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

Greetings, and welcome to the Vaxart Norovirus Phase I Top Line Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Ed Berg, Senior Vice President and General Counsel. Please go ahead.

Good afternoon, and welcome to today's call. Joining us from Vaxart are Steven Lo, Chief Executive Officer; and Dr. Sean Tucker, Founder and Chief Scientific Officer. Before we begin, 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 materially differ 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 also on 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 Steven Lo. Steve?

Thanks, Ed, and thanks to all of you for joining us this morning. Earlier today, we issued a press release reporting positive top line results from our norovirus Phase I clinical trial comparing our second-generation oral pill vaccine constructs to our first-generation constructs. We are very pleased to see that the second-generation constructs produced an increase in norovirus blocking antibodies in both the high-dose and low-dose cohorts. Notably, the increase in norovirus blocking antibodies in the high-dose cohort was statistically significant. In the Phase II challenge study of our first-generation constructs, these antibodies correlated with protection against norovirus infection. We are very optimistic that the significantly higher level of norovirus blocking antibodies observed in this Phase I study with our second-generation constructs will translate into an even higher rate of protection than the 30% relative reduction observed in the Phase II challenge study of the first-generation constructs. As a reminder, the full data from the Phase II challenge study were published last month in Science Translational Medicine and the press release summarizing the results is available on the Vaxart website. Before turning the call over to Sean for a review of the Phase I data, I would like to take a moment to underscore both the critical public health need for a safe and effective norovirus vaccine as well as the market opportunity that such a vaccine provides. From a public health standpoint, norovirus is a leading cause of acute gastroenteritis or AGE worldwide and is responsible for outbreaks of infection and illness globally. It is not just a cruise ship virus, but one that infects schools, daycares, social settings, healthcare settings and more. Each year, there are approximately 685 million norovirus infections globally, with 20 million infections occurring annually in the United States. Due to these high rates of infection, norovirus is believed to cause nearly 20% of diarrheal disease globally. Additionally, the economic burden associated with norovirus infection and AGE is estimated at $60 billion worldwide and $10 billion in the United States. Market research suggests that the total potential U.S. market size for a safe and effective norovirus vaccine is in the multibillion dollars category. This attractive market opportunity is based on the potential use of a norovirus vaccine in several age and risk-based populations, which include those over 65 years old, those who are immunocompromised, people in the long-term care, skilled nursing or assisted living facilities, military personnel, healthcare professionals, first responders, food handlers, child care providers as well as travelers or members of the travel industry. Realizing the potential of this market requires a vaccine that has several specific characteristics. Of course, providing a durable cross-reactive immune response is critical for efficacy, it must also be safe and well tolerated. However, there are other characteristics that are important for making an effective vaccine broadly available. These include ease of use through the ability to self-administer the vaccine, a thermal stable formulation that obviates the need for complex cold chain logistics, the use of state-of-the-art recombinant technology free of live replicating virus or animal products, which allows use in many populations, including those who are immunocompromised and a modular, scalable development process that allows for rapid adaptation of new vaccines in response to emerging norovirus strains. Our norovirus vaccine candidate possesses all of these characteristics, and we believe it has first and/or best-in-class potential. Our second-generation norovirus construct is a bivalent vaccine designed to address the major norovirus genotypes currently in circulation by stimulating mucosal and systemic immune response to the GI.1 and GII.4 genotypes. The GII.4 genotype, which accounts for 68% of all circulating norovirus strains is the predominant cause of pediatric illness worldwide and is the overwhelmingly predominant cause of disease among elderly individuals in health care-associated outbreaks. It also results in more severe illness compared with other GII and GI genotypes. As we have previously shared, preclinical data demonstrate that our second-generation norovirus constructs stimulate the production of more GII.4 and GI.1 specific serum antibodies compared with the first-generation constructs. As Sean will share with you now, we observed this increase in the Phase I head-to-head trial of the first- and second-generation constructs. Sean.

