"The Biotech Buyout Binge" research report.
This a very tiny biotech - essentially a "penny" stock. But it's a penny stock with a lot of promise.
The company is Inovio Pharmaceuticals Inc. (NYSE: INO), a Blue Bell, Penna.-based venture that's working on synthetic vaccines for cancers and for infectious diseases.
At first glance - with a market cap of roughly $92 million and a stock that's trading at 66 cents a share - Inovio looks like the classic penny stock. And because the company currently has no sales, the initial impression is certainly that of an early-stage, penny stock biotech.
But this is why there's such great value in having access to the insights of a high-tech guru - who's able to tell us that there's much more to the Inovio story than most investors think.
"While it's true that Inovio has no sales at present, what's more important to note is that this is a company that's still been able to finance its operations because it has done a superb job raising money from both government sources and foundations," Michael said. "What that tells us is that Inovio has great science. You see, the folks in charge of the funding are able to differentiate between hype and promise, and they can see that Inovio's science has great promise."
Indeed, Inovio's anti-malarial-vaccine initiative has received millions of dollars in funding from a group affiliated with Bill and Melinda Gates. That's been enough to help finance the clinical trials it's pursuing, and to continue its research-and-development efforts.
The biotech is working on vaccines for cervical cancer and leukemia. And it has an injection-enhancing technology that it refers to as "electroporation." As you'll see, that technology is pretty intriguing.
"When a patient gets an injection ... a shot ... they also receive a quick electric pulse," Michael explained. "That pulse causes cell membranes to open and accept the DNA contained in the injection. Those cells then produce the antigens needed to tell the immune system to fight that particular, targeted disease. It's really quite ingenious."
But it was Inovio's pursuit of a "cure" for the flu - its synthetic vaccine effort - that started this conversation. I urged Michael to tell us more.
"The company is working on a "universal' flu vaccine - which is what we really need to avoid pandemic-like outbreaks," Michael told me. "Right now, vaccine-makers try to develop inoculations that are unique to the current flu season. That means they have to be developed, manufactured and distributed as quickly as possible. And if they "miss' and don't match the vaccine to the virus, or if a new strain of virus emerges, the vaccine isn't effective, and it's usually too late to develop a new one."
The obvious solution is to create an influenza vaccine that can protect us from existing and newly emergent "unmatched" strains of the virus. Lots of companies are trying to do this, and it's also one of Inovio's key goals.
"What we really need to see is a vaccine that can give us protection against current, known strains of the flu - and pre-emptive protection against strains that could emerge," Michael told me. "It takes a unique technology to achieve that objective. And that's what Inovio is trying to do with its "synthetic consensus' design approach - also known as its "SynCon®' technology."
To form their "Buy, Sell or Hold" ratings, most tech analysts read whitepapers, troll news sites, read stock charts, attend trade shows ... you get the idea.
But before he told me about this particular company, Michael actually had dinner with Inovio co-founder and company CEO J. Joseph Kim. So he was able to get his questions answered on a firsthand basis. And Michael also got some great insights on the biotech sector in general.
But that's another story for another time.
Analysts have a consensus target of $2 a share on Inovio
