What happened

Shares of Vaxart (VXRT -1.62%) 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.