Vaxart, Inc. (VXRT) is a clinical-stage biotechnology company leading the charge in developing a transformative oral vaccine platform. With a diverse pipeline targeting major infectious diseases and a steadfast commitment to improving global public health, Vaxart has emerged as a pioneering force in the pharmaceutical industry.

Company Background

Founded in 2004 and headquartered in South San Francisco, California, Vaxart has undergone a remarkable journey of innovation and progress. The company was originally incorporated as West Coast Biologicals, Inc. before changing its name to Vaxart, Inc. in 2007 and reincorporating in Delaware. In February 2018, Vaxart completed a reverse merger with Aviragen Therapeutics, Inc., solidifying its position as a publicly-traded entity. Through this merger, Vaxart acquired two royalty-earning products, Relenza and Inavir, as well as three Phase 2 clinical stage antiviral compounds. However, the company later discontinued independent development of these antiviral compounds, opting instead to enter into an exclusive worldwide license agreement with Altesa Biosciences, Inc. in July 2021 for one of the compounds, Vapendavir.

Early Challenges and Achievements

Vaxart's early years were marked by significant challenges, including substantial financial losses from 2019 to 2022. In 2020, the company recorded a $4.25 million impairment charge related to the developed technology for Inavir. Additionally, Vaxart faced legal hurdles, including a consolidated securities class action lawsuit filed in 2020, which was partially settled in 2022. Despite these obstacles, the company persevered in advancing its proprietary oral vaccine platform. A notable achievement came in 2018 when Vaxart completed a Phase 2 challenge study of its H1N1 flu vaccine candidate, funded through a $15.7 million contract with the Biomedical Advanced Research and Development Authority (BARDA). The study results were encouraging, showing that Vaxart's oral tablet vaccine candidate reduced clinical disease by 39% relative to placebo.

Proprietary Technology Platform

Vaxart's proprietary VAAST (Vector-Adjuvant-Antigen Standardized Technology) platform has been the driving force behind its success. This innovative approach aims to generate broad and durable immune responses, potentially protecting against a wide range of infectious diseases. Unlike traditional injectable vaccines, Vaxart's investigational vaccines are administered using a room-temperature-stable tablet, offering enhanced convenience and accessibility for patients.

Pipeline and Clinical Programs

The company's diverse pipeline includes several promising candidates targeting a range of infectious diseases, including norovirus, coronavirus (including SARS-CoV-2), and influenza. Vaxart's lead programs have demonstrated encouraging results in clinical trials, underscoring the potential of its oral vaccine platform.

Financials

In the third quarter of 2024, Vaxart reported revenue of $4.93 million, a significant increase from the $2.1 million recorded in the same period of 2023. This revenue growth of 134.3% was primarily driven by government contracts related to the Biomedical Advanced Research and Development Authority (BARDA), a testament to the industry's confidence in Vaxart's capabilities. The revenue consisted of $4.89 million from government contracts and $40,000 in non-cash royalty revenue related to the sale of future royalties.

For the most recent fiscal year ending December 31, 2023, Vaxart reported total revenue of $7.38 million. The company's net loss for the same period was $82.47 million. Operating cash flow (OCF) for the fiscal year 2023 was negative $70.45 million, while free cash flow (FCF) was negative $72.32 million.

In the third quarter of 2024, Vaxart's net loss was $14.08 million, with research and development expenses of $15.07 million and general and administrative expenses of $4.34 million. The company's OCF for Q3 2024 was negative $4.20 million, and FCF was negative $4.21 million.

Liquidity

Vaxart's financial position remains robust, with $58.7 million in cash, cash equivalents, and investments as of September 30, 2024. The company's management expects this cash runway to sustain operations into 2026, providing ample resources to advance its pipeline and achieve key milestones.

As of December 31, 2023, Vaxart reported $34.76 million in cash and cash equivalents, along with $4.96 million in short-term investments, totaling $39.71 million in liquid assets. The company's debt-to-equity ratio stood at 0.2659, indicating a relatively low level of leverage. Vaxart's current ratio and quick ratio were both 3.32, suggesting strong short-term liquidity.

