Vaxart, Inc. (VXRT) Earnings Call Transcript & Summary

Greetings, and welcome to the Vaxart Business Update and First Quarter 2023 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the webcast over to your host, Ed Berg, Senior Vice President and General Counsel.

Good afternoon, and welcome to today's call. Joining us from Vaxart are Andrei Floroiu, Chief Executive Officer; Dr. Sean Tucker, Founder and Chief Scientific Officer; Dr. James Cummings, Chief Medical Officer; and Phillip Lee, Chief Financial Officer.  Before we get started, I would like to remind everyone that during this conference call, Vaxart may make forward-looking statements, including statements about the company's financial results, financial guidance, its future business strategies and operations and its product development and regulatory progress, including statements about its ongoing or planned clinical trials.  Actual results could differ materially from those discussed in these forward-looking statements due to a number of important factors, including uncertainty inherent in the clinical development and regulatory process and other risks described in the Risk Factors section of Vaxart's most recently filed annual report on Form 10-K and other periodic reports filed with the SEC. Vaxart undertakes no obligation to update any forward-looking statements after the date of this call.  I'll now turn the call over to Andrei Floroiu. Andrei?

Thank you, Ed, and thank you to all of you for joining us today. On today's call, our team will highlight the progress we have made on our norovirus oral pill vaccine program during the quarter. We will also discuss updates on our plan for an oral pan-betacoronavirus vaccine and showcase data that demonstrates the unique benefits of our platform. Starting with norovirus, most notably in the quarter, we initiated our Phase II dose-ranging study for our bivalent norovirus oral vaccine candidate. We remain on track to deliver on our planned milestones for 2023 with anticipated data readouts for both the dose-ranging study and for our ongoing Phase II challenge study of our G11 monovalent norovirus vaccine candidate later this year. James will provide more details on both studies in a moment. But first, a quick reminder on why this program and the studies are so important for global public health and while we are committed to Vaxart's oral pill norovirus vaccine approach. Norovirus is a significant public health issue, which leads to a significant economic burden in developed countries, and there is no through vaccine. More than 21 million people are inspected in the U.S. each year, resulting in an annual disease burden of more than $10 billion in the U.S. alone.  It is important to note that norovirus predominantly affects each segment, children under the age of 5 and older adults. There are about 20 million kids in the U.S. and about 55 million older adults over the age of 65. Additionally, there are approximately 15 million other Americans who can benefit from a norovirus vaccine, such as health care and child care service providers, bringing our total domestic market opportunity to approximately 90 million America. In the U.S., most people are concerned about Salmonella or equal. But if you look at the total number of cases, norovirus is the most frequent foodborne illness by far. If you've been following current events, you know that everyone is at risk for norovirus in schools, workplaces and many other places where people gather in those numbers.  People who experience norovirus symptoms are missing school and work and are not able to perform their daily function. We believe that our norovirus vaccine program has the potential to address the need and a tremendous disease burden that norovirus carries both in the U.S. and around the world. To date, we have produced data from 6 completed norovirus clinical trials that have enrolled nearly 350 subjects. These data have shown immune responses from our vaccine to be strong, long-lasting comparable to natural infection from norovirus, similar in both elderly and young adult population, a result that generally is not seen with injectable vaccine. In March, we shortcake our differentiated norovirus program on a virtual KOL call that we sponsored would lead us in the norovirus pacing development. These experts share their insights and perspectives on the global [indiscernible] effective and readily deployable norovirus vaccine.  We hope that many of you were able to join this informative event as we continue to educate the financial community about the magnitude of the unmet need and the opportunity for a norovirus vaccine. A replay of that event is available on our Investor Relations section on our website at www.vaxart.com. Looking ahead, we have several important clinical milestones this year, and we remain on track to achieve them. First, we expect to report top line data from the ongoing Phase II dose-ranging study of our bivalent norovirus vaccine candidate in mid-2023.  Next, we anticipate reporting top line data from the ongoing Phase II challenge study of our G11 monovalent norovirus vaccine candidate in the third quarter of this year. And then we look forward to initiating this year the Belen Melinda Gates Foundation funded clinical trial to evaluate the ability of our norovirus vaccine candidate to induce antibodies in breast milk and transfer those antibodies to in infants. Taken together, these milestones have the potential to support the continued advancement of Vaxart's norovirus program towards the Phase III trial, while also potentially providing further validation of the promise of our norovirus pill vaccine platform. Norovirus continued to remain relevant, both nationally and globally, and we are encouraged by this opportunity to advance our oral pill vaccine technology.  Now I'll turn the call over to James for a review of our norovirus program. James?

