What happened

Shares of Biocryst Pharmaceuticals (NASDAQ:BCRX) were jumping 10.5% higher as of 3:43 p.m. EST on Tuesday, after rising more than 22% earlier in the day. The big gain stemmed from investors' anticipation that Biocryst could have greater opportunities with the spread of a new coronavirus in China.

So what

As of the latest reports, at least 291 people in the Chinese city of Wuhan have been infected with the coronavirus, with six confirmed fatalities, and the virus has begun to spread to other Chinese cities and even to other countries.

Pipette dropping blood into one of several test tubes

Image source: Getty Images.

Biocryst currently has one antiviral drug approved by the Food and Drug Administration. The drug, Rapivab, is used to treat acute uncomplicated cases of the flu in patients who are two years old and older. Biocryst also is evaluating the experimental drug galidesivir (BCX4430) in a phase 1 clinical study. Galidesivir has demonstrated promising potential in fighting several families of viruses, including coronaviruses.

However, Biocryst is a long way off from having an approved drug that could be used to combat the virus that's causing serious concerns in China. Today's jump in the company's share price could evaporate quickly.

Now what

It's not unusual for a biotech stock to jump after significant events that could open up new opportunities for a treatment in the company's pipeline. However, the more important thing for investors to watch with Biocryst is the pending FDA approval decision for berotralstat in preventing attacks of hereditary angioedema (HAE).

Biocryst filed for FDA approval of the drug in December. Assuming berotralstat wins approval, the company plans to launch the drug later this year.