PreMarket Prep Stock Of The Day: Vaxart

Amid the carnage in the technology sector over the last few sessions, the COVID-19 crisis has taken a backseat to a much-needed correction in the markets. However, there are still issues moving in response to the crisis.

One of those issues is Vaxart Inc VXRT and is the PreMarket Prep Stock Of The Day.

The Company: Vaxart is a biopharmaceutical company focused on the discovery and development of direct-acting antivirals to treat infections that affect patients globally. The company has three product candidates: Influenza, Norovirus and RSV Vaccine, an oral fusion protein inhibitor for the treatment and prevention of respiratory syncytial virus (RSV) infections, and BTA074, a topical antiviral treatment in for condyloma caused by human papillomavirus.

Initial Surge: Before the open on June 24, as the issue was wallowing at the $2.50 area, it had a nice boost when it was revealed the issue was set to join the Russell 3000 index. In that session on much heavier than average volume, it rallied from $2.66 to $3.19. That was actually the secondary catalyst for the issue's jaunt to $17.49 by July 14.

On June 25, the company announced it signed a Memorandum of Understanding with Attwill Medical Solutions LP (AMS) affirming the parties' intent to establish AMS as a resource for lyophilization development and large scale manufacturing including tableting and enteric coating for Vaxart's oral COVID-19 vaccine. AMS will be assigning dedicated resources and equipment for the scale-up and commercial production of the vaccine upon entering a formal agreement.

During that session, it nearly doubled to $6.26 on monster volume. In volatile fashion, it worked its way higher before ending that session at a four-year closing high of $16.97 on July 14.

Reality Check: As is so common on “news” moves similar to this, they do not hold up. The stocks are rented for a few days by momentum traders and when it runs out of suckers for buyers, it reverses course hard.

Beside profit-taking, another catalyst for the retreat may be the revelation of a shareholder lawsuit by multiple law firms, on the behalf of customers who suffered losses due to securities fraud. A large portion of the technical damage was done in late July as the issue slumped to end the month at $9.39.

After attempting to stabilize at the $10 area in the first few weeks of August, it had another leg lower as the lawsuits continued to mount, reaching its low for the decline on Sept. 2 ($4.53). It ended last week not far off that low at $4.93.

We Won't Get Fooled Again: Before today's open, the company announced its COVID-19 vaccine candidate induced potent systematic and mucosal immune responses in preclinical studies. After a surge in pre-market trading to $6.70, the issue has grappled with the overhead supply phenomena (investors stuck long the issue, attempting to exit on any signs of strength).

In a fairly tight range following a higher open, it made its current high and low for the day in the first hours of the session. As of 11:30 a.m. ET, it found buyers just above Friday’s closing price of $4.93 at S5.11. On the upside, buyers have not been to take the issue anywhere near its pre-market high as $5.69 stands as the high for the day.