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In the early days of the coronavirus vaccine race, Inovio Pharmaceuticals (INO 3.87%) was one of the favorites. But the biotech company’s program fell behind.

One major headwind slowed things down: The U.S. Food and Drug Administration (FDA) placed Inovio’s coronavirus vaccine trial on a partial clinical hold in late 2020. The agency lifted the final delay — the hold on the phase 3 part of the trial — about a year later.

But Inovio’s turmoil isn’t over. Co-founder Joseph Kim resigned as CEO, the company said this week. And Inovio is dropping its plan to develop its coronavirus vaccine candidate as a primary series. Instead, it’s aiming for use as a booster only. And Inovio said its HPV vaccine candidate will need at least one additional study.

Does all of this mean Inovio is in trouble? Or could this embattled company be at a turning point that will lead to a recovery?

Image source: Getty Images.

The vaccine landscape

First, let’s take a close look at the coronavirus vaccine landscape — and Inovio’s program. Rivals Pfizer and Moderna have vaccinated most of the U.S. population. Those companies, along with AstraZeneca and Johnson & Johnson, have dominated the market worldwide. Biotech Novavax recently entered the picture, representing even more competition.

As the pandemic shifts to an endemic situation, demand may decline. But I wouldn’t expect it to disappear. The virus will still be around. And that means at least those who are most vulnerable may opt for an annual booster.

Inovio stopped development of its candidate as a primary series for one main reason: cost. The company says a drop in severe COVID-19 cases worldwide means it would have to increase its trial size to meet efficacy goals. That results in a greater investment.

As I mentioned above, even if Inovio continued and commercialized a primary series, it would face enormous competition — at a time when vaccine demand may decrease. So the idea to focus on a booster to be used after an individual has had any other primary series is a smart one.

Of course, even as a booster, Inovio’s product would face competition. But here’s what could give an eventual Inovio booster a push. Research has shown that mixing and matching vaccines actually results in stronger immunity.

A study published in The New England Journal of Medicine demonstrated higher neutralizing antibody production in those who received a different booster versus one that matched the primary series. Inovio’s partner Advaccine showed that boosting with Inovio produced stronger T-cell responses than delivering a third dose of an inactivated coronavirus vaccine.

Beyond the coronavirus program

Moving on to the next piece of recent news — Inovio has other programs beyond the coronavirus. And here, we come to VGX-3100, its HPV vaccine candidate for precancerous cervical dysplasia.

The company was nearing the end of a phase 3 study. But the FDA recently said Inovio will need one or possibly two more trials before it’s able to seek approval. Inovio says this means it won’t be able to file for approval next year as originally planned.

All of this means Inovio faces a longer timeline to market for its coronavirus vaccine candidate and its HPV vaccine candidate. Both potential products could carve out a place in the market if and when they get there, of course. But right now, Inovio is still a few crucial steps away.

At the same time, a new CEO has just taken the reigns. Inovio appointed Jacqueline Shea to the position. Shea previously served as CEO of Aeras, a non-profit organization specializing in the development of tuberculosis vaccines.

Recovery or trouble?

At this point, is Inovio set for recovery or mired in trouble? The fact that the company is changing strategies for its coronavirus candidate is positive. And a new CEO may be able to drive progress at the company after the challenges it’s faced over the past couple of years. This may be a turning point for Inovio.

But it’s still too early to say whether Inovio can get onto the right path. First, I would like to see some clues that the coronavirus and HPV programs are moving past the recent headwinds — for example, additional trial data and/or positive feedback from regulators. I also would like to see Inovio’s progress under the direction of Shea.

Inovio shares might look like a bargain now if the company ends up winning regulatory approval of even one product in the next few years. The stock has dropped more than 90% from its high back in June of 2020 and is trading for less than $2.

But even at this level, I’m not buying. Only evidence that Inovio is successfully advancing its current programs will reduce the risk of investing in this biotech stock.