What happened

Shares of Vaxart (NASDAQ:VXRT) were 15.6% higher as of 11:06 a.m. EDT on Thursday after rising as much as 27.8% earlier in the day. The company didn't announce any new developments, but there are two likely factors behind today's big jump.

First, reports circulated on Wednesday that Vaxart registered a patent in Europe for its norovirus program. Second, some investors appeared to have begun buying the biotech stock on a pullback after Vaxart's announcement on Monday that the Food and Drug Administration has approved the start of a phase 1 clinical study of its oral COVID-19 vaccine candidate. The momentum that began yesterday continued today.

Four scientists looking at a touchscreen pad displaying "coronavirus"

Image source: Getty Images.

So what

The underlying reason behind Vaxart's rebound is that investors are bullish about the company's growth prospects.

That's understandable. Vaxart stands to become the first company to advance an oral COVID-19 vaccine into clinical testing in humans. There are several key advantages that an oral vaccine could potentially have over injected vaccine candidates in development. Those experimental vaccines must be refrigerated for transportation and storage; Vaxart's vaccine doesn't have to be. An oral vaccine would also be much more convenient to administer to patients. It's even possible that an oral vaccine could work better in some respects than injected vaccines. 

If Vaxart's oral COVID-19 vaccine works, it would bode well for the company's other oral vaccine programs focusing on norovirus, influenza, human papillomavirus, and respiratory syncytial virus. But it's still way too early to know how safe and effective Vaxart's coronavirus vaccine will actually be.

Now what

Investors will want to keep their eyes on Vaxart's progress with the phase 1 study of its oral COVID-19 vaccine. The company plans to begin enrollment this month. And it expects to report results from a challenge study in hamsters of its oral coronavirus vaccine in mid-October. In addition, results could soon be announced from a nonhuman primate challenge study being funded by the federal government's Operation Warp Speed.