Shares of clinical-stage vaccine developer Vaxart (VXRT 11.11%) are up again today, gaining 12.34% to $9.83 apiece as of 2:30 p.m. EDT. The stock is up 21% over the past five trading days due to greater capital inflows after the company released encouraging second-quarter earnings on Aug. 5.
Vaxart managed to raise $36.2 million during the quarter via issuing new stock -- bringing its cash balance to $177.3 million. That is quite significant for a company with a market cap just north of $1 billion. In addition, the company received clearance from the U.S. Food and Drug Administration to move into phase 2 clinical trials for its experimental oral coronavirus vaccine.
The vaccine failed to induce noticeable neutralizing antibody levels in phase 1, leading many investors to abandon the stock. But Vaxart is far from a one-trick pony. With solid funding, the company can diversify its pipeline into other areas to make up for its coronavirus shortfall. Subsequent to Q2, Vaxart signed a worldwide licensing agreement with Altesa Biosciences for its experimental antiviral Vapendavir. If approved, Vaxart could receive up to $130 million in milestone payments before royalties. What's more, it is also running a placebo-controlled booster study to test its norovirus vaccine candidate.
The small-cap biotech is still down nearly 60% from its highs in February before clinical data on its coronavirus vaccine candidate came out. The company still has a series of corporate problems that remain unresolved, such as a federal investigation for misrepresenting its role in Operation Warp Speed. Furthermore, even if approved, its coronavirus vaccine candidate is becoming redundant due to an oversupply of authorized vaccines in the country. As a result, I would be careful about getting too excited about the biotech's potential.