Executive Summary / Key Takeaways

• Vaxart is a clinical-stage biotechnology company focused on developing oral recombinant protein vaccines via its proprietary VAAST platform, aiming to address limitations of traditional injectable vaccines through mucosal immunity and convenient tablet delivery.
• The company's lead COVID-19 program, supported by a significant BARDA award up to $460.7 million, has initiated dosing in the large 10,000-participant Phase 2b comparative trial following the lifting of a temporary stop work order and BARDA approval.
• The norovirus program is advancing with a Phase 1 study evaluating potentially more potent second-generation constructs, with topline data expected mid-2025, which could be a catalyst for partnership discussions.
• Despite progress, Vaxart faces significant financial challenges, with a cash runway projected into Q1 2026, necessitating further capital raises or partnerships, and the company is addressing NASDAQ listing compliance through a proposed reverse stock split.
• Key catalysts to watch include the mid-2025 norovirus Phase 1 data readout and ongoing progress and potential interim data from the large COVID-19 Phase 2b study.

A Differentiated Approach in the Vaccine Landscape

Vaxart, Inc. is carving out a unique position within the competitive vaccine industry by focusing on the development of oral recombinant protein vaccines delivered via a convenient tablet. At its core is the proprietary Vector-Adjuvant-Antigen Standardized Technology (VAAST) platform, designed to overcome some of the inherent limitations of traditional injectable vaccines, such as the need for cold chain storage, the risk of needle-stick injuries, and the primary induction of systemic rather than mucosal immunity.

The company's strategic vision centers on leveraging the VAAST platform to generate broad and durable immune responses, particularly at mucosal surfaces like the nose, mouth, and intestines – the primary entry points for many infectious pathogens. By stimulating mucosal immunity, Vaxart aims to potentially block infection and transmission more effectively than vaccines that primarily induce systemic immunity. The tablet format offers tangible benefits, including ease of administration, potential for improved patient compliance (especially for those with needle aversion), and simplified logistics and distribution, as the tablets are designed to be room temperature stable. While specific, universally applicable quantitative benefits like a fixed percentage cost reduction or yield improvement across all candidates are not detailed, the strategic intent is clear: to offer a more accessible, potentially more effective, and easier-to-deploy vaccine option. Early data from the platform's application, such as the 85% relative decrease in viral shedding observed in the Phase 2 GI.1 norovirus challenge study, hint at the potential for reduced transmission, a key differentiator.

Vaxart operates within a vaccine market dominated by large pharmaceutical companies like Pfizer (PFE), Moderna (MRNA), and Merck (MRK), which primarily utilize established injectable or newer mRNA technologies. These giants benefit from vast scale, extensive commercial networks, and deep financial resources, reflected in their significantly higher revenues, positive operating margins (PFE ~23%, MRNA ~-122%, MRK ~35% TTM operating margins vs. VXRT's -89% TTM), and robust cash flow generation. Novavax (NVAX), another protein-based vaccine developer, operates at a larger scale than Vaxart but also faces profitability challenges (NVAX ~-36% TTM operating margin). Vaxart's competitive positioning relies heavily on its technological differentiation – the oral, mucosal-targeting tablet. While its clinical programs are generally in earlier stages compared to the approved products or late-stage candidates of larger rivals, the potential for a differentiated immune response and logistical advantages represents its core competitive moat. The company's strategy involves pursuing indications with significant unmet needs (like norovirus, where no approved vaccine exists) and leveraging government partnerships, such as the substantial BARDA award for COVID-19, to fund large, pivotal trials that would otherwise be prohibitively expensive. Customer dynamics favor ease of use and accessibility, areas where Vaxart's tablet could excel, while supplier dynamics, particularly for clinical trial materials and manufacturing, represent potential dependencies that could impact timelines and costs, a vulnerability compared to vertically integrated large pharma.

Pipeline Progress and Strategic Focus

Vaxart's pipeline is anchored by its lead programs in COVID-19 and norovirus, alongside promising preclinical work in avian influenza and human papillomavirus (HPV).