Thanks, Steve, and thanks to everyone on the call. Before I review the Phase I trial data, I'd like to take a moment to provide some context around the rationale for undertaking a head-to-head comparison of our first- and second-generation norovirus oral pill vaccine constructs. As a company at the forefront of leveraging oral delivery to improve mucosal and systemic immunity, we are continually learning from every preclinical and clinical study we conduct and incorporating new knowledge into our vast platform and the design of our vaccine candidates. As a result of this ongoing optimization and advancing our first-generation norovirus constructs through clinical development, we have applied the information gleaned from those studies into the development of our second-generation norovirus constructs. Additionally, the Phase II challenge seed the first-generation construct utilized a proprietary norovirus blocking antibody assay or NBAA that we developed and showed that higher titers in this assay correlated with protection from norovirus infection. We believe that a Phase I head-to-head study using this assay as the primary endpoint would provide clinical validation of the superior immunogenicity of the second-generation constructs. Improvements in the NBAA responses, we believe would impact both protection against infection and clinical norovirus disease. Therefore, such validation would give us enhanced confidence to take the second-generation candidate into the later-stage clinical development and potentially toward the market. I am excited to report the Phase I results were consistent with our preclinical studies. Specifically, we saw significantly increased GI.1 NBAA titers in the cohort receiving the high dose of the second-generation constructs compared with an equivalent dose of the first-generation construct. This was evidenced by a 141% increase in GI.1 NBAA titers, which corresponds to a 3.2% increase in the geometric fold response from 2.2 to 5.4. We also saw significantly increased GII.4 NBAA titers in the cohort receiving the high dose of the second-generation constructs compared with an equivalent dose of the first-generation constructs as evidenced by an 84% increase in NBAA titers for GII.4, which corresponds to a 1.6% increase in the geometric fold response from 1.9 to 3.5. A low-dose of the second-generation constructs producing numerical increase in NBAA titers compared with the first-generation constructs, which is highly encouraging even if these increases were not statistically significant. I would like to note that the trial was not designed originally to show statistical superiority. So the fact that we achieved it with a high-dose cohort really underscores the magnitude of the increases in NBAA titers with the second-generation constructs. With respect to safety, all the norovirus vaccine candidates evaluating the study were well tolerated with no vaccine-related serious adverse events. We expect to publish complete data from this study, including results for the exploratory endpoints of serum NBAA titers at 179 days and fecal IgA against norovirus BP1 at day 0, 28 and 179 in a peer-reviewed journal. I'll turn the call back to Steve Lo for closing remarks.

Thanks, Sean. As we have previously shared, assuming a partnership or other funding, we expect to conduct a Phase IIb safety and immunogenicity study of the new norovirus oral pill vaccine candidate that could potentially begin as early as the second half of 2025, followed by an end of Phase II meeting with the U.S. Food and Drug Administration. A Phase III trial could then begin as early as 2026. Currently, we believe we have the only norovirus vaccine candidate in oral pill formulation and that the Phase I data we have shared with you today adds to the growing body of evidence supporting the potential benefit of our approach. These data include not just efficacy and safety, but also the very real administration and access constraints that limit the use of injected vaccines. We intend to incorporate these compelling new data into our ongoing discussions with potential partners and believe that they bolster the value proposition of our norovirus vaccine program. Thanks, everyone, for your time today. Operator, we will now open the call for questions.

[Operator Instructions] Our first question comes from the line of Roger Song with Jefferies.

Great. Congrats for the data. A couple from us. So maybe the first one is, can you give us a reminder if you have disclosed that is the correlation between the NBAA and then the norovirus infection protection coming from your -- the challenge study before because now we see the full increase from the baseline we want to just benchmark that the correlation you have reviewed before.

Yes. This is Sean. Again, I think that what we showed in that publication is that there were 2 main correlates protection to both the NBAA as well as the fecal IgA. Obviously, both of them independently correlated as well. And given that what the purpose of the study was to show that the new constructs were better than the old, we thought that the NBAA would be a very good readout from the standpoint of deciding that. And certainly, we do see that the new constructs do behave better. And again, because of the correlations that we provided in that publication, we do think that it's critical or important that we were able to succeed in that.

Got it. And then for the next steps, you have the Phase IIb, assuming the partner, maybe just what could be the Phase IIb design before you can start the Phase III? And then second part of the question is what kind of the partner profile you're looking for? And then how is the partnering discussion have been going?

Sure. Roger, let me handle the second question and then Sean could just cover the first part. So in terms of the partner conversations, frankly, they're going well. There are a variety of potential partners who we have been in discussions with, including large multinational companies. There are some regional players as well. And one of the things that they were certainly waiting for is this data. We're excited because now we have the data, it's positive. Sean will go into more details there. But that really just sets us up for, I would say, productive conversations and also allowing potential partners to also review the data. So sorry, Sean, please go ahead.

