Inovio Pharmaceuticals Inc. (INO) shares had a great run during the first half of this year, more than doubling to  $11.40 in June from the lows of $4.9 during January. News of Inovio’s head start in developing the Zika virus vaccine was the major contributor to the rally. But the euphoria has largely faded as evidence emerges that containing the virus may be much more difficult than anticipated.

Inovio’s Advantage

The most alarming challenge the from Zika virus infection is microcephaly in fetuses, which causes babies to be born with severe birth defects. As of today, no approved vaccines or treatment therapies exist for Zika disease. (For more, see Zika Plays Ready to Break Out.)

Though numerous pharmaceutical companies and academic research groups have announced dedicated plans for developing Zika virus vaccines, only Inovio and a U.S. government research center have managed to start human clinical studies. Inovio is developing its Zika vaccine, named GLS-5700, in collaboration with Korean company GeneOne Life Science, Inc.

Inovio initiated the first human study in June 2016 that included 40 patients from the U.S. and Canada. The second phase, expected to commence soon, will involve 160 adult patients from Puerto Rico. Half of the trial patients will take GLS-5700 Zika vaccine, while remaining half will be on placebo, a substance that has no therapeutic effect and is used as a control in testing new drugs.

Two-pronged Competition

While Inovio’s lead appears substantial, rivals may catch up fast. The National Institutes of Health (NIH) has also developed a Zika vaccine and commenced its clinical trial in August on 80 adults. And a dedicated team of researchers at Florida State University, Johns Hopkins University and the NIH discovered “existing drug compounds that can both stop Zika from replicating in the body and from damaging the crucial fetal brain cells that lead to birth defects in newborns.”

In addition to the development of newer drugs by competitors, the discovery of existing drugs could pose a larger threat to Inovio’s lead as the time to market would be minimal. This means that Inovio has limited time to commercialize potentially one of the most effective medicines for treating the Zika virus infection. (For more, see Zika Virus Vaccine Overturns Pharma Industry Playbook.)