The COVID-19 program has received a significant boost through a partnership with the U.S. government. Following an initial $9.3 million contract for planning activities, Vaxart was awarded up to $460.7 million by HHS BARDA through the ATI-RRPV contract under Project NextGen. This substantial funding is allocated to conduct a large, approximately 10,400-participant Phase 2b comparative study evaluating Vaxart's oral pill COVID-19 vaccine candidate against an approved mRNA comparator. The study is designed to assess relative efficacy against symptomatic and asymptomatic disease, as well as systemic and mucosal immune induction and safety over 12 months. Enrollment began in September 2024 with a 400-participant sentinel cohort, which completed enrollment in November 2024. An independent DSMB reviewed the 30-day safety data in January 2025 and recommended the study proceed without modifications, underscoring a favorable safety profile to date. Although the 10,000-participant portion faced a temporary stop work order in February 2025, this was lifted in April 2025, and Vaxart received BARDA approval to initiate dosing on May 15, 2025, with dosing commencing on May 27, 2025. Enrollment for this large cohort is estimated to take approximately five to six months. The strategic importance of this trial cannot be overstated; it represents a pivotal opportunity to demonstrate the potential advantages of Vaxart's oral platform head-to-head against the current standard of care with significant government backing.

The norovirus program targets a widespread cause of acute gastroenteritis with a substantial economic burden ($10 billion annually in the U.S.) and no approved vaccine. Vaxart's first-generation bivalent candidate showed promising results in a Phase 2 GI.1 challenge study, demonstrating a statistically significant 29% relative reduction in infection and an 85% relative decrease in viral shedding, along with strong mucosal and systemic immune responses. Following constructive feedback from the FDA in the latter half of 2024 regarding correlates of protection, Vaxart developed new, second-generation norovirus constructs. Preclinical data suggest these new constructs are more potent, designed for higher antigen expression in the intestine, potentially leading to substantially improved immune responses. A Phase 1 open-label study comparing these second-generation constructs head-to-head against the first-generation was initiated in March 2025, with topline data anticipated in mid-2025. This data readout is a critical near-term catalyst, as positive results could validate the enhanced potency of the new constructs and potentially accelerate partnership discussions. Additionally, a Phase 1 study in lactating mothers, partially funded by the Bill & Melinda Gates Foundation, yielded positive topline results in April 2024, showing significant increases in norovirus-specific antibodies in breast milk (4-fold for GI.1, 6-fold for GII.4 in the high dose group), suggesting potential for passive transfer of immunity to infants. The path forward for the norovirus program, including a potential Phase 2b study as early as H2 2025 and Phase 3 in 2026, is contingent on successful Phase 1 data and securing additional funding or a partnership.

Beyond the lead programs, Vaxart continues preclinical work on an avian influenza vaccine candidate, which demonstrated 100% protection against death in a ferret challenge model, and an HPV therapeutic vaccine candidate targeting strains responsible for 70% of cervical cancers, showing promising immune-stimulating and antitumor activity in preclinical models. These represent potential future pipeline expansion opportunities, though they require further investment to advance towards clinical trials.

Financial Health and Outlook

Vaxart's financial position reflects its status as a clinical-stage biotechnology company with no product sales, relying primarily on external funding. For the three months ended March 31, 2025, total revenue increased significantly to $20.876 million compared to $2.181 million in the same period of 2024. This surge was predominantly driven by a substantial increase in revenue from government contracts, rising from $1.596 million in Q1 2024 to $19.297 million in Q1 2025, primarily due to activities under the 2024 ATI-RRPV BARDA contract. Non-cash royalty revenue related to the sale of future royalties also increased, from $0.585 million to $1.579 million, although these amounts are passed through to HCRP.

Operating expenses totaled $35.811 million in Q1 2025, up from $26.251 million in Q1 2024. This increase was primarily attributable to a 62% rise in research and development expenses, reaching $30.744 million, driven by increased clinical trial costs for the COVID-19 and norovirus programs. General and administrative expenses decreased by 30% to $5.067 million, reflecting reductions in personnel costs, stock-based compensation, and legal fees. The net result was a net loss of $15.591 million for Q1 2025, an improvement from the $24.417 million net loss in Q1 2024, largely due to the significant increase in BARDA revenue offsetting the rise in R&D spend.