Sure. In terms of what the Phase IIb would look like, essentially this is a safety study to get their ends up for the standpoint of having your vaccine in the final formulation as well as in dose. And we haven't disclosed the exact number. And obviously, we do it with placebo, but essentially, it's in the hundreds, not in the thousands over.

Our next question comes from the line of Cheng Li with Oppenheimer.

Congrats on the data. Maybe a few questions from us. First, I'm just wondering, given the pretty robust data, what is your prediction that the immunogenicity data may translate to reductions in like norovirus infection and also the AGE events compared to the first-generation product?

Obviously, it's a good question. Keep in mind, one of the reasons why we chose NBAA as a readout is it was correlated with protection in that norovirus challenge study that we published earlier this year. We do think it's an important parameter to monitor. Keep in mind, in that challenge study where we were hitting people with a very, very large dose of norovirus, we were able to show a 30% relative reduction in infection. Obviously, if your titers go up on the NBAA, we think we do better in the challenge study. And in the field because you're not bombing people with so much norovirus, we do even better. So we can't really predict, obviously, completely what would happen in the field study, but our feeling is the combination of field study plus using these better constructs, it would translate to much better protection over.

Okay. Got it. And just secondly, just seems like both doses are very effective. So any thoughts on which dose are going to take forward to the Phase IIb.

Yes. I think that some of it will depend on the partnering discussions we have. Obviously, both doses did quite well. It probably is showing that even at the lower dose, you're kind of getting close to the maximum response. So yes, it's a good question. I mean you might lean into the high dose just because you got a little bit better response, but I will -- I'm going to say that we'll have to -- we'll wait to see what the partners think as well over.

Okay. Got it. And just lastly, just any color you can share around the -- maybe the fecal IgA data, that would be great.

Yes. At this point in time, one of the things we wanted to do is essentially look at both fecal IgA as well as NBAA, but we thought that because of the timing, we could get an answer on the dose as well as the constructs very quickly, just with NBAA, and that's what we need to -- and because that data was available, we were able to disclose it.

Our next question comes from the line of Mayank Mamtani with B. Riley Securities.

Congrats on very strong results here. So while you don't have a placebo arm here, but if you were to compare the second-generation norovirus candidate, immunogenicity versus, say, placebo, could you just put in context what the fold increase would look like on the NBAA primary efficacy evaluation here? And I guess the second part to the question that was asked before, what would your expectation be in that proportionality of serum or fecal IgA and also serum IgG. I don't know if you've looked at that, given the fold increase you're seeing on titers here. By our math, you're like 12-fold higher on GI.1 versus placebo. Like would you expect a similar proportionate increase for the IgA and also maybe IgG, where obviously we can draw some comparison to the mRNA approach?

Yes. There's a lot packed in your question. So I'll try to bring it out as best I can. Obviously, we think fecal IgA is important from a mechanistic standpoint. We do know that there's a -- with the mucosal vaccine, you do get some read-through into the sera, which is why the NBAA turns out to be very significant from the standpoint of looking at protection. At this point in time, obviously, the key thing about this experiment was to essentially decide whether the new constructs were better than the old. We have enough data from the NBAA to basically make that a definitive statement about it. And in fact, it was statistically significant. At this point in time, one of the things we're going to do is we're working on getting all the data complete for this and then published as well as present this data. So we haven't detailed out if you're asking how does a placebo do? Well, obviously, if you give a placebo tablet to people in norovirus world, there's not really an increase in those titers. So you can't -- you don't see an increase whatsoever. And again, as you could probably go back to our earlier papers to see what the background titers are in people, but they certainly vary between something in the order of 10 to 100 in terms of the background. So anyhow, like I said, we'll have more data coming out in presentations as well as the publication later this year.

That's helpful. And then what's the outstanding work remaining? I know you got some started with the regulators on establishing correlate protection, but just curious what maybe next steps are? And if there's a prespecified kind of analysis you can build in your Phase II. And again, your Phase II, you are saying would be a dose-ranging study versus placebo and not a challenge study, right, for you to make the case to go into a Phase III next year?

