The first rule that applies to healthcare developers is: "do not mess with the FDA." Case in point: Shares of vaccine maker Inovio (INO) crashed by 33% over the past two trading sessions, as a result of the FDA halting the planned Phase 2/3 clinical trial of its DNA COVID-19 vaccine candidate INO-4800.
The study has been put on hold, with the FDA citing the need for more questions regarding the trial. Inovio stated it will address the questions in October, following which, the FDA has 30 days to decide whether the trial can go ahead.
Inovio’s shares have been subject to extreme price swings since the company joined the race to develop a coronavirus vaccine. However, after soaring by 860% in the first half of the year, the share price has pulled back significantly. Since closing at $31.69 on June 29, the stock has shed 64% of its value, as concerns it won’t be able to get its vaccine over the finish line have come to the fore.
H.C. Wainwright analyst Ram Selvaraju remains skeptical, too, staying on the sidelines for now. The 5-star analyst reiterated a Hold rating on INO shares and cited the company’s market valuation and volatility as the reasons behind the lack of a price target. (To watch Selvaraju’s track record, click here)
Selvaraju said, “As a reminder, the company originally planned to start the Phase 2/3 trial this month. We now estimate that the trial could start by the end of 2020 if the FDA reviews the response and lifts the partial clinical hold in a timely manner... We continue to expect the publication of full Phase 1 data set in a scientific journal in the coming months. In addition, the partial clinical hold does not impact the advancement of Inovio’s other candidates in development.”
There is similar sentiment among Selvaraju’s colleagues. The stock has a Hold consensus rating based on 2 Buys, 5 Holds and 1 Sell. However, there’s possible upside of 21% over the next 12 months, given the average price target clocks in at $13.71. (See Inovio stock analysis on TipRanks)
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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.