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Operation Warp Speed coronavirus vaccine efforts, Vaxart stock

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  • The Trump administration’s coronavirus vaccine program, called Operation Warp Speed, has been shrouded in secrecy since launching in May.
  • Some tiny biotechs have started to announce they have been selected as part of Operation Warp Speed, sending their stocks soaring.
  • The government has said that Operation Warp Speed selected 14 vaccine research programs, but it has declined to specify which companies are involved.
  • Warp Speed is the federal government’s effort to have 300 million doses of a safe and effective vaccine by January 2021.
  • Visit Business Insider’s homepage for more stories.

On Friday, a tiny San Francisco biotech made a bold claim.

The biotech called Vaxart said it was chosen by Operation Warp Speed, an effort from the Trump administration to speed up work on a coronavirus vaccine and make an immunization broadly available by early next year.

In reality, its vaccine candidate has just been selected for early research in primates. Other major companies are already testing coronavirus vaccines in people. Still, the stock more than doubled on Friday, before giving up some of its gains.

“When I read the news this morning, they made this sound like it was a major component of Operation Warp Speed,” said biotech investor Brad Loncar. “It’s not like this is some huge bet by the government on this technology. It’s just being folded into some animal studies.”

A spokesman at the Department of Health and Human Services, which oversees Warp Speed, declined to comment. Vaxart declined to make executives available for interviews and didn’t respond to written questions.

Operation Warp Speed’s goal is 300 million doses of a coronavirus vaccine by January

The US government launched Operation Warp Speed last month. It’s an effort spanning several federal agencies that aims to have 300 million doses of a safe and effective coronavirus vaccine by January 2021. The government said it selected 14 vaccine programs to initially focus on, with plans to cut that number in half over the next few months. But it hasn’t publicly identified the drugmakers and biotechs who are involved.

The New York Times reported on June 3 that the Trump administration had picked five vaccine projects for Operation Warp Speed, from Moderna, Oxford and AstraZeneca, Johnson & Johnson, Merck, and Pfizer.

Pfizer has publicly said that it’s involved with Operation Warp Speed and Moderna has confirmed its vaccine is part of the program. The US is also funding a vaccine being developed by GlaxoSmithKline and Sanofi, which was not included in the reported list of finalists.

Vaxart’s small size and lack of experience in bringing vaccines to market also raises questions about the company’s ability to meet the goals of Operation Warp Speed.

Robinhood’s most popular stock

The company, which went public in 2018 through a reverse merger, had 14 employees at the end of 2019. By mid-March, Vaxart was down to 10 workers, and the company said in a securities filings that its workforce “would be insufficient to commercialize our vaccine product candidates.”

“If they’re wanting to really get in the race they need more capability than what a company with 10 employees on their 10-K can possibly have,” veteran drug researcher Derek Lowe told Business Insider, referring to the company’s annual filing. 

Lowe said he does like the idea of trying as many platforms as possible against the coronavirus, including Vaxart’s oral tablet idea. But he also questioned why a biotech like Vaxart has not landed a partner company for its technology that could accelerate its work. Several big vaccine developers like GlaxoSmithKline, Merck, and Sanofi have partnered with many small drug companies on vaccine programs.

Vaxart’s most advanced vaccine program is an experimental flu vaccine that’s in mid-stage trials. It hasn’t developed any approved vaccines or gotten a candidate into large, late-stage trials, and doesn’t have manufacturing facilities.

Vaxart has benefited significantly from investor enthusiasm for its coronavirus claims. It started the year trading at around 36 cents per share, and traded on Friday around $8, an increase of more than 2,000%. On Friday, it was the most popular stock to buy on the trading app Robinhood, according to Robintrack.

Read more: The US will make a coronavirus vaccine free to ‘vulnerable’ Americans, a senior Operation Warp Speed official pledges

Another small biotech also touted its relationship with OWS, leading to a stock spike

It’s not the first time a small biotech has gotten a big boost by touting work with Warp Speed.

ImmunityBio and NantKwest, two biotechs run by billionaire Patrick Soon-Shiong, said they were selected to be part of Operation Warp Speed in a May 27 statement.

“ImmunityBio is honored to have been selected as one of the 14 companies for Operation Warp Speed and is committed to moving our vaccine candidate through the process to prevent people from contracting this deadly virus,” said Soon-Shiong, the CEO of ImmunityBio and NantKwest.

NantKwest, which is publicly traded, saw its shares jump 39% the day of that release. At the time, HHS wouldn’t say whether Soon-Shiong’s companies were involved with OWS. 

The US Biological Advanced Research and Development Authority agreed to fund a study of its vaccine on monkeys, Soon-Shiong said in a May 27 interview with Business Insider, when asked to describe NantKwest’s relationship with Operation Warp Speed. 

Like VaxArt, NantKwest has not produced any approved drugs. The biotech had been focused on treating cancer.

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