In three decades of existence, Inovio Pharmaceuticals (INO) has yet to bring a drug to market, but the company’s pipeline of synthetic vaccines is long, strong and full of potential. The bulls argue the strength of the portfolio, no debt, cash on hand, and partnerships with biotech stalwarts like Roche (RHHBY) as reasons to be in the stock. The bears contest that the company is still too developmental with only one drug in a mid-stage trial (VGX-3100 for cervical dysplasia).
Potential MERS Vaccine
The bulls got some additional fodder to chew on Wednesday morning as Blue Bell, PA-based Inovio delivered news that preclinical research of its SynCon DNA vaccine induced “robust and durable” immune responses in mice with virulent Middle East Respiratory Syndrome coronavirus, or “MERS” as its commonly called.
In the study, DNA vaccine constructs targeting multiple MERS antigens were generated using the SynCon vaccine platform, which were then administered to mice with MERS utilizing Inovio’s Cellectra electroporation-based delivery technology. The researchers observed strong neutralizing antibodies and broad CD8+ T cells. These T cells are critical in virus control as they recognize antigens on the surface of an infected cell, bind with the cell and kill it.
“With human data showing the powerful killing effect of T cells generated by our vaccine for HIV and our therapy for HPV-associated cervical dysplasia and various cancers, we look forward to providing Inovio's answer to MERS, a deadly infectious disease that has unknown pandemic potential,” said Dr. J. Joseph Kim, president and chief executive at Inovio, in a statement today.
High Rate of Fatality in MERS Outbreak
MERS is a new viral respiratory illness that was first reported in September 2012 in Jeddah, Saudi Arabia. The World Health Organization confirmed that through October, 149 cases had been reported, with 63 of those people infected were dying from the virus. Since then, WHO has confirmed additional cases being diagnosed in Spain, Kuwait and Saudi Arabia, bringing the total to 157 cases and 66 deaths. The Geneva-based agency also said that there is no compelling evidence that camels are a source of infection of humans. Saudi officials say that genetic sequencing is being conducted currently to provide more conclusive proof.
Nearly all of the cases have been reported in countries in or surrounding the Arabian Peninsula, with European cases being linked to people visiting countries such as Saudi Arabia, Kuwait, Qatar and the United Arab Emirates.
And while not as contagious as Severe Acute Respiratory Syndrome, MERS has a much higher fatality rate. In an outbreak late in 2002, more than 8,000 cases of SARS were diagnosed (mostly in Hong Kong), leading to 775 deaths across eight months. There is still no cure or vaccine for SARS, nor is there any vaccine or effective drugs for MERS, putting a bit of a spotlight on the importance of what Inovio is working on with its technologies.
Potential for Boom or Bust
From an investment standpoint, both the bulls and bears can offer compelling arguments, but if people only invested in biotechs with commercialized products, or even only late-stage drug candidates, most of the biotech sector would be forced to shutter its doors. The fact that the company doesn’t have all its eggs in one basket also bodes well for Inovio, with several different vaccine programs in various stages of development for a wide array of indications. Looks like these factors have put the bulls in charge, with shares of INO up about 280 percent through Tuesday’s close at $1.92. Shares have jumped ahead in early Wednesday action following the news, rising about 10 percent to $2.12 an hour into the trading day.
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