What happened 

Shares of Veru (VERU -7.57%) jumped 38.4% on Tuesday following positive analyst commentary. 

So what 

H.C. Wainwright analyst Yi Chen says investors should buy Veru's shares following the biotech company's promising phase 2 clinical trial results for VERU-111, its investigational oral drug for COVID-19 patients at high risk for acute respiratory distress syndrome.

Chen boosted his price forecast for Veru's stock from $12 to $17 after hospitalized COVID-19 patients treated with VERU-111 saw an 81% reduction in death or respiratory failure compared to those who received a placebo. 

A person is pointing to an upwardly sloping stock chart.

Veru's stock price rose sharply on Tuesday. Image source: Getty Images.

Chen is optimistic that these positive results will allow Veru to eventually obtain regulatory authorization for VERU-111 as a potentially life-saving treatment for hospitalized COVID-19 patients.

Now what 

After its sharp gains on Tuesday, Veru's stock price is now trading roughly 13% above Chen's target price. Still, if the biotech can successfully develop VERU-111, there would likely be strong demand for the oral drug, at least until the coronavirus pandemic subsides. More gains could lie ahead for Veru's shareholders if VERU-111 proves both safe and effective in the phase 3 study the company expects to begin in April.