The Bull Thesis for VXRT Stock is Questionable at Best

Investors should simply avoid Vaxart (NASDAQ:VXRT) stock at this time. Although VXRT stock has an interesting business model, there is arguably not much behind it. I’ll get to that in a moment, but I’d first like to start by noting that Vaxart has multiple hurdles to overcome which increase its probability of failure.

The Vaxart (VXRT) logo is surrounded by face masks, syringes and pills.
Source: Ascannio /

Just to name a few, there’s the binary nature of biotech investing, and the time to commercialization. There are a host of other concerning signals as well. What it all adds up to is a company with many routes toward stagnation or worse, failure. And one which needs too much to go right in order for success to occur. 

I’m essentially stating that it’s too much of a gamble, and I believe it’s business model as it relates to Covid-19 exemplifies that risk. 

Demand for Business Model 

Vaxart’s business is selling oral vaccines given in tablet form. The company utilizes its VAAST platform to deliver two payloads against a given disease or virus. The patient swallows a Vaxart pill and it delivers a protein antigen against the disease or virus and an immune booster as well. 

The company has a pipeline of four prophylactic (tablet) vaccines, one of which is indicated for Covid-19. That program has completed Phase 1 of the Clinical Trial process. 

That is all good and well, and as a business makes perfect sense. So, I am not questioning its business model in that regard. Rather, I question Vaxart’s claim that a Covid-19 vaccine given in pill form will reduce vaccine hesitancy much at all. 

Vaxart’s claim stems from an April poll commissioned by the company. 

Bull Thesis Depends on It

That poll of 1,500 adult age Americans found that 7 in 10 people would prefer taking a vaccine pill rather than receiving an injection. 

The poll also indicated that 23% of those 1,500 people didn’t plan to get vaccinated but one third of that 23% would if a pill were administered. The poll goes on to extrapolate that a Vaxart Covid-19 vaccine in pill form could possibly be used to vaccinate an additional 19 million Americans. 

I take issue with the central idea here because it essentially asks the people being polled about an option that doesn’t exist. It forces them to answer that they would take a tablet vaccine if it existed. 

If the pill were commercially available and in front of them, it’s easy to assume that far fewer would say yes.  

The idea that injections are a central part of American hesitancy toward vaccination seems almost insignificant. Anecdotally speaking, have you seen many posts which argue that a needle jab is causing hesitancy anywhere? I know I haven’t. 

So, I have issue with the bull thesis that there would even be strong demand for Vaxart’s Covid-19 pill. That doesn’t even consider the binary nature of biotech investing. That’s a significant hurdle with known pitfalls. 

The simple fact is that Vaxart’s Covid-19 tablet is in the early stages of Phase 2 trials. Like all biotech programs, it’ll either fail or succeed. And the historical odds are not in its favor. 

Biotech Finances

Biotech companies almost always follow the same path: Burn through mountains of cash in R&D and development in the hope that commercialization leads to a pot of gold on the other side. 

Vaxart recorded a net loss of $16.007 million in the first quarter. And it ended the first quarter with $177.3 million in cash and liquidity. It only recorded slightly over .5 million in revenues for the period as well. 

Those numbers aren’t particularly concerning for a biotech. At that rate the company might anticipate losing perhaps $80 million this year. But it raises the very real prospect that biotech companies always wrestle with. That is, at some point cash on hand becomes an issue and then an equity raise becomes a real possibility. 


VXRT stock relies on too many ‘ifs’ in order to reach success. There’s too much time to go for it to bring a Covid-19 tablet to the market, adn too much to potentially go wrong between now and then.

On the date of publication, Alex Sirois 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.

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