Here’s Why IBIO’s Choice of IBIO-201 in the Vaccine Race is a Good Thing

IBIO stock is a much better speculative buy than it was a month ago

The Sept. 9 announcement from iBio (NYSEAMERICAN:IBIO), that it had selected IBIO-201 as its leading candidate for prevention of the novel coronavirus was excellent news for IBIO stock. Although it had considered two possible candidates, the company felt IBIO-200 didn’t quite match the efficacy of IBIO-201.

Why is that such good news? Consider what it’s going to take in order to get the vaccine — any vaccine — to the world.

The Long Game Favors IBIO Stock

Did you know it will take 8,000 Boeing 747 cargo planes to deliver Covid-19 vaccines to the four corners of the globe? To inoculate the entire world against Covid-19 is going to be an enormous undertaking. 

“Safely delivering Covid-19 vaccines will be the mission of the century for the global air cargo industry,” said IATA’s director general and CEO, Alexandre de Juniac, in a statement.

“We urge governments to take the lead in facilitating cooperation across the logistics chain so that the facilities, security arrangements and border processes are ready for the mammoth and complex task ahead.”

Why is this important to iBio’s current situation?

As scientists around the world, including those at iBio, work around the clock to develop effective vaccines to get us back to normal, it illustrates that iBio isn’t out of the running despite the impression that it’s fallen well behind those groups in Phase 2 or 3 of clinical trials

Sure, Moderna (NASDAQ:MRNA) and its ilk are in the driver’s seat, and will likely garner a significant chunk of the vaccine business in both the U.S. and overseas, but iBio can play a role in the vaccine game.

My InvestorPlace colleague Alex Sirois believes iBio’s out of the running, recommending that investors look elsewhere if they’re interested in a Covid-19 payday. 

“For investors considering an investment on the hope that something is going to materialize, you shouldn’t. The timeline that would be required is long,” Sirois wrote on Aug. 20. 

“Again, there are 20 something other vaccine candidates further along than this one. It may be that the company later makes significant strides with its operations. However, as I mentioned in my last article about the company, it has a history of losing money.”

Tell me an early-stage drug development company that doesn’t lose money?

More Vaccines Is Better

Folio, the brand journalism site at the University of Alberta, recently reported on the eight things people need to know about the worldwide hunt for a Covid-19 vaccine. 

Number two on that list was the fact that more than one vaccine may work. Folio contributor Gillian Rutherford spoke with Lynora Saxinger, a University of Alberta infectious diseases specialist and co-chair of Alberta Health Services’ Scientific Advisory Group on Covid-19. 

“I actually would be really happy if multiple vaccines are proven to work, and they were all manufactured in different ways, because then there’s less likely to be bottlenecks in production that would affect our ability to scale up,” Saxinger said.

“Billions of doses will be needed and anything that will help diffuse the manufacturing, and allow countries to make their own, would be excellent.”

Now, I’m not a biologist, unless you count the stuff I’m growing in my fridge. Still, it seems the most important thing for the overall health and well-being of the entire planet is to have enough vaccines to provide at least two shots to every single person living and upright. 

To do that, you’ve got to have more than one candidate. More importantly, they needn’t all be ready at the same time. As vaccines get approved, they’re shipped off to the country most in need. 

How Long Will a Vaccine Last?

It’s impossible to know how long Covid-19 vaccines will last or be necessary. 

At the end of July, The Wall Street Journal discussed the idea that the vaccines that get the greenlight might only work for months or years, not for the rest of your life, which means new Covid-19 vaccines could potentially be developed for years to come. 

Only a handful of vaccines generate lifetime immunity for most people, such as the ones for measles, a viral infection that naturally produces lifelong immunity,” the WSJ reported. 

“Experts caution against expectations of such longevity for Covid-19, citing experience with other respiratory viruses plus emerging data on the longevity of the antibodies that can prevent the virus from entering human cells and replicating.”

So, to me, it seems logical that iBio is carrying on with its vaccine development process because it too knows this to be the case. It might not be the first in the starting gate, but that doesn’t mean it’s missed the race. 

Bottom Line on IBIO Stock

In early August, I suggested that without a vaccine, IBIO stock was a non-starter. I even suggested that investors consider the ETFMG Treatments, Testing and Advancements ETF (NYSEARCA:GERM) as a safer way to play the race for a Covid-19 vaccine. 

However, iBio’s announcement that it’s settled on one candidate to take into clinical trials suggests that it’s still in the game. And while I wouldn’t invest in its stock, it’s now trading at less than half its share price when I last wrote it in early August.

If you’re a speculative investor, the news, combined with a lower stock price, makes it an interesting bet. A month ago, I wouldn’t have said that.

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.