Markets

Why Heat Biologics Stock Is Spiking Today

What happened

Heat Biologics (NASDAQ: HTBX), a prerevenue biotech, is off to a strong start today. The company's shares spiked by as much as 46% in early-morning trading in response to a positive update for its experimental COVID-19 vaccine.

Specifically, Heat announced that its COVID-19 vaccine candidate exhibited compelling evidence of immunogenicity (the ability to provoke a body's immune response) in a preclinical (animal) study. Although the biotech's shares have cooled off a bit over the course of today's session, they are still up by a noteworthy 20% as of 10:56 a.m. EDT.

A small globe covered by a face mask that reads coronavirus.

Image Source: Getty Images.

So what

While Heat is well behind the leaders in the race to develop a COVID-19 vaccine, these positive preclinical data could open the door for a lucrative collaboration with a big-name pharma or perhaps a sizable government grant. The U.S. federal government has been extremely generous in terms of funding when it comes to developmental-stage coronavirus vaccines in general.

Now what

Is Heat's stock a worthwhile buy on this news? Under normal circumstances, preclinical data wouldn't exactly be a material event in the life of a biotech company. Preclinical data frequently don't pan out in human trials, after all.

However, the fact that Heat might now be in line for a large cash infusion from the U.S. government changes the situation entirely. Aggressive investors, in turn, might want to consider opening a small position in this emerging coronavirus play soon.

10 stocks we like better than Heat Biologics
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Heat Biologics wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of June 2, 2020

 

George Budwell has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

HTBX

Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More