Vaxart, Inc. ($VXRT)

Greetings, and welcome to the Vaxart Stockholder Fireside Chat Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the webcast over to David Carey of Finn Partners.

Thank you, operator. Good afternoon, and welcome to today's call. Joining us from Vaxart are Steve Lo, Chief Executive Officer; Dr. Sean Tucker, Founder and Chief Scientific Officer; Dr. James Cummings, Chief Medical Officer; Jeroen Grasman, Chief Financial Officer; and Ed Berg, Senior Vice President and General Counsel. 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, any partnerships with third parties, timing of any anticipated regulatory approvals or that any such approvals will be obtained the company's future cash runway, ability to regain compliance with NASDAQ listing standards or raised capital of such listing is regained and its product development and regulatory process, 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 in other public 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, David. Good afternoon, everyone, and thank you for joining us. In the first quarter, we made meaningful progress advancing our clinical programs and preparing for key data milestones that we believe will help demonstrate the value of our oral vaccine platform. Beyond preparing our COVID-19 program for its upcoming readout and have also spent the last few months strengthening our financial position and streamlining our operations to support disciplined execution and extend our runway. Specifically, our work during the first quarter was focused on the steps needed to disclose data from the 400-person sentinel cohort of our Phase IIb COVID-19 trial. This cohort is an important part of our program, providing our first 12-month look at the safety, select efficacy measures and the also immune response of our oral vaccine candidate in a head-to-head study. We are currently working through the data reconciliation process required to complete the analysis and move toward a top line readout. This effort is backed by a strong commitment from our partners at BARDA. To further strengthen our Board and add clinical and strategic oversight, we were pleased to welcome Dr. James Breitmeyer to our Board of Directors in April. Jim is a veteran of drug development, who has successfully led multiple candidates through complex clinical and regulatory pathways. He brings more than 35 years of biopharmaceutical experience, including leadership of programs resulting in multiple FDA approvals and global regulatory successes. As part of our ongoing commitment to Board refreshment, with the addition of Dr. Breitmeyer, we have added two new directors with significant drug and business development expertise over the past two years to strengthen the addition of fresh perspectives. We believe that adding directors with these proven track records is a significant advantage as we approach our upcoming data catalysts. On the operational side, we completed our headquarters move in April, consolidating and reducing our footprint and also established a $25 million share purchase agreement with Lincoln Park Capital. No shares have been sold to date and the use of this purchase agreement is subject to the company's discretion. These steps are part of our ongoing effort to maintain a lean operation, provide financial flexibility and position us to direct our capital towards our core drug development programs. Finally, we continue to maintain a productive dialogue with the team at Sanofi as we advance our COVID-19 program. I'll turn the call over to James now to update you on where we stand with the COVID-19 trial. James?

Thanks, Steve. The primary goal of our Phase IIb COVID-19 trial is to evaluate the safety and the efficacy of our oral vaccine pill against the leading injectable mRNA vaccines. This is the first time our mucosal technology has been clinically tested in a head-to-head comparison against an approved mRNA standard, which is a significant milestone for our platform. This first look at this head-to-head evaluation comes from our 400-person sentinel cohort. We are currently in the final administrative stage of data validation and quality reconciliation for this group. I want to be very direct on our current status. Vaxart management is currently blinded to the results and has not reviewed the data. This is a standard procedure to ensure that the analyses are finalized before the results are unblinded and shared in accordance with our agreed-upon process with BARDA, our funder. Because this is a BARDA-funded study, there are established partnership protocols and data sharing processes that govern the process of our unblinding. These are deliberate and their standard administrative steps required when working with a government partner. We are currently completing those final steps in coordination with BARDA to support the release of top line results. As a reminder, the primary purpose of this sentinel cohort is to evaluate the safety and the inogenicity, including longer-term follow-up. While there will be some efficacy related measures reported this 400-person sentinel cohort was not powered to provide statistically significant comparison between the oral pill and mRNA vaccine groups. As we announced in January of 2025, an independent Data Safety Monitoring Board, or DSMB, has already conducted a planned review of the initial safety data from this cohort and recommended the study continue without any modifications. This provided an important external validation of our platform safety, while we, at Vaxart, remain blinded to the full 12-month data. While these results are an important precursor to how our oral pill vaccine performs against mRNA vaccines, as we mentioned, this cohort was not powered to provide definitive efficacy comparison. More definitive insights are expected to come from our main cohort of approximately 5,000 participants, which is designed and powered to evaluate relative efficacy and safety. I'll now turn the call over to Sean Tucker to discuss norovirus. Sean?

