Inovio Gets Downgrades Despite Grant for Coronavirus Test

Inovio Pharmaceuticals receives downgrades from two analysts.
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Inovio Pharmaceuticals (INO) - Get Report received downgrades from two analysts Friday even after the biotech company said it received a $5 million grant from the Bill and Melinda Gates Foundation related to research for the coronavirus.

Shares were falling 14.7% to $8.10 in premarket trading.

The Plymouth Meeting, Pennsylvania-based company said it had received the grant to speed up testing of a proprietary smart device for intradermal delivery of a vaccine to treat the coronavirus that causes Covid-19.

Inovio is developing a vaccine called INO-4800, currently in preclinical studies and is looking to advance to human clinical trials in April.

RBC Capital analyst Gregory Renza downgraded Inovio to sector perform from outperform with an unchanged $7 price target.

Renza said that while the stock price appreciated 180% year to date given the company's Covid-19 efforts with the introduction of a potential "fast responder" INO-4800, he believes that it is too early to count on the vaccine opportunity.

Renza said he is still positive on the company's overall DNA-based platform with the focus on Inovio's "shots on goals" upcoming over 2020 and 2021.

Piper Sandler analyst Christopher Raymond downgraded Inovio to neutral from overweight with an unchanged price target of $8. Raymond said that while there is value with the company's development platform, the stock is currently not trading on fundamentals.

He maintained that Inovio is worth $11 to $14 a share, even with a successful Covid-19 vaccine.

Maxim analyst Jason McCarthy, however, raised his price target on Inovio to $12 from $6 and kept his a buy rating on the shares.

He said that although it is too soon to tell whether the stock is a coronavirus play, the company is "firmly in the driver seat" through multiple potential inflection points given its $270 million cash position. He also said that the rise in Inovio valuation over the past few weeks is "validation" to the company's use of DNA-based immunotherapies.