Tempted by Inovio Pharmaceuticals (NASDAQ:INO)?

It would be easy to be tempted by Inovio Pharmaceuticals (NASDAQ:INO) , a little biotech company out of Pennsylvania that's part of the seemingly endless fray to produce a coronavirus vaccine. Some of the newest reports out of the company even suggest that it's close. As good as that news may be, there's a lot else weighing on Inovio Pharmaceuticals that suggest this is one to stay away from.

Big Promise on One Really Big Point

Inovio Pharmaceuticals might indeed look like a tempting proposition because it—like a lot of other pharmaceutical companies out there—has joined the race for a coronavirus vaccine. As that goes, Inovio seems to be farther along than a lot of other competitors; it's reported that it will go into phase two and three trials likely before the end of summer.

That's where things start to get a little shaky. Inovio, during its earnings call, revealed that its vaccine candidate will be readily reproduced, to the point where it can produce one million doses this year—not bad for a vaccine that doesn't technically exist yet and can't really go into production until at the very least September—but that the company can ramp up production next year a hundred-fold, rolling out 100 million doses by 2021.

What's more, this vaccine is also said to be incredibly hardy. It can survive in normal refrigerated conditions for five years, and at room temperature for just over a year. It also plans to price its vaccine, when it exists, at similar rates to other releases. This is made even more puzzling by the revelation that the Inovio vaccine needs a complimentary gadget to actually deliver the treatment; dubbed the Cellectra, it essentially inserts genetic material into its target.

Then The Earnings Report Kicked In

There's no doubt Inovio's vaccine sounds amazing, but it would be easy to be skeptical about the company's claims. After all, this is a company that reported a second-quarter loss of $0.83 per share. That's up from the loss taken in 2019's second quarter, reports note, which came in at $0.30 per share. This is on the back of revenue of $267,000, nearly double the revenue of $136,000 seen in 2019.

All of these figures are substantially below estimates, reports further noted, as FactSet was predicting a loss of $0.17 per share for the quarter and revenue of $2.6 million. Inovio explained that the discrepancy in expected over actual losses was based on a “derivatives liability,” one that requires it be revalued every reporting period. Yet even without this issue, the company would have still had a net loss higher than expectations at $0.20, the company acknowledges. Just to make matters worse, Stifel cut the price target on Inovio from its original $24 to $16.

History is Not on Inovio's Side

This isn't the first time Inovio has released plans for new vaccines. Back in 2009, Inovio was seen offering plans for an H1N1, or swine flu, vaccine.  Ever since, the company has been working on vaccines for everything from malaria to Zika, and was even said to be working on a vaccine for cancer. Ambitious plans, but to date, not a one of them has come to fruition.

Joining the horse race for the vaccine that will help bring the world back to normal, meanwhile, has done Inovio a world of good. The company has gained, at one point, a whopping 963% of its stock value, and in perhaps a graver twist, insiders are said to be selling shares. Looking at the company's five-year charts is almost shockingly predictable. The company spent nearly five full years trading below the $10 level, except for a couple of brief stays in the $10 to $11.08 range. That's when March 2020 hit, and the huge coronavirus sell-off proved to be the catalyst point for launching Inovio into the comparative stratosphere, hitting a new top of $29.98 on June 26. The stock has been on a mostly downward slide ever since, however, and there are reports that shareholders are looking to sue Inovio for inflating its claims.

Basically, no part of this picture looks good. Yes, Inovio could be the ultimate winner of the coronavirus stakes and leave everyone else with a slate of also-ran ribbons. It could win a fat government contract because the US government has been visibly buying up any coronavirus treatment that passes muster. Yet Inovio isn't exactly a bellwether of success because it has yet to actually have a visible success. There's something to be said for the scrappy underdog, but Inovio doesn't even look that promising.