Vaxart: No Midnight Bells Ringing Yet for This Cinderella Biotech Story

It has been a breakout year for vaccine specialist Vaxart (VXRT). Entering 2020, the company had a market cap just below a puny $17 million. Since then, shares have exploded by an incredible 4748% as investors have piled in with the hope Vaxart can be the surprise provider of the coveted COVID-19 vaccine.

However, Vaxart stock still has plenty left in the tank, according to B Riley FBR analyst Mayank Mamtani.

The 5-star analyst believes that, based on the company’s proprietary VAAST (vector-adjuvant-antigen standardized technology) vaccine platform, Vaxart’s “one-of-its-kind oral solution,” could set it apart from the competition.

Mamtani added, “We believe clinical proof of concept from norovirus and influenza programs validates VAAST’s targeted immune system activation approach with enteric-coated tablets designed to release a vaccine specifically in the small intestine. This activation of gut immunity provides protection at the inner linings of the GI and respiratory tracts and is a key differentiator versus other platform approaches, in our view.”

Apart from the convenience of an oral solution instead of the more commonly used injection, Vaxart’s approach has logistical advantages, and its worldwide distribution would cause “only a minimal incremental burden to the global vaccine supply chain.” Moreover, the unique approach could increase global vaccination rates because it is one well suited to developing counties whose less advanced healthcare systems are already under duress due to the pandemic.

It is worth remembering, however, that the company is still in very early stages. Preclinical trials have been promising with several vaccine candidates generating immune responses in 100% of tested animals following a single dose. With the most suitable vaccine candidate now selected, Vaxart plans on initiating a phase 1 trial in 2H20, possibly starting in the summer. Despite having to play catch up with other more advanced programs, Mamtani doesn’t rule out additional funding to accelerate the progress of Vaxart’s COVID-19 vaccine program.

“Although VXRT is lagging a bit on timelines in a crowded influenza and COVID-19 landscape, we believe convenience differentiation and generation of de-risking data sets will likely translate into adequate non-dilutive funding support, including Operation Warp Speed for COVID-19 and J&J for a universal influenza program, in 2H20,” Mamtani said.

To this end, Mamtani rates Vaxart a Buy along with a $22 price target. The implication for investors? Further upside of “just” 30%. (To watch Mamtani’s track record, click here)

Over the past 3 months, two other analysts have thrown the hat in with a review of Vaxart; Both reaffirm Mamtani’s positive assessment with additional Buy ratings. (See Vaxart stock analysis on TipRanks)

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