Several recent news items have improved my confidence in Vaxart (NASDAQ:VXRT) stock. Specifically, another columnist provided additional evidence that the company’s Covid-19 vaccine candidate could be effective even though it did not spur the production of “neutralizing antibodies” in most participants in a Phase I trial.
Moreover, another company agreed to license a different product made by Vaxart, providing some validation of the latter company’s technology.
Finally, two research firms recently issued highly optimistic assessments of VXRT stock, indicating that Wall Street is becoming more bullish on the name.
I previously provided extensive evidence showing that the company’s Covid-19 candidate, VXA-CoV2-1, could be effective. The evidence was based on data showing that patients developed stronger T-cell responses than those who received the vaccines made by Moderna (NASDAQ:MRNA) and Pfizer (NYSE:PFE).
Those who are bearish on Vaxart have focused on the inability of VXA-CoV2-1 to spur neutralizing antibody production in most of the patients who were involved in a Phase I trial of the vaccine candidate.
In a recent column for Seeking Alpha, however, an author writing under the name Clinically Sound Investor identified additional evidence suggesting that this issue may be unimportant.
Specifically, Vaxart provided evidence that another one of its vaccine candidates (a shot that is supposed to prevent the flu) showed similar efficacy, immunogenicity and safety as Sanofi’s (NASDAQ:SNY) flu vaccine in a Phase 2 trial.
The article indicates that Fluzone is likely to produce many more antibodies than Vaxart’s candidate because Sanofi’s Fluzone has eight strains of an inactivated flu antigen, while Vaxart’s candidate has just one strain.
Licensing Deal and VXRT Stock
On July 7, Vaxart disclosed that it had signed a global licensing deal with Altesa Biosciences. Under the agreement, Altesa will develop and commercialize Vaxart’s anti-viral drug Vapendavir, The agreement could ultimately be worth as much as $130 million.
Altesa’s willingness to take the time to make the deal and work on Vapendavir provides some validation of Vaxart, its work and its technology. I don’t believe that Valtesa would have made the deal if it did not have some confidence in Vapendavir’s potential.
On June 11, Piper Sandler analyst Yasmeen Rahimi initiated coverage of VXRT stock with an $18 price target. Vaxart’s vaccine platform, Ad5, has been validated in 200 clinical studies, de-risking the vector for approval due to regulator familiarity according to Rahimi.
Jefferies also was upbeat on Vaxart. Arguing that the results of the comparison between Fluzone and Vaxart’s candidate eliminates the risk posed by the platform, the firm thinks that Vaxart can generate annual revenue of more than $1 billion.
Jefferies started coverage of VXRT stock with a $13 price target and a “buy” rating.
The Bottom Line on VXRT Stock
I believe that the successful trial of Vaxart’s flu vaccine candidate, along with the company’s licensing deal with Altesa, greatly reduces the risk facing VXRT stock.
Further, the analysts’ optimism about Vaxart makes me more upbeat on the shares.
Since Vaxart’s vaccines are delivered in pill form they are so much more convenient than injected shots. I think that it will be able to sell hundreds of millions of doses even if they are slightly less effective than the incumbent vaccines.
Given the fact that the market capitalization of VXRT stock is less than $1 billion, I continue to believe that the shares should be bought by speculative investors.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Larry has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Among his highly successful contrarian picks have been solar stocks, Roku, and Snap. You can reach him on StockTwits at @larryramer. Larry began writing columns for InvestorPlace in 2015.