Why Inovio Pharmaceuticals Stock Is Plunging
Added: (Thu Jul 18 2019)
Pressbox (Press Release) -
Inovio Pharmaceuticals the clinical stage vaccine company has seen a very unsteady run at the moment, seeing a dip of as much as 13.3% in pre-market trading today, but the question is what has sent investors running for the hills? After the end of trading on Tuesday, Inovio made the announcement that the companies cost cutting initiatives that centers in the acceleration of the development of their most advanced HPV clinical assets, along with a number of other high importance candidates. The biotech giant have as a result decided to halt their early stage trials for their advanced bladder cancer candidate, and cut the workforce on the project by almost 30%. These moves by the company are set to slash the company’s burn rate by over 25% over the course of the next year.
Now most commonly in biotech investors, when a company decides to cut costs and focus on later stage clinical candidates investors rejoice, however in the case of Inovio the company has a history of changing the direction and financial spread of their company, with little to show for it. In fact, Inovio has been part of the biotech industry for nearly 2 decades, and at this point has zero commercial stage products. Investors are probably concerned that the latest change made by the company will turn out to be yet another dead end.
Although it would appear that investors are obviously irritated and at the end of their fuse with Inovio’s lack of focus over the course of the last twenty years, there is clearly a good argument, that finally the company may be turning a corner. The huge downfall for Inovio has been the managements run and gun approach to product development, which has caused the biotech to repeatedly dilute shareholders positions, so that it has the liquidity to fund its early stage programs. In spite of this Positive signals have been seen from the company, by their choice to prioritize, fast to market products, which could be a sign that the company are moving towards a more shareholder friendly era. In no way is that a reason, which investors should jump in the deep end with this huge pullback, but the strategic realignment does look like a positive for the company at the end of the day.
Sarah Miller – IEC International