As of March 31, 2025, Vaxart held $41.9 million in cash, cash equivalents, and short-term investments. Management has stated that this amount is not sufficient to fund planned operations for 12 months from the filing date of the Q1 2025 10-Q (May 13, 2025). Based on their current plan, which includes strategic cost reductions and workforce adjustments (approximately 10% reduction in February 2025 and 21% in May 2025), the company expects its cash runway to extend into the first quarter of 2026. The BARDA funding, while substantial ($85.6 million received as of March 31, 2025, plus $9.2 million subsequent to quarter-end), is primarily cost-reimbursable for the COVID-19 trial and is not sufficient to fund all of Vaxart's operations and other pipeline programs.

The company remains dependent on raising additional capital through equity financing, debt, or strategic partnerships to continue its operations and advance its pipeline. These conditions raise substantial doubt about Vaxart's ability to continue as a going concern for a period of one year from the 10-Q issuance date. To provide flexibility for future capital raises and address NASDAQ listing requirements (the company is at risk of delisting for failing to meet the $1 minimum bid price), Vaxart has proposed a reverse stock split to its shareholders. Management views this as a necessary measure to maintain NASDAQ listing, which they believe is critical for stock liquidity and investor appeal, particularly for institutional investors.

Risks and Challenges

Investing in Vaxart involves significant risks inherent in clinical-stage biotechnology companies. The most pressing risks include:

• Funding and Going Concern: The company's limited cash runway and dependence on raising additional capital pose a significant risk. There is no guarantee that funding will be available on acceptable terms, or at all, which could force delays, reductions, or termination of development programs.
• BARDA Funding Uncertainty: While the large BARDA award is crucial, it is subject to government decisions. Although the stop work order was lifted, future decisions regarding funding levels, timelines, or contract termination could severely impact the COVID-19 program and the company's financial health.
• Clinical Trial Success: The success of Vaxart's vaccine candidates depends on positive results from ongoing and planned clinical trials. Vaccine development is complex, and candidates can fail at any stage. The large Phase 2b COVID-19 trial and the Phase 1 norovirus trial are critical tests.
• Regulatory Approval: Even with positive clinical data, there is no guarantee of regulatory approval from agencies like the FDA. The regulatory pathway for novel oral vaccines may present unique challenges.
• Competition: The vaccine market is highly competitive. Vaxart's candidates must demonstrate clear advantages in efficacy, safety, or convenience to compete with established injectable vaccines and other emerging technologies.
• NASDAQ Listing: Failure to regain and maintain compliance with NASDAQ listing requirements could lead to delisting, negatively impacting stock liquidity and potentially the company's ability to raise capital.

Conclusion

Vaxart stands at a critical juncture, propelled forward by the potential of its differentiated oral vaccine platform and supported by a significant government partnership for its lead COVID-19 program. The initiation of dosing in the large Phase 2b COVID-19 trial marks a major operational milestone, offering a clear path towards potentially validating the platform's capabilities against a widely used mRNA comparator. Simultaneously, the norovirus program's advancement with potentially more potent second-generation constructs and an anticipated mid-2025 data readout presents another near-term catalyst that could unlock partnership opportunities.

However, the company's financial runway remains constrained, underscoring the urgent need for successful capital raising efforts or strategic collaborations. The going concern risk is material, and the proposed reverse stock split highlights the challenges in maintaining public listing amidst a low share price environment. While the technological promise of an oral, mucosal-targeting vaccine is compelling and offers a clear competitive distinction, Vaxart must successfully execute its clinical programs and secure necessary funding to translate this potential into approved products and sustainable growth. Investors should closely monitor the progress of the Phase 2b COVID-19 trial, the outcome of the Phase 1 norovirus study, and the company's ability to strengthen its financial position through non-dilutive funding or partnerships. The investment thesis hinges on Vaxart's ability to navigate these financial and clinical hurdles and demonstrate that its innovative oral vaccine technology can deliver meaningful clinical benefits and capture a valuable share of the global vaccine market.