Vaxart (NASDAQ:VXRT) news for Monday isn’t good as the company faces a federal investigation over claims of its connection to the novel coronavirus Operation Warp Speed program.
The problems for VXRT stretch back to June when it said it was part of the program. Investors jumped on the news and sent Vaxart stock soaring higher. That one announcement boosted its stock from roughly $3 per share to almost $17 per share. At that same time, hedge fund Armistice Capital sold a large portion of its VXRT shares for massive profits.
However, the company only had limited involvement in Operation Warp Speed and isn’t receiving any funding from the program. Following that revelation, investors started filing lawsuits against the company. These claim that it misrepresented its involvement in Operation Warp Speed.
Vaxart is denying the allegations and is working to dismiss two of the lawsuits. However, it still faces a class-action one, as well as this new federal investigation. Despite these troubles, the company is moving forward with its coronavirus vaccine. It says it’s seen positive results in recent hamster trials, reports CNNBusiness.
A Vaxart spokesperson said the following to ABC News.
“The Vaxart non-human primate challenge study was organized and funded by Operation Warp Speed, as stated in the June 26, 2020 company press release. The statements made in that press release are accurate and any allegation to the contrary is baseless.”
VXRT stock was down 5.4% as of noon Monday.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.
