Stock Analysis & Ideas

Vaxart Has Great News if You’re Afraid of Covid-19 — And You’re a Hamster

Science produced some wonderful news this week for members of the Mesocricetus auratus community — more commonly known as hamsters.

Data on a preclinical trial of Vaxart’s (VXRT) oral and intranasal anti-coronavirus vaccine candidate, published in the peer-reviewed journal Science Translational Medicine, showed that hamsters treated with the COVID-19 vaccine candidate targeting “S” proteins in the SARS-CoV-2 coronavirus were less able to transmit the virus. Additionally, a Phase I clinical trial of different Vaxart vaccine targeting both “S” and “N” proteins is showing promise that it “could be effective against a range of diverse coronaviruses.”

That’s great news for rodents — and maybe for humans as well, inasmuch as the vaccines Vaxart is developing don’t require patients to get a “shot,” but can rather be administered orally or intranasally. As Vaxart noted in its press release Thursday, these new options have the potential to “address vaccine hesitancy among individuals who are averse to injection.”

Investors cheered the news Thursday, bidding up Vaxart shares by 11%. On Wall Street, however, at least one analyst somewhat seemed skeptic. B. Riley’s Mayank Mamtani reiterated a Neutral rating on the stock, while lowering his price target on Vaxart to $6 a share (from $7).

Admittedly, investors aren’t usually thrilled to see a price target cut. But in this case, Vaxart’s current price of $3.51 per share still leaves about 70% upside if Vaxart moves towards the analyst’s promised target price. And how might that happen?

Bad news first: Investors may be pleased by Vaxart’s progress towards developing a Covid-19 vaccine that doesn’t involve shots, jabs, or pricks. But in Mamtani’s view, “established [Covid-19] vaccine sponsors have admittedly set a high bar for new entrants,” given the very high efficacy of their vaccines — and the fact that they’ve been out on the market for some time now and proven generally both safe and effective. Vaxart’s potential to deliver a vaccine that doesn’t involve a shot, therefore, may help it gain a niche market if it ever gets approved — but it’s still something of a long shot.

Now the good news: Mamtani actually seems more enthused about another Vaxart vaccine, this time against norovirus. “CDC/FDA Canadian agencies have been investigating an outbreak of norovirus linked to raw oysters harvested in Canada,” notes the analyst, and because there’s “limited competition in the norovirus vaccine space,” another vaccine company was able to quickly rush out an IPO and achieve a $500 million market capitalization — $55 million more than Vaxart is currently worth — based on a norovirus vaccine candidate that it’s developing.

This other norovirus vaccine, moreover, is an injectable vaccine — like all the Covid vaccines out there. As such, the same characteristics of Vaxart’s vaccine technology that might make it attractive to folks afraid of catching Covid, might make it similarly attractive to folks afraid of catching norovirus. In Mamtani’s view, “VXRT’s oral vaccine could capture a meaningful market share due to convenience and differentiating mucosal immunity.”

And that, in a nutshell, is why he thinks this $3.52 stock could go to $6. (To watch Mamtani’s track record, click here)

Overall, with 3 recent analyst reviews, including 2 Buys and 1 Hold, VXRT gets a Moderate Buy rating from the analyst consensus. The average price target of $8 indicates it has room for a 127% upside. (See VXRT stock forecast on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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