Please ensure Javascript is enabled for purposes of website accessibility

Why Vaxart Stock Skyrocketed Today

By Joe Tenebruso – Updated Jun 26, 2020 at 1:41PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The coronavirus vaccine maker will participate in a government-funded study.

What happened

Shares of Vaxart (VXRT -3.67%) soared on Friday after the biotech company said that its oral COVID-19 vaccine had been selected to receive funding from a federal government program aiming to deliver hundreds of millions of safe and effective coronavirus vaccine doses to Americans by January 2021. 

As of 1 p.m. EDT, Vaxart's stock was up 66% after surging as much as 128% earlier in the day. 

So what

Vaxart said its experimental vaccine, which is administered by tablet rather than by injection, will participate in a nonhuman primate (NHP) challenge study organized and funded by Operation Warp Speed, a program created by the Trump administration to "accelerate the development, manufacturing, and distribution of COVID-19 vaccines, therapeutics, and diagnostics," according to the U.S. Department of Health & Human Services. 

"We are very pleased to be one of the few companies selected by Operation Warp Speed, and that ours is the only oral vaccine being evaluated," Vaxart CEO Andrei Floroiu said in a press release.

A person is pointing up toward an upwardly sloping stock chart.

Vaxart's stock rocketed higher on Friday. Image source: Getty Images.

The study will test the effectiveness of Vaxart's oral COVID-19 vaccine candidate, which is designed to produce mucosal and systemic immune responses in patients. Floroiu says this approach could have certain advantages over other vaccines currently being developed.

"SARS-CoV-2, the coronavirus that causes COVID-19, is primarily transmitted by viral particles that enter through the mucosa -- nose, mouth, or eyes -- strongly suggesting that mucosal immunity could serve as the first line of defense," Floroiu said.

Moreover, Vaxart's oral vaccine could be easier to store and transport in large quantities. "Our vaccine is a room temperature-stable tablet, an enormous logistical advantage in large vaccination campaigns," Floroiu said.

Now what

Investors are taking Vaxart's inclusion in Operation Warp Speed as a vote of confidence for its oral vaccine candidate, and rightfully so. The program is designed to seek out promising potential vaccines and provide them with government funding to accelerate their development. 

Still, there are other promising vaccines in the program, including those being developed by Johnson & Johnson, AstraZeneca, and Moderna,  among others. There are also more than 100 other COVID-19 vaccines currently being developed around the world. 

So, while investors are understandably excited about Vaxart's recent progress, formidable competition still exists in the race for a COVID-19 vaccine. That makes Vaxart's stock a relatively high-risk investment.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Vaxart, Inc. Stock Quote
Vaxart, Inc.
$2.10 (-3.67%) $0.08

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.