Vaxart Q1 2025 Earnings Call Transcript

Quartr
Provided by Quartr
May 13, 2025

Key Takeaways

  • Stop work order lifted on the 10,000-participant Phase 2b COVID-19 oral pill vaccine trial with patient screening underway and dosing expected in Q2’25.
  • Completed enrollment in the Phase 1 open-label dose-ranging study of the second-generation norovirus vaccine, with topline data due mid-2025 and partnership discussions poised to accelerate on positive results.
  • Preclinical candidate for avian influenza achieved 100% protection in ferrets, with full data slated for scientific meetings and peer-reviewed publication later this year.
  • Implemented another round of workforce reductions to streamline costs amid a challenging biotech funding environment and extend cash runway into Q1’26.
  • Board proposed a reverse stock split (up to 1-for-50) to regain NASDAQ compliance and avert potential delisting, highlighting ongoing pressure on the share price.
AI Generated. May Contain Errors.
Earnings Conference Call
Vaxart Q1 2025
00:00 / 00:00

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Operator

Greetings. Welcome to Vaxart Business Update and First Quarter 2025 Financial Results conference call. A question-and-answer session will follow management's opening remarks. Individual investors may submit written questions to ir@vaxart.com. As a reminder, this conference is being recorded. I would now like to turn the webcast over to your host, Ed Berg, Senior Vice President and General Counsel.

Ed Berg
Ed Berg
SVP and General Counsel at Vaxart

Good afternoon and welcome to today's call. Joining us from Vaxart are Steven Lo, Chief Executive Officer; Dr. Sean Tucker, Founder and Chief Scientific Officer; Dr. James Cummings, Chief Medical Officer; and Philip Lee, Chief Financial Officer. Before we begin, I would like to remind everyone that during this conference call, Vaxart may make forward-looking statements, including statements about the company's financial results, financial guidance, its future business strategies and operations, and its product development and regulatory progress, including statements about its ongoing or planned clinical trials. Actual results could materially differ from those discussed in these forward-looking statements due to a number of important factors, including uncertainty inherent in the clinical development and regulatory process, and other risks described in the risk factors section of Vaxart's most recently filed annual report on Form 10-K, and also on other periodic reports filed with the SEC.

Ed Berg
Ed Berg
SVP and General Counsel at Vaxart

Vaxart undertakes no obligation to update any forward-looking statements after the date of this call. I'll now turn the call over to Steven Lo. Steve?

Steven Lo
Steven Lo
CEO at Vaxart

Thanks, Ed, and thanks to all of you for joining us this afternoon. I'd like to begin today's call by acknowledging our partners at BARDA and the Department of Health and Human Services, and thanking them for engaging with us in the productive dialogue that has led to the lifting of the stop work order on the 10,000 participant portion of our Project NextGen phase 2B COVID-19 vaccine trial. We believe that the additional review and scrutiny of the trial design and the data supporting the safety and efficacy of our COVID-19 oral pill vaccine program will ultimately instill greater confidence in the study's results. We acknowledge that some of you have been frustrated that we haven't been providing real-time updates regarding our ongoing discussions with BARDA and HHS, and we have received many inquiries throughout this period as to our lack of communication with our shareholders.

Steven Lo
Steven Lo
CEO at Vaxart

We certainly recognize the importance of timely and transparent communication with you, but we are limited to what information we can share due to our contractual obligations with BARDA and HHS and the confidential nature of these discussions. Adhering to those obligations is essential to the productive relationships we have established with both of these agencies and, as I hope you will appreciate, has been critical to the continued advancement of our COVID-19 program. In balancing the constraints of our Project NextGen contractual obligations with our SEC reporting requirements, we will continue to disclose material information in a timely fashion through our filings on Form 8-K, and in those instances where we receive the necessary and timely approvals, we will also issue press releases. James will shortly provide an update on the status of the phase 2B COVID-19 study and the actions we are taking to initiate patient dosing.

Steven Lo
Steven Lo
CEO at Vaxart

The bottom line is that we are delighted to be actively screening patients and are hopeful that we will begin dosing in the 10,000 participant portion of the study in the second quarter of 2025. Let me also add that we are operating under our current contract with BARDA, which has not changed and still provides up to $460.7 million for the phase 2B study. James will also provide an update on our norovirus vaccine clinical program, but I want to note that we are pleased to have quickly completed enrollment in our phase 1 trial comparing our second-generation constructs with our first-generation constructs. While this is an open-label trial, we are still blinded to all study results at this time. We expect to report top-line data from this trial in mid-2025 in line with our previously stated guidance.

