A pre-market announcement yesterday by Inovio Pharmaceuticals Inc (NASDAQ:INO) dealt a blow to its shares, sending them down by over 16%.
About 3.7 million shares changed hands, over three times the average volume of 1.22 million shares.
The company said that the FDA placed a clinical hold on its proposed phase III clinical program for VGX-3100.
Adverse action from the FDA can have life-threatening consequences for small drug developing companies such as Inovio, which had a market capitalization of just $514 million as of yesterday after the decline.
Inovio Pharmaceuticals Inc (NASDAQ:INO) and the issue with the FDA
The company announced that it had received an initial communication from the FDA requesting additional data to support the shelf-life of the newly designed and manufactured disposable parts of the CELLECTRA® 5PSP immunotherapy delivery device.
The company said the U.S. Food and Drug Administration (FDA) had placed a clinical hold on its proposed phase III clinical program for VGX-3100, a vaccine for the treatment of cervical dysplasia, a precancerous condition caused by human papillomavirus (HPV).
“Inovio estimates that the start of the phase III clinical program will be delayed until the first half of 2017 pending resolution of the FDA’s requests,” said the announcement.
Inovio Pharmaceuticals Inc (NASDAQ:INO)’s decline was coming, according to technicals
A reference to the daily chart of Inovio Pharmaceuticals Inc (NASDAQ:INO) shows that it made multiple tops while testing the $11.60 level during April – July, but thereafter entered a decline once it failed to breach that resistance.
The decline was the upper line of a descending triangle with the horizontal support at $8.47.
A hint of things to come was apparent from the sharp fall the stock had between October 11 and October 17 – this plunge took it right through both the horizontal support line and the 200-day moving average.
Unless there is substantial good news, and soon, the stock is in a bear grip.