Why This Inovio Analyst Is Reducing Estimates For The Coronavirus Vaccine Developer

Inovio Pharmaceuticals Inc INO failed to inspire confidence among investors despite revealing in its second-quarter earnings report that it is on track for a September start for a Phase 2/3 clinical study of its developmental DNA coronavirus vaccine. 

The Inovio Analyst: Cantor Fitzgerald analyst Charles Duncan reiterated an Overweight rating on Inovio shares and reduced the price target from $45 to $31. 

The Inovio Thesis: Inovio's planned Phase 3 study in at-risk volunteers with an assumed higher case rate — although encouraging — poses greater execution risk and mounting competition for clinical trial resources and in-market demand, given the progress made by other vaccine developers, Duncan said in a Tuesday note. (See his track record here.)

Cantor is taking a conservative stance and reduced its estimate for Inovio's number of doses sold in 2022-2026, the analyst said.  

Given Inovio's quarter-end cash position of $372 million, there is likely to be sufficient funding into 2023, with a bevy of potential pipeline milestones, he said. 

The 94% responder rate for the INO-4800 vaccine in the Phase 1 study and qualitative characterization of the composition of immune responses warrant movement of the investigational vaccine into a Phase 2/3 efficacy study, Duncan said. 

The analyst said he expects patient enrollment in the study to occur during the summer or early fall.

The proposed Phase 2/3 study is likely to enroll health care workers, first responders and persons in other occupations that place them at higher risk of COVID-19 infection, he said. 

The size and the speed of the study will depend on several factors, including the viral attack rate, Duncan said. 

The Rest Of Inovio's Pipeline: Inovio's other upcoming catalysts include two key data readouts from the Phase 3 REVEAL-1 and REVEAL-2 clinical studies of VGX-3100 in cervical dysplasia, the analyst said.

The company is also expected to release 18-month overall survival data from INO-5401/INO-9012/checkpoint inhibitor in glioblastoma multiforme and data from the Phase 2 study of MEDI-0457 in combination with durvalumab for metastatic HPV-related squamous cell carcinoma of the head and neck, according to Cantor Fitzgerald.

INO Price Action: Inovio shares ended Tuesday's session down 23.01% at $14.62. 

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Posted In: Cantor FitzgeraldCharles DuncanCoronavirusCovid-19vaccineAnalyst ColorBiotechEarningsHealth CarePrice TargetReiterationAnalyst RatingsGeneral

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