Steven Lo
Steven Lo
CEO at Vaxart

We continue to hold meaningful conversations with potential strategic partners who are closely monitoring this upcoming data readout. If the data prove our research thesis of an improved norovirus second-generation construct, we believe it could lead to a partnership that would further advance the program and could provide further non-dilutive funding to the company. Taking a step back, we believe vaccines are essential for the infrastructure of public health. They are, by many accounts, one of the top public health achievements in the 20th century. There are also major economic benefits, such as lower costs to our healthcare system and increases in overall workplace productivity. Compared to pharmaceutical products, a vaccine can achieve a steady state of revenue at its peak, whereas a pharmaceutical can taper off earlier in its product lifecycle.

Steven Lo
Steven Lo
CEO at Vaxart

Bringing a new vaccine to market is a lengthy, capital-intensive process, and as we continue to navigate the headwinds in the biotech environment, we had to make some difficult choices in order to achieve our upcoming milestones within our existing cash position. That includes rationalizing our costs through another round of workforce reductions in the past few weeks. It's not something we want to do, but it's unfortunately necessary for us to streamline our costs in order to maximize our future opportunities. Finally, as announced in a press release issued earlier today, Phil Lee submitted his resignation as CFO for personal reasons. I would like to thank Phil for the valuable contributions he has made during his tenure at Vaxart. We do appreciate his willingness to stay on as a non-executive employee for a few weeks to ensure a smooth transition for our incoming CFO, Jeroen Grassman.

Steven Lo
Steven Lo
CEO at Vaxart

We are very excited that Jeroen has joined Vaxart. A seasoned executive in healthcare and finance, Jeroen brings more than 20 years of experience in biotech, with his four most recent years at Altru Bio, a clinical-stage private biotech company. There, he was instrumental in leading finance and operations and helped scale the company for global clinical studies. Jeroen also had successful stints at PacPharma, Intarsia Therapeutics, and Genentech. We look forward to working with Jeroen and welcome him to our team. I'll now turn the call over to James for a review of our COVID-19 and norovirus clinical programs. James.

James Cummings
James Cummings
Chief Medical Officer at Vaxart

Thanks, Steve. I'll start by reiterating Steve's recognition of the collaborative effort and support from our government partners that led to the lifting of the stop work order on the 10,000 participant portion of the COVID-19 phase 2B clinical trial. Following receipt of the notification lifting the hold on April 24, we have restarted the activities needed to initiate dosing in this portion of the study, including reactivating clinical trial sites, screening study participants, and coordinating shipment of clinical trial materials. As a reminder, the 10,000 participant portion of this trial will compare the efficacy, immunogenicity, and safety of the company's KP2 oral vaccine candidate against an mRNA comparator directed against KP2. Participants in the trial are being followed for 12 months to assess safety, efficacy, and immunogenicity of our oral pill COVID-19 vaccine candidate. Efficacy will be assessed in subjects with and without COVID-19 symptoms.

James Cummings
James Cummings
Chief Medical Officer at Vaxart

Regarding the 400 participant sentinel cohort of the study, we have been continuing our per protocol follow-up activities. In this cohort, we compare our oral pill XBB candidate against an mRNA XBB comparator rather than KP2. While a sentinel cohort was designed primarily to provide safety information regarding our new vaccine construct, we eagerly anticipate the important initial data on safety, immunogenicity, and efficacy that this cohort will provide. COVID-19 continues to pose a threat to human health, and we believe that our oral pill vaccine candidate has the potential to provide enhanced efficacy compared with injected vaccines because our vaccine candidate stimulates mucosal immunity at sites within the body that are the points of viral entry. We also believe that an orally administered vaccine is an important alternative to individuals who are averse to needle injections. I'll now turn to our norovirus vaccine clinical program.

James Cummings
James Cummings
Chief Medical Officer at Vaxart

As announced last month, we quickly completed enrollment of all 60 participants in a phase 1 open-label, dose-ranging clinical trial designed to enable a head-to-head comparison of our second-generation oral pill norovirus vaccine candidate against our first-generation candidate. This study is designed to assess safety and measure immune markers that have correlated with protection in our already completed challenge study conducted with our first-generation norovirus vaccine candidate. We remain on track to report top-line data in mid-2025. You know, I know some of you have questions about our rationale for going back to a phase 1 development with a second-generation norovirus vaccine candidate rather than just continuing to advance our first-generation norovirus vaccine construct.

James Cummings
James Cummings
Chief Medical Officer at Vaxart

The simple answer is that we're a data-driven vaccine development company committed to developing oral pill vaccines that are not only first-in-class but also provide the most effective and durable protection against infection and disease symptoms and have the highest likelihood of success in the marketplace. This means that we carefully evaluate the results from each of our preclinical and clinical studies and use these data to optimize our vaccine candidates. Based on data generated from our first-generation norovirus vaccine candidate in both the completed challenge study and the clinical trial conducted in elderly participants, and from the preclinical data obtained from our second-generation norovirus vaccine candidate, we anticipate that our second-generation vaccine candidate could well provide greater protection against norovirus infection and illness. After conversations with our advisors and regulatory groups, this path forward enables us to advance our norovirus vaccine clinical program with the strongest vaccine candidate.

