What happened

Heat Biologics (NASDAQ:HTBX), a prerevenue biotech, is off to a strong start today. The company's shares spiked by as much as 46% in early-morning trading in response to a positive update for its experimental COVID-19 vaccine.

Specifically, Heat announced that its COVID-19 vaccine candidate exhibited compelling evidence of immunogenicity (the ability to provoke a body's immune response) in a preclinical (animal) study. Although the biotech's shares have cooled off a bit over the course of today's session, they are still up by a noteworthy 20% as of 10:56 a.m. EDT.

A small globe covered by a face mask that reads coronavirus.

Image Source: Getty Images.

So what

While Heat is well behind the leaders in the race to develop a COVID-19 vaccine, these positive preclinical data could open the door for a lucrative collaboration with a big-name pharma or perhaps a sizable government grant. The U.S. federal government has been extremely generous in terms of funding when it comes to developmental-stage coronavirus vaccines in general.

Now what

Is Heat's stock a worthwhile buy on this news? Under normal circumstances, preclinical data wouldn't exactly be a material event in the life of a biotech company. Preclinical data frequently don't pan out in human trials, after all.

However, the fact that Heat might now be in line for a large cash infusion from the U.S. government changes the situation entirely. Aggressive investors, in turn, might want to consider opening a small position in this emerging coronavirus play soon.