Thank you, James. We are currently evaluating how our second generation constructs perform against the GII.17 norovirus strength. GII.17 has become a much more prevalent strain, and we are testing our bivalent vaccines cross-neutralization capabilities to ensure it can recognize and neutralize this emerging variants. We expect to share that preclinical data and add thought clinical evaluations in the last study later this year in both scientific meetings and potentially scientific publications. Regarding the next steps for norovirus, we are prepared to initiate our next clinical trial in 2026, depending on the ownership or the receipt of other funding. In the meantime, we are continuing to refine our vast platform and our manufacturing processes in order to ensure our high-yield tableting is ready for large-scale needs. I'll now hand the call over to Jeroen for the financials. Jeroen?

Thank you, Sean. Vaxart ended the first quarter with cash, cash equivalents and short-term investments of $61 million. Revenue for the first quarter was $39.2 million compared to $20.9 million last year, with the growth in revenue, primarily driven by BARDA contract. First quarter 2026 also included revenue recognized from the Dynavax license and collaboration agreement signed in November 2025. We also reduced our R&D and G&A expenses compared to the first quarter of 2025 by closely managing personnel and facilities costs. The revenue growth and cost control measures led to a net income of $5.2 million for the quarter or $0.02 per share. As Steve mentioned, we enhanced our financial flexibility in April by establishing a $25 million share purchase agreement with Lincoln Park Capital. This facility provides us with an efficient capital management tool that we can utilize to support our capital needs at our discretion over the next 24 months. Based on our current plan, we continue to expect our cash runway to extend into the second quarter of 2027. With that quarter's move completed and the lease termination taking effect next week, we have significantly reduced our long-term liabilities and fixed overhead, allowing us to focus our resources on our clinical catalysts. We'll now take your questions.

So we've received numerous questions from many shareholders. And there were several overlaps. So we're grouping the questions initially together by topic. So the first question is we've been getting a lot of questions on the primary focus of the sentinel readout, and if it is safety and not efficacy. And in addition, the questions regarding whether people can expect the readout given that early Q2 has already passed. And I'll turn that question to James. James?

Sorry, I was stuck on mute. Thanks, David. As a reminder that the primary purpose of this sentinel cohort is to evaluate safety and immunogenicity, including longer-term follow-up. It is not, and it's never been the purpose to evaluate efficacy. While there will be some efficacy related measures reported, this 400-person sentinel cohort was empowered to provide. This is the important part, a statistically significant comparison between the oral pill and mRNA vaccine groups. As we announced in January 25, an independent data safety monitoring board already conducted a planned review of the initial safety data from this cohort, and it recommended the study continue without any modifications. The DSMB has continued to meet and reaffirm these findings. This provides important external validation of our platform safety while we remain blinded to the full 12-month data. While these results are an important precursor to know how our oral pill vaccine performs against mRNA vaccines, as I mentioned, this cohort was not powered to provide a definitive efficacy comparison, this smaller cohort. That's because it's a 400-person cohort and would not be specifically powered to reach that conclusion. This ensures enough data is collected to avoid false negatives and showing results are not due to chance. But more definitive insights are expected to come from our main cohort of the approximately 5,000 participants in this study, and it's designed and powered to evaluate relative efficacy and safety. In addition, we're dedicating significant resources to manage the 5,000 participant main study cohort, which is a primary focus of our clinical efforts. We anticipate the primary efficacy and safety data readout from this larger group in early 2027. I think that sums it, David.

Okay. Thank you, James. Next question is also for you. Does Vaxart believe there will be a meaningful difference in immunogenicity, longevity and cross-reactivity of immune response, and viral -- sorry, better load reduction that would be visible even in a small cohort?