James Cummings
James Cummings
Chief Medical Officer at Vaxart

If the results of the phase 1 clinical trial are positive, the next step would be to conduct a phase 2B safety and immunogenicity study that could begin as early as the second half of 2025, followed by an end-of-phase 2B meeting with the FDA and a potential phase 3 clinical trial initiating as early as 2026. As we shared with you in the past, these additional trials will require a partnership or other funding. We continue to actively pursue partnerships and will provide an update when available. I'll now hand the call over to Dr. Sean Tucker, our Founder and Chief Scientific Officer, for the latest developments from our avian flu preclinical program. Sean?

Sean Tucker
Sean Tucker
Founder and Chief Scientific Officer at Vaxart

Thank you, James. As many of you are aware, the currently circulating H5 bird flu is causing significant outbreaks in wild birds as well as poultry and dairy cows across the United States. To date, the Centers for Disease Control and Prevention has reported 70 cases of avian flu in humans, all of which are believed to have resulted from contact with infected poultry or cows. There is no known person-to-person spread at this time. Public health concerns regarding the spread of avian flu in people are focused on those individuals at risk of infection due to contact with infected animals. However, there is also a concern that continued spread of the virus among animals may enable the development of mutations that could make it easier for the virus to infect humans or result in human-to-human transmission. As the current avian flu outbreak is the largest and longest in U.S.

Sean Tucker
Sean Tucker
Founder and Chief Scientific Officer at Vaxart

History, there is a growing interest in the need for a safe and effective vaccine that could protect those at risk of infection. Results from a recent preclinical study show that our new avian flu influenza vaccine was 100% protective against death in a robust FAIR clade 2.3.4.4b challenge model compared with 0% survival in placebo-treated animals. We expect to report data from these studies in a peer-reviewed forum, which includes presenting the complete results at a scientific or medical conference and eventually publishing the data in a peer-reviewed journal. We believe that our avian influenza program has the potential as a partnership and business development opportunity and look forward to sharing more data from the program later this year.

Sean Tucker
Sean Tucker
Founder and Chief Scientific Officer at Vaxart

We believe the relatively short timeline for advancing this new avian flu vaccine candidate to preclinical studies reinforces the power of our vast platform to enable rapid development of novel vaccines that can address the dynamic and evolving infectious disease landscape. Our modular, scalable, and standardized approach to vaccine development supports rapid development of various vaccines against established targets as well as against new and emerging pathogens. As such, we believe we have an important role to play in innovating vaccines that are easier to develop and to deliver than traditional injected vaccines and mRNA vaccines. I'll now hand the call over to Phil Lee, our CFO, for a brief discussion of our financials. Phil?

Phillip Lee
Phillip Lee
CFO at Vaxart

Thank you, Sean. The details of our first quarter 2025 financial results are summarized in today's press release. Revenue for the first quarter of 2025 was $20.9 million compared to $2.2 million for the first quarter of 2024. Revenue in the first quarter of 2025 was primarily from the BARDA contract awarded in June 2024. Revenue in the first quarter of 2024 was primarily from the BARDA contract awarded in January 2024. Vaxart ended the first quarter with cash, cash equivalents, and investments of $41.9 million. As Steve mentioned earlier, the company implemented additional measures to reduce operating costs and better align its workforce with the needs of its business in the past few weeks. Based on our current plan, Vaxart now expects cash runway into the first quarter of 2026.

Phillip Lee
Phillip Lee
CFO at Vaxart

To further extend our cash runway, Vaxart will remain aggressive in seeking strategic partnerships and pursuing other non-dilutive funding options. As announced in the press release today, I had delivered my notice to resign from Vaxart as Chief Financial Officer. My decision to depart the company at this important juncture was not one that I took lightly, but it was a decision that I made for personal reasons. I would like to thank Steve, the board, and the entire organization for giving me the opportunity to work at the leading oral vaccine biotechnology company. I will now turn the call back to Steve for closing remarks.

Steven Lo
Steven Lo
CEO at Vaxart

Thanks, Phil. On behalf of the company and the board, we appreciate all the work that you've done for Vaxart and wish you the very best of luck on your future endeavors. Before we open the call to take your questions, I would like to use this time to discuss our upcoming annual shareholder meeting that is taking place virtually on Wednesday, May 21, at 11:30 A.M. Eastern Time, 8:30 A.M. Pacific Time. Specifically, I would like to address the reverse stock split in proposal number two and explain our rationale. Like many of our shareholders today, we do not believe our current stock price reflects anywhere close to what we believe is the full value of our company. In fact, members of the management and the board, like our shareholders, have also suffered losses related to the company's share price decline.

