On Friday, B.Riley raised the price target for Vaxart Inc. (NASDAQ:VXRT) shares to $2.50, up from the previous $2.00, while maintaining a Buy rating on the stock. This adjustment follows the company's announcement on Thursday that it has received a significant BARDA-funded project NextGen award.
The award, which could total up to $453 million, is for conducting a Phase IIb study involving 10,000 participants to compare Vaxart's oral COVID-19 vaccine candidate against an approved mRNA vaccine.
The funding is a continuation of a BARDA contract that initially included $9 million for start-up activities. The additional funding was contingent upon Vaxart's ability to meet certain conditions, such as successful manufacturing and securing enough GMP-quality vaccine product and comparator mRNA vaccines.
Vaxart is set to immediately receive the first tranche of $65.7 million to further start-up activities, including contracts with clinical research organizations and vaccine procurement. The remaining $387.2 million will be disbursed in intervals as the program advances and incurs costs that will be charged to the U.S. government.
Management at Vaxart aims to begin enrollment for the trial in mid-2024, with an interim analysis possible by the first quarter of 2025. This analysis will be based on approximately 250 symptomatic disease endpoint events.
The full study could extend into the first half of 2026 if a 12-month follow-up period is deemed necessary for the primary efficacy analysis. Vaxart also plans to introduce its next-generation COVID vaccine candidate in this study.
Preclinical data on this candidate is forthcoming, which is expected to provide insights into the Phase IIb trial's risk profile as it will be compared to updated immunogenicity data from peer mRNA and protein-based vaccines.
In the broader context of U.S. government-supported vaccine development, the Department of Health and Human Services (HHS) has also awarded BARDA grants of $34 million to Castlevax and $40 million to Cyanvac for the development of an intranasal vaccine candidate.
This highlights a continued focus on developing mucosal vaccines. According to B.Riley, Vaxart has produced the most compelling dataset in this area, spanning both respiratory and norovirus vaccines.
The price target increase reflects anticipated R&D spending subsidization over the coming years and includes the impact of a concurrently announced $40 million follow-on offering by the company.
In other recent news, Vaxart Inc., a biotech company, has made remarkable strides in its vaccine development programs. The U.S. Department of Health and Human Services (HHS) has committed up to $500 million to support mid-stage trials for innovative COVID-19 vaccines, including a notable grant of up to $453 million to Vaxart for its oral COVID-19 vaccine candidate. This funding is part of Project NextGen, an initiative aimed at fostering the development of new vaccines and treatments for COVID-19.
In addition to this, Vaxart has reported positive results from its Phase 1 clinical trial for a bivalent norovirus vaccine candidate. The company is planning to launch a Phase 2b trial for its oral XBB COVID-19 vaccine candidate, pending additional funding and regulatory approval.
On the financial front, Vaxart's Q1 2024 revenue stood at $2.2 million, with cash and investments amounting to $36.7 million, projected to last until late 2024. The company has also expanded its authorized shares from 250 million to 350 million and made amendments to its equity incentive and employee stock purchase plans.
Vaxart's stockholders ratified the appointment of WithumSmith+Brown, PC as the company's independent registered public accounting firm for the year ending December 31, 2024. These recent developments underscore Vaxart's ongoing efforts to advance its vaccine candidates and potentially facilitate future growth initiatives.
InvestingPro Insights
Following the optimistic outlook from B.Riley, InvestingPro data provides a mixed financial perspective on Vaxart Inc. (NASDAQ:VXRT). With a market capitalization of 132.61 million USD, the company shows a significant revenue growth in the last twelve months as of Q1 2024, surging by 1174.75%. This may reflect the market's positive response to the company's potential in vaccine development. However, Vaxart's financial health is nuanced by a negative P/E ratio of -1.62, indicating that it is not currently profitable. Moreover, the company's gross profit margin stands at a concerning -660.08%, underscoring the challenges it faces in converting revenues into actual profit.
InvestingPro Tips highlight that Vaxart holds more cash than debt, which is a strong indicator of financial stability. This is particularly relevant as the company embarks on a large-scale Phase IIb study, which will require substantial financial resources. Additionally, Vaxart's liquid assets exceed short-term obligations, providing some assurance of the company's ability to meet its immediate financial commitments. Notably, analysts do not anticipate the company to be profitable this year, and a sales decline is expected in the current year. These insights suggest that while the company has potential, there are significant financial hurdles to overcome.
For a deeper dive into Vaxart's financial metrics and additional tips, investors can explore further with the InvestingPro platform. There are 7 more InvestingPro Tips available for Vaxart, which can be accessed by visiting: https://www.investing.com/pro/VXRT. To enhance your investment strategy, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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