Whats Going On Currently
Inovio Pharmaceuticals, March 7th, announced it has priced an underwritten offering of 27,377,266 shares of its common stock, and warrants to purchase up to 13,688,633 shares of common stock, at a combined price to the public of $0.55 per share and related warrant for gross proceeds of $15.1 million. Biotech financing options can be exercised at anytime and for good reason too. Biotech companies, especially smaller ones, experience a high cash burn rate when "mid-stage" clinical development is taking place. On the other hand, the mid-stage clinical data produced from these studies can move stock explosively upwards and, let's face it, that is why us bio-tech investors patiently wait for data results during in this time.
Why Inovio Pharmaceuticals Is A Buy Here
Currently, shares are trading 20% lower today for Inovio, then the day prior. This drop in share price is obviously due to the common stock offering issued today. Inovio currently has a huge pipeline with many phase studies well underway. This offering caught some investors off guard when data for Hep c and HIV are due at any moment. Lesson learned here is that companies will raise money at any time possible and if it makes sense. My suggestion is to buy now, if not already invested, and consider it a gift. Investors already with a stake in Inovio know to average down when shares are trading in the .50 cent range. Although this isn't always possible for all investors and not necessary to see a profit in the near future either. This brings me to my next point. Let's look at what near term catalyst could rocket this well past a dollar. First we have ChronVac hepatitis C vaccine interim results for Phase II. Then, results for the Hep C vaccine are due out 1st qtr of 2013. Next, we have PENNVAX®-G vaccine for HIV; finial phase 1 data will be published in a peer reviewed medical Journal, most likely, this month. I won't do all your homework for you, as far as upcoming catalyst are concerned, but this information can be found directly on Inovio's website under their pipeline link. If you decide to look further into this company, check their list of partners supporting their vast pipeline, which is nothing short of impressive. Inovio is on the frontline of the new generation of DNA vaccines. What separates them from the others, is their best in class T cell responses which is key in battling all forms of cancer, their safety record, and proven potential recorded in previous clinical studies.
Valuation
There is a potential upside of 239.4% for Inovio Biomedical based on a current price of $0.53 and an average consensus analyst price target of $1.80. Buying in now could be the smartest investment move I have came across in a long time.
Bio-tech Risk
Bio-tech companies are always a risk and subject to failure of their clinical products being developed. Invest based off your own due diligence.
Disclosure: I am long INO.