Summary
- External funding sources and partnerships are developing into a long-term strategic opportunity for Inovio.
- Accelerating COVID vaccine testing is an urgent worldwide need, therefore Operation Warp Speed (OWS) should not be the only focal point for investors.
- International regulatory approval could also result in global opportunities for their oncology and infectious disease pipeline, adding to the value proposition.
Introduction
On June 03, 2020, The New York Times reported in their article, "Trump Administration Selects Five Coronavirus Vaccine Candidates as Finalists" the names of several vaccine candidates reported to be showing the most promise for inclusion into Operation Warp Speed (OWS). While there was not an official White House press briefing or press release announcing the selection, the NYT article clarified their report by noting that the final decision on the list of approved vaccine candidates will instead be made "within a few weeks".
Later, on that same day, Bloomberg's edition of the story, "White House Works with Seven Drugmakers in 'Warp Speed' Push", added more uncertainty for Inovio investors. The Bloomberg article reported a number of the same candidates already mentioned in the NYT article, but left open the door for the inclusion of two additional vaccine manufacturers. The added uncertainty resulted in an unfavorable market reaction that pounded the share price of Inovio Pharmaceuticals (NASDAQ:INO) down -13.92% for the day.
Nevertheless, investors should focus on the global landscape with Inovio as they're currently better positioned to expand and/or capitalize on international funding opportunities and existing partnerships that include the International Vaccine Institute (IVI), The Vaccine Alliance (GAVI) and The Coalition for Epidemic Preparedness Innovations (CEPI). Each of these international organizations is equally determined to accelerate progress towards development, manufacturing and, distribution of a COVID-19 vaccine as the pandemic remains a priority of heightened global concern for leaders around the world.
Recent market opportunities in the infectious disease space and the rapidly changing COVID-19 landscape create an added amount of volatility in this risk/reward scenario. Biotech stocks, especially those advancing a COVID-19 vaccine or therapy, still face months of uncertainty. While I believe that it will take several approaches to mitigate this threat, I invest in Inovio Pharmaceuticals because of their ever-broadening pipeline filled with emergent oncology solutions using 21st century DNA science and their proprietary platform. This remains the primary narrative of my Inovio investment thesis.
The value add to Inovio lies in their ability to develop a rapid response to infectious diseases. If Inovio's COVID-19 vaccine candidate (INO-4800) is approved by any regulatory body around the world, the decades of hard work by scientists perfecting DNA medicine to combat cancer and other ailments will have been validated, and the long-term value proposition for investors seeking potential capital appreciation will remain long-term bullish.
ACT Accelerator or Warp Speed?
I recently penned an article, "How Inovio Pharmaceuticals Could Make It To "The Show" outlining five key components necessary to improve the chances for a biotechnology stock, such as INO to succeed on Wall Street. These key areas were technology, science, financing, people and partnerships. While I encourage the reader to become familiar with these elements, this article expands on the most recent announcements concerning Operation Warp Speed, a snapshot of the new data from their Glioblastoma (GBM) trials (a deadly form of brain cancer), key characteristics of Inovio's platform and the value proposition for the long-term story of Inovio Pharmaceuticals.
For those new to the story, Operation Warp Speed is the White House response to the outbreak of COVID-19. The goal is to eliminate or reduce the hurdles that have historically plagued the pharmaceutical industries vaccine research and development teams with cumbersome regulatory processes that can delay approval of lifesaving drugs and medical devices. The OWS initiative provides the framework for three focus areas; 1) development, 2) manufacturing, and 3) distribution. As part of this framework, Congress has allocated nearly $10 billion along with other funding possibilities through the Biomedical Advanced Research and Development Authority (BARDA) and the National Institutes of Health (NIH).
Investors should also be attentive to the recent EU efforts that raised over $8 billion on May 4, 2020, as part of the Access to COVID-19 Tools Accelerator. ACT is a global effort to accelerate the development, manufacture and access to new diagnostics, therapies and vaccines to fight COVID-19 so people around the world will have access to solutions. ACT was officially announced by the World Health Organization (WHO) and the EU on April 24, 2020. Operation Warp Speed was officially unveiled by the White House on May 15, 2020.
Efforts by the global community to accelerate the development, manufacturing and distribution of vaccines and therapeutics are a global opportunity for investors and not stamped, "Made in America Only".
