Virpax Pharmaceuticals

Kurta Law is investigating brokers who recommended that their clients purchase shares of Virpax Pharmaceuticals. This investment came with substantial risks that made it unsuitable for many investors. These risks appear in the prospectus, the SEC filing that companies use to disclose their business strategy and related risks prior to offering the securities for sale. Unsuitable investments violate FINRA Rule 2111 and Regulation Best Interest, and investors who incur losses may be able to recover via FINRA arbitration.

If your broker recommended that you invest in Virpax Pharmaceuticals, you may have a claim against the firm through FINRA arbitration.  FINRA arbitration offers a quicker and cheaper remedy for investors than suing in civil court. Contact (877) 600-0098 or email info@kurtalawfirm.com to speak to a securities attorney for free today.

What is Virpax Pharmaceuticals?

According to its website, Virpax Pharmaceuticals is a specialty pharmaceutical company focused on developing a new type of local anesthetic, with an emphasis on non-addictive tendencies.

At the time of the prospectus, Virpax Pharmaceuticals had a portfolio of preclinical drugs and no reason to suggest that any of these drugs would make it to market. Developing these drugs is incredibly time-consuming and capital-intensive. Investing in companies at this stage is exceedingly risky, as further trial research could unveil previously unknown, and dangerous, side effects.

Investors should also know that Virpax Pharmaceuticals is registered as an emerging growth company, meaning that it can make limited disclosures in its prospectus. Less information generally means more risk.

Virpax Pharmaceuticals Stock

Virpax Pharmaceuticals (VRPX) investments involve a high degree of risk, according to the company’s prospectus. Initially offered at $10.00 per share, the stock closed at $178.40 per share on August 23, 2021. Recently, the stock traded at $4.16 per share. This massive drop in value was not surprising, given the risks clearly disclosed in the company’s prospectus.

Risks Associated With Virpax Pharmaceuticals Investments

Brokerage firms that approve an investment are required to understand the risks associated with an investment. Furthermore, brokers must accurately represent the risks associated with certain investments.

The prospectus states at the beginning of its “Risk Factors” section: “We are a preclinical stage biopharmaceutical company with a limited operating history and have incurred losses since our formation. We incurred net losses of approximately $3.3 million and approximately $2.6 million for the years ended December 31, 2019 and 2018, respectively, and incurred net losses of approximately $3.6 million and approximately $2.6 million for the nine months ended September 30, 2020 and 2019, respectively.”

Still being in the pre-clinical trial phase, the was no guarantee that any of these drugs would ever reach the market, and if these drugs failed to acquire the necessary approvals, Virpax would be left in a significantly poor financial situation.

Additionally, even if these drugs did successfully progress through clinical trials and receive the necessary FDA approval, Virpax admits that its estimates regarding the market for these drugs could be overstated: “Even if we obtain significant market share for any product candidate, if approved, if the potential target populations are smaller than we anticipate, we may never achieve profitability without obtaining marketing approval for additional indications.”

Finally, whatever success Virpax observed through its pre-clinical studies could not be said to indicate future success: “The results of preclinical studies, early clinical trials or analyses of our product candidates may not be predictive of the results of later-stage clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials.”

Other Risks Associated With Commercialization:

The risks associated with this type of investment do not end in the laboratory. Besides the scientific proof that Virpax Pharmaceuticals still required, the prospectus stated that it would have to overcome the following business hurdles to successfully commercialize.

• Securing substantial additional funding.
• Receiving the necessary marketing approval.
• Developing and maintaining successful strategic relationships.
• Fending off strong competition that already exists in both the biomedical and pharmaceutical industries.
• Adapting to changing regulations.
• Building a strong intellectual property portfolio.
• Gaining broad market acceptance for product candidates.
• Building and maintaining appropriate sales, distribution, and marketing capabilities through third parties.

Failure of any one of these goals could result in a total business failure and a complete loss for investors.

ThinkEquity Underwriter

ThinkEquity served as the underwriter of Virpax Pharmaceuticals. Investors should know about this broker’s potential conflicts of interest. An underwriter should keep potentially overly risky investments from trading on the public stock market. But because underwriters make money by bringing new stocks to market, they may be motivated to overlook certain risks.

What Can I Do If I Suffered Losses?

If you lose money investing in Virpax Pharmaceuticals, consider reaching out to a Kurta Law securities attorney. Our securities attorneys have 5-star reviews on Google and a proven track record when it comes to securing fair settlements for our clients. Call (877) 600-0098 or email info@kurtalawfirm.com.