Some investors, though, had grown skeptical.
On March 9, Andrew Left of Citron Capital, which is shorting Inovio’s stock and stands to profit if it declines, began publicly questioning Inovio’s approach to devising a coronavirus vaccine and accusing it of engaging in “serial stock promotion.” He later issued a report comparing the company to Theranos, the disgraced blood-testing company, and cataloging Inovio’s history of promoting and then failing to produce vaccines.
Inovio’s stock price plunged 66 percent, though it would soon soar to new heights thanks to optimism about its potential vaccine.
Days later, shareholders sued Inovio in federal court in Pennsylvania. Citing Dr. Kim’s remarks at the White House and earlier comments he made on Fox Business Network about having created a vaccine, the suit claimed that the company had “capitalized on widespread Covid-19 fears by falsely claiming that Inovio had developed a vaccine.” In April, another group of shareholders filed a separate suit in the same court, accusing Dr. Kim and Inovio’s board of mismanagement and unjustly enriching themselves, among other things.
Inovio has disputed Mr. Left’s critiques, but the company publicly clarified that it had developed a vaccine construct — essentially a road map — not an actual vaccine. Inovio has not publicly responded to the pending shareholder lawsuits.
Over the past 10 years, insiders at Inovio have sold more than $25 million in stock, according to the financial data provider Equilar. Last year, Dr. Kim was forced to sell about half his Inovio shares — causing the stock price to drop by more than a third — after he used his shares as collateral to borrow money and was caught in a so-called margin call, requiring him to immediately repay his loan.
This year, following steep run-ups in Inovio’s stock price, insiders have sold $3.8 million in shares. (Earlier this year, Inovio banned executives from “engaging in short-term or speculative transactions in the company’s securities, including pledging and purchasing company securities on margin.”)