On Feb. 14, 2020, Chief Executive Officer of Inovio Pharmaceuticals, Inc. Joseph Kim announced on a live Fox Business News broadcast with host Neal Cavuto that his company had developed a COVID-19 vaccine.
Kim then met with President Trump to discuss the global coronavirus outbreak — a meeting that also included executives from Johnson & Johnson, Regeneron, and other pharmaceutical companies. Kim doubled-down, claiming yet again that his company had developed a COVID-19 vaccine.
In a statement released Tues., March 3, Kim claimed:
“Using our modern DNA medicines platform, we designed our DNA vaccine INO-4800 in three hours after the publication of the genetic sequence of the novel coronavirus…. We immediately began preclinical testing and small-scale manufacture.”
The stock market responded and Inovio Pharmaceuticals, Inc. — a 40-year-old company that has yet to develop an FDA-approved product — made $208 Million, selling more than 43 million shares between Jan. 1 and March 11.
Later, in a mere 6 days of trading, the individual share price of Inovio stock more than quadrupled from $4.38 to $19.26 per share.
The problem? Inovio had not, in fact, developed a COVID-19 vaccine.
Inovio Allegedly Capitalizes on Fears for Financial Gain
The first lawsuit against Inovio Pharmaceuticals has now been filed, alleging violations of federal securities laws. The complaint states that between the dates of Feb. 14 and March 9 (known as the “class period,” or the period during which unlawful conduct is alleged to have occurred), Inovio took advantage of the fear and panic of the American people by falsely claiming it had developed a vaccine for COVID-19.
Before stock-market trading began on March 9, the online investment newsletter Citron Research exposed Inovio’s misstatements. Citron then called on the U.S. Securities and Exchange Commission (SEC) to conduct an investigation into Inovio’s COVID-19-vaccine claims.
Citron Research, which has been exposing securities fraud since 2001, has played an instrumental role in spotting and bringing to light numerous high-profile cases, including Valeant Pharmaceuticals’ attempt in 2015 to use sham transactions to inflate drug sales.
In response to Citron Research’s newsletter, Inovio’s per-share stock price fell from its March 9 opening of $18.72 per share to close at $9.83. The following day, Inovio's stock price fell from its $9.30 per share opening price to close at $5.70. The 2-day drop wiped out approximately $643 Million in market capitalization for Inovio, marking a 71% decline from its high.
Currently, the lawsuit filed against Inovio seeks investors who purchased Inovio stock between Feb. 14, 2020 and March 9, 2020. Interested shareholders will have until May 12, 2020 to apply to be the lead plaintiff in the securities class-action lawsuit.
If you have suffered economic loss due to Inovio’s alleged violation of securities law, you may be able to recover damages through a securities class-action settlement. Learn more about how to get involved in securities class-action.
False Claims in a Time Where Truth Is All That Matters
For weeks, Americans have been forced to grapple with fact, fiction, and misinformation stemming largely from the White House, which has offered delayed, confusing, and exaggerated messages. From dubbing the coronavirus a “hoax,” to claiming the virus may disappear in April like a “miracle,” the president and his cabinet, state representatives, and scientific experts have all contradicted one another to varying degrees.
The result has been nothing short of disastrous, creating an imbalance among citizens who either take the virus very seriously or not at all. When truth should be front and center, along with clear-cut advice from the top-down, much of the American public has been forced to make their best-educated guesses on matters such as social distancing, staying indoors, and self-quarantining.
The end to the coronavirus pandemic has become a beacon of hope — shining a light during a dark and tragic time when tens of thousands of people are dying around the world. During these tough times, the world looks toward its leaders, and that includes executives who have access to resources and are charged with being responsible with the facts, spearheading innovation, and finding solutions.
This is why the securities fraud allegation against Inovio Pharmaceuticals — that it falsely claimed to have developed a vaccine — must be taken seriously. Now is not the time to be making unfounded claims.
The world needs hope. What it doesn’t need is false hope.