Steven Lo
Steven Lo
CEO at Vaxart

Nevertheless, we are at risk of being delisted from NASDAQ. Despite our best efforts, including many of the accomplishments our team highlighted earlier, we have not yet been able to regain compliance with NASDAQ's $1 minimum bid price requirement. We consider the reverse stock split a measure of last resort before the late June deadline. I'd like to use this opportunity to describe why we believe that voting for proposal number two is in the best interest of Vaxart and for you, our shareholders. While a reverse stock split is not something our board or management desires, we do believe it is necessary for the following reasons. First, the primary driver behind the proposed reverse stock split is to ensure our continued listing on NASDAQ. To reiterate, we would prefer to avoid a reverse stock split.

Steven Lo
Steven Lo
CEO at Vaxart

However, this is currently our best path forward to regain compliance and maintain our NASDAQ listing. A NASDAQ delisting would likely have a material adverse effect on the value of our company and the value of your stock since liquidity is significantly lower on the OTC markets, which could negatively affect the stock price. As I wrote in my letter to stockholders last week, if we do regain NASDAQ compliance in the required timeframe, the board does not intend to affect a reverse stock split. Second, maintaining our listing on NASDAQ may broaden our investor appeal. Many brokerage firms and investment funds avoid lower-priced stocks, discouraging investors from companies not listed on a major exchange. The limitations associated with trading on a less recognized exchange would deter most institutional investors. Furthermore, we anticipate that a delisting could lead to a termination of research coverage by financial analysts.

Steven Lo
Steven Lo
CEO at Vaxart

This lack of research coverage would reduce market visibility and potentially negatively impact investor sentiment and understanding of our value proposition. I want to be clear that a reverse stock split only causes a change for all issued shares of Vaxart's common stock uniformly and does not result in dilution. As we stated earlier on this call, we remain aggressive in exploring business development partnerships and non-dilutive funding options with the goal of achieving our upcoming clinical and regulatory milestones. In the event that we receive shareholder approval before proceeding to affect a reverse stock split, we will first evaluate our situation to determine the likelihood of regaining compliance with NASDAQ. Several factors continue to change, including, but not limited to, the status of our programs and our stock price.

Steven Lo
Steven Lo
CEO at Vaxart

If compliance is not achieved by the June 30 deadline, NASDAQ is expected to issue a written notice indicating that Vaxart's securities will be subject to delisting. At that point, Vaxart may appeal the delisting to a NASDAQ hearings panel and present its case for continued listing. However, there is no assurance that NASDAQ will concur with the appeal. We continue to evaluate and exhaust all of our options to avoid a reverse split and maintain our NASDAQ listing. We are proud of the significant breakthroughs that we have accomplished, but there is still much work ahead that will require continued investment. Vaxart has come a long way in developing a novel oral pill vaccine that can reimagine how people are vaccinated globally.

Steven Lo
Steven Lo
CEO at Vaxart

The recent lifting of the HHS stop work order for our COVID trial is very encouraging, amplified by HHS's state of belief in the need for developing novel vaccine technologies that extend beyond conventional needle-based approaches. Your support is essential to positioning Vaxart for continued success. We have received numerous messages from our loyal base of shareholders, and I can attest to having read them. I share your passion and frustration in our share price, but we need your support to get to the finish line and continue our important work in advancing our research. Thanks, everyone, for your time today. We will now open the call for your questions.

Operator

Thank you. If you would like to ask a question, please press Star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star 2 to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the Star keys. One moment while we pull for questions. Our first question is from Cheng Li with Oppenheimer & Company. Please proceed.

Cheng Li
Cheng Li
Director of Biotech Equity Research at Oppenheimer & Co

Oh, hi. Good afternoon. Thanks for taking the questions and congrats on the progress. And Phil, best luck to you and your future endeavors. Maybe I'd like two questions from me, one on COVID-19 and the other on norovirus. For the COVID-19 program, I'm just curious any color you can share on the gating factor to start patient dosing. I think you mentioned you are expecting dosing to start in the second quarter. Also, how fast you think you can complete enrollment of the 10,000 participants in the phase 2B study? On the norovirus program, just can you help us to set the expectations for the phase 1 results? How would you define a positive study? Thank you.

Steven Lo
Steven Lo
CEO at Vaxart

Great. Hi, Cheng. It's Steve. Thank you very much for the questions. On your COVID-19 question, I'll make a few comments, and then I'll turn it over to James as well. On norovirus, I think both Sean and James can take that. As it relates to the gating factors, first of all, we're obviously very pleased with the fact that the stop work order was lifted. Once that was lifted, we, frankly, the next day had a conference call, Zoom meeting with BARDA. In that process of restarting, there were just some things that we needed to start moving forward with, including the screening of patients, et cetera. Those are the natural next steps in the study. Once we get to check off some of those steps, our hope is that we'll be given the green light to start dosing.

Steven Lo
Steven Lo
CEO at Vaxart

I'll turn it over to James if he wants to add just some additional details behind that.

