(Adds analyst comment, updates shares, recasts first paragraph) April 23 (Reuters) - Inovio Pharmaceuticals said on Friday the U.S. government pulled the funding for a late-stage study testing its COVID-19 vaccine candidate and that it would now pursue conducting the trial largely outside the country. Shares of the drug developer slumped 26.7%, as the decision followed the U.S. Food and Drug Administration in September putting the Phase 3 portion of the mid-to-late stage trial on hold for more information on the device used to inject the shot. Inovio said on Friday depending on the results of its mid-stage trial, it would run the late-stage study for its vaccine candidate, INO-4800, with partners such as China’s Advaccine and the International Vaccine Institute (IVI). The U.S. Department of Defense will continue to fund its ongoing mid-stage study, the company said. “This decision is not a reflection of the awardee or product, rather a fast-moving environment associated with the former Operation Warp Speed on decisions related to future products,” the department informed the company. Inovio has lagged behind rivals in the race to develop a COVID-19 vaccine, with shots from Pfizer Inc and partner BioNTech SE, Moderna Inc and Johnson & Johnson receiving U.S. emergency use authorization. “With multiple authorized and robustly effective COVID vaccines available, we have long viewed INO’s window of opportunity to run a trial as somewhat narrow,” Piper Sandler analyst Christopher Raymond said. The company will now fund the trial either on its own and/or with help from another partner, Raymond said in a client note. Inovio did not immediately respond to a Reuters request for comment. Earlier this month, Inovio received $6.9 million in funding from the Coalition for Epidemic Preparedness Innovations (CEPI) to work with the International Vaccine Institute on an early-to-mid-stage trial for INO-4800 in South Korea. The company said it would continue to test its other vaccine candidate, INO-4802, targeting variants of the coronavirus.