iBio Inc (NYSEAMERICAN: IBIO) has had a tremendous run in the market as of late. After announcing a partnership with CC Pharming to develop a coronavirus vaccine, the stock skyrocketed. However, we’re looking at declines of more than 10% early this morning and many are asking if the run for the top is over. I don’t think it is. Here’s why:
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There Are A Few Factors Driving IBIO Stock Declines
For those of you wondering why iBio’s stock is taking a dive, the answer is simple. There are two main factors driving today’s decline:
- Overall Market Conditions – The conditions in the market overall are horrible. As coronavirus cases reach more than 100,000, fear is striking the market which is leading to widespread declines. While some coronavirus-related stocks are still seeing green, many, even in this hot space, are trading in the red. So, poor conditions are likely weighing on IBIO at the moment.
- Profit Taking – As I mentioned in a recent post, the stock has seen a bit of profit taking as of late, and it makes sense. When a stock runs up more than 900% those who see it reaching the top want to dive into the money that they’ve earned. While we have seen some profit taking, the stock is still trading on tremendous gains over the past 30 days and will likely recover very soon.
The truth of the matter is that there are many investors looking at IBIO and hoping that this isn’t the end of the run. Well, those hopes are not going to be let down in my view.
Nothing has changed at iBio. There has been no issues with the partnership with CC Pharming, nor has the company announced any issues with its FastPharming Facility. So, the strategic advantages are still at play, and they are overwhelmingly valuable.
Think about it, as the biotechnology industry races to find a viable vaccine to protect against COVID-19, CC Pharming has already developed viable vaccines against cousin strains of the coronavirus. With experience in this specific type of virus, there are clear advantages in the development of a vaccine here.
Beyond that, when we talk about a pandemic, speed is everything. Speed of diagnostic testing, speed of treating those who are sick, and speed of vaccinating those who aren’t all play a role in how efficiently the problem is controlled. This is where the company’s FastPharming Facility comes in.
IBIO developed the FastPharming Facility under a government grant. The whole idea here was to be prepared for a pandemic by creating a facility that can develop mass amounts of vaccines at a very fast pace. Well, we are now looking at an epidemic that is quickly becoming a pandemic and the company has the tools to work quickly.
This isn’t just a competitive advantage in its partnership with CC Pharming, it’s a competitive advantage in vaccine manufacturing. Think about it, no matter who develops the first viable vaccine for COVID-19, they will want to manufacture it quickly. With the FastPharming Facility, IBIO is a prime candidate for manufacturing partnerships, even if it’s not first to develop the vaccine.
The Bottom Line
The bottom line here is simple. Nothing has changed at iBio but its stock price. The company’s strategic advantages are still in play, several catalysts are still ahead and the declines in the stock are likely nothing more than an opportunity to get in on future value at a discount.
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