One of the competitors in the race to bring a COVID-19 vaccine to market has recently experienced a serious setback. Inovio’s (INO) Phase 2/3 trial evaluating its COVID-19 vaccine candidate, INO-4800, has been put on partial clinical hold.
The FDA has more questions about INO-4800 and the CELLECTRA device, which uses a brief electrical pulse to reversibly open small pores in the cell to allow the plasmids to enter, overcoming a key limitation of other DNA and other nucleic acid approaches, such as mRNA. The company is expected to respond to the FDA’s questions this month, with the trial’s initiation set to come in November.
Benchmark analyst Aydin Huseynov points out that the delay most likely isn’t related to safety concerns. He argues that given the FDA’s more restrictive recent guidance, INO might need to provide more information on the pre-clinical, clinical and device data for its candidate. It should be noted that AstraZeneca’s vaccine trial has also been paused since September 9, with the UK’s MHRA allowing the company to continue its vaccine trial on September 12.
“While the delay is disappointing, we think the additional front-end data requests may actually strengthen the Phase 2/3 readout once the preliminary randomized data is available next year... Despite the setback, INO-4800 appears to be one of the safest vaccines in development, with other differentiating qualities such as easiness of manufacturing, storage, and transportation, as well as presumed superior cellular responses,” Huseynov explained.
Some investors have expressed concern about INO’s ability to stick to its timeline, but Huseynov remains unphased. Back in 2016, INO’s current Phase 3 trial of VGX-3100, its vaccine for precancerous cervical dysplasia, was also put on hold by the FDA due to several questions regarding the delivery device. However, the company restarted the trial in 1H17, as per the previously anticipated timeline.
“While the current INO-4800 context is somewhat different, we think INO will be able to adhere to the announced October timeline and eventually initiate the trial in November, per 30-day FDA period,” the analyst stated.
Given that it’s difficult for Huseynov to believe “only one or two vaccines will be able to address the vaccination needs of the world,” he sees the potential November trial initiation as a “binary event and an inflection point for INO stock.”
Based on all of the above, Huseynov stayed with the bulls. In addition to a Buy rating, he puts a $25 price target on the stock. Investors could be pocketing a gain of 100%, should this target be met in the twelve months ahead. (To watch Huseynov’s track record, click here)
Turning to the rest of the Street, other analysts aren’t as optimistic. With 2 Buys, 5 Holds and 1 Sell assigned in the last three months, the word on the Street is that INO is a Hold. At $13.71, the average price target implies 9% upside potential. (See INO stock analysis on TipRanks)
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