Pharma Company Inovio Must Face Most of False COVID-19 Vaccine Claims

Pharmaceutical company Inovio must face the majority of claims it misled the public about having a COVID-19 vaccine in the works, causing its stocks to spike, then plummet.

In an order published Tuesday in the U.S. District Court for the Eastern District of Pennsylvania, Judge Gerald J. Pappert partially granted Inovio’s motion to dismiss, but allowed most of the investors’ initial claims to go ahead.

The class action alleges that in the midst of the 2020 pandemic, between Feb. 14 and Aug.10, Inovio made intentionally confusing statements around its progress on a COVID-19 vaccine in an attempt to take advantage of virus fears and push up its trading price, Law360 reported.

“Defendants’ ongoing unlawful scheme has caused significant damages to investors and allowed the company to raise over $320 million in stock offerings,” a September version of the suit reportedly said.

Part of the suit centers on two statements that Inovio Chief Executive J. Joseph Kim made to the media last year, one in February and one in March. 

In the first, Kim told Fox Business News Inovio had constructed its vaccine within three hours of accessing COVID-19’s genetic sequence. That statement caused the company’s stock to rise 7.5%. In March, he claimed Inovio “had developed a COVID-19 vaccine in a matter of about three hours,” which caused the stock to spike 69.7%. 

However, in response to these announcements, Citron Research posted on Twitter that Inovio’s claims were “ludicrous and dangerous” and urged the SEC to investigate. 

Although Inovio denied Citron’s allegations, it stated that the vaccine was not actually a “vaccine,” but an “early stage prototype,” causing the company’s stock price to plummet.

In his order Tuesday, Judge Pappert found investors had provided enough evidence at this point in the case to allege that Kim misled the public with the February statement, Law 360 reported.

“By alleging defendants claimed to have achieved something they did not achieve and thereby instilling false confidence in investors, plaintiffs have satisfied their burden of alleging why Kim’s statements were misleading,” the judge said.

However, he threw out a claim that Inovio misled the public to believe it had received government funding to produce a vaccine when it put out an April press release announcing it had been included in the government’s vaccine initiative Operation Warp Speed, Law360 reported.

The judge said Inovio never claimed to be receiving vaccine funding.

Were you affected by the misleading statements made by Inovio regarding a coronavirus cure? Let us know in the comments below.

The investors are represented by Darren J. Robbins, Tor Gronborg, Trig R. Smith, Matthew J. Balotta and James E. Barz of Robbins Geller Rudman & Dowd LLP and Lawrence F. Stengel of Saxton & Stump.

The Inovio Virus Vaccine Investor Class Action Lawsuit is Patrick McDermid v. Inovio Pharmaceuticals Inc. et al., Case No. 2:20-cv-01402, in the U.S. District Court for the Eastern District of Pennsylvania. 

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