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Covid-19 vaccine company under federal investigation after allegedly misrepresenting its role in government program Operation Warp Speed

California biotech company Vaxart, which is working on a Covid-19 vaccine, is under federal investigation and is being sued by a number of i...

Posted: Oct 18, 2020 12:05 PM

California biotech company Vaxart, which is working on a Covid-19 vaccine, is under federal investigation and is being sued by a number of investors for allegedly exaggerating its involvement in the US government's Operation Warp Speed program for developing Covid-19 vaccines and treatments.

Vaxart stated in an October 14 Securities and Exchange Commission filing that it's being investigated by the SEC and federal prosecutors, and that it was served with a grand jury subpoena in July from the US District Court for the Northern District of California.

In June, Vaxart issued a press release that said "Vaxart's Covid-19 Vaccine Selected for the US Government's Operation Warp Speed." The news helped propel Vaxart's stock price to nearly $17, up from approximately $3, and hedge fund Armistice Capital, which partly controlled Vaxart, sold shares for a profit of more than $200 million, according to its SEC filings.

A few weeks before the announcement, Vaxart granted amendments to the warrants agreements, which allowed Armistice to sell almost all of their stock, which they did once the stock price skyrocketed.

In July, the US Department of Health and Human Services (HHS) told the New York Times that it had not entered into a funding agreement or negotiations with Vaxart. Armistice and HHS did not respond to requests for comment.

Vaxart has not been chosen by Operation Warp Speed to receive research funding, but instead had limited involvement, HHS told the New York Times in July. Vaxart's vaccine, an oral tablet, was only involved in preliminary studies on primates sponsored by Warp Speed.

In a statement to CNN Business Saturday, the company said, "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."

In its October SEC filing, Vaxart wrote that it has provided documents called for by the subpoena to demonstrate its role in Operation Warp Speed. "The company has voluntarily provided documents requested by the SEC and is cooperating with this informal inquiry," it stated.

Vaxart and its board have been sued several times by shareholders who accuse the company of allegedly inflating Vaxart's stock price by misrepresenting its role in Operation Warp Speed. Vaxart addressed those lawsuits in its filing, saying that it's seeking to have two of the suits dismissed, while another class-action suit is still proceeding.

On October 14, Vaxart announced encouraging results from its study on hamsters that received oral dosages of its Covid-19 vaccine.

The stock was down 3.5%, to approximately $6, as of Friday evening.

California Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 903684

Reported Deaths: 17343
CountyConfirmedDeaths
Los Angeles2989376989
Riverside657571279
San Bernardino623531072
Orange583261444
San Diego54314868
Kern33775416
Fresno30590436
Sacramento25264484
Santa Clara24014388
Alameda23215460
San Joaquin21630489
Contra Costa18523241
Stanislaus17572396
Tulare17495286
Ventura14192164
Imperial12700336
San Francisco12069140
Monterey1132189
San Mateo11075159
Santa Barbara9760120
Merced9465155
Sonoma9163134
Kings821883
Solano728674
Marin7057128
Madera498174
San Luis Obispo414132
Placer408857
Yolo316658
Butte305952
Santa Cruz277125
Napa194215
Shasta184630
Sutter183712
San Benito143615
El Dorado13154
Yuba129310
Mendocino112421
Tehama8628
Lassen7661
Lake68915
Glenn6573
Nevada6088
Humboldt5629
Colusa5506
Calaveras34218
Amador32416
Tuolumne2684
Inyo22715
Siskiyou1930
Del Norte1781
Mono1782
Mariposa782
Plumas680
Modoc290
Trinity260
Sierra60
Alpine30
Unassigned00
Chico
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Oroville
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Paradise
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Chester
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Red Bluff
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Willows
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Fire danger will be extreme Sunday-Monday as the biggest dry wind event of the season takes shape. A widespread freeze in the Sierra-Cascades as low as single-digit values possible Sunday night. Mild & sunny weather after Tuesday.
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