Yes. The key thing from the standpoint of the Phase IIb is to get enough safety data against placebo. So -- and again, we haven't specified exactly how many, but it's in the hundreds so that you have confidence that in your final formulation that you're going to use going forward that you, again, have a big enough safety database to feel good about the next steps and having these discussions about what takes for approval. At this point in time, we're not proposing a new challenge study and this Phase IIb would be effectively a safety study with immunogenicity as well. And again, you could -- it's not powered to look at efficacy in the field. But if you had certainly enough outbreaks, you could certainly monitor that. And again, we still haven't published or disclosed what our exact design of that Phase IIb study is, but the primary endpoint of that study is to look at safety versus placebo in enough subjects that you have confidence that what you're doing is not going to cause any harm.

Okay. And lastly, any medical conference you're targeting for a full data presentation in the second half?

Yes. I think the 2 conferences that we're going to plan on going to this year, we're going to go to the calicivirus conference, which essentially talks about norovirus ad nauseam with all the leading experts. And then there's a World Vaccine Congress in Europe, which is in Amsterdam this year.

Mr. Berg, I'll turn the floor over to you for the written portion of the Q&A.

Okay. First question is for Sean. Why do you believe there was statistical significance for the higher dose cohort, but not for the lower dose cohort?

Yes, it's a very good question. Well, the key thing is that there were small improvements in the antibody titers at the higher dose that led to significant p-value. Again, keep in mind that both higher and lower dose cohorts of the new constructs did have higher antibody titers in the first-generation. It's just that the higher dose had a slightly improved response and therefore, was able to get a better -- a significant p-value, but both did pretty well given the size of the study.

Okay. Another question for Sean. Were there any common side effects?

Yes. Just to keep in mind that our detailed safety data is still being compiled. I can tell you across the 3 dosing arms and post dose, solicited symptoms were consistent with our legacy studies, and there were no vaccine-related serious adverse events nor dose-liming pharmacotoxicity.

Great. Another question for Sean. How do these data compare with pure norovirus data currently in clinical development?

Yes. Obviously, this is a Phase I, and we are looking at just essentially our NBAA assay. Keep in mind, our NBAA assay is a blocking titer assay, which is similar to the HGVA titers that other companies are using. However, it's not the same. So it's hard to compare across. We don't think it's the right way to look at these things. Further, keep in mind that the composition of the serum antibodies that we get is really higher in norovirus-specific IgA due to the mucosal deduction. And we do think that, that makes a difference and it makes it -- our response is going to be much more potent.

Okay. Great. A question for Steve. What is the latest on partnership discussions?

Yes. So our partnership discussions continue to go well. They have been waiting for this data. So we're obviously very excited to be able to release this data. And this will actually set the tone for the ongoing discussions. And as I stated earlier, there are quite a few partners interested, and they range from a variety of types of companies, right, to include the large multinational companies to some of the regional players. There's also companies outside the United States who have expressed interest in licensing the asset as well. So we will be very busy in the upcoming weeks as we move forward and share this data.

Another question on partnering for you, Steve. Are partnering discussions exclusive to noro? Or would you consider a partnership that also includes either COVID or other vaccines in the portfolio?

Yes. So in terms of COVID, as a reminder, we do have that our current COVID program has -- is fully funded to the tune of $460 million with our Project NextGen award, which we're excited and it's moving forward very well with dosing and enrollment. We've been spending a lot of time for obvious reasons talking to partners on norovirus, and that largely is the primary discussion. But it's also safe to say that every partner is different and the discussions of a few have included, what about other assets in your portfolio to include COVID as well as even some discussions on our HPV therapeutic. More importantly, this data shows some great progress that we have made with the second-generation constructs. And I think as a result, it really does sort of heighten the awareness as well as the excitement for the platform in itself. So bottom line, norovirus is certainly taking most of the discussion, but also the rest of what we're working on has also been bringing some attention.

And a final question for Sean is along similar lines, but scientifically, is there a read-through with the data of the second-generation constructs today for the COVID-19 trial or for the preclinical programs?

Yes. Well, of course, the technology we employed with the second-generation norovirus constructs is the same as we've implemented in the COVID-19 Phase IIb trial as well as throughout our platform. We do expect that we will see improvement immunogenicity in that COVID-19 study with these new second-generation approaches. So we're very excited about that potential.

Okay. Thank you. That is all the questions we have at this time. Operator, can you close this out, please?

Thank you. This concludes our Q&A session, and thus concludes our call today. We thank you for your interest and participation. You may now disconnect your lines.