Inovio Pharmaceuticals  (INO) - Get Inovio Pharmaceuticals, Inc. Report shares fell sharply Friday, after Bank of America analysts downgraded the company to underperform from neutral.

They acted “due to the increasingly limited market opportunity for INO-4800 (COVID-19 vaccine) and as the next major non-COVID value driver, the REVEAL-2 readout, isn't until the second half of 2022,” the analysts wrote.

Inovio shares fell 45 cents, or 5.4%, to end the day at $7.95

“After the Department of Defense declined funding for the phase 3, we removed INO-4800 from our net present value, as we didn't see the program as a key value driver,” the analysts said.

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“However, the primary focus of the Street and management still remains on Inovio's COVID-19 franchise, which we view as unfortunate given the limited market opportunity, very effective existing therapies and continued COVID-19 investment/focus from much larger and more established COVID-19 vaccine players (Moderna  (MRNA) - Get Moderna, Inc. Report, Pfizer  (PFE) - Get Pfizer Inc. Report, Johnson & Johnson  (JNJ) - Get Johnson & Johnson (JNJ) Report).”

Further, “We view the continued focus on COVID-19 as a negative for Inovio given that other pipeline investments are likely to have a higher return on investment,” the analysts said.

“We understand that the emergence of COVID-19 variants will keep sentiment high, but the likelihood of clinical and commercial success is low, which could lead to higher share volatility with underwhelming results.

“We believe the rest of the pipeline has more attractive opportunities, specifically VGX-3100 and INO-5401, but we don't think that investors have focused on this.”

Earlier this week, Moderna MRNA said it’s developing a single-dose vaccine that combines its COVID-19 vaccine and its candidate flu vaccine.