Thanks, David. I'm not going to jump to any conclusions or predetermine any outcomes here. We're blinded to the data. Once we're unblinded, we will evaluate it for appropriate context.

Thanks, James. Another question for you. What specifically still needs to be done by Vaxart and BARDA in order to release the sentinel cohort data?

As I mentioned earlier, we're currently in the final administrative stage of data validation and quality reconciliation from this group. And that's pretty standard. As part of this process, the data is being carefully reviewed to ensure accuracy, completeness, consistency prior to analysis, again, typical for a study of this size and importance. This means that a third party is evaluating the database to ensure that data has been entered correctly and to identify any records that might be and complete. This is done to ensure that the final analysis is done on the most accurate data possible. We're working closely with our partners at BARDA to complete these steps in order to release the sentinel cohort data. To be clear though, this is a procedural matter. It is not a data issue. The study remains blinded, and we have not yet seen the results ourselves.

Thanks, James. Next question we've received from several individuals and also on the online portal here this afternoon. Why has the time line slipped? Are you confident that the data will be released before the end of the quarter?

That's a fair question. The third-party review is taking a little longer than anticipated because there are some very specific partnership protocols and some contractual data sharing guidelines that covering the timing of our unwinding. These are deliberate administrative steps required when you work with a contractual partner. All of this is taking really a lot more time than we'd hoped. We are working through those final steps now. While we are still aiming to release the top line results in Q2, it's important to remember that we are working with the contractual part of a partner, and we're not in full control of that timing. That's my projection.

Okay. James, can you provide additional details as to what BARDA is requesting from Vaxart that's causing the delay in disclosing your safety data?

Sure. So as part of our collaboration, BARDA is working with us to finalize the analysis plan and ensure all relevant data elements are incorporated for the sentinel cohort being something I mentioned previously. This includes reviewing certain information that's typically addressed later in the study, but it's being incorporated at this stage to support a thorough and aligned analysis process. We continue to work closely together to complete these steps and ensure the data are fully validated and ready for disclosure.

Thanks, James. Next question. Does the delay in reporting the results from the sentinel cohort indicate that there is a problem with the data or the process for collecting or analyzing it.

Starting to sound like the James show. And no, it does not. This is a part is regular process for data analysis and sharing it is not related to the data, the collection process or the analysis. Our government partner had specific protocols governing when and how blinded data can be unblinded and share. Those steps have taken longer than we originally anticipated, but they are procedural in nature. Vaxart Management is currently blinded to the results, and we have not seen the data. Once we get the administrative clearance, we will flip the card over, unblind and report me. We're excited to do so as you are.

Okay. Thank you, James. Let's switch to norovirus. Next question is, have there been any further conversations with your prospective partners about the norovirus program. Do you believe there is a realistic chance of securing a funding partner before the end of the year for norovirus. And Steve, I'll turn that to you.

Yes. We continue to have active discussions with potential partners. And I want to just tell everybody, this remains a priority for us. As you would expect, however, we can't guarantee that there will be an agreement and when they occur, but I want to assure everybody that we're working continuously to make sure that we keep having good active discussions. This is with great focus and conviction on our team. And frankly, securing funding for this trial is a critical next step for the company, and we're certainly treating it that way.

Okay. Steve. Next question is, what is the likelihood that a Phase IIb norovirus trial begins in Q3? And Steve, could you take that one?

Yes. We understand this question is about pace. And let me take a few moments to explain how we approach this, right? So the gating factor is funding. It's not science. We have noted that, and you've probably seen that advancing the norovirus program is important to us for the next clinical stage, and that really is dependent on securing a partnership or some external funding. We are, like I said earlier, engaging with potential partners. We're looking at various options, and we do want to move this forward in a very strategic and capital-efficient manner. Funding this does require significant resources, so it's important that we align this program with the right partner, with the right funding structure to support its success. Because we want to be good stewards of shareholder capital. We're not going to rush into a trial that's going to be underpowered or under designed just to hit a certain milestone.

Thanks, Steve. Next question. And Sean, could you please take this one? Has BARDA shown any interest in norovirus or flu. It would seem with their goal of next-gen platforms that Vaxart is uniquely positioned to work with them, to bring those products coming to market.

