Vaxart (VXRT 20.20%) surged early in the coronavirus vaccine race. It climbed 2,400% in the first six months of 2020. That's as investors bet it would bring a potentially game-changing candidate to market. But Vaxart's program didn't move as quickly as those of vaccine market leaders Pfizer and Moderna. Vaxart's candidate currently is in a phase 2 study.
Data is expected in the first half of this year. But Vaxart has released reports from some preclinical studies that offer us reason to be optimistic. In fact, 19 words from Vaxart's chief scientific officer may mean big things for the biotech -- and trouble for vaccine rivals.
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Targeting where infection begins
CSO Sean Tucker's words relate to a non-human primate study involving the vaccine candidate. So first, a bit of information on that study. Vaxart is testing an oral vaccine candidate. It's taken in tablet form. The company said this candidate produced antibody levels in blood serum similar to those of injectable vaccines. But it also produced antibody responses in mucosal sites -- such as the nose. This is key because this is where infection actually begins.
Now here are the words that could make things difficult for rivals:
"These antibodies are only minimally induced in currently authorized vaccines and may be key to protecting against new variants," Tucker said.
Why could antibodies in the mucosa better handle variants? Tucker uses omicron as an example. This variant mainly replicates in the upper respiratory tract. And that means antibodies on site might be more effective than those in the blood.
Tucker also said mucosal response could reduce transmission of the virus. This has been another challenge for vaccine makers. Today's vaccines haven't absolutely proved the ability to cut transmission of the virus from person to person.
Two major benefits
So, Vaxart's investigational vaccine might have two major benefits: the ability to beat variants and the ability to reduce the risk of transmission. Of course, the company still must prove its candidate can do this in humans. It will be important for investors to monitor the upcoming batches of clinical trial data.
Now, you might be wondering: If Vaxart reports the same results in humans -- does that really mean trouble for established leaders like Pfizer and Moderna? I don't expect Vaxart to unseat the biggest players. These companies are working on updated vaccines and boosters right now. So, they, too, may produce a vaccine with significant advantages over today's products. But Vaxart could put a bit of a dent in their market share.
I think Vaxart's potential success could create a bigger problem for fellow latecomers to the market though. Clearly, the above two points Tucker mentions are major advantages for Vaxart. Add to that the fact that Vaxart's candidate doesn't involve a jab. And that it's room temperature stable so is easy to transport and store. All of this makes it a winning choice for healthcare providers and their patients. If Vaxart's candidate reaches commercialization, it could become a game-changer for all of these reasons.
What does this mean for investors right now?
Vaxart's pipeline includes eight oral vaccine candidates against various infectious diseases. The most advanced programs are in phase 2 -- for coronavirus, norovirus, and seasonal flu. The company hasn't yet brought an oral vaccine to market. And failure can happen at any stage of development. If Vaxart experiences a big setback in late-stage trials, dreams of revenue in a few years may transform themselves into dreams of revenue many years down the road. That's why it's best to invest in Vaxart only if you're an aggressive investor.
But investors who don't mind the risk should consider this dynamic biotech stock. If Vaxart confirms its preclinical findings in humans, the company may rise above many of its vaccine rivals -- and deliver revenue and share price gains in the long term.