Thanks, Andrei. We're really proud of our clinical team for their continued efforts to advance our mission and make meaningful progress with the Vaxart platform. During the first quarter of this year, we dosed the first subject in the Phase II dose-ranging study of our bivalent norovirus oral vaccine candidate. Recall that this candidate contains 2 very important genotypes, G11 and G24, which have caused the majority of norovirus disease in humans over the past 20 years. As a reminder, this trial enrolled 135 healthy adults at 3 sites here in the United States. The first 10 sentinel subjects received open-label high-dose vaccine, and the remaining subjects were randomized to high or low-dose vaccine or placebo. Each of the vaccine norms has 50 subjects, and the placebo one has 25 subjects. The primary endpoints are safety and immunogenicity in order to determine a dose level for the Phase III development. Enrollment was completed in mid-April, and we expect to report top line data from the study in the middle of this year. If successful, the next step will be a Phase IIb study, leading to an end of Phase II meeting with the FDA in 2024. In March, we announced the expansion in the number of cohorts in our ongoing Phase II G11 norovirus challenge study, measuring the efficacy and safety of our monovalent norovirus vaccine candidate. This study is also designed to identify a correlative protection between immune responses to the vaccine and a reduction in the risk of norovirus infection and/or acute gastroenteritis. Enrollment in this ongoing double-blinded study is completed, and we continue to expect to report top line data in the third quarter of 2023.  In April, I presented on previously disclosed data from our norovirus program at the World Vaccine Congress in Washington, D.C. These data demonstrate that our oral pill, bivalent norovirus vaccine candidate has many broad advantages, including the following: it induces broad immune responses via both mucosal and systemic responses. Immune response rates were above 90% for the high dose. Immune responses were durable. They lasted for more than 200 days. Vaccine responses can be boosted after 1 year. Immune responses in the elderly, those aged 55 to 80 years in this study were very similar to those in younger adults aged 18 to 49. And finally, Vaxart coronavirus vaccine has a clean safety profile and has been well tolerated in this and all of our clinical trials to date.  Next week, we'll make 3 presentations at the 8th International Calicivirus Conference in Rotterdam, the Netherlands. Dr. Sean Tucker, our Founder and CFO, will be presenting a paper on breast milk antibodies and the potential ability to block transmission. Dr. Becca Flutter will present data demonstrating that boost administration of our oral norovirus vaccine candidate at 18 months after bivalent immunization is effective in inducing potent immune responses. And lastly, I'll be presenting an overview of Vaxart's bivalent vaccine efforts to date as well as providing additional details on our studies in elderly subjects. We continue to believe in the potential of our bivalent norovirus candidate, as we target a BLA submission and possible FDA approval. We look forward to updating you on our progress as we provide updates from our concurrent Phase II clinical trials. I'll now turn the call over to our Founder and Chief Science Officer, Dr. Sean Tucker, for an update on our pan-betacoronavirus program. Sean?

