherapies like Bristol-Myers Squibb’s (BMY) Opdivo or Merck’s (MRK) Keytruda. All of the roughly $40 million in 2017 revenue that Inovio’s expected to report came from government grants or payments from big pharma partners like AstraZeneca (AZN), Roche Holding (RHHBY) and Regeneron Pharmaceuticals (REGN). With just a year or two’s worth of cash on its balance sheet, the cash-consuming Inovio will need to raise more capital to get any products to market.
H.C. Wainwright analyst Raghuram Selvaraju rates Inovio a Buy, with a price target of $13, based mainly on the company’s chances of success with an HPV disease vaccine that’s beginning the final phase of clinical testing. But he’s also encouraged by Inovio’s latest progress toward a universal flu vaccine. In a Tuesday note, Selvaraju wrote:
After a 24% jump on Tuesday, Inovio shares gave back 11% today, easing down to $5.094.