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Why Heat Biologics Stock Is Popping Today

By George Budwell – Aug 26, 2020 at 9:00AM

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A pre-print is sending the biotech's shares higher today.

What happened

Shares of the developmental biotech Heat Biologics (HTBX -1.09%) jumped by as much as 21% in pre-market trading Wednesday morning. The company's shares perked up in response to the release of a pre-print (a preliminary article that has yet to be peer-reviewed) discussing the animal data for its COVID-19 vaccine candidate. The pre-print is currently available on bioRxiv's website. 

Heat's COVID-19 vaccine candidate uses a cellular heat shock chaperone protein, glycoprotein 96 (gp96), to deliver the SARS-CoV-2 spike protein to the immune system. This novel vaccine reportedly triggered strong cell-mediated immune responses in the respiratory tissue of transgenic mice.

A doctor holding out a vial labeled as COVID-19 vaccine.

Image source: Getty Images.

So what

Although Heat won't have a vaccine ready for public consumption anytime soon, its vaccine candidate may end up playing a critical role in halting the ongoing pandemic. The key issue is that Heat's vaccine is designed to ramp up T-cell immunity -- not simply antibodies.

That's a big deal because recent studies have clearly shown that antibodies often do not confer long-term immunity to this particular virus. Heat, in short, may have a hidden gem on its hands with this T-cell targeting vaccine candidate.    

Now what

The bad news is that Heat doesn't expect to launch a phase 1 trial for this vaccine until early next year. By then, there could be multiple COVID-19 vaccines -- and therapies -- already on the market.

That doesn't mean that Heat's promising COVID-19 vaccine candidate won't find an audience if approved late next year or in 2022. But it certainly won't be part of the first wave of commercial-stage COVID-19 vaccines. Biotech investors, in turn, should probably keep this potentially lengthy timeline in mind before buying shares. 

George Budwell has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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