It’s tempting to view Vaxart (NASDAQ:VXRT) as a company unfortunately one year too late. And it might be an accurate assessment. Though VXRT stock was tied to a compelling need, that is to address the novel coronavirus, competition may render the underlying company a moot point.
As you probably know, Vaxart is among the many biotechnology and pharmaceutical firms that pivoted sharply to the Covid-19 crisis. Because it specializes in vaccines, VXRT stock wasn’t nearly as speculative as other Covid players, many of which had little ties to the vaccination business before the pandemic. More importantly, Vaxart specializes in oral vaccines, which really gave the company a distinct advantage.
For as much talk as there was about exciting new technologies to combat the SARS-CoV-2, ranging from the subunit to nucleic acid to viral vector approaches, they all had one thing in common: needles. Back in November 2020, I mentioned the orally administered vaccine as a big plus for VXRT stock:
In that context, Vaxart may be able to sneak into the discussion at some point. Unlike the majority of vaccine candidates, Vaxart’s proposal doesn’t involve an injection but rather an oral administration. That could be a huge factor given that millions of Americans are scared of needles. And I’d say that quite a few more would prefer an oral vaccine over an injected one. Hence, VXRT stock has some relevance that makes it distinct.
Sure enough, speculative fervor pushed Vaxart shares to double digits. At the peak, VXRT closed the Feb. 2 session at an optically satisfying $23.33. Of course, that satisfaction was short-lived, with the equity unit tumbling immediately into single-digit territory the day after.
It wasn’t a surprising result. As I mentioned in November, VXRT was one of my ideas for biotech penny stocks worth a gamble. The operative word is gamble.
VXRT Stock Has Probably Run Out of Gas
Moving forward, I don’t see how Vaxart can overcome the challenges that dominant players Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) impose. These two companies are already out in the field, vaccinating the population like crazy. By the time Vaxart’s solution becomes viable – if it becomes viable – the crisis may have faded. Naturally, this wouldn’t be too pleasant for VXRT stock.
Indeed, competition is the threat that Sandra Vanderbyl and Sherry Kobelak of the Journal of Commercial Biotechnology discussed as the primary negative catalyst for biotech enterprises. In many cases, biotech firms work on unmet medical needs, “so the only risk is threat of competition of another company working on the same disease.”
Well, with Covid-19, seemingly everyone and their dog was working on a vaccine. Thus, competition has been intense for VXRT stock, making its underlying possibility of success unlikely.
Of course, opinions vary on this topic. My InvestorPlace colleague Larry Ramer wrote that speculators should consider giving VXRT stock a chance. Mainly, Ramer discusses the superiority of oral administration versus intramuscular administration. Anecdotal, yes, but I think most folks prefer taking their meds in the mouth rather than in the arm.
But it’s not just the discomfort of intramuscular jabs that bother people. When you consider the onerous infrastructural impact that many Covid-19 vaccines impose, the idea of oral tablets makes plenty of sense. Unlike certain mRNA vaccines, you don’t need ultra-cold freezers to store tablets.
Heck, as Ramer points out, you don’t even need professional administrators. As he put it, “Even if pills can’t be mailed directly to consumers, they can easily be mailed or delivered to many more distribution points than shots. That, in turn, should make obtaining vaccines much easier for consumers, particularly those who live in rural areas or don’t own automobiles.”
Still, this crisis would need to head back into inferno mode and that might be problematic for VXRT stock.
Americans Are Ready to Move On
In the back of my mind, I felt that it was possible Americans would adopt a different culture, that Covid-19 would be the incident that transformed how we interact with others. Certainly, the infighting, the acrimony in Washington and violence on the street gave credence to this idea.
Now, I’m not so sure. You see, Americans are incredibly resilient. They’re not about to change who they are, not when we see daylight from this crisis.
In other words, those who wanted to take the vaccine already did. Those who don’t will not. With Covid-19 cases in the U.S. having cratered, the idea to push vaccination at this point seems superfluous.
Of course, you never know how this crisis may turn out. Also, we may see another pandemic break out, which may bolster VXRT stock. However, this is extreme speculation at this point. I think the narrative here is done unless something insane happens.
On the date of publication, Josh Enomoto 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.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.