James Cummings
James Cummings
Chief Medical Officer at Vaxart

Sure. Thanks, Steve. In terms of the duration of enrollment for the study, I'd say approximately five to six months. I say approximately because we'll take a look at what enrollment after screening looks like over the first several weeks and adjust our expectations there. Hopefully, that answers that question. Over.

Steven Lo
Steven Lo
CEO at Vaxart

Great. Cheng, what we can do is you had a question on norovirus and specifically what does a phase 1 success look like. Sean, at a high level, you want to address that? James, if you want to add.

James Cummings
James Cummings
Chief Medical Officer at Vaxart

Yeah. I think from our standpoint, I think success would be that the new constructs are trending better than the old constructs. We did not, the size of the study is not enough to look for statistical significance, but we do expect that the new constructs will do a little bit better on key immunogenicity endpoints. I'll concur. I think that we're basing moving forward with that study based on some of the preclinical data. That's compelling. Look forward to having that data, top-line data sometime mid-year.

Steven Lo
Steven Lo
CEO at Vaxart

Yeah. We're certainly very.

James Cummings
James Cummings
Chief Medical Officer at Vaxart

Thanks, Sean. Yeah. We're certainly pleased that we were able to complete the enrollment as fast as we could to really get to that milestone.

Cheng Li
Cheng Li
Director of Biotech Equity Research at Oppenheimer & Co

Yep. Thanks for all the color.

Operator

Our next question is from Mayank Mamtani with B. Reilly Securities. Please proceed.

Mayank Mamtani
Mayank Mamtani
Senior Managing Director and Group Head of Healthcare Research at B. Riley Securities

Yes. Good afternoon, Dean. Thanks for taking our questions. Best wishes to Phil and look forward to working with you on. Yeah. Just maybe following up on the COVID program, the specific BARDA correspondence that you're having prior to initiating dosing in the 10,000 subject trial, have there been any learnings from the Sentinel cohort that is informative to these discussions? Maybe also, if you could comment on how you may want to handle the results from the Sentinel cohort in the later part of this year. I have a follow-up on norovirus.

Steven Lo
Steven Lo
CEO at Vaxart

Sure. Great. Yeah. I'll let James add some more details here. Like I was saying earlier, the conversations have been really productive. I think we do incorporate all that we learned from enrollment, et cetera, as well as how we ship comparator as well as our product to the different sites. That has certainly been something that we continue to build upon. Let me turn it over to James in terms of specifics with the study.

James Cummings
James Cummings
Chief Medical Officer at Vaxart

Thanks, Steve. Now that we are off the pause and we are currently activating or reactivating study sites and screening individuals, that's really your first step prior to enrollment and dosing. We have activated 20 sites, and we have screened approximately 199 folks who are in screening right now. That process, there's an upcurve to that that will continue to climb as we activate more sites and maintain a very, I think, strong posture in terms of screening and enrollment. Over.

Mayank Mamtani
Mayank Mamtani
Senior Managing Director and Group Head of Healthcare Research at B. Riley Securities

Sorry, my question was around the sentinel cohort, that 400 subject, because that data could be helpful in many ways, including to your point, enrollment. James, if you could maybe comment on that.

James Cummings
James Cummings
Chief Medical Officer at Vaxart

Sure. I'd say that we intend to engage with our partners at BARDA to determine if some sort of interim analysis with that group would be mutually advantageous to both parties. The study is set to conclude in terms of the 12 months of safety follow-up by December of this year. We are blinded as well. This is a double-blinded study. Currently, I can't give you any color further than that.

Mayank Mamtani
Mayank Mamtani
Senior Managing Director and Group Head of Healthcare Research at B. Riley Securities

Understood. Thank you. About the recent DSMB review for your norovirus trial, could you touch on maybe what items were looked at? Also, if you could comment on what we saw in your recent phase 1B publication and kind of the entire package that's coming together. If you want to have an end-of-phase 2 meeting, I assume some of the prior generation construct data would also be relevant to be engaging the regulators. Could you maybe put all that together, how you're planning to do that end of this year? Thanks for taking the questions.

Steven Lo
Steven Lo
CEO at Vaxart

Sure. James can provide some detail there. Just in terms of from an interaction with the FDA, I think we've said in the past, right, they look at the totality of the data. All of that's incorporated. James, feel free to add some more color.

James Cummings
James Cummings
Chief Medical Officer at Vaxart

Thanks, Steve. In terms of our SMC, our Safety Monitoring Committee for that phase 1, what we were looking at serially, it's safety to ensure that we see a clean safety profile with no areas of concern to move forward with the protocol as designed and written. The safety data was reviewed upon completion of the low-dose cohort, and then after some sentinel members of the higher-dose cohort. Again, along with our entire platform, we see consistently a safety profile that is very similar to placebo. For details in terms of the phase 1, Sean, do you want to comment on your thoughts in terms of the immunologic outcomes there? Over. Sure.

