Shares of Innovio Pharmaceuticals (NASDAQ: INO) After Thursday’s sharp decline, some were bouncing back on Friday. The stock was up 6.1% from 11:22 pm EDT on the day, while up more than 7.7% on the day.
Innovio did not report any new developments. Instead, the partial rebound is likely a result of investors optimistic about the company’s prospects at the dip. It is also possible that some short-sellers may cover their positions before the weekend as Avio announced the good news before Monday.
Relatively small stock moves with no news are nothing to excite. This is especially true when trading volume is lower than normal, as it is for Innovio today. But it’s not bad to check why some investors are optimistic (and why some short-sellers may be nervous).
There seems a good chance that Innovio will have positive news to announce in the near future. CEO Joseph Kim confirmed at the Cantor Virtual Global Healthcare Conference on Thursday that a peer-review of the Phase I results of the company’s coronavirus vaccine candidate INO-4800 is scheduled to arrive within the next few weeks. Kim also assured that Innovio would be able to begin its phase 2/3 clinical study of the INO-4800 in September, although the biotech is still awaiting Food and Drug Administration approval to begin the study.
In addition, Kim remains optimistic that Innovio will receive external funding for its Phase 2/3 clinical trial of the INO-4800. He said at the Cantor conference that the company believed it would increase funding “sometime in September”.
Granted, CEOs typically spin their company’s stories as positively as possible. But publicly overstating prospects can open the door to potential lawsuits. Investors and short-sellers cannot rule out the real possibility that Innovio will soon have many positive developments, providing important catalysts for biotech stocks.
Make some important announcements for Innovio over the next few weeks, based on Kim’s public comments. However, the most important thing is how the INO-4800 fares in the expected Phase 2/3 studies. If all goes well, the company may be on track to obtain FDA emergency use authorization for the coronavirus vaccine in the first half of 2021. But there are a lot of obstacles for Innovio to clean up before this happens.