Sure. Obviously, we have an ongoing productive relationship with BARDA through our COVID-19 program. And of course, we had a past relationship slip relationship with them on flu. So they are really familiar with our platform and our broader capabilities. At this time, BARDA support is focused on the current COVID study, and we have not announced the additional funding from BARDA for the norovirus or flu programs. We will continue to evaluate a range of potential funding sources, including government and strategic partners to advance all of our programs.

Thanks, Sean. Do you believe you'll be able to elicit VX20 and/or VX22 antibodies in a majority of subjects before you begin the NORA Phase II. Sean, could you take that one?

Yes, it's an interesting question. VX20, VX-22 are monoclonal antibodies with broadly neutralizing capabilities and a cross-reactive against many different genotypes. Keep in mind, these antibodies were clone from a Vaxart clinical trial participants However, these clones may not be relevant for all people with various generic genetic backgrounds. Because of this, we are focused on efforts to advance our norovirus programs that can address all people and all genetic backgrounds. The key thing from this is that we are currently doing things that are much more proactive and relevant such as testing our bivalent vaccine cross neutralizing capabilities against the GII.17 norovirus strain, which has recently become a more prevalent variant across the globe.

Thanks, Sean. Next question. Can you give us an update on your interactions with Sanofi. Are you confident that Sanofi will continue the partnership that you establish with Dynavax. Steve, could you take that, please?

Sure. So as a reminder, Dynavax became a subsidiary of Sanofi, and that closed in the first quarter. So moving forward, I'll generally refer to this collaboration at Sanofi. And so I'll certainly let you all know that we continue to have a -- and maintain a very good productive dialogue with the team at Sanofi as we advance the COVID-19 program forward. They share in our view that the global demand for COVID-19 vaccines remains robust. And as a reminder to everybody, our exclusive license and collaboration agreement with Sanofi is a worldwide agreement. [ Sanofi ] has the option to assume full responsibility for the program only after evaluating the results from the Phase IIb clinical trial and at the end of Phase IIb meeting with the FDA. Because this ongoing trial is heavily funded by BARDA, as we've discussed in the past, our partners at Sanofi certainly see this is gaining access to a high-value clinical data trial that has been significantly derisked by government investment.

Thanks, Steve. Next question, has there been any update on the status of the avian influenza study or when investors might expect to see the results? Sean, could you please take that?

Yes. Again, our focus is on publishing this data in a peer-reviewed journal. And again, the timing is dependent on that process. As with other programs, we will certainly provide updates as appropriate and once that process is complete.

Okay. Next question, what's the rationale for doing a share purchase agreement at this time given the company's cash runway extends to the second quarter of 2027. And Jeroen, could you please answer that?

Sure. Thank you, David. So this agreement enables us to strengthen our balance sheet as needed and at our sole discretion. So we're able to do this at any point in time over the 24-month term of the agreement. We maintained full control over the timing and amount of any sales as [ LinkoPark ] is required to purchase the stock at our direction. This arrangement has the potential to also bring us broader benefits as a company as well. For example, a backstop financing facility can strengthen our hand in partnership negotiations because we have other access to capital. Also, as a high-value investment opportunity arises, we can act quickly without the time and expense of a traditional capital raise. Back to you, David.

Thanks, Jeroen. Next question is also for you. Does Vaxart plan to use the additional capital for a specific purpose?

Sure. So yes, first and foremost, as I just said, the share purchase agreement provides us with the financial flexibility and optionality at favorable terms versus the more traditional rates. So we use this. So any use of proceeds will be determined based on our specific needs at the time of the sale. Our disclosures have stated that the funds are intended to be used for working capital and general corporate purposes. The objective would clearly be here to support our existing priorities. So that includes the advancement of our norovirus proband leading the ongoing collations and on other programs and develop our pipeline, as we just talked about, avian flu programs and other vaccine candidates. In any case, use of proceeds would be to really fund activities are value-creating and not merely to just extend our runway. David?

Thank you, Jeroen. Next question is for Steve. Can you explain the rationale for bringing Dr. Breitmeyer on to the board at this time? Are there any more changes to the Board planned?

