In all likelihood, the Covid-19 opportunity has passed for Inovio Phamaceuticals (INO). The DNA vaccine specialist was one of the early pacesetters last year in the race to get a coronavirus vaccine to market. However, while several peers made it past the finish line a while ago, Inovio’s program has stalled, beset by issues impeding its progress.
That said, Jefferies analyst Kelechi Chikere thinks the company could potentially have a lot to offer and might be worth investors’ attention.
“INO has a large pipeline of over 15 different programs for infectious diseases (e.g., COVID-19 and MERs) and oncology (e.g., HPV+ cancers),” the analyst said. “Shares of INO have primarily been driven by its CV-19 vaccine. While initial Phase I and II data for its vaccine are encouraging, we think INO's opportunity is becoming increasingly marginalized. However, on balance, INO has several other programs including a Phase III in cervical dysplasia and a Phase II in GBM that are interesting and warrant more investor interest.”
The company recently released results from the Phase 3 study of VGX-3100 in women with high grade HPV + precancerous cervical dysplasia, with the trial hitting both primary and secondary efficacy endpoints.
Chikere says questions remain on the treatment’s “clinical utility,” and admits the absolute placebo-corrected treatment effect in the Phase 3 testing of 13% is below the 26% exhibited in Phase 2. However, due to a dearth in non-surgical options, the analyst sees “room for the drug.”
Inovio is currently testing VGX-3100 in a second “nearly identical” Phase 3 study, with data expected next year. The final results, says Chikere will “help elucidate the clinical profile of VGX-3100 and potential market uptake.”
Another program piquing Chikere’s interest is the development of INO-5401 – a DNA vaccine against glioblastoma currently being tested together with Regeneron’s PD1 Libtayo – for which the “interesting early data” will be explored in larger studies.
On balance, however, while the analyst “likes the platform and sees upside as INO's pipeline progresses,” Chikere considers the stock as “fairly valued.” As such, Chikere rates Inovio shares a Hold along with a $9 price target. suggesting shares will remain range bound for the foreseeable future. (To watch Chikere’s track record, click here)
On the other hand, the Street’s average price target implies healthy upside; at $13.83, the figure suggests one-year returns of ~50%. Overall, the stock has a Moderate Buy consensus rating, based on 2 Buys and 5 Holds. (See Inovio stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.