iBio (IBIO) Stock: Profit Taking Is Discounting The Opportunity

iBio IBIO Stock News

iBio Inc (NYSEAMERICAN: IBIO) is falling pretty hard in the market this morning, giving up more than 10%. While these declines may be shocking to many, the fact of the matter is that they are creating a bit of an opportunity. Here’s what’s going on:

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Why IBIO Is Falling

There hasn’t been any news that would suggest that declines are ahead. There have been no new hurdles in the development of COVID-19 vaccines, no fund raise announcements, and nothing else that would fundamentally suggest that the stock should fall. However, the declines are understandable.

Recently, IBIO has been on a tremendous run in value. It’s common that when we see dramatic gains in the value of any stock in a short period of time, we see profit taking at what investors believe to be the top. That seems to be what’s happening today.

However, this profit taking is only discounting the opportunity.

The reality is that IBIO has plenty going for it and there’s good reason to be excited. The company was one of the first to announce that it is working on a vaccine for the coronavirus. However, it’s not just working on one, it has announced two COVID-19 vaccine development programs.

I know, you’re thinking, “Everyone and their mums in biotech are working on a COVID-19 vaccine.” There’s no denying the fact that the vaccine space has many players looking to be first. However, there are a few things you should know:

  • Most companies working on a vaccine don’t actually have anything tangible.
  • Most companies that do have a tangible vaccine under development have no idea how they’re going to manufacture enough doeses for the masses.
  • It will take more than one vaccine to erradicate the coronavirus as a single company simply won’t be able to produce enough doses for the global community.

All of this bodes well for IBIO. First and foremost, the company doesn’t have just one tangible coronavirus vaccine candidate, it has two. That’s huge! Moreover, the company is the owner of the FastPharming Facility, a facility that was commissioned by the United States government for the ability to produce vaccines and biologic agents quickly in the face of a pandemic. Meaning that the company has mass-manufacturing under control.

Also, there have been several statements that Moderna and Inovio are well ahead. They may be. However, there are a few things to consider here:

  • There is no gaurantee that either of these companies will be successful in the long run.
  • These vaccines require more than one dose.
  • Again, even though these companies do have mass manufacturing plans, they simply can’t manufacture enough of their vaccines for the global population.

IBIO is working on a single-dose vaccine, a clear benefit to the multi-dose options that these two big dogs are working on. Beyond that, even if Moderna and Innovio hit the market first, they simply aren’t going to be able to meet global demand. To do so will take a consortium of companies working to develop multiple vaccines, leaving plenty of room for IBIO to be profitable here.

The Bottom Line

The bottom line here is that in my view, iBio remains the top pick in the COVID-19 space. Not only is the company among the leaders like MRNA and INO, success in the space would be far more significant for this small biotech play than it would for these other companies, making the potential for gains much more significant.

With multiple development programs underway, the FastPharming Facility, the single dose option, and the significance of the company breaking into the space from a financial standpoint, IBIO is a stock that should not be ignored, making today’s declines a potential opportunity to get in on tremendous gains at one heck of a discount.

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