So Dr. James Breitmeyer is a highly qualified pharmaceutical executive. He has experience being on board. He has extensive clinical and regulatory experience spanning 35 years. And as we were approaching some of our very important critical data milestones, obviously, including the upcoming readouts for our BARDA-funded COVID-1 program. Jim's experience and his track record of leading programs to 8 FDA product approvals really provides us with a distinct advantage. Furthermore, on top of his previous work, he also served as President of Bavarian Nordic, which is a vaccine company. And there, he oversaw the development of infectious disease and [ bioterrorism ] vaccines. It aligns perfectly with the work we're doing alongside our government partners. And that's the reason why we believe that Jim's expertise is really helping us navigate through this complex path from clinical development to regulatory approval, it will be invaluable to us as we work through validating our oral vaccine platform.

Okay. Steve, another question for you. Are any of Vaxart's directors planning to step down, or are you expanding the Board?

We regularly evaluate board composition and current skill sets to ensure that we have the right expertise to support the company's strategy and our stage of development. We believe that with the recent additions, the Board just does just that, right? As we demonstrated by the recent addition of Dr. Breitmeyer our focus is strengthening capabilities in areas like clinical development and regulatory strategy. And also as part of our ongoing commitment to Board refreshment with the addition of Dr. Breitmeyer, as a reminder, we've added two new directors in two years with significant drug and business development expertise and that really ensures that we have fresh perspectives on the board.

Okay. A couple of additional Board questions. Next one, Steve. Can you clarify the rationale for recent board changes, and how those decisions align with shareholder interests? And would you consider a retail shareholder representative to the Board?

Yes. So the Board believes it's important to bring relevant fresh perspective to the Board room regularly. And of course, the directors also need to provide rigorous oversight regarding the execution of our strategy. And so their skills and experiences are critical in this regard. And the recent board changes reflect a focus on ensuring that we do have the right mix of expertise to support the company's current stage and its priorities. This also includes strengthening capabilities in areas like clinical development, regulatory strategy, capital markets. Those are important to a company like Vaxart as we advance our programs. And these decisions are aligned with what the shareholder interests are by positioning the company to execute effectively and realize the maximum value of our platform and pipeline. As we've shown, the Board is open to fresh perspectives and would consider and evaluate any qualified nominee as part of the Board's nominating and governance committee process.

Okay. Next question. Why should shareholders have confidence in the current Board and any new nominees to create value going forward. Steve?

Yes, as I was saying earlier, our Board is actively overseeing our strategy, how we allocate capital and the progress that we are making. They're working closely with the leadership team and holding all of us accountable on the management team to deliver. In doing so, they're putting the company in the best position possible to enhance shareholder value. As I stated earlier, right, we added two new directors, and they bring the right mix of medical, business, financial and other relevant experience and experiences to -- and expertise to drive our company forward and also ensure that we have the cash runway to execute our strategy. Specifically, our Board benefits from our directors' broad mix of experiences across clinical development, regulatory strategy, commercialization, business development amongst many areas, and that's directly aligned with advancing our pipeline.

Thanks. Steve, what do you think about the role shareholders should have in the selection of Board of Directors?

Yes. So all shareholders, no matter how big or small of their ownership stake have a voice. Their vote matters as part of the annual meeting process. Our Board of Directors and management team are shareholders as well, and our interests are aligned with all of Vaxart investors. Our shareholders should know that our directors are committed to creating value, taking actions that are in the best interest of all Vaxart shareholders. They are overseeing a clear strategy to advance our programs, drive growth and extend our runway. So ultimately, we can create shareholder value.

Okay. Thanks. Steve, another question for you. How will you build investor trust and drive shareholder value with urgency over the next year?

Yes. So our top priority is delivering on the key clinical milestones, including the sentinel readout, as we discussed and the fully powered Phase IIb data later this year. So we believe those are the most important drivers of value. We're focused on disciplined execution, cost management, as we explained earlier, ensuring resources are directed toward the highest impact programs, while also maintaining our runway. And finally, our goal is to advance our clinical programs. So as I stated earlier, generating meaningful data and leveraging those results to support partnership opportunities and the broader value of our platform.

