Vaxart (NASDAQ:VXRT) is a clinical-stage biotech company focused on commercializing orally-delivered vaccines. VXRT stock has been volatile in 2021, thanks to hopes and setbacks related to its potential Covid-19 vaccine product.
However, Vaxart is more than just a quick Covid-19 play. The company’s platform, more broadly, is focused around trying to make vaccines in general deliverable by swallowing.
This could end up having applications well beyond just Covid-19. Needle-phobia is a real thing, and if Vaxart can reliably vaccinate folks without an injection, it could end up being a big winner.
So far, however, Vaxart has struggled to get sufficient commercial momentum to really validate its business model. And, unfortunately, traders seem to be latching onto it simply as another quick Covid-19 trade, which could leave shares vulnerable if and when omicron variant fears diminish.
Let’s not get ahead of the story, though. How did Vaxart get to where it is today?
Vaxart’s History
Like many clinical-stage biotech firms, Vaxart has struggled to establish a track record of commercial success. If you look at the company’s historical filings, it generated tens of millions of dollars of revenue annually in the early 2010s. However, this came from a firm named Biota. Biota later became Aviragen, and Aviragen in turn completed a merger with Vaxart to become today’s surviving entity.
In other words, don’t rely too heavily on the company’s historical financials. Vaxart in its current form has only managed to generate a few million dollars of annual revenue in recent history.
Prior to its merger with Aviragen, Vaxart was in business for quite awhile itself as a private company. Indeed, Vaxart’s origins trace back to the early 2000s when it was known as West Coast Biologics and sought to make vaccines for avian flu.
Unfortunately, it has yet to get a product over the finish line that would help the company finally become a lasting success.
Vaxart’s Covid-19 Ambitions
Like many small biotech firms, Vaxart hopped onto the Covid-19 vaccine or treatment trend. This was logical, given that there could potentially be a decent-sized market for an oral vaccine. Particularly with vaccine mandates now being in place in many countries and a certain set of the population being deathly afraid of needles, this could be a golden opportunity for Vaxart.
However, its oral Covid-19 vaccine remains tied up in clinical testing, and thus may miss the window for commercial success. With every new variant, it has extended the potential commercial life of Covid-19 vaccines. With each additional variant, however, it seems more likely that populations will reach herd immunity and the need for boosters would diminish.
On the plus side, there might be some clinical benefit to an oral vaccine for Covid-19 versus the existing options. Pre-clinical stage Vaxart research found its Covid-19 vaccine generates what it deemed mucosal immune response. This could potentially give it added protection in organs such as the lungs as opposed to a traditional injection vaccine.
The Company’s Pipeline
Vaxart’s inability to get products to market in a significant way over its many-year history is not inspiring. Regardless, it would be one of the leaders in orally-delivered vaccines if it gets either its Covid-19 or another oral vaccine to market.
In addition to Covid-19, Vaxart is working on vaccines for Norovirus, seasonal influenza, and RSV among others. The seasonal influenza vaccine in particular is significantly along the path to development as it is well into Phase II.
Ultimately, Vaxart needs to get something approved and generating significant revenue to prove out the value of its pipeline. If one oral vaccine works, then investors will ascribe a higher valuation to the others. But until the first one becomes a commercial success, investors will cast a skeptical eye toward the whole enterprise.
VXRT Stock Verdict
Vaxart is more than just a quick play to try to cash in on Covid-19 excitement. More than a few Covid-19 stocks from 2020 have long since dropped from people’s radars; companies like iBio (NYSEAMERICAN:IBIO) have already slumped to new lows. VXRT stock doesn’t belong in that same category.
For on thing, Vaxart is developing a whole platform around oral vaccines, and has other candidates in its pipeline. This isn’t just a desperation attempt to latch onto the current pandemic. That said, Vaxart needs to get at least one of its vaccines actually approved and generating revenues before investors will place too much faith in the whole commercial pipeline.
Oral vaccines sound promising, but it will be risky until Vaxart can start producing earnings. And on the flip side, VXRT stock is vulnerable to short-term downside if and when the virus comes under control via other means.
On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a sizable New York City-based hedge fund. You can reach him on Twitter at @irbezek.