Actions of Vaxart (NASDAQ: VXRT) skyrocketed 26.4% at 11:22 a.m. EDT Monday. The huge jump came after investment banker B. Riley FBR started hedging the stock with a buy price target of $ 22. This target price represented a premium of 176% compared to the closing price of Vaxart on Friday.
It is generally best to take analysts’ price targets with a grain of salt. On the other hand, investors can take advantage of understanding why analysts like or dislike a given security.
In this case, B. Riley FBR seems very optimistic about the prospects for the Vaxart COVID-19 oral vaccine candidate. This experimental vaccine was recently selected by the US Government’s Operation Warp Speed for funding and inclusion in a preclinical study.
Keep in mind, however, that it is too early to know if Vaxart will succeed. In April, the company announced encouraging results for its oral COVID-19 vaccine candidate in preclinical trials. However, the vaccine candidate has not yet reached clinical testing.
Vaxart hopes to move its oral COVID-19 vaccine candidate to a phase 1 study in the second half of 2020, potentially as early as this summer. Until this trial begins, the primary catalyst for the biotech stock will likely be the results of preclinical testing of its universal oral flu vaccine candidate. These preclinical tests are carried out in collaboration with Johnson & Johnson.