James Cummings
James Cummings
Chief Medical Officer at Vaxart

After completion of the challenge study, we were able to identify a couple of key immune parameters that we thought were important, the first of which is looking at essentially functional antibodies in serum as well as fecal IgA responses. While we will measure both of these parameters in the new study, and our hope based on our preclinical work is that the new constructs will trend better than the old construct. Over.

Mayank Mamtani
Mayank Mamtani
Senior Managing Director and Group Head of Healthcare Research at B. Riley Securities

Thank you.

Operator

Our final question is from Roger Song with Jefferies. Please proceed.

Liang Cheng
Liang Cheng
Senior Research Associate at Jefferies

Hi. This is Liang Cheng on from Roger. Thanks for taking our questions and congrats on the progress. I guess a couple of questions from us. First of all, the COVID program. I wonder what's the stop work order, what's the impact on your expected timeline to complete a study, maybe quickly remind us where are you conducting a study and how do you think about the finality there? On the norovirus program, understanding that phase 2 will probably depend on potential partnership. Any active conversation that is ongoing right now?

Liang Cheng
Liang Cheng
Senior Research Associate at Jefferies

Thank you.

Steven Lo
Steven Lo
CEO at Vaxart

Hi, Liang. Thanks for the question. I'll go ahead and chat briefly about the stop work order, and then James could add his perspective, and then we'll go into the partnership question. Number one, I think we were very pleased that when we received the stop work order on February 21, it was for 90 days. The fact that it was lifted within 60-62 days afterwards certainly exceeded our expectations because we thought we would go the full 90 days. I think as well to your question, right, that there were 60 days where we could not do anything and that had some minor impact. James can talk about the fact that, as he mentioned earlier, right, we were trying to reactivate the sites as soon as possible. James, if you want to just cover anything from an enrollment standpoint and projections.

James Cummings
James Cummings
Chief Medical Officer at Vaxart

Sure. As part of the study, the stop work order or the pause did impact the 10,000-person cohort of this study. We continued with the 400-person sentinel study. They had already been dosed. We were already observing them for safety. That continues. That 400-person sentinel group, as I mentioned, should conclude the clinical follow-up in December of this year and then project out after unblinding analysis of samples, cleaning of data, a three- to six-month timeframe in terms of some data there. In terms of the 10,000-person cohort, once we begin dosing, I would project, and this is a prediction, about a six-month enrollment period. We will learn more as we continue screening and then begin enrolling and dosing individuals about the period of time that that will take.

James Cummings
James Cummings
Chief Medical Officer at Vaxart

From the time the last person is enrolled, there's a 12-month follow-up period where we're looking at safety, at immunogenicity, but also efficacy, both from a symptomatic standpoint of someone who has symptoms and comes in to be screened to see if they actually have the SARS-CoV-2 virus and COVID-19 infection, as well as asymptomatic surveillance that will occur for 12 months after they've received either our investigational vaccine construct or the approved vaccine. I think that's very interesting from the way that COVID-19, the SARS-CoV-2 virus operates because it mutates over time. We will take a look at not just the protective efficacy, but also take a look at what types of viruses may have mutated that may not be as good for a direct IgG response, but we feel our mucosal response should potentially have an advantage. Over.

Steven Lo
Steven Lo
CEO at Vaxart

Good. Liang, this is Steve. I'll go ahead and address your question on norovirus partnership discussions, right? Number one, we see norovirus as a very important opportunity, right? There's an unmet need here. We're aware of many companies who are pursuing norovirus as well. I think that's a promising market, as well as the fact that there are many companies out there that don't have a norovirus vaccine in their portfolio. Certainly, if you're a large global multinational company, that is something that could be desirable. We are having discussions with a broad and diverse range of companies. Like I said, they include some of the large multinational companies, some medium-sized companies as well. These companies are both global as well as some regional players that are in the United States, but also outside the United States.

Steven Lo
Steven Lo
CEO at Vaxart

I think everyone is waiting like we are for the top-line results, which we have guided everyone to mid-year of this year. I think upon those results, it is our expectation that those discussions will accelerate. From our standpoint, we are pleased that there is interest in norovirus. It certainly supports our thesis that this is a great market opportunity. Frankly, we are the only ones that I am aware of that have an oral vaccine that is in development.

Liang Cheng
Liang Cheng
Senior Research Associate at Jefferies

Very helpful. Thanks for the additional color.

Operator

With no further phone questions, I would like to turn the conference back over to Ed Berg for our written question portion of the call.

Ed Berg
Ed Berg
SVP and General Counsel at Vaxart

Thank you, Operator. I want to thank our shareholders. They have submitted quite a number of written questions. The questions were around both our programs, our science, financial matters, and our proposed reverse stock split. We will handle the questions in that order. The first question is for Steve around our COVID program. Since you are currently the only company to get a stop work order lifted for Project NextGen, can you elaborate on your conversations with BARDA and HHS?

