After a well-publicized meeting with President Donald Trump on March 2, CEO J. Joseph Kim repeated his claim about a vaccine and said Inovio could begin testing in early April, and the stock price quadrupled. But on March 9, the day Inovio had planned to offer $50 million of its common stock for sale, a short-seller report called the company's vaccine claims "ludicrous and dangerous," and its share price dropped from $18.72 to $9.83 by the end of the day and then to $5.70 by the end of the next.
A shareholder filed suit a class action suit, claiming the company had not actually developed a vaccine as Kim had claimed and instead capitalized on hype surrounding the emerging pandemic to artificially inflate Inovio's share price.
After a lead plaintiff was named in June, the proposed class filed an amended suit claiming that in addition to Kim's earlier misstatements, Inovio should be held liable for statements made between March 24 and May 12 assuring investors the company would be able to deliver 1 million doses of a COVID-19 vaccine by the end of 2020.
The company "said nothing" in that time about the fact that the manufacturer of its vaccine had canceled its contract with Inovio on May 7, the suit claims. Then on June 3, it was publicized that Inovio had sued the manufacturer over the canceled contract, stating in the suit that the cancellation made it "mathematically impossible" for Inovio to deliver the 1 million vaccine doses by the end of the year.
The company is now seeking to dismiss the complaint, having filed its brief late last week.
A long term holder who has held shares since prior to 2/14/20 as of right can make a derivative demand for increased governance and a return of class action suit related costs and fees back to the company via D&O policies, and may be entitled to an incentive award (which often ranges between $5,000 and as high as $50,000) - at no cost whatsoever.
