The coronavirus pandemic has provided a boost – pardon the pun – for the vaccine market. The need to blunt Covid-19’s impact has resulted in a huge inflow of capital and the advancement of disruptive technology. It has also provided a platform for small companies to make their mark, and that in turn has opened opportunities for investors.
For a period last year, shares of small vaccine maker Vaxart (VXRT) soared to incredible highs based on the early potential of its covid vaccine candidate which offered one very distinguishing feature – it came in pill form.
But after reporting disappointing early-stage results – the vaccine exhibited the induction of broad immune cells but didn’t generate neutralizing antibodies – the candidate fell far behind in the race to get a vaccine to market. Vaxart has advanced the candidate to a phase 2 study, with data anticipated in 1Q22.
While Jefferies’ Roger Song notes the vaccine showed some “interesting data,” he also says there’s still a long way to go with the bar “set high” by injectables. “We will watch for Ph2 data of 2nd gen pipeline in 1Q22 to further assess its potential, and do note an oral vaccine could be preferred option if efficacy/safety profile is comparable,” Song said.
While the Covid-19 program has piqued investors’ interest, the analyst thinks the company could have an opportunity in another field. Vaxart is developing a vaccine for norovirus – the main cause of gastroenteritis in the world and the reason behind ~50-100k hospitalizations each year in the US.
“While the mortality associated with norovirus is not high,” Song explained, “We believe a successful vaccine that receives CDC/ACIP recommendation for vulnerable populations could generate ~$1B+ annual sales, similar to MRK’s RotaTeq vaccine against rotavirus (similar gastro virus and morbidity/mortality), which did ~$800M in ‘20 and is on track to achieve ~$1B in ’22/23.”
The early data to-date has been promising – in several early clinical studies, the oral vaccine induced antibody secreting cells (ASC) and mucosal IgA antibodies – and there should be two data readouts in 1Q22 which could act as catalysts for the shares. However, the biggest impact could come for a Phase 2 challenge study which will be initiated next year, with a top-line result “potentially” in 4Q22. Song believes this could act as a “critical catalyst” which will provide “validation of real clinical vaccine efficacy.”
To this end, Song assumed coverage of VXRT stock with a Buy rating and $12 price target, suggesting room for 84% growth over the coming year. (To watch Song’s track record, click here)
Four other analysts have recently chimed in with Vaxart reviews, of which three are positive and one is skeptical, providing the stock with a Strong Buy consensus rating. The average price target is an optimistic one; at $13.75, investors are looking at possible returns of ~111% on the one-year horizon. (See Vaxart 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.
