Actionable news
0
All posts from Actionable news
Actionable news in INO: Inovio Pharmaceuticals, Inc.,

Inovio's Zika Vaccine Is Not Its Most Attractive Asset

Summary

Developing vaccines for emerging diseases is very competitive.

Inovio’s vaccine for HPV related precancers should start Phase 3 this year.

Gilead would be my favored acquirer.

Inovio (NASDAQ:INO) recently announced it is developing a vaccine for the Zika Virus (Inovio Pharmaceutical's DNA Vaccine for Zika Virus Induces Robust Immune Responses in Preclinical Study). Though relatively mild itself, Zika can produce neurological defects in the fetuses of pregnant women. Should you rush to invest?

Inovio is also developing a Dengue fever vaccine. Dengue fever has emerged in Hawaii and is certainly headed to at least Florida and probably most southern states of the U.S. Should you rush to invest?

There are good, in fact great reasons to invest in Inovio, but taking time to do research and understanding where the value is in Inovio will serve you better than rushing in based on headlines. First, be clear that Inovio has no approved vaccines on the market at this time. While Inovio has had revenue from grants and collaborations, including milestone payments from partners, essentially all of Inovio's stock value is based on the promise of its vaccine pipelines.

I'll start my review with the riskier parts of the pipeline. Then I'll cover the HPV vaccines. Finally, I'll look at which larger companies could buy Inovio, which could boost the stock long before the first Phase 3 results come in.

Zika, Dengue, Ebola: Oh My!

We are no longer afraid of "lions, and tigers, and bears." They are safely confined to zoos and nature reserves. Aside from our fellow human beings, our main fear is disease. In particular, we fear emerging diseases. There are therapies for most older infectious diseases. But when a new disease appears, new therapies must be invented.

Sanofi (NYSE:SNY) has already run the race to develop and obtain approval of a dengue vaccine. Dengvaxia is approved in Mexico, the Philippines and Brazil. It is not a particularly effective vaccine, but it will have to do until better vaccines are developed and approved.

Inovio recently announced a successful preclinical test of a Chikungunya vaccine, claiming 100% protection. It has also worked on a MERS vaccine with GeneOne Life Science. Its dengue vaccine, based on DMAB (DNA based monoclonal antibody production) technology protected 100% of mice in a pre-clinical trial. So it could prove to be better than Dengvaxia in humans, but to compete would need to complete Phase 1, 2, and 3 trials.

Inovio's emerging disease vaccines are currently all preclinical except for Ebola, which has started a Phase 1 trial. Inovio's ability to produce DNA-based vaccines quickly is impressive, but the reality is that the clinical trial process is long and competition is fierce. It is worth monitoring, perhaps worth investing in, but calling these potential therapies winners when they are still preclinical is going too far for me.

It is fair to conclude that the value of Inovio's emerging viral diseases program is currently intangible. One or more vaccines could start producing revenue in a few years, but zero revenue is a distinct possibility. Since other entities, notably DARPA, pay for these programs, there is little downside for Inovio.

HPV Precancer and Cancer programs

In the relatively short run, 2 to 5 year time frame, the obvious value for Inovio investors is in the HPV precancer and cancer...


More