Vaxart (VXRT -12.49%) started out 2021 with its stock skyrocketing. However, most of those early gains evaporated after the biotech announced preliminary results from an early-stage clinical study evaluating the company's experimental tablet COVID-19 vaccine. In this Motley Fool Live video, recorded on Feb. 3, contributors Keith Speights and Brian Orelli discuss whether or not investors should now bail on Vaxart stock.

This article represents the opinion of the writer(s), who may disagree with the "official" recommendation position of a Motley Fool premium advisory service. We're motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Keith Speights: Another big story is related to the coronavirus battle. That big story comes from Vaxart. The ticker there is VXRT. Vaxart is a clinical-stage biotech. They're evaluating a tablet COVID-19 vaccine, in phase 1 testing. This morning, Vaxart announced some preliminary results from that early stage test and they referred to the results as positive. It showed pretty solid T cell responses in around 75% of participants. But the big story was that the participants didn't show neutralizing antibodies and Vaxart stock plunged over 60% at one point earlier today. I think it's now down close to 50% or so. Brian, do you think this huge drop is warranted on this news?

Brian Orelli: Yeah. I think you've got to have neutralizing antibodies to be able to work. The way this works is they take the antibodies that out of the patients and in a laboratory test, they mix the antibodies with the virus and see if the virus can infect cells in the laboratory test tube, Petri dish. Basically, that's a surrogate for whether the antibodies, if the patient got infected, whether those antibodies would bind to the virus and eliminate the virus's ability to inject into the cells. I think that without neutralizing antibodies, it's hard to see how this is going to protect the patient.

Speights: Now, the T cell response, that's also good news, right?

Orelli: Right. Yes, but antibodies are your first line of defense and so I'm not sure that T cell responses is going to be good enough, and I don't know of any vaccine where there's a T cell response, but no antibodies and it works. Maybe there is and maybe somebody will come with some examples, but it seems unlikely to work in my opinion.

Speights: Yeah. I think you're not alone in that opinion. A stock doesn't sell off 50%, around 50% or so unless people think the news was really bad. However, this is, I won't say funny, but it's interesting anyway. Brian, the headline in Vaxart's press release was, "Vaxart announces positive preliminary data from phase 1 clinical trial" Not only that, I'm going to come down and there was a quote that struck me as just interesting. This is the CEO of Vaxart. He said that, "These results, together with the recent data from our peers, further raise our confidence in the success of VXA-CoV2-1 [which is their vaccine] and the broad potential of our platform." So this raises their confidence. Brian, what do you think?

Orelli: Yeah, I don't know. You see biotech CEOs all the time. They put "positive" in their press release headline and the shares go down because they are focusing on one thing that it was positive and investors are way more worried about something else that was negative. This is the problem with investing in unproven technologies. Vaxart had been bid up because it's a COVID-19 story. But their actual technology of making tablet-based vaccines hasn't been proven out and so I think the drop is definitely warranted because it puts a lot of questions over whether their platform actually works.

Speights: Yeah. Investors, viewers, just be aware that biotech CEOs, like other CEOs of other companies, sometimes try to spin the news and that's what we're seeing a little bit this morning. All along, I've followed Vaxart and I thought that its tablet vaccine approach was promising. But like you said, Brian, it's so early and there are so many hurdles to jump that I always had that reservation. Although I thought, hey, if it's successful, the stock could be huge. It could be a huge winner. An oral vaccine that's effective would be awesome. But that's why you usually just need to wait until these companies prove themselves a little bit in later-stage testing.

Orelli: Yeah. You need to buy small enough that it's not going to be a major hit if you hit a 50% drop in 1% of your stock, less than 1% of your portfolio and then it drops 50%, that's not a major hit to your overall portfolio.

Speights: Yeah. Any time I have discussed Vaxart personally, I would always say, look, this is only a consideration for really aggressive investors who are ready and willing to take on a lot of risks because it's certainly a risky stock and it proved that to be the case this morning.

Orelli: Of course, I felt the same way about Moderna before they proved out that they are [inaudible].

Speights: Sure, yeah.

Orelli: It does work the other way, too.

Speights: High risk, but high reward if all works out, right?