Robinhood Markets is the company behind the Robinhood investment platform. Robinhood is particularly popular with the younger generation and has received praise for its efforts to “democratize finance”. Thanks to his app, many who had never invested in stocks before are now actively doing so. When you consider that the stock market is still one of the best wealth generators for the common man, that’s not a bad thing.

That said, Robinhood investors aren’t perfect, and while the list of the company’s 100 most popular stocks on the platform has some excellent selections, others aren’t that great. Here are two popular Robinhood stocks that I wouldn’t buy with free money: Okcugen (NASDAQ: OCGN) and Inovio Pharmaceuticals (NASDAQ: INO).

1. Ocugen

Ocugen – a clinical stage biotech company that currently has no commercialized products – is playing in the coronavirus vaccine market. It’s not necessarily a losing strategy, especially for a company this size; The current market capitalization is only $ 1.45 billion. There is still some blank space in the COVID-19 vaccine market, particularly in developing countries and with the advent of newer varieties of the disease.

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If Ocugen receives the Emergency Use Authorization (EUA) from the US Food and Drug Administration for his candidate and even generates $ 1 billion in sales, it would be a big win for the company. However, there are a few important points to keep in mind. First, the company signed an agreement to jointly develop and commercialize its candidate Covaxin with India-based Bharat Biotech. While Ocugen will hold the commercial rights to the vaccine in the US and Canada (pending approval), it will retain only 45% of Covaxin’s profits in those countries.

Second, the prospects of an early EUA in the US for Covaxin are as good as gone. As recommended by the FDA, Ocugen is now likely to file a biologics application that will take several months longer to review than an EUA. Third, Covaxin’s ability to gain market share in this competitive environment is dubious. In a Phase 3 clinical study conducted in India with 25,798 participants, the vaccine candidate was found to be 77.8% effective against COVID-19. Its effectiveness against the rapidly spreading delta variant was 65.2%.

In the meantime they are from. developed vaccines Pfizer, Modern, and Novavax have all shown an overall effectiveness of 90% or greater. Could Covaxin’s overall effectiveness be at least partially less because the late-stage study was conducted in India, where the Delta variant originated? Maybe, but other vaccines including that of. displaced Johnson & Johnson, have also shown potency against this variant. Put all of this together and add the usual risks Biotech companies (including potential unforeseen clinical and regulatory setbacks), Ocugen seems far too risky to invest in right now.

2. Inovio Pharmaceuticals

Inovio Pharmaceuticals also hopes to enter the COVID-19 market with its candidate INO-4800. However, the biotech’s prospects are even worse than Ocugen’s. Inovio faces at least two major challenges. First, the company is unable to conduct a Phase 3 clinical trial in the US because regulators have raised concerns about the proprietary device it uses to deliver its Cellectra 2000 vaccine.

Second, the US government withdrew funding for the Phase 3 portion of its Phase 2/3 study for INO-4800. As a clinical-stage biotech, Inovio is not generating product sales, and while it received grants last year to support its coronavirus-related efforts, the company will have a hard time getting additional ones with several vaccines that are now widely available Gaining third-party funding. Party grants.

So is the INO-4800 destined to stay in Inovio’s late-stage pipeline forever? Not necessarily. The company plans to conduct a phase 3 clinical trial in Asia and South America in collaboration with Advaccine Biopharmaceuticals Suzhou. The trial, due to start before the end of summer, will test the safety and effectiveness of two doses of the vaccine candidate given one month apart. In theory, Inovio could also make decent sales on INO-4800 given the advent of newer variants of the virus. However, until the phase 3 study is completed, it is impossible to predict how much the coronavirus vaccine market will still be able to gain.

Time isn’t on Inovio’s side, and betting that the company’s master plan comes true seems speculative. In short, it would be best to stay away from this company – at least for now.

This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all think critically about investing and make decisions that will help us get smarter, happier, and richer.