Vaxart, Inc. (NASDAQ:VXRT) - Oral Vaccine Platform Offers Promising Path to Address Major Public Health Challenges

Published on September 24, 2024 | Ticker: VXRT

Vaxart, Inc. (NASDAQ:VXRT) is a clinical-stage biotechnology company primarily focused on the development of oral recombinant vaccines based on its proprietary Vector-Adjuvant-Antigen Standardized Technology (VAAST) platform. The company is developing prophylactic vaccine candidates that target a range of infectious diseases, including norovirus, coronavirus including COVID-19, and influenza. Vaxart is also generating preclinical data for its first therapeutic vaccine candidate targeting cervical cancer and dysplasia caused by human papillomavirus (HPV).

Business Overview

Vaxart was originally incorporated in California in 2004 under the name West Coast Biologicals, Inc. The company changed its name to Vaxart, Inc. in 2007 and reincorporated in Delaware. In 2018, Vaxart completed a reverse merger with Aviragen Therapeutics, Inc., with Vaxart surviving as a wholly-owned subsidiary.

Vaxart's primary focus is on developing its proprietary oral vaccine platform, which is designed to generate broad and durable immune responses that may protect against a wide range of infectious diseases and may be useful for the treatment of chronic viral infections and cancer. The company's investigational vaccines are administered using a room temperature-stable tablet, rather than by injection.

Vaxart's pipeline includes the following key programs:

Norovirus Vaccine

: Norovirus is the leading cause of acute gastroenteritis in the United States, contributing to 109,000 hospitalizations and 900 deaths annually. Vaxart is developing a bivalent vaccine candidate designed to protect against both the GI.1 and GII.4 norovirus genotypes. In 2023, the company reported positive topline data from a Phase 2 dose-ranging study and a Phase 2 GI.1 norovirus challenge study. Vaxart plans to meet with the FDA in mid-2024 to discuss potential next steps, which may include a Phase 2b study and a GII.4 challenge study.

COVID-19 Vaccine

: Vaxart is developing an oral pill COVID-19 vaccine candidate, VXA-CoV2-1.1-S, which expresses the SARS-CoV-2 spike protein. In 2022, the company reported positive topline data from a Phase 2 study evaluating the vaccine's ability to boost immune responses in individuals previously vaccinated with an mRNA COVID-19 vaccine. Vaxart was recently awarded a $9.3 million contract from the Biomedical Advanced Research and Development Authority (BARDA) to support a Phase 2b clinical trial comparing its XBB COVID-19 vaccine candidate to an mRNA comparator.

Influenza Vaccine

: Vaxart has completed a Phase 2 challenge study of its H1N1 flu vaccine candidate, which demonstrated a 39% reduction in clinical disease relative to placebo. The company is also developing novel vaccine constructs containing its own antigens to create a universal influenza vaccine candidate.

HPV Therapeutic Vaccine

: Vaxart is developing a therapeutic oral vaccine candidate targeting HPV 16 and HPV 18, the two strains responsible for 70% of cervical cancers and precancerous cervical dysplasia. The company has tested its HPV 16 vaccine candidate in mouse models, demonstrating tumor cell killing and a significant reduction in tumor volume.

Financials

For the full year 2023, Vaxart reported annual revenue of $7.4 million, down from $10.2 million in 2022. The decrease was primarily due to a decline in non-cash royalty revenue related to the sale of future royalties on Inavir sales in Japan. Annual net loss for 2023 was $82.5 million, compared to a net loss of $92.3 million in 2022.

Vaxart's annual operating cash flow in 2023 was -$70.5 million, and its annual free cash flow was -$72.3 million. The company's negative cash flows reflect its ongoing investment in research and development activities to advance its vaccine pipeline.

As of March 31, 2024, Vaxart had $36.7 million in cash, cash equivalents, and investments. The company believes its current cash runway will fund its operations into the late fourth quarter of 2024. Vaxart plans to raise additional capital through the sale of equity, debt financing, government programs, or strategic alliances to support its continued operations and pipeline development.

For the first quarter of 2024, Vaxart reported revenue of $2.2 million, up from $0.7 million in the same period of 2023. The increase was primarily due to $1.6 million in revenue recognized from the company's contract with BARDA. Vaxart's net loss for the first quarter of 2024 was $24.4 million, compared to a net loss of $25.1 million in the first quarter of 2023.

Vaxart's operating cash flow in the first quarter of 2024 was -$21.2 million, and its free cash flow was -$21.3 million. The company's negative cash flows reflect its ongoing investment in research and development activities, including the preparation for the upcoming Phase 2b COVID-19 vaccine trial.

Liquidity

In September 2021, Vaxart entered into a Controlled Equity Offering Sales Agreement, under which the company may offer and sell up to $100 million in shares of its common stock. As of March 31, 2024, the company had approximately $68.9 million in net proceeds still available under this agreement.

In January 2024, Vaxart also entered into a securities purchase agreement with RA Capital Healthcare Fund, L.P., pursuant to which the company sold 15.4 million shares of common stock for gross proceeds of $10 million.

Risks and Challenges

Vaxart faces several risks and challenges in the development and commercialization of its vaccine candidates, including:

- Uncertainty in the clinical development and regulatory approval process: Vaxart's vaccine candidates are in various stages of clinical development, and there is no guarantee that they will successfully complete clinical trials and obtain regulatory approval.

- Competition from other vaccine developers: Vaxart's vaccine candidates face competition from other companies developing oral, intranasal, and injectable vaccine technologies.

- Reliance on third-party manufacturers and suppliers: Vaxart relies on contract manufacturing organizations and other third-party suppliers for the production of its vaccine candidates, which could disrupt its operations if these partners experience issues.

- Potential for adverse events or safety concerns: As with any vaccine development, Vaxart's candidates may experience adverse events or safety concerns that could delay or halt their development.

- Ability to secure additional funding: Vaxart will need to raise additional capital to support its ongoing operations and pipeline development, and there is no guarantee that it will be able to do so on favorable terms or at all.

Outlook

Vaxart is focused on advancing its pipeline of oral vaccine candidates and securing the necessary funding and regulatory alignment to support its development efforts. Key upcoming milestones include:

- Norovirus Vaccine: Vaxart plans to meet with the FDA in mid-2024 to discuss potential next steps for its norovirus vaccine program, which may include a Phase 2b study and a GII.4 challenge study.

- COVID-19 Vaccine: The company expects to initiate its Phase 2b clinical trial evaluating its XBB COVID-19 vaccine candidate against an mRNA comparator as early as the second quarter of 2024, subject to securing additional funding and regulatory alignment.

- Influenza Vaccine: Vaxart continues to develop novel vaccine constructs containing its own antigens to create a universal influenza vaccine candidate.

- HPV Therapeutic Vaccine: The company remains engaged in discussions with regulatory agencies, governments, non-governmental organizations, and other potential strategic parties to determine the best way to progress its HPV program.

Conclusion

Vaxart's proprietary oral vaccine platform offers a promising approach to addressing major public health challenges, such as norovirus, COVID-19, and influenza. The company's pipeline of vaccine candidates has demonstrated positive results in early-stage clinical trials, and Vaxart is working to advance these programs through the regulatory process and secure the necessary funding to support their development.

While Vaxart faces several risks and challenges, the company's focus on execution and its passionate team of scientific experts position it well to capitalize on the significant opportunities in the vaccine market. As Vaxart continues to generate data and progress its pipeline, investors will want to closely monitor the company's progress and its ability to secure the resources needed to bring its innovative vaccine solutions to patients around the world.

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