Inovio Pharmaceuticals Inc (NASDAQ: INO) shareholders are suing the company in U.S. District Court alleging the vaccine maker misled investors by saying it came up with a coronavirus vaccine candidate in about three hours.
That statement amounts to a deliberate misrepresentation to the public to inflate Inovio's stock price, the shareholders said in the lawsuit, which was filed Monday in the Eastern District of Pennsylvania.
Inovio Shareholders Allege Stock Pumping: Ever since CEO J. Joseph Kim flaunted the "three-hour achievement" in a televised mid-February interview, the company has continued to release updates on the vaccine program in a bid to keep the stock on an upward trajectory, acccording to the lawsuit.
The investors reiterated in the lawsuit that Inovio had not designed a viable coronavirus vaccine in three hours, but rather arrived at a vaccine construct.
When short sellers targeted Inovio over the three-hour statement, the company said on Twitter that it had designed only a vaccine construct.
The lawsuit shows a lack of understanding of the science behind DNA medicines, an Inovio spokesperson told Benzinga on Tuesday.
The company designed a vaccine construct for INO-4800 within three hours after the viral sequence became publicly available; produced the vaccine at a small scale and entered preclinical trials in January; entered human trials in April; and plans to report results later in June, the spokesperson said.
"Based on extensive prior work creating DNA vaccines using our proprietary DNA medicines platform, we are confident that we have a viable approach to address the COVID-19 outbreak."
Inovio's COVID-19 Journey: Inovio's shares rallied through February and hit a high of $19.36 March 19, only to retreat to $5.13 in the wake of short seller reports.
The company is already facing another proposed class action lawsuit filed March 12.
Inovio has also accused a manufacturing partner in a lawsuit of refusing to divulge information required to scale up manufacturing, according to Fierce Pharma.
According to the latest update provided by Inovio on its INO-4700 vaccine candidate in early June, the company said it plans to start a two-stage Phase 1/2 trial in South Korea.
INO Price Action: At last check, Inovio shares were slipping 1.92% to $13.88.
Inovio Analysts Tackle Coronavirus Vaccine Timeline, Funding, Pipeline After Q1 Report
Moderna Analyst Says Coronavirus Vaccine Candidate Has 65% Chance Of Success
See more from Benzinga
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.