Vaxart’s Compelling Story Will Take a Long Time to Play Out

Vaxart (NASDAQ:VXRT) is an intriguing biotech company that is attempting to develop oral vaccines for a number of conditions, including most notably, Covid-19. If you’re among those investors who, like me, were not familiar with VXRT stock, the company’s participation in the Covid-19 vaccine race explains the price movement.

A scientist holds a test tube while it is in a container
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Like many biotech companies, Vaxart was a penny stock at the beginning of 2020. That changed with the onset of the pandemic sparked by the novel coronavirus. Although the company was never a candidate for Operation Warp Speed, VXRT stock has soared above $10 per share on three occasions.  

The stock has failed to hold those levels, but on each occasion, it appears to be forming a higher base of support. As of this writing, VXRT shares are trading at $7.15. And that means the beauty of Vaxart lies in the eyes of the investor and where they bought the stock.  

But where VXRT stock goes from here is less clear. There certainly appears to be a market for oral vaccines. However, it may be years before the company delivers a product to meet that opportunity.

Oral Vaccines Address Two Key Issues 

Those of us that don’t make a living studying virology learned about two obstacles in the distribution of the Covid-19 vaccine. The first is the use of needles. This is a psychological impediment for some. However, it also raises logistical concerns. After getting a vaccine to a location, a network needs to be in place to stick needles in arms. And one of the most common side effects of any shot is pain or swelling at the injection site.  

Second, as many of us learned, the mRNA vaccines by Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) have low temperature storage requirements. This creates an added logistical concern.  

And both issues are amplified in developing countries, which is where the largest opportunity for Vaxart may ultimately lie. 

Hoping That Different Is Really Better 

VXRT stock has been dropping significantly after the company released data on its Phase 1 study. The results weren’t bad, but not what analysts were expecting. Vaxart CEO Andrei Floroiu stated, “Our vaccine’s immune response appears very different than that seen from the leading injectables…” 

By different, Floroiu meant the vaccine created mucosal as opposed to serum antibodies. However, the vaccine did produce more potent T-cell responses than either of the mRNA vaccines.  

Time will tell if that is a better approach. But time is not on Vaxart’s side at least as it relates to Covid-19. With each passing day, more Americans become fully vaccinated. And in one of its latest announcements this week, the Center for Disease Control (CDC) said that data suggests individuals who have recovered from even a mild case of Covid-19 may have long-lasting antibody production. This would reduce, or altogether eliminate, the need for those individuals to be vaccinated.  

The good news is the company has several other vaccine candidates in their pipeline. However, none of those candidates are further along than its Covid-19 candidate.  

The Bottom Line on VXRT Stock 

It should be obvious that any investor looking to take a position in VXRT stock should keep their position small. Vaxart does not yet have a product that’s in market and it could be several years before they do.  

By itself, that doesn’t mean you have to stay away from VXRT stock. However, if you’re buying it as a Covid-19 play, you may be disappointed. On the other hand as a long-term speculative bet that the company can deliver a safe, effective oral vaccine, there may be an opportunity.

The company has products in their pipeline. That essentially gives it about the same risk as many electric vehicle (EV) stocks.  

On the date of publication, Chris Markoch 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 Publishing Guidelines. 

Chris Markoch is a freelance financial copywriter who has been covering the market for seven years. He has been writing for Investor Place since 2019. 

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