What happened

Shares of Inovio Pharmaceuticals (NASDAQ:INO) are skyrocketing today, up by 20% as of 12:59 p.m. EST, after Fox Business reported that the biotech has discovered a vaccine for the novel coronavirus that has sickened more than 45,000 people around the globe and killed more than 1,100. The company hopes to start a phase 1 clinical trial as early as this summer.

So what

Inovio was reportedly able to develop the vaccine in about three hours after it obtained the DNA sequence of the virus. Rather than giving the patient attenuated virus like most vaccines, Inovio's technology uses DNA to express viral proteins in the patients' cells, which causes the immune system to develop antibodies to the virus.

All the biotech really needed was the sequence of the COVID-19 virus and a good guess as to which viral protein was likely to create an immune response. The latter was probably helped by the fact that Inovio had already developed a vaccine for a different coronavirus that causes Middle East respiratory syndrome (MERS), so researchers likely knew which protein would be immunogenic.

Last month, Inovio received a $9 million grant from the Coalition for Epidemic Preparedness Innovations to develop the vaccine against the COVID-19 virus.

People with face masks walking on the sidewalk

Image source: Getty Images.

Now what

The quick speed at which Inovio is working is good news considering all the companies that have said they're developing treatments and vaccines for the COVID-19 virus. Some of the potential competition, like Gilead Sciences and Johnson & Johnson, have substantially more resources than Inovio.

The bigger issue that investors need to worry about is whether the novel coronavirus will result in a large global pandemic, or whether it will largely remain in China and peter out like SARS did. Every day the outbreak goes on makes it more likely that the virus could spread worldwide. China reported over 15,000 new cases of the infection in one day after a new methodology on how to categorize the infections was adopted.