As the deadly new virus spread globally, Inovio Pharmaceuticals, a small biotech company in Pennsylvania, rushed to develop a vaccine. After announcing promising early results, Inovio’s stock soared more than 1,000 percent.
That was 2009, when H1N1, better known as swine flu, was stoking fears of a devastating pandemic. In the years since, Inovio has announced encouraging news about its work on vaccines. The upbeat declarations have caused the company’s stock price to leap, enriching investors and senior executives.
There’s only one catch: Inovio has never actually brought a vaccine to market.
Now, with a new pandemic raging, Inovio is working on a new vaccine: for the novel coronavirus. A flurry of positive news releases about its funding and preliminary results have sent Inovio’s shares up by as much as 963 percent.
But some scientists and financial analysts question the viability of Inovio’s technology. While there are some early signs of promise with the company’s vaccine, Inovio has released only bare-bones data from the first phase of clinical trials.
Shareholders have sued Inovio, claiming it has exaggerated its progress on a coronavirus vaccine to inflate its stock price.
Developing vaccines is hard. The fact that a company like Inovio has never brought a vaccine to market is not necessarily an indictment of its underlying approach to creating vaccines.
Inovio’s specialty is attempting to develop DNA-based vaccines, which use a virus’s own genes to provoke an immune response. But the company’s decade of attempts have not borne fruit. In fact, no DNA-based vaccine has ever made it to market.
Still, Inovio’s stock market value has gone from less than $500 million at the start of the year to more than $3 billion today.
Some investors, though, have grown skeptical.
On March 9, Andrew Left of Citron Capital, which is shorting Inovio’s stock and stands to profit if it declines, began publicly questioning Inovio’s approach to devising a coronavirus vaccine and accusing it of engaging in “serial stock promotion.” Days later, shareholders sued Inovio in federal court in Pennsylvania. In April, another group of shareholders filed a separate suit in the same court.
In April, Inovio began trials of its potential vaccine, testing it on 36 people. Inovio said its vaccine generated an immune response, but the company did not disclose any data about the magnitude of that response. Scientists said that made it impossible to gauge whether the vaccine would protect anyone.
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