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Vaxart: Not Just a Covid-19 Play

Vaxart (VXRT) made a big splash last year, as one of the smaller companies to enter the Covid-19 vaccine race. However, while Vaxart’s Covid-19 vaccine candidate’s oral nature differentiates itself from the pack, the program has yet to reach full fruition and results have been mixed so far.

Jefferies’ Kelechi Chikere says the candidate has exhibited some “interesting data but the bar is set high by injectables and much work still needs to be done.”

That said, while investors have cottoned on to one opportunity, Chikere says better prospects lie with a different candidate from Vaxart’s pipeline.

“While investor interest seems to be on CV-19,” the analyst said, “We are particularly interested in its norovirus vaccine program, which has already shown promising early data, and could be a $1B+ market opportunity. We see interest in this program increasing with more data coming over the next 6-12 months.”

Norovirus is the main cause of gastroenteritis across the globe and results in between 50-100k hospitalizations in the US each year. Multiple Phase 1 results showed the oral vaccine triggered antibody secreting cells (ASC) and mucosal IgA antibodies. The latter is key in neutralizing the virus in the gut, where it is present in the body.

The company recently set in motion a Phase 1/2 age-escalation study and is anticipated to begin a Phase 2 challenge study in the third quarter. Also in Q3, there’s the potential of a 12-month booster dose data readout from the Phase 1 testing.

Pending positive results, Chikere expects Vaxart will sit down with the FDA and plan the program’s next steps.

Although the analyst concedes the norovirus mortality rates are not particularly high, he believes that a successful vaccine which is also recommended for vulnerable populations by the CDC (Centers for Disease Control and Prevention) could achieve sales of over $1 billion a year.

For example, Merck’s RotaTeq vaccine against rotavirus (a comparable gastro virus), generated sales of $750 million in 2019 and is “on track” to deliver over $1 billion in sales in 2022/23.

Accordingly, Chikere rates VXRT a Buy rating along with a $13 price target. The analyst therefore sees shares gaining ~58% over the next 12 months. (To watch Chikere’s track record, click here)

2 other analysts have recently reviewed Vaxart’s prospects and both have reached the same conclusion as Chikere – Buy. The stock’s Strong Buy consensus is backed by a $14.67 average price target, indicating room for ~78% upside in the next 12 months. (See VXRT stock analysis on TipRanks)

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