The Case for iBio Stock Is Real, but Leaves a Key Question Unanswered – InvestorPlace


I’ve been curious about iBio (NYSEAMERICAN:IBIO) and its FastPharming technology ever since I began writing about IBIO stock earlier this year. Not curious enough I guess. And so I’m concerned that I misled investors into thinking that the technology itself was unproven.

A scientist in medical gear peers through a microscope.

Source: Shutterstock

It’s not. But with the stock down nearly 30% since another dismal earnings report, it’s hard to make a bullish case for the company’s plant-based production system.

And it appears I’m not the only one. The fact is that iBio built its FastPharming facility in 2010 via funding from the Defense Advanced Projects Agency (DARPA). DARPA is a part of the U.S. Department of Defense (DOD).

2010 is a long time ago, so I looked into DARPA’s funding. Sure enough, it’s one of those departments that doesn’t particularly care who’s in office. According to the Congressional Research Service, DARPA funding doesn’t change much. I suppose you could quibble that its $3.39 billion in fiscal 2020 was a 2.7% decrease.

Proven, but not Welcome

This was part of DARPA’s “Blue Angel” initiative. And the intent was to provide a facility that would be capable of manufacturing mass quantities of recombitant proteins faster than traditional productions systems.

That’s an interesting tidbit to throw around at your (virtual) holiday party. But here’s where the story gets more interesting. DARPA initiated Blue Angel to explore “a range of technologies that could enable faster responses to pandemics.”

Do you see where this is going? You don’t have to be a conspiracy lover (I love a good Clive Cussler novel, but I really don’t live down the rabbit hole) to ponder the next question.

With a history of funding from the federal government, why wasn’t iBio’s FastPharming technology part of the federal government’s Operation Warp Speed (OWS)?

Consider this. In September, Pharma’s Almanac, provided background about iBio’s FastPharming technology. The article cites the following:

Successfully fighting a pandemic requires tackling the disease with multiple modalities. Given the mutability of viruses, multiple therapeutics and vaccines must be developed simultaneously, as a single vaccine will not necessarily be effective for all people. iBio’s FastPharming® system is well-positioned to respond quickly to critical mutations appearing on viral antigens and provide variation of a vaccine timely for optimal efficacy.

So again, I have a question. Why wasn’t iBio’s FastPharming technology not front-and-center as a helping hand in the Covid-19 vaccine race?

The Answer Is Obvious, or Is It?

Well I’m sure I’ll have a bunch of people who (actually) know more than I do saying that the vaccines we’re hearing about from Pfizer (NYSE:PFE), Moderna (NASDAQ:MRNA) and AstraZeneca (NASDAQ:AZN) use messenger RNA (mRNA). These types of vaccines have never been mass produced and there is no defined large-scale manufacturing process.

And I thought about that. But hear me out. Johnson & Johnson (NYSE:JNJ) has yet to bring their Covid-19 candidate through Phase-3 trials. That’s a vaccine that uses “traditional” vaccine technology. You’d think that it might be a candidate for iBio’s FastPharming technology.

Or maybe not? I’m not trying to stir the pot, but it sounds like the federal government has plenty of proof of concept and was still hesitant to pull the trigger.

Is All Hope Lost for IBIO Stock?

Plant-made pharmaceuticals are not a new discovery. And iBio has been in the game for a long time. For that reason I understand Louis Navellier’s broad argument. There is a reason to like iBio. It’s just not likely to have anything to do with Covid-19.

To date, iBio has a number of experimental vaccines in its pipeline. However, all of them are still in early stage clinical trials and have a long way to go, if ever, before they are approved. And that includes the company’s Covid-19 vaccine candidates.

That leaves the company’s FastPharming technology to pay the bills. And as Will Ashworth points out, right now FastPharming is the primary revenue driver for iBio. However, that’s not preventing the company from losing money.

Being a part of the solution for delivering a Covid-19 vaccine could change that. But that seems unlikely. And so does a short-term bullish case for IBIO stock. This remains a speculative investment at best.

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

Chris Markoch is a freelance financial copywriter who has been covering the market for over six years. He has been writing for Investor Place since 2019.


Please enter your comment!
Please enter your name here