Is now the time to take a look at speculative Covid-19 play Vaxart (NASDAQ:VXRT) stock? The clinical-stage biotech name has been at work on an oral coronavirus vaccine since before Covid-19 was declared a pandemic. Shares have seen several parabolic price movements since then.
Those who chased its prior rallies may have ended up with losses. But as shares make another retreat, this may be a vaccine play worth rolling the dice on. Emphasis on “rolling the dice.” This company has been around for decades, but it’s yet to have big-time success. Its chances of turning its prospective no-jab Covid vaccine into a reality may be at best a long-shot.
Even so, the music hasn’t stopped just yet. Many may believe, that with the vaccine rollout, it’s game over for “also rans” in this space. But, there’s still a shot there will be demand for its VXA-CoV2-1 oral vaccine if it gets approved. With the potential for more positive news sending it higher once more, the recent pullback may be a buying opportunity.
VXRT Stock and Its Latest Short-Lived Rally
Positive news has temporarily sent Vaxart shares zooming several times since February 2020. The latest one started late last month, ahead of the release of promising phase-1 trial data. Shares went from around $5.50 per share up to over $10 per share. But just before the unveiling of said results, the stock’s most recent pop was followed by yet another drop. As of this writing, the stock’s now back mid-single-digit prices (around $6.30 per share).
The phase-1 data may have shown promise, especially against variants of Covid-19. But this failed to fuel another rally. Instead, it wound up being a “buy the rumor, sell the news” situation. From this, it’s clear that this will remain a stock to trade, rather than something to buy and hold for long-term gains.
Admittedly, it’s more of a gamble than an investment. If it fails to follow up with its recent positive development with another morsel of good news, VXRT stock risks sliding further back towards prior price levels. However, it’s not out of the running just yet.
In the coming months, the company could again release promising data that points to this candidate continuing to move through Vaxart’s pipeline. But what about demand? With so many now vaccinated in the U.S., is there room for a new entrant? At first glance, given the wide availability of the vaccines already approved for emergency use, this doesn’t seem to be the case. But it may still manage to find a market.
Why There’s A Potential Market for VXA-CoV2-1
When discussing another speculative vaccine play, Ocugen (NASDAQ:OCGN), I made the argument that it’s questionable whether there’s enough demand for yet another vaccine. In the United States, the three major vaccines, from BioNTech (NASDAQ:BNTX) and Pfizer (NYSE:PFE), Johnson & Johnson (NYSE:JNJ), and Moderna (NASDAQ:MRNA) are widely available.
But vaccine hesitancy runs high. As a result, vaccine supply still outstrips demand. With just those unwilling to/not interested in taking it yet making the bulk of those not yet vaccinated, it doesn’t seem likely a candidate late to the party will find a market. This points to Ocugen failing to live up to expectations even if it’s able to import Covaxin to the U.S. market. Yet the niche nature of Vaxart’s vaccine may give it success in a crowded market.
As our own Louis Navellier pointed out May 11, nearly 1/3 of vaccine-hesitant Americans would be willing to take a jab-free vaccine. In short, a vaccine in pill form may be a less divisive way to win over the millions who have so far refused to get the one currently-available vaccine.
However, even with this outcome, Vaxart’s candidate may also be too late to the party. With the CDC’s recent guidance change regarding masks, and the President’s response, enough sitting on the fence may change their minds, increased vaccination numbers, bringing the U.S. to herd immunity levels sooner rather than later.
Bottom Line: A Risky Play, But Could See Another Pop in the Short-Term
Its potential to win over the vaccine hesitant is just one factor pointing to this “also-ran” finding commercial success. As cases remain bad in Brazil, India, and other countries, Vaxart may find success with its candidate in these hard-hit regions of the world. The fact the phase-1 results showed it strength in combating variants is another positive in its corner.
This is a risky play, with a catalyst that more likely than not won’t pan out. But if it releases more promising news within the coming months, it could go on yet another parabolic run. Approach VXRT stock cautiously, but as its share price retreats, now may be the time to pounce.
On the date of publication, Thomas Niel 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.
Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.
