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Why Arcturus Therapeutics Stock Was Up 16% Thursday

By Jim Halley – Dec 16, 2021 at 8:32AM

Key Points

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The biotech stock climbed more than $5 a share in early trading Thursday.

What happened

Arcturus Therapeutics (ARCT -0.26%), which focuses on clinical-stage messenger RNA (mRNA) medicines, saw its shares rise 16% on Thursday. The stock closed at $35.52 on Wednesday, then opened at $38 today and rose to as high as $41.15 by midmorning. The stock has a 52-week high of $124 and a low of $24.87, and is down more than 7% so far this year.

Doctor holding and showing potential Covid-19 vaccine vial in laboratory after medical research and test.

Image source: Getty Images.

So what

The biotech company gave an update about studies of ARCT-154 and ARCT-165, two of its mRNA COVID vaccine candidates, that it is evaluating as a primary vaccine and as a booster for the Comirnaty vaccine produced by Pfizer and BioNTech. The preliminary results showed that the first 8 of 12 participants in the ARCT-154 study and the first 9 of 12 participants in the ARCT-165 study had increased antibodies to fight COVID and neutralization against various COVID variants, including the alpha, beta, gamma, and delta strains.

Arcturus said it also plans to evaluate the trials' participants for antibody activity against the omicron variant and expects to have that data in the first quarter of 2022.

Now what

It's great news for Arcturus, but it's also important to note there is significant competition regarding COVID vaccines. However, the company's Lunar lipid-mediated delivery platform could ultimately prove to be more valuable against other diseases. Basically, mRNA therapies can be used to replace proteins to treat diseases like cystic fibrosis that are caused by a lack of proteins or by defective ones.

The biotech stock had been a favorite of ARK Invest's Cathie Wood, and in the short term, there's a possibility the stock could continue to surge if retail investors force a short squeeze. The stock is still a lot closer to its 52-week low, so this may provide a decent entry point for investors.

However, in the long term, there's plenty of risk associated with any company such as Arcturus that has only $413.9 million in cash (enough, the company says, for two years of operations) and has lost $54.1 million in the last quarter.

Jim Halley owns Pfizer. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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