Thanks, James. Our research team has made tremendous strides in publishing clinical and preclinical data and presenting that data in front of important gatherings of scientific and governmental leaders. During the World Vaccine Congress last month, I presented previously published data from Vaxart studies demonstrating our vaccine platform's ability to block transmission and boost existing COVID-19 vaccine. We believe Vaxart COVID-19 vaccine has a favorable immune profile, achieving all of the following objectives. It is room temperature stable; it is easy to administer. It induces serum antibody responses and serum neutralizing antibody responses. It induces potent T cell responses; it creates a mucosal immune response. It can inhibit virus transmission. It is cross-reactive against SARS COV2 variants and other beta coronaviruses and it importantly boosts the most important COVID vaccine. Based on all of mucosal cross-reactivity data we have reported to date in our COVID clinical vaccine studies, we believe we may be able to create an oral pan beta coronavirus vaccine. We continue to develop new constructs that enhance pan-betacoronavirus crosser activity, and we plan to advance these to the clinic when we are ready. Not a vaccine would make it used to both protect against current circulating viruses and to future-proof the vaccine, either against emerging coronavirus threats or other beta coronaviruses, making it a valuable tool for pandemic preparedness. We believe this approach makes tremendous sense. There is continued interest in next-generation COVID-19 vaccine from regulatory and governmental bodies as evidenced by the Biden administration's reported proposed commitment of up to $5 billion through such next-generation coronavirus vaccine. We look forward to continuing to engage with the government with the goal of obtaining funding for our pan-betacoronavirus program.  I'll now turn the call over to Phil for a brief discussion of the financials. Phil?

Thanks, Sean. The details of our financial results for the first 3 months of 2023 are summarized in today's press release. Factor ended the first quarter of 2023 with cash, cash equivalents, restricted cash and marketable securities of $71.8 million compared to $95.7 million as of December 31, 2022. The decrease was primarily due to cash used in operations as we advanced our norovirus program. We continue to expect our current cash position provides us with runway into the second quarter of 2024. On behalf of all of us at Vaxart, I'd like to thank you for your time today. We will now open the call for your questions.

[Operator Instructions] Your first question is going to come from Mayank Mamtani with B. Riley.

So you seem to have an mRNA per joining this effort to develop a norovirus vaccine, which validates the disease burden and market opportunity that you guys have been talking for a while, and you obviously are miles ahead here in terms of being in Phase II. Could you just talk a little bit about the platform differences, advantages relative with your platform relative to say mRNA? And then I have a follow-up.

Yes, let me tell you a little bit about -- obviously, I think our platform will be very good from the standpoint of listening antibody responses in mucosal surfaces, and certainly, norovirus is something to infect the intestinal stage. We do know we make very strong intestinal antibodies. So we think we have an advantage. As you know, mRNA vaccine can be very good in making serum antibody responses, but those tend to be a little more transient. I think our data, at least in noroviruses that we can at least have our antibodies in the serum last for more than 200 days. So I think we have some significant advantages. And obviously, we're further ahead.

Great. And then on the Challenge study for the monovalent, are you guys able to sort of comment on how the -- sort of the expectation of events that you had when you designed the study relative to sort of where you are -- and if anything, else that you guys have learned as you have been executing on the study versus your original plan? That would be great.

Why don't I take this one, Sean. This is James. So if you recall that challenge studies, typically, they're more aggressive than what you see in nature, no real-world occurrence of disease. The sample size for this study is built primarily for descriptive statistical analysis as we're really looking to understand how the vaccine operates. To do this, we have a number of measures we're looking at, including, but not limited to, a decrease in severity of AGE acute gastroenteritis, a decrease in viral shedding, effect on infectivity and effect on disease severity.

[Operator Instructions] Our next question is going to come from Roger Song with Jefferies.

Great. A few quick ones on as. So the first one for the bivalent immunogenicity data in midyear. So can you just let us know what is the expectations for the data and how you're going to make the [ go/no go ] decision forward and understanding you will potentially do a Phase IIb. What will be the potential study designs for that based on the Phase II immunogen data you will see in the midyear? Yes, I have a follow-up after that.

Sure, Roger. This is James. So I'll take a stab at that. For the Phase II, our 202-norovirus study, we're looking at the safety and immunogenicity of 2 different dosage strengths of our bivalent construct. And we'll take a look at both the safety, which to date, knock on wood, is looking just as our portfolio has in the past, well tolerated. But we'll also look at immunogenicity and compare those 2 groups. I think those are sort of the 2 things we'll look at to judge what dose to take to the larger study in the Phase IIb, so that we can get enough safety data to then have a follow-on discussion post Phase II discussion with the FDA. And the follow-on to that study would likely take a few months. So we would project, if all is successful, potentially 2024.

