Citron Delivers Blow to Inovio’s Surging Stock Amid Vaccine Hope

(Bloomberg) -- Inovio Pharmaceuticals Inc.’s meteoric rise on the back of hype for a vaccine to treat the coronavirus drew the ire of noted short-seller Citron Research, as the firm slapped a $2 target on the drug maker.

“SEC should immediately HALT this stock and investigate the ludicrous and dangerous claim that they designed a vaccine in 3 hours,” the tweet said. “This has been a serial stock promotion for years. This will trade back to $2. Investors have been warned.”

The stock has seen a massive flood of trading activity as retail investors and day traders flipped shares amid hopes that the company can deliver a vaccine to combat the fast-spreading virus. Shares surged as much as 37% on Monday morning, extending a year-to-date rally that briefly topped 480%, before traders circulated Citron’s claims.

“We’re not going to lend credibility to this report or this outlet with a response,” an Inovio spokesperson said by telephone. The company has highlighted claims it designed a vaccine candidate in just three hours. It plans to present the results of human trials by the fall and deliver 1 million doses for further studies or emergency use by the end of the year, according to a March 3 release.

The company’s chief executive told Bloomberg News last month that the company is “proactively establishing additional relationships” to scale up manufacturing. Chief Executive Officer J. Joseph Kim said the company was talking with global pharma companies, Chinese manufacturers and others.

Citron is the latest skeptic to voice concern about the company and its plans to develop a vaccine, pointing to decades of over-promising and under-delivering. Short sellers have pointed out that the drug maker has never successfully developed a medicine and has previously promoted plans to combat pandemic threats like Ebola in 2014 and Zika in 2016.

Bets against the company have accelerated over the past few weeks with 23% of shares available for trading currently sold short, according to data compiled by financial analytics firm S3 Partners. That’s the highest in at least a year and a spike from a 12-month low of about 10% in January, data show.

Trading in the Plymouth Meeting, Pennsylvania-based drug company topped firms like General Electric Co., Apple Inc., Ford Motor Co., and Microsoft Corp. Tuesday through Friday last week with the company being the most-traded stock in the U.S. on a couple of occasions. Well over 100 million shares changed hands on each of the past four sessions, a sign of retail activity given less than 100 million shares are even available for trading.

As of 1:36 p.m. in New York, more than 109 million shares had traded.

To contact the reporter on this story: Bailey Lipschultz in New York at blipschultz@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Kristine Owram, Cristin Flanagan

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