Inovio sinks 26% after US government decides to discontinue funding for next phase of COVID-19 vaccine trial

• Inovio tumbled nearly 30% on Friday after the company said the government will stop funding a late-stage study of its COVID-19 vaccine candidate.
• Inovio said the decision stems from the 'rapid deployment of vaccines' and isn't a reflection on its INO-4800 candidate.
• The biotech firm said it will work with its global partners on the Phase 3 vaccine trial.

Inovio Pharmaceuticals shares were chopped down by nearly a third on Friday after the US government said it will discontinue funding for a late-phase trial of the company's COVID-19 vaccine candidate.

The biotech company said it was informed that it will lose federal financial support for the phase three segment of its Innovate trial for INO-4800. The DNA vaccine candidate is aimed at preventing infection from SARS-CoV-2, the coronavirus behind the COVID-19 disease.

"The decision results from the changing environment of COVID-19 with the rapid deployment of vaccines," said Inovio in a statement. "This decision is not a reflection of the awardee or product, rather a fast-moving environment associated with the former Operation Warp Speed on decisions related to future products."

Shares of the company dropped as much as 29% to $6.49 then slightly pared the loss to 25%. The moves put the stock down by roughly 22% since the start of 2021.

The government will complete the funding for the phase 2 trial of INO-4800, the company said, which added that the phase 3 funding decision does not impact its other work with the US government.

The US has been ramping up the nationwide rollout of COVID-19 vaccines made by Pfizer and Moderna. This week, President Joe Biden said his administration reached its goal of completing 200 million vaccine shots during his first 100 days in office.

Inovio will continue working with other global partners on the late-stage study of INO-4800, including Advaccine Biopharmaceuticals, its partner in China.

Inovio also said it will keep evaluating its pan-COVID variant vaccine, INO-4802, and assessing boosting capabilities for INO-4800.

"Inovio remains well-positioned to support both pandemic and endemic vaccine needs with INO-4800 and INO-4802," it said.