Inovio Has a Great Foundation in More Ways Than One: INO, BPAX, INHX

What causes a stock to pop 16% in one day? Most of the time it would be news, but for Inovio Pharmaceuticals, Inc. (AMEX:INO), that doesn't seem to be the case. Inovio is developing several advanced vaccines to fight illnesses including leukemia and hepatitis C, but it won't enter those markets unchallenged. Names like Inhibitex, Inc. (NASDAQ:INHX) and BioSante Pharmaceuticals, Inc. (NASDAQ:BPAX) are also developing vaccines for those two markets, and will certainly be tough competitors.

Nevertheless, INO popped in a major way today, and did so on in the best buying volume we've seen in weeks. The fact that it happened today here in the shadow of a major pullback (and especially without a news-based catalyst) forces one to wonder if this is the beginning of an organic (read 'sustainable') rally effort.

If it is, then it's all riding on the shoulders of the vaccine technology, and as was said, Inovio Pharmaceuticals isn't alone in that race.

On the hepatitis C front, INO will be colliding with the recently-acquired Inhibitex. INHX should be a name to contend with too, given the premium it commanded and the fact that the company had several suitors. Its oral hep-C treatment has an obvious convenience benefit, and with it only being in phase II trials, the confidence in the outcome of the trial is high. Yet, Inovio Pharmaceuticals will eventually be able to compete.

As it stands right now, the INO flagship in the hepatitis C race - called CHRONVAC-C - is only in late phase I and early phase II trials. However, the viral load reductions observed in very early testing were in the phenomenal 93% to 100% range, depending on the dosage. No safety issues were observed either.

As for leukemia, BioSante Pharmaceuticals - despite a monster setback for the stock in December - is the name to aim for.

You might recall that BPAX shares plunged from $2.52 to $0.48 in mid-December after results of its Libigel (a female libido enhancer) was shown to be ineffective in Phase III trials. While the poor performance of one drug is understandably frustrating, the company's got a much bigger pipeline - though less hyped - than Libigel.  One of those less-hyped trials is for a leukemia vaccine in Phase II trials that looks surprisingly promising. Its Chronic Myeloid Leukemia (CML) drug showed complete remission in nearly half of its patients, and the Acute Myeloid Leukemia (AML) therapy saw an improvement of 30% in the survival rate.

Inovio Pharmaceuticals is no slouch on this front either, however. In fact, the company's DNA vaccine is specifically taking on AML and CML too, and it's in Phase II trials as well. Though no early results are posted yet, it's pretty clear the market plans on liking something it's going to hear in the near future.

So if Inovio is behind BioSante in the leukemia race and behind Inhibitex in the hepatitis C race, what makes it so great that investors suddenly want it so badly today? It's not just a hep-C and cancer treatment that's getting INO investors excited. It's the underlying platform that's making a whole collection of vaccines available for development by Inovio.

It's called the SynCon DNA vaccine design process. Inovio's vaccine design process uses bioinformatics, combining genetic data and ultra-powerful computing. The construction process is able to synthetically define antigens and gene sequences common across different viral groups (families) of HIV, HCV, human papillomavirus (HPV), and flu. This capability better targets certain immune system mechanisms to produce a higher level of coded antigen, which enhance the overall ability of the DNA vaccine to create the desired immune response. It's being used to develop not two drugs, but ten drugs, including treatment for HIV, prostate cancer, and the flu.  

Though it's still too early to say success is assured, the platform itself can do a lot... a lot more than the foundational technologies being used by a bunch of other biotech names. Looks like the market's finally starting to believe it. INO could make for a juicy trade if this surge gets traction. And, given the volume and circumstance, it seems like it will.