Okay. Thank you. Steve, next question. Do you believe near-term stock price appreciation is a priority? And how are you thinking about that versus longer-term strategy?

Yes. Our Board and management team are always focused on creating shareholder value for now and also for the future. We're confident that these steps that we're taking now to advance our pipeline, while also extending our run well -- runway will create the most long-term value for shareholders. At the same time, we recognize that the importance of creating value in the near term and believe that we can do so through these same drivers that will deliver sustainable long-term value. So it gets back to the science, delivering positive outcomes for patients, executing on our growth strategies and achieving the strategic outcomes we've been talking about.

Okay. Thank you. Jeroen, next question for you. There are questions on management balancing dilution risk with the need to preserve flexibility. And we also know people have asked when we would consider raising capital versus relying on partnership funding?

Thank you, David. Our our capital allocation strategy is really to balance the spending discipline with the advancement of our science with the ultimate goal of positioning the company for stronger strategic and financial outcomes over time. So in order to reach those outcomes, we need sufficient cash runway to execute the development of our vaccine portfolio over time. So we pursued and continue to pursue non-dilutive funding and partnerships as demonstrated by the ongoing support from BARDA and our Dynavax collaboration, which both have provided meaningful validation and capital. Our most recent agreement with Lincoln Park Capital is another good example of our capital raising strategy, and it's intended to provide access to capital as needed rather than requiring us to raise funds in bulk all at once. Finally, we're also realistic that we need to raise cash in other ways in order to achieve the outcomes we're seeking and ultimately maximize our shareholder value. I'll leave it there.

Thank you, Jeroen. Thank you. Steve, next question is for you. What's the plan and time line for regaining compliance and relisting on NASDAQ? And would a reverse stock split be necessary in order to do so?

Our focus is on executing our strategy and advancing our clinical programs, and we want to continue to focus on that. We believe that's going to be the primary driver of long-term value. And we do and continue to assess what's the best approach based on market conditions than the company's progress. So we want to really act in the best interest of the shareholders here. So it's really going to be executing on our strategy and advancing our clinical programs.

Okay. Thank you, Steve. The next group of questions is related to proxy and the annual meeting. So Ed, if you could take the first question, when do you plan to file your proxy statement?

Sure. So we will be updating our shareholders in due course with information about the annual meeting and of course, that will come through our proxy filings. And like all public companies, we have a shareholders meeting every year and shareholders will be hearing more about it in the future.

Okay. Thank you. And a few more questions for you related to this topic. Have you spoken to the concerned shareholder group?

So we do regularly engage with a broad range of shareholders, and we welcome dialogue and input from them, but we don't comment on specific conversations. We remain committed to listening to shareholder perspectives, considering them in our regular course and maintaining open lines of communication.

Has the concerned shareholder group notified Vaxart that they intend to nominate candidates to the Board? Have you received any nominees?

So we don't comment on specific shareholder communications, like I said, or on potential actions. But we -- when we have disclosure obligations, we, of course, take this seriously. And so when there's something to disclose, we'll do so appropriately. Our slate of Director nominees will be included in the proxy, which will be filed in the coming weeks.

Okay. A follow-on question. When was the deadline for the concern shareholders group to submit their proposal for directors?

So our nomination window for directors was between February 2, 2026, and March 4, 2026, so that window has closed. And of course, I'll tell everyone to stay tuned for our proxy filing.

Okay. Thank you, Ed. Checking on the Q&A portal, it looks like all the questions have been -- submitted have been covered, and we haven't received any further questions. So Steve, I'll turn the call back over to you for closing remarks.

Okay. Thanks, David. I want to thank you all for joining us today and submitting your questions. We appreciate how engaged all of our shareholders are. This is an exciting and important time for Vaxart. We are advancing our programs. We're on the precipice of releasing data and taking prudent steps to extend our runway and ensure we have the flexibility and resources to execute on our current strategy. We remain committed to creating safe, effective and accessible oral pill vaccines that protect our global communities and help people to lead healthier lives. In doing so, we are confident we can create sustainable shareholder value. Thank you again.