Steven Lo
Steven Lo
CEO at Vaxart

Yeah, thanks. First of all, as I stated earlier, we are grateful and thankful that we have the stop work order lifted. I think that's the result of some productive conversations that we had with BARDA and HHS throughout that process. They certainly evaluated our program on the merits as well as on the science. From our standpoint, these are productive conversations, and I'm sure everyone will respect that they also need to be confidential. We've been asked that these conversations are, I think, at a point where we're not able to share because of the fact that we want to respect our contract with BARDA as well as our relationship with them. Certainly, we believe that they were productive, and it could be one of the reasons why the stop work order was lifted.

Ed Berg
Ed Berg
SVP and General Counsel at Vaxart

Thanks. I do want to add that we only know about our program and what's been publicly announced. We don't have any information about other programs beyond that, just for everyone's clarity. A question on the norovirus front from a shareholder. In the norovirus trial, you're testing a low dose and high dose and have mentioned dose-specific responses in prior trial results. If this is the case, why was the decision made to use a lower dose for the phase 1 clinical trial? James, if you could cover that.

James Cummings
James Cummings
Chief Medical Officer at Vaxart

Sure. Thanks, Ed. The dose we used in our previous phase 2 trial was a 1E11 per strain dose. Don't forget, this is a bivalent vaccine, so there's two strains. It was based on safety and immunogenicity data from the previous trials. We intend in this study to compare the 1E11 dosage of a legacy vaccine with both a low, a 1E10, and a high 1E11 dosage per strain of our second-generation norovirus candidate. This is going to allow us to choose the correct dosage moving forward. Dose-ranging studies are really best practice for any new vaccine construct. We are conducting this study to determine the best dose to provide us with the best chance of enhancing efficacy and similar safety. Over.

Ed Berg
Ed Berg
SVP and General Counsel at Vaxart

Thanks, James. We have a question for Sean on avian flu. The avian flu preliminary results appear very promising. How quickly can the candidate enter the clinic?

Sean Tucker
Sean Tucker
Founder and Chief Scientific Officer at Vaxart

Right now, we're still in preclinical investigations. We have some other things coming up. Obviously, we do think that our candidates can be manufactured very quickly. Right now, we're getting ready to prepare some drug product for clinical use. Obviously, when we're done with the results, we'll publish them when they're available.

Ed Berg
Ed Berg
SVP and General Counsel at Vaxart

Thanks. A science question for Sean. HHS recently directed $500 million to progress universal influenza vaccines that could protect against any strain of the virus. What are your thoughts on the results of that vaccine versus Vaxart's? Do you see the cross-reactivity of Vaxart's vaccine as on par with theirs?

Sean Tucker
Sean Tucker
Founder and Chief Scientific Officer at Vaxart

We certainly appreciate that HHS is investing money in innovative approaches to vaccine and technology, including ours. We do believe our unique mechanism of action as well as convenience has the potential to set us apart from any other vaccine technology out there. Another thing is we believe our ability to generate cross-reactive IgA may be beneficial for flu as well as for other indications.

Ed Berg
Ed Berg
SVP and General Counsel at Vaxart

Thank you. We'll move on from our programs to financial questions. For Steve, sorry, for Phil. You've received funding from the government, and you could be receiving more under this award. Can't use that money to fund the operations of the company.

Phillip Lee
Phillip Lee
CFO at Vaxart

I think the best way to address this is really by starting by stating a few of the key financial terms of the award. The first one is that it does provide funding for up to $460.7 million as of today. Importantly, of that $460.7 million, really $240.1 million is currently available for payment. Importantly, as disclosed in today's press release, the company has actually already received $85.6 million of cash payments through March 31, 2025. What does that mean for Vaxart? A vast majority of these payments that Vaxart receives are actually used to pay the vendors to run the COVID-19 phase 2B trial. There is a portion of this award that covers a portion of our overhead, as well as a fee paid to Vaxart for conducting this trial. We do actually use that portion to help cover operations of the company.

Phillip Lee
Phillip Lee
CFO at Vaxart

That is actually considered in our current cash runway guidance of cash into the first quarter of 2026. I think I'd also like to reiterate that, like any other government contract, the full operations of the company are not funded by this award.

Ed Berg
Ed Berg
SVP and General Counsel at Vaxart

Thanks, Phil. One other financial question for you. Did you raise money off the ATM that you put in place in March?

Phillip Lee
Phillip Lee
CFO at Vaxart

For those that are on the call and just aren't actually aware, we did file for an at-the-market, so that's otherwise known as an ATM offering, in March of this year. By filing for the ATM, it allows Vaxart to have the option, but not the obligation to actually raise, and in our case, up to $50 million by selling shares in the open market. As mentioned earlier, like many of you, we do really believe we are undervalued. In fact, we don't want to raise money at the current stock price. Since we've put the ATM in place in March, we have not sold any shares through the date of this call. If I could just summarize there, really, just no equity financings or dilution related to financings have really occurred since the last earnings report.

