Shares of Inovio Pharmaceuticals (INO) are under pressure on Wednesday after Roth Capital analyst Jonathan Aschoff downgraded the stock to Sell after the company released "very limited" preliminary Phase 1 results from its trial with SARS-CoV-2 vaccine INO-4800. Despite its inclusion in the White House's Operation Warp Speed initiative, the analyst is "unimpressed that further preclinical work is required, rather than proceeding straight to later-stage trials."

INO-4800 INTERIM DATA: Inovio announced what the company called “positive” interim clinical data of INO-4800, its vaccine candidate against novel coronavirus, or SARS-CoV-2, from the first two Phase 1 clinical trial cohorts. In addition, Inovio said that its INO-4800 has been selected to participate in a non-human primate, or NHP, challenge study as part of the U.S. government's Operation Warp Speed, a new national program aiming to provide substantial quantities of safe, effective vaccine for Americans by January 2021. Inovio has also expanded its Phase 1 trial to add older participants in additional cohorts and plans to initiate a Phase 2/3 efficacy trial this summer upon regulatory concurrence.

COVID VACCINE DATA 'UNIMPRESSIVE': Roth Capital analyst Jonathan Aschoff downgraded Inovio Pharmaceuticals to Sell from Neutral with a price target of $11 after the company released what he called "very limited" preliminary Phase 1 results from its trial with SARS-CoV-2 vaccine INO-4800. The analyst told investors that he is "not encouraged by the complete absence of immune response details" and sees the denial of Inovio's injunction forcing suppliers to share needed production technology.

Aschoff added that despite its inclusion in the White House's Operation Warp Speed program, he is "unimpressed that further preclinical work is required, rather than proceeding straight to later-stage trials." Given the abundance of intense competition that is "far better" capitalized than Inovio, the analyst believes INO-4800 will ultimately fall out of the running.

Meanwhile, Maxim analyst Jason McCarthy also downgraded Inovio to Hold from Buy. The analyst noted that the data in the company's Phase 1 clinical study of a COVID-19 vaccine candidate may have been "positive," but the stock is already up over 700% year-to-date and the potential success of INO-4800 appears to be priced into the shares.

LACK OF DATA LIMITS INTERPRETATION: Also commenting on the preliminary Phase 1 INO-4800 data, Stifel analyst Stephen Willey noted that the "paucity of information" regarding patient immunogenicity limits interpretation of the early results. While 34 of 36 patients, or 94% of trial participants, showed some kind of immunological response, defined as having achieved one or more positive response criteria for immunological response, Willey said the proportion of patients achieving either neutralizing antibody and/or T-cell responses will be needed to appropriately assess the competitive relevance of this data. The analyst, who believes this preliminary data is likely to raise more questions than answers and limits his ability to get more constructive on the shares, kept a Hold rating on Inovio.

Piper Sandler analyst Christopher Raymond also made no change to his Neutral outlook following the disclosure of initial top-line clinical data for the company's COVID-19 vaccine candidate, INO-4800. While 94% of participants demonstrated an "overall immunological" response at week 6, with a benign safety profile, Raymond continues to worry that investor hopes for INO-4800 to emerge as a viable vaccine candidate to address the current COVID-19 pandemic are unrealistic barring clarity on the manufacturing scalability front.

Reiterating a Sector Perform rating on Inovio’s shares as well, RBC Capital analyst Gregory Renza told investors that he is "cautiously optimistic" about the interim topline data, which showed a high rate of immune responses from the study, and "encouraged" by the preclinical challenge developments. He awaits details on the Phase I data, the animal challenge studies, as well as clarity on the path forward from the FDA though in accordance to expectations the news establishes Inovio's continued presence in the quest for a viable vaccine.

WHAT'S NOTABLE: Pfizer (PFE) and BioNTech (BNTX) this morning announced preliminary U.S. data from the most advanced of four investigational vaccine candidates from their BNT162 mRNA-based vaccine program, Project Lightspeed, against SARS-CoV-2, the virus causing the current global pandemic. The BNT162 program is evaluating at least four experimental vaccines, each of which represents a unique combination of mRNA format and target antigen.

Overall, the preliminary data demonstrated that BNT162b1 could be administered in a dose that was well tolerated and generated dose-dependent immunogenicity, as measured by RBD-binding IgG concentrations and SARS-CoV-2 neutralizing antibody titers, the companies said. The ongoing U.S. Phase 1/2 randomized, placebo-controlled, observer-blinded study is evaluating the safety, tolerability, and immunogenicity of escalating dose levels of BNT162b1. The initial part of the study included 45 healthy adults 18 to 55 years of age. Preliminary data for BNT162b1 was evaluated for 24 subjects who received two injections of 10 microgram and 30 microgram, 12 subjects who received a single injection of 100 microgram, and 9 subjects who received 2 doses of placebo control.

These preliminary data, together with additional preclinical and clinical data being generated, will be used by the two companies to determine a dose level and select among multiple vaccine candidates to seek to progress to a large, global Phase 2b/3 safety and efficacy trial. That trial may involve up to 30,000 healthy participants and is anticipated to begin in late July 2020, if regulatory approval to proceed is received. If the ongoing studies are successful and the vaccine candidate receives regulatory approval, the companies expect to manufacture up to 100M doses by the end of 2020 and potentially more than 1.2B doses by the end of 2021. In that event, BioNTech and Pfizer would work jointly to distribute the potential COVID-19 vaccine worldwide.

PRICE ACTION: In morning trading, shares of Inovio have plunged over 17% to $22.33.