Inovio Pharmaceuticals (INO) Stock: Citron Created An Opportunity

Inovio Pharmaceuticals INO Stock News

Inovio Pharmaceuticals Inc (NASDAQ: INO) has had an incredible run in the market as of late. After announcing that it had developed a coronavirus vaccine candidate using its DNA medicines platform, the investing community rallied around the stock. Unfortunately however, the team of short sellers at Citron took a stab at the company yesterday, leading to dramatic declines. Nonetheless, this could be an opportunity. Here’s why:

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Citron Sends INO Stock Tumbling

As mentioned above, Citron released a sell-side report yesterday surrounding Inovio Pharmaceuticals. In the report, the firm said that the company’s claims to have developed a vaccine candidate in just three hours is a dangerous claim, topping the report off by saying that the SEC should halt trading on the stock and launch an investigation.

As a result of the report, INO stock closed the day on losses of more than 30%. Of course, investors are wondering if Citron is right here. Well, in my view, they missed the mark.

The entire basis of the short report had to do with the fact that the company developed a vaccine in three hours. However, there’s a bit more to the story.

To develop the vaccine candidate, INO used its DNA medicines platform, a platform that took several years to develop. The idea behind the platform is to be able to quickly produce viable candidates by using the DNA sequence of the virus.

Once the DNA sequence of the Wuhan coronavirus was made available, Inovio Pharmaceuticals used its technology to do exactly what the technology was designed to do. Unfortunately, the screaming success of this technology raised a red flag at Citron. Nonetheless, INO stabbed back with a recent tweet.

While the company did not name Citron in the tweet, it was clearly aimed at the firm. Here’s what the company had to offer:

A third-party report today demonstrated a lack of understanding of the science behind DNA medicines. Inovio designed a vaccine construct for its coronavirus vaccine (INO-4800) within three hours after the viral sequence was publicly available; produced the vaccine at small scale and was in preclinical trials in January – preclinical results are available in Nature Communications. Inovio expects to move into human trials next month.

Based on extensive prior work creating DNA vaccines using our proprietary DNA medicines platform, we are confident that we have a viable approach to address the COVID-19 outbreak.

We remain committed to sharing our progress as we advance into the clinic in the coming weeks.

A Large Opportunity In The Making

While yesterday proved to be a painful day for Inovio Pharmaceuticals investors, the truth of the matter is that the Citron-fueled declines likely opened the door to an incredible opportunity.

Ultimately, Citron got it wrong here. The entire basis of their short report was the company’s claims that it developed a vaccine candidate within 3 hours. While I believe this to be the case, it really doesn’t matter if it took 3 hours, 3 days or 3 weeks.

What matters is that INO has a viable COVID-19 vaccine that has shown promise in preclinical studies. This preclinical data is promising, published and readily available.

Considering that, the more than 30% declines experienced yesterday are nothing more than an opportunity to get in on the stock at a discount. All in all, the company is one of the leaders in the race to develop a coronavirus vaccine, and that my friends is incredibly valuable!

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