Inovio Pharmaceuticals CEO Joseph Kim at the company’s San Diego office. Inovio is working on a vaccine for the new coronavirus.

Inovio Pharmaceuticals CEO Joseph Kim at the company’s San Diego office. Inovio is working on a vaccine for the new coronavirus. Photo by Jamie Scott Lytle

Chinese scientists on Jan. 10 shared online the genetic sequence of a deadly strain of coronavirus. The next day, Inovio Pharmaceuticals whipped up a potential vaccine.

A crop of life sciences companies are rushing to combat the coronavirus outbreak, triggering big movements in their stocks and millions in grant funding. Part of the race is playing out in San Diego, home to Inovio’s research and development division, with others locally turning toward the disease.

The Coalition for Epidemic Preparedness Innovations awarded up to a $9 million grant to support Inovio’s vaccine. It’s in preclinical testing and could move into human trials by early summer.

While regulators could fast-track Inovio’s program, analysts have cautioned that a vaccine might not be approved for the wider public for at least a year.

“We’re going to move as fast as we can,” Inovio CEO Joseph Kim said over the phone.

Inovio’s technology revolves around DNA. So, the company only needed the genetic profile of the virus, instead of a sample of it, to develop a vaccine.

“We were able to rapidly respond,” Kim said. "This is a great opportunity for us to demonstrate the power of our DNA medicines platform.”

The new coronavirus, known as 2019-nCoV, originated in the Chinese city Wuhan. As of Feb. 5, more than 27,000 people worldwide have been infected, and 563 people have died from the disease. It lacks an approved vaccine or treatment.

Other drugmakers pursuing 2019-nCoV vaccines include Moderna, a Massachusetts company that also secured grant money.

Some pharmaceuticals want to repurpose existing drugs for 2019-nCoV. Gilead Sciences in late January struck an agreement with Chinese authorities to test its experimental drug for the Ebola virus in coronavirus patients. The company is headquartered in Foster City, Calif.

Kim said Inovio’s work on related viruses prepared the company for 2019-nCoV.

In 2018, the Coalition for Epidemic Preparedness Innovations — the same Norwegian group that awarded Inovio the recent grant — gave the company $56 million to support clinical testing of vaccines for Lassa fever and Middle East Respiratory Syndrome, which also fall into the coronavirus family.

Inovio is based in Pennsylvania but has more than 165 employees in San Diego, the center of its 2019-nCoV endeavor.

Kim noted the company could land additional grant money to offset 2019-nCoV vaccine development and clinical testing costs. As such, he believes the potential vaccine could be profitable.

Virus Could Dissipate

But 2019-nCoV could dissipate before drugmakers reach the market with vaccines, leaving little demand. This has happened with other viruses.

"This is not an established market where you know you're going to be able to sell a certain number of drugs," said John McCamant, editor of the Medical Technology Stock Letter that’s aimed at investors.

He added the outbreak brought volatility to some biotech stocks. Certain investors are hunting for companies poised to benefit from coronavirus, while others are betting against these stocks.

Inovio saw stock trading volumes swell on Jan. 24 following the grant announcement. Its stock price also jumped, but the gains were largely erased by Feb. 5, with shares closing at $3.56.

Investor Interest

Investors are watching other Inovio programs. Its furthest along is VGX-3100, currently in a late-stage clinical trial to treat precancerous cervical lesions and infection brought on by HPV, or human papillomavirus.

With coronavirus spreading, another stock that’s been heavily traded: Aethlon Medical, amid speculation that the San Diego company could set its sights on 2019-nCoV. Its device has regulatory clearance to treat life-threatening viruses without approved therapies.

CEO Timothy Rodell said it’s unclear whether the company’s blood-filtration device could be of use for a virus that affects the respiratory system and digestive tract.

“We’re looking to be prepared if in fact it turns out we could be helpful,” Rodell said. “And we're going to continue to do that with this epidemic, and incidentally with all the other epidemics to come.”

In late January, the World Health Organization declared 2019-nCoV a global emergency. Rodell, a physician by training, noted for perspective that the flu is deadlier and more widespread.

This influenza season in the U.S. has seen an estimated 19 million cases of flu, 180,000 hospitalizations and 10,000 deaths, according to the Centers for Disease Control and Prevention.

San Diego’s Ligand Pharmaceuticals helps pharmaceuticals discover and develop medicines — including for coronavirus. Its technology to boost drug solubility is baked into Gilead’s drug that’s undergoing testing for 2019-nCoV.

Other Ligand programs could shape additional coronavirus treatments in the works, the firm said. Unlike other companies associated with battling Coronavirus, Ligand's stock avoided volatility.

Matt Foehr, president and chief operating officer of Ligand, said it’s too early to say whether coronavirus will be a major business driver.

“Time will tell,” he said.