Inovio Pharmaceuticals Inc INO shares are plummeting following an adverse development in its coronavirus vaccine program.
What Happened: The Pennsylvania-based company said the FDA has imposed a partial clinical hold on the planned Phase 2/3 trial of INO-4800 – its DNA vaccine against the novel coronavirus. The partial clinical hold also applied to the company's Cellectra 2000 delivery device to be used in the trial.
The setback comes in the wake of the regulatory agency having additional questions regarding the planned trial. Inovio earlier had a timeline of September for initiating the mid-to-late stage trial.
The partial clinical hold is not due to any adverse events related to the ongoing expanded Phase 1 study, according to Inovio. Additionally, the development doesn't impact the advancement of the company's other pipeline assets.
Why It's Important: With about five biopharma companies having advanced their respective coronavirus candidates into late-stage trial already, Inovio was considered lagging behind. The partial hold should prove costly for Inovio's stock, which has gained about 300% on the vaccine program.
The development should also lend credence to the arguments of short sellers, which have time and again expressed serious doubts concerning the veracity of Inovio's claims regarding discovering the vaccine construct in record time and also the efficacy of the investigational vaccine.
What Next? Inovio said it's actively working to address the FDA's questions and plans to respond in October. The regulatory agency would then have about 30 days to inform the company of its decision as to whether the company can go ahead with the trial.
This would mean the company can't initiate the trial until November at the earliest.
"INOVIO and its partners are continuing to prepare for a planned Phase 2/3 trial of INO-4800, following resolution of the FDA's partial clinical hold and subject to the receipt of external funding to conduct the trial," the company said.
In pre-market trading, Inovio shares were sliding 32% to $11.48.
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