Potential Wins at Inovio Pharmaceuticals (NASDAQ: INO)

When we talked about Inovio Pharmaceuticals (NASDAQ:INO) about a month ago, things weren't exactly looking good for the company. While it had some exciting possibilities in its quiver, market forces weren't treating the company well, and investors seemed increasingly skeptical that possibility could be transmuted into reality. Fast forward to modern-day, and things indeed don't look well for Inovio, but that may be the opportunity some have been waiting for.

The Beginning of the End?

It has not been what anyone would call a good three weeks or so for Inovio. When we last picked it up, the share pricewas holding at $14.62. Today, it's lost around a third of that price, dropping down to $9.85. This is well below what our research found to be the consensus price target, which currently sits at $14 even. In fact, almost a dollar's worth of that loss came between September 2 and September 3, a lot more volatility than many investors would like.

Things don't improve much from there. The Muddy Waters short-selling firm, led by Carson Block, pointed out that recent court decisions against Inovio made it pretty clear that the company did not indeed have the manufacturing capacity to hit one million doses of a COVID-19 vaccine by the end of 2020. It also did not appear to have the necessary capacity to make 100 million doses through 2021, either. Muddy Waters also pointed out that Inovio seems to have a lot in common with Theranos, who recently had troubles of its own.

Just to cap things off, it still remains the case that Inovio has yet to have a product actually approved for use by the Food and Drug Administration (FDA), or seemingly any other regulatory body for that matter.

Or Just the End of the Beginning?

The picture is grim for Inovio right now. With the CDC telling states to prepare to disseminate a COVID-19 vaccine by as early as late October, it stands to reason that something has been prepared, and there's finally a winner in those stakes. It's a safe bet that Inovio's option is not the one that's going to be widely spread by CDC and state operations, either, if there actually is a vaccine that gets spread out therein.

However, there's a point to consider that should give Inovio investors a little extra hope. The price is down, which opens up the potential for a buying opportunity. With the stock under $10 a share, it's in “reasonable flier territory” for just about any small investor.

Additionally, Inovio also has one more advantage in its favor: it's not just a coronavirus vaccine mill. Sure, it's been working in that direction—who hasn't?—but while the development of INO-4800 (its coronavirus vaccine candidate) is a big deal, it's got other irons in the fire as well. Perhaps the biggest of these is known as VGX-3100. VGX-3100 is currently in two phase three clinical studies to find a weapon against “precancerous cervical dysplasia related to human papillomavirus (HPV)”, sometimes called “high-grade squamous intrapithelial lesions (HSIL).”

The study herein is expected to complete in 2021, and so far, the reports from the other tests carried out are proving pretty positive, which means that Inovio may be on the cusp of having an approved product. That's a move which will almost certainly light a fire under its stock price...currently available for dirt cheap. The company's balance sheet is also helpful here; reports suggest the company has $118.8 million more in liquid assets than it has in total liabilities, meaning it could pay off its current debt load without a second thought.

A Risk, But Perhaps One Worth Taking

Yes, there's no way to get around it: Inovio Pharmaceuticals is a risky play. A very risky play. Its chances of landing the first-mover advantage in coronavirus treatments are slim to vanishing. The stock price is slipping. None of these are good signs, and when you consider that the company still doesn't have a product line, it only gets worse.

However, there are some advantages left to Inovio. The company has products currently under development, and if it can get a treatment for HSIL to market, that's certainly going to give it a boost. If it can get a coronavirus vaccine in play, even better; its lack of production capabilities won't be much of a problem if it's one among several, filling in the gaps as a niche player.

Inovio's picture isn't bright right now. But there are certainly enough points in its favor to make at least considering this as an investment worthwhile.