Ed Berg
Ed Berg
SVP and General Counsel at Vaxart

Thanks, Phil. We'll move on to questions around the reverse stock split. These are for Steve. First, what went into the decision to keep the authorized share count unchanged? Can that be amended prior to the annual meeting?

Steven Lo
Steven Lo
CEO at Vaxart Inc.

First of all, what I want to do is acknowledge and thank all the folks with questions, all of our shareholders, and also specifically our retail shareholders who are very passionate about this subject. We receive a lot of questions there and really want to acknowledge that and that we understand your concerns there. Given where we are in the process, we did look into how we could amend the proposal, just given, unfortunately, the shareholder meeting is next week, so it's a little late in the process to amend the proposal. With that said, we are taking into consideration your concerns. We're looking into and evaluating how best to address this in time for the annual meeting. We know it's important to you.

Steven Lo
Steven Lo
CEO at Vaxart Inc.

From our standpoint as well, it is not our intent to, as Phil mentioned, have a lot of dilution in our stock. We will look into this and certainly have an update whenever we can.

Ed Berg
Ed Berg
SVP and General Counsel at Vaxart

Thanks, Steve. I'm going to shift to a related question. Are you planning to revise the reverse stock split to a more reasonable level? What goes into determining the ratio of the split, if approved?

Steven Lo
Steven Lo
CEO at Vaxart Inc.

Yes. When we first started working on this, and I also want to just update folks that in our filing with NASDAQ to stay in compliance, we're in the second six months of that. Part of that requirement to regain compliance in our discussions with NASDAQ is the fact that we do have to show a plan on getting above a dollar. That actually includes the fact that we have to look at a reverse stock split. That was the first step. The next step was, let's look at a range that could make sense. The board had a wide range to maximize flexibility. With that said, we at present don't have the intention of trying to effect a reverse split in the 1-50 ratio.

Steven Lo
Steven Lo
CEO at Vaxart Inc.

As I mentioned in one of the recent stockholder letters, the board really intends to select a ratio for the reverse stock split, if approved, that's high enough to have us cure the NASDAQ deficiency. Obviously, we prefer not to have to do that through the achievement of our important milestones and continued execution on our plans. If we are in that situation, then our intent is to only select the ratio that's small enough to get us into compliance with NASDAQ.

Ed Berg
Ed Berg
SVP and General Counsel at Vaxart

Thanks, Steve. Another question. If compliance isn't regained in time, are you preparing to appeal to NASDAQ for an extension, especially considering the recent program pause?

Steven Lo
Steven Lo
CEO at Vaxart Inc.

Sure. As I was saying earlier, when we received the second six-month extension from NASDAQ, it was contingent upon our company having a plan to effect a reverse stock split. It is part of the process, which is why we are putting the vote forward to our shareholders. We have been informed by NASDAQ that they do not engage in the dialogue about extension until after the June 30th deadline. This is why we want to have the optionality. Obviously, we are requesting and asking our shareholders to vote for the proposal number two with our intent of only using it if we have to.

Ed Berg
Ed Berg
SVP and General Counsel at Vaxart

Thanks. I think we'll end on this question, which I know some of our shareholders have really wondered about, which is, why don't you just delist from NASDAQ and trade on the OTC market?

Steven Lo
Steven Lo
CEO at Vaxart

Thanks. Yes, that's a frequent comment. We've investigated this. We've looked into it as well. From what we can see, a delisting from NASDAQ would have a significantly detrimental impact on the value of our shares. When a company is traded on an OTC market, liquidity is quite much lower, which could also negatively impact the stock price. As you may know, many brokerage firms and investment funds really steer clear of the lower-priced stocks and companies that are not on a major exchange, which could also discourage other potential investors. The restrictions that come with trading on a less prominent exchange could also deter the institutional investors. We do not really desire being on that type of an exchange because it could also result in dropping research coverage by our covering analysts who have been very supportive. We have a good relationship with them.

Steven Lo
Steven Lo
CEO at Vaxart

Long and short of it is, we certainly believe that staying on NASDAQ is in the best interest of the company and its shareholders.

Ed Berg
Ed Berg
SVP and General Counsel at Vaxart

Thank you, Steve. That's all the questions we have at this time. Operator, can you close the call?

Operator

Yes. Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Executives
    • James Cummings
      James Cummings
      Chief Medical Officer
    • Steven Lo
      Steven Lo
      CEO
    • Phillip Lee
      Phillip Lee
      CFO
    • Ed Berg
      Ed Berg
      SVP and General Counsel
    • Steven Lo
      Steven Lo
      CEO
    • Sean Tucker
      Sean Tucker
      Founder and Chief Scientific Officer
Analysts
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