COVID-19 Program

In the COVID-19 program, Vaxart's ongoing Phase 2b clinical trial is a testament to the company's commitment to addressing the global health crisis. The study, funded by a BARDA contract valued at up to $456 million, is designed to evaluate the relative efficacy, safety, and immunogenicity of Vaxart's oral COVID-19 vaccine candidate compared to an approved mRNA vaccine. The trial's sentinel cohort of 400 participants has been fully enrolled, and the company expects to initiate the second, larger phase of the study in early 2025 upon a favorable review by the independent Data and Safety Monitoring Board (DSMB) and the FDA.

Norovirus Program

Vaxart's norovirus program has also gained significant traction, with the company presenting promising data at the Infectious Disease Week (IDWeek) conference. The Phase 2 study evaluating the safety, immunogenicity, and clinical efficacy of Vaxart's norovirus vaccine candidate met several primary endpoints, including a statistically significant reduction in the rate of norovirus infection. In September 2023, Vaxart announced that its Phase 2 GI.1 norovirus challenge study met five of six primary endpoints based on preliminary topline data. The study showed a statistically significant 29% relative reduction in the rate of norovirus infection between the vaccinated and placebo arms, as well as a strong induction of norovirus-specific antibodies.

Additionally, in July 2023, the company announced that its Phase 2 dose-ranging trial evaluating the safety and immunogenicity of the bivalent norovirus vaccine candidate met all primary endpoints, with the vaccine candidate showing a favorable safety profile and robust immunogenicity. The company's Phase 1 study in lactating mothers and their nursing infants demonstrated the potential for antibody transfer through breast milk, highlighting the versatility of Vaxart's platform.

Early-Stage Pipeline

While Vaxart continues to make strides in its clinical programs, the company has also made strategic investments in its early-stage pipeline. This includes preclinical work on avian flu, seasonal flu, and human papillomavirus (HPV) vaccines, showcasing Vaxart's commitment to addressing a wide range of infectious disease threats. The company's HPV therapeutic vaccine candidate, targeting HPV 16 and HPV 18 (responsible for 70% of cervical cancers and precancerous cervical dysplasia), has shown promising results in preclinical studies, demonstrating the ability to elicit T cell responses and promote tumor cell killing in mouse models.

Challenges and Regulatory Feedback

However, Vaxart is not without its challenges. The company has received constructive feedback from the FDA regarding the norovirus program, requiring additional clinical data before progressing to the next phase of development. Vaxart is actively working to address the regulator's concerns and determine the best path forward for this critical program.

Furthermore, Vaxart's stock has faced pressure, with the share price trading below the $1.00 minimum bid requirement for The Nasdaq Capital Market. The company has been granted a 180-day grace period to regain compliance, and management is exploring various options to address this listing issue.

Investment Potential and Future Outlook

Despite these obstacles, Vaxart remains steadfast in its mission to revolutionize the vaccine industry. The company's unwavering commitment to its oral vaccine platform, coupled with its diversified pipeline and strong financial position, positions Vaxart as a compelling investment opportunity for those seeking exposure to the rapidly evolving pharmaceutical landscape.

As Vaxart continues to navigate the regulatory landscape and advance its groundbreaking programs, investors should closely monitor the company's progress and the potential impact of upcoming milestones on its long-term growth trajectory. The company's focus on developing oral recombinant vaccines based on its proprietary VAAST platform for a range of infectious diseases, including norovirus, coronavirus, and influenza, presents a unique value proposition in the biotechnology sector.

Conclusion

Vaxart's story is one of innovation, resilience, and the pursuit of transforming global public health. With a robust pipeline, a seasoned management team, and the backing of key government agencies, the company stands poised to make a lasting impact on the future of vaccine development. The significant year-over-year revenue growth in Q3 2024, primarily driven by government contracts, underscores the potential of Vaxart's technology and the confidence placed in its capabilities by major stakeholders in the healthcare industry.

As Vaxart continues to advance its clinical programs and explore new applications for its oral vaccine platform, the company's ability to maintain its financial stability and progress towards key milestones will be crucial factors in determining its long-term success. With a cash runway extending into 2026 and a diverse pipeline of vaccine candidates, Vaxart is well-positioned to capitalize on the growing demand for innovative vaccine solutions in the global healthcare market.