By Tomi Kilgore, MarketWatch
As the coronavirus out of China spreads and gets deadlier, shares of health care companies that announce plans to take part in finding a vaccine, or identifying patients with the new strain, have rallied sharply in very active trading.
On Thursday, among the bigger coronavirus gainers was Inovio Pharmaceuticals Inc.’s stock /zigman2/quotes/202993817/composite INO -1.96% , which ran up 12% to the highest close since May 9. Trading volume swelled to 12.3 million shares, compared with the full-day average over the past 30 days of about 1.4 million shares, according to FactSet.
The Pennsylvania-based biotechnology company said early Thursday that it was awarded a grant of up to $9 million by the Coalition for Epidemic Preparedness Innovations (CEPI) to develop a vaccine for the new strain of coronavirus, 2019-nCoV, which originated in Wuhan, China, and has killed no less than 17 people.
The grant builds on Inovio’s existing partnership with CEPI, in which the company was granted in April 2018 an award of up to $56 million to develop vaccines for Middle East Respiratory Syndrome (MERS) and Lassa fever.
The latest grant was aimed at funding development of Inovio’s new vaccine matched to 2019-nCoV, INO-4800, through phase 1 human testing.
Inovio and its partners was able to advance its vaccine for Zika virus “from bench to human testing” in seven months, which Inovio said it believed to be the fastest vaccine development on record in recent decades.
“We have challenged ourselves to do this one even faster,” said Joseph Kim, in a phone interview with MarketWatch.
Kim said after the DNA sequence of the new coronavirus strain was made publicly available on Jan. 11, Inovio was able to design and construct a potential vaccine in “a matter of hours,” and the animal-testing process has already begun.
Kim said he’s targeting the first human tests to begin in the U.S. “before early summer.” And while it could typically take years to get a vaccine through all three phases of human testing, “in a potential outbreak setting, there could be a lot of shortcuts,” Kim said.
Meanwhile, the World Health Organization’s (WHO) emergency committee, which was convened to give advice on whether the 2019-nCoV outbreak should be deemed a public health emergency of international concern (PHEIC), said that it “ did not constitute a PHEIC ,” but added that the committee should reconvene in a “matter of days.”
Analyst Jason McCarthy at Maxim Group reiterated his buy rating on Inovio and his price target for the stock of $6.00, which is 55% above current levels. In a note to clients titled, “New coronavirus; who do you call? Inovio,” McCarthy said the previously developed vaccine candidates for MERS and Zika was a key reason why CEPI picked Inovio for 2019-nCoV.
Outside of the coronavirus programs, Inovio has one treatment for brain cancer in phase 3 trials and two immuno-oncology therapies in phase 2 trials.
Inovio’s stock has run up 67% over the past three months but was still down 23% over the past 12 months. In comparison, the iShares Nasdaq Biotechnology exchange-traded fund /zigman2/quotes/206189322/composite IBB -0.61% has advanced 13% the past three months, the SPDR Health Care Select Sector ETF has advanced 13% and the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.42% has gained 10%.