Vaxart (VXRT -5.79%) started last month on a sour note. The phase 1 trial data for its investigational coronavirus vaccine was disappointing, and its stock sank by 58% in a single trading session. The reason: Vaxart's candidate lacked one quality considered key for a successful vaccine.

But there was a bright spot within the trial data. And the company is relying on that bright spot as it advances the investigational vaccine into phase 2 trials during the second quarter. Now the question for investors is whether they should believe in Vaxart once again -- and buy shares of the clinical-stage biotech.

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So, first of all, what happened?

Here's the bad news: Vaxart's COVID-19 vaccine candidate didn't produce neutralizing antibodies in the participants in its phase 1 trial. Those particular types of antibodies are seen as important because they block infections. In their own early-stage studies, the vaccines developed by Pfizer (PFE -1.77%) and Moderna (MRNA -5.38%) both were shown to induce recipients to produce higher levels of neutralizing antibodies than are found in patients who have recovered from COVID-19. Those companies later reported vaccine efficacies of more than 94% in phase 3 clinical trials, en route to becoming the first ones to earn regulatory approval for their coronavirus vaccines.

Other companies that have advanced COVID-19 vaccine candidates into late-stage trials also have reported high levels of neutralizing antibody activity. So, investors viewed Vaxart's lack of this element as a big negative.

But as mentioned above, one positive point stood out in the report. Vaxart's investigational vaccine produced strong killer T cell responses. In fact, Vaxart said that these responses were the highest the company has ever seen in its clinical trials.

Killer T cells don't block infections, but they play a major role in fighting them -- and therefore preventing the spread of the infection throughout the body, explains an article in Nature on COVID-19 vaccine development. That's good for the patient because it usually translates into a mild illness instead of a serious case. It's also good for those around the patient: If killer T cells limit viral circulation, then an infected person may shed fewer viral particles. And that means a reduced likelihood that they will transmit the virus to others.

Handling new variants

Another advantage of killer T cells is their potential to handle new variants of concern -- i.e., strains with genetic changes that make them more transmissible or dangerous, or better able to evade the other lines of defense induced by current vaccines. These days, we can refer to the Brazilian, U.K., and South African strains. A report published in Cell Reports Medicine showed recovered coronavirus patients produce T cells that recognize 30 to 40 parts of the antigen. This opens the door to a broad immune system attack on the coronavirus -- even if some parts of it have mutated.

This could be great news for Vaxart and its candidate. But the big question is: Is robust T cell generation enough to make it an effective coronavirus vaccine? Or do we need a combination of neutralizing antibody production and T cell response? For that answer, we will have to wait on Vaxart's later-stage trials to offer us evidence.

Some investors may wonder why Vaxart's candidate has sparked so much interest in the investment community. After all, plenty of companies are closer to the vaccine race finish line.

The answer is that Vaxart's candidate has the potential to be a game-changer -- if it's effective enough. That's because its candidate is an oral vaccine, taken as a tablet. People will love avoiding a painful jab. But more importantly, a room-temperature-stable tablet makes storage and distribution much easier and cheaper. It's easy to imagine governments stocking up on such a product.

What about risk?

The biotech company has six other candidates in its pipeline, so in the medium term, it won't solely be reliant on getting a COVID-19 vaccine to market. But for now, Vaxart's share price performance is largely driven by developments in the coronavirus vaccine program.

As mentioned, we haven't yet seen a coronavirus vaccine candidate report efficacy based on T cell production. And that's why Vaxart stock remains high risk -- at least until it produces initial efficacy data. Vaxart also is advancing strain-specific candidates that could be used along with its original vaccine candidate. Positive data for those investigational vaccines could lower investors' risk.

Still, considering all of these points, I wouldn't buy this biotech stock in March -- unless I was a very aggressive investor. For the rest of us, the best place for Vaxart stock is on our watch lists.