Got you. And then so given you will have the challenge study data from the monomer in 3Q as you do the Phase IIb for the bivalent, do you expect you will also do something similar as the change study before you move into the pivotal or you will bring the bivalent with the larger Phase IIb manages data with the monovalent challenge data and moving into the Phase III pivotal?

Well, I think the sequence of events are such that we'll have the top line data from the 202 study, the Phase II dose comparison study, Part A, midyear. As we said in this conversation, we'll have the top line data for the Challenge study in Q3 of this year. So those 2 data points are fairly important as we map out our next steps. Does that answer your question, Roger, because I'm not quite sure if I got that?

Yes. Just -- I think you answered the question, but just curious, do you need another change in study for our bivalent before you can move into later-stage development.

Well, I think that's a discussion to have with the regulatory agencies after we have this data in terms of additional studies, whether or not that's a requirement or not is something that we'll be talking to the agency about.

That concludes the audio portion of the Q&A. So I will now turn it over to Edward for the written Q&A.

Thank you. We've had a number of online questions. James, this first question is for you. Did you have additional discussions with the FDA this quarter? And if so, what was the context of those discussions, if any?

Thanks, Ed. We had not planned for formal discussions with the FDA this past quarter and really haven't had a need for any discussions in the past quarter. But we do plan for a post-Phase II meeting with the FDA once the larger Phase IIb studies completed, as I mentioned to Roger.

Also on the subject of norovirus. This question is for Sean. How important is identifying correlative protection to the overall norovirus program? And a follow-up question too, what could identify in those correlates tell you about the vaccine candidate and probability of success in Phase III. Thanks, Ed.

Thanks, Ed. Yes, certainly, understanding what immune parameters are reflective of the success. It's important for us speeding up the clinical development. He helps you know what to look for in late-stage trials and helps you understand that any change you make in dose and vaccination schedule can positively impact efficacy. Of course, this is not a have to have, but it's certainly nice to have because it can speed up your trials and definitely reduce the size of your -- and your Phase III study.

Thanks, Sean. We have one more question on the norovirus program. This one is for James. Would herd immunity have a role for norovirus if you vaccinate infants would adults be protected over time?

Yes, that's an interesting question. It's unknown how norovirus infectivity and spread would be affected by a vaccine because as you know, there's no currently approved vaccine out there. However, there are several studies that inform us that show that if you vaccinate young children, you also improve the health of adults. There is a relatively well-known study out of Japan that showed when a young children were vaccinated for influenza. The rate of death for all causes are all cause mortality in the elderly population, decreased significantly. You might not be able to protect against all illness, but we know that children acquire disease and then transmit to their families, and that's a portion of global health that we hope to address.

We have a question -- the next question is on the coronavirus, the COVID program we have. And that actually is, I think, Sean and Andrei, you might want to answer this. The question is that the Washington Post reported on the Biden administration's RFI for next-generation coronavirus vaccines and the report referenced a potential $5 billion in funding. Does the Biden administration next-gen vaccine proposal change at all how you're thinking about the pan-betacoronavirus program that you referenced in the call?

Yes. That's a good question. Again, the report of potential funding for next-generation vaccines is a positive step. I don't think the announcement changes our approach, but it is probably reflective of the consensus of the scientific community that improvements to the current vaccine can be made.

Yes, what I would add to what Sean said is that we see this progress from the [indiscernible] as confirmation of our approach. And as people that have ready RFI can attest, we feel like the requirements and the focus on because of immunity fit very well our platform. So we are quite encouraged by these initiatives. And we're looking forward to seeing how we can participate in it.

Thank you, Andrei. One final question. This one is for Sean. Again, on COVID. Do you have a timeline for advancing a pan beta coronavirus vaccine candidate to the clinic?

Yes. I mean, certainly, we are continuing to develop newer candidates in -- or should say, construction research, which we believe have increased potential to make a potent Japan beta coronavirus vaccine. We're not providing any guidance at the time. Again, timing depends on multiple factors.

Okay. That's all the questions we have I'll turn it back over to the operator.

Okay. Thank you. This concludes our call. You may now disconnect, and thank you again for joining us.