Should I invest in Inovio Pharmaceuticals shares in February?

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Feb 2, 2021
  • Inovio Pharmaceuticals shares are a risky investment option
  • BlackRock increased its ownership in Inovio Pharmaceuticals
  • Inovio Pharmaceuticals has signed an agreement with Advaccine Biopharmaceuticals

In less than several weeks, Inovio Pharmaceuticals (NASDAQ: INO) shares have advanced from $8.8 to $19, and the current price stands around $15. Inovio Pharmaceuticals has signed an agreement with Advaccine Biopharmaceuticals, and the positive news is that BlackRock increased its ownership in this company.

Fundamental analysis: BlackRock increased its ownership in Inovio Pharmaceuticals

Inovio Pharmaceuticals is an American biotechnology company focused on discovering, developing, and commercializing synthetic DNA products for treating cancers and infectious diseases. Inovio Pharmaceuticals shares are advancing, supported by the news that BlackRock increased its ownership in the company.

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According to the report, BlackRock now owns more than 14 million shares of Inovio Pharmaceuticals. This could indicate that the price could advance even more if BlackRock continues to buy shares of this company.

Inovio Pharmaceuticals has signed an agreement with Advaccine Biopharmaceuticals for exclusive right to develop, manufacture, and commercialize COVID-19 DNA vaccine INO-4800 within Greater China. This is positive news for shareholders, and according to the agreement, Inovio will receive the payment of $108M and royalty equal to a high single-digit percentage of annual net sales.

“INOVIO’s partnership with Advaccine enables us to leverage their deep expertise, capabilities, and network across the region – making it possible to rapidly produce and, if and when approved, distribute our vaccine candidate to more people across Greater China. We are grateful for Advaccine joining our global manufacturing coalition as a dedicated resource for Greater China and look forward to our continued partnership in the fight against COVID-19,” said Dr. J. Joseph Kim, President and Chief Executive Officer of INOVIO.

Last month, the company announced that it would offer 17.7 million shares at $8.50 per share, for expected gross proceeds of ~$150.5M. The closing date was January 25, this was much below the current price, and many analysts say that a reasonable stock price valuation stands around the $14-15 range.

My opinion is that Inovio Pharmaceuticals shares are a risky investment option, the company still operates with loss, and it has a relatively large debt. The book value per share is less than $2, and there are certainly better long-term investment opportunities at the moment.

Technical analysis: Bulls remain in control of the price action

Data source: tradingview.com

The critical support levels are $15 and $12; $18 and $20 represent the resistance levels. If the price jumps above $18, it would be a signal to buy shares, and the next target could be around $20.

On the other side, if the price falls below the $12 support level, it would be a firm “sell” signal and probably a trend reversal sign.

Summary

Inovio Pharmaceuticals has signed an agreement with Advaccine Biopharmaceuticals, and the positive news is that BlackRock increased its ownership in this company. There are some obvious risks when it comes to investing in shares of Inovio Pharmaceuticals, and there are lots of better long-term investment opportunities at the moment. If the price falls below the $12 support level, it would be a firm “sell” signal and probably a trend reversal sign.

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