VFC's Stock House: Inovio Pharmaceuticals Primed To Move Higher
Inovio Pharmaceuticals could benefit from pipeline progress and environmental factors.
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Inovio Pharmaceuticals (INO) has already been discussed discussed as a hot, but still speculative stock to watch for 2013 based on its growing trading volume and a deep pipeline of synthetic vaccines derived from the company's proprietary SynCon platform. Through SynCon Inovio has produced numerous synthetic vaccines intended to treat or prevent various infectious diseases and cancer types. Maybe most notably - at least for the time being - the company has developed a universal flu vaccine that is currently being tested in clinical trials. This flu vaccine may have the company positioned to receive a significant amount of attention over the near term due to factors external of the market.
For those following the news these days, a widespread flu outbreak has hit forty one states and the number of those affected is growing rapidly. This year's outbreak has already surpassed last year's numbers and - as can always be expected in these instances - the CDC, government leaders and the general public are calling for a vaccine. Every few years (remember H1N1) or so an outbreak becomes large and widespread enough that any company developing a universal flu vaccine - or even one that treats the individual strand in question - gets thrust to into the spotlight, not only because a potential marketable solution could turn into a very lucrative proposition for a given company, but also because government money often starts flowing in the form of grants to help find a cure. This grant money can be hugely beneficial to still-developmental companies and it's quite possible that Inovio may be primed to receive a boost in investor and/or financial media interest, given the early successes of its universal flu technology and the speculation that often follows these outbreaks.
A few years ago Cel-Sci Corp (CVM), for example, a company known for developing an immunotherapeutic treatment for head and neck cancer, about quadrupled in price due - in part - to speculation surrounding its LEAPS application as a potential treatment for the swine flu.
If Inovio does in fact become a recipient of increased media and/or investor attention, the recent volume boost discussed during the closing days of 2012 could be justified and shares may be in a position to move higher now. Increased scrutiny of the SynCon technology could also lead investors to look more closely at the rest of the SynCon-based pipeline, which includes nine programs in development, three of which are currently in Phase II and six of which are already being funded by third parties, according to documents contained on the Inovio website. While companies still in the Phase II stages of development are considered highly speculative options, investing such plays early on could prove very lucrative for both long term investors and short term traders as some of the most impressive gains these stocks can achieve often develop in lieu of a transition from Phase II to Phase III and in conjunction with positive trial results. As often discussed here, it's a good idea, in my opinion, to play the trading opportunities with each significant catalyst along the way while still holding onto a group of core shares for the long term play, if one so chooses to hang around for the long haul. This strategy could have an investor on house money - or even better - in the green long before the entire story is played out and help alleviate the risk of remaining 'all-in' through dilutive financing events that may take place along the way, as is common for still-developing companies.
With or without increased attention from the ongoing flu outbreak, INO is one to keep an eye on this year. As proven recently with Organovo Holdings (ONVO), volume often precedes price and INO has already seen a volume boost. There are also several interim and actual trial results that could play out during the cost of 2013 that, if positive, provide significant catalysts for the stock.
Also of note, Inovio is slated to present at the Biotech Showcase 2013 investor conference in San Fransisco this week. This event could also attract new interest to the company.
Inovio Expands Collaborative Effort To Develop Malaria Vaccine
Just in time for Inovio's presentation at the Biotech Showcase, a new collaborative effort was announced early Monday morning that will combine existing technology of the PATH Malaria Vaccine Initiative (MVI) with Inovio's proprietary electroporation vaccine-delivery technology. Electroporation, as previously discussed, uses small, targeted electrical pulses to inject therapeutic treatments directly into damaged or infected cells. This method allows for more precise delivery of a therapy - which increases effectiveness - without damaging surrounding tissue, as does other current standards of care. This collaborative effort between PATH MVI and Inovio expands on a previous agreement singed in 2010 and follows early successes of the initial deal.
The expansion of the agreements not only provides huge potential in treating malaria, but it also provides another validation of the electroporation technology, which has already been put to test with other developmental therapies and procedures. A Phase I/IIa clinical trial based on Monday's news is roughly a year away, according to information contained in the press release, and provides another potential price and development catalyst later on down the road.
Given the death and devastation caused annually by malaria, PATH MVI is on a mission to develop the means and methods to eradicate the disease. It's collaborative efforts with Inovio provides significant validation to the electroporation delivery methods and also helps to validate INO as a speculative play with growing potential in the sector.
Disclosure: Long INO.
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