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

Greetings, and welcome to the Vaxart Stockholder fireside chat. [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.

Joining us from Vaxart are Steve Lo, Chief Executive Officer; Dr. Sean Tucker, Founder and Chief Scientific Officer; Dr. James F. 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 approval will be obtained, the company's future cash runway, ability to raise capital, 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 risk factors described in the Risk Factors section of Vaxart's most recently filed annual report on Form 10-K and 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. The second quarter and recent weeks marked a pivotal period of execution and progress for Vaxart. In July, we achieved a key milestone in our Phase IIb COVID-19 trial, announcing positive 12-month safety data from our sentinel cohort. These results provided encouraging validation for the safety of our oral pill platform as we prepare to report top line data from the approximately 5,000 participant main cohort in the first half of 2027. We were able to release this data after we finalized a contract modification with our partners at BARDA in June, which also released dedicated funding that will allow us to conduct a much deeper scientific analysis of the trial data. I want to express my sincere appreciation to our hard-working employees at Vaxart and the trial participants, clinical investigators, and study coordinators across all our sites. The dedication of these participants and the research teams in executing a trial of this scale and advancing our needle-free vaccine makes our progress possible. From a business development standpoint, we are continuing to seek a partnership for our norovirus program and have seen continued partner interest. We are taking a disciplined approach to these discussions to ensure any next steps reflect the full value of this asset in the best interest of our shareholders. Right now, it is critical for us to focus on completing the Phase IIb COVID-19 trial, which represents our most immediate value driver. In addition to our clinical momentum, we have taken important actions to enhance our corporate governance and engage openly and constructively with our stockholders, ensuring we remain strongly aligned. Our decision to enter into a cooperation agreement with the shareholder group reflects our commitment as well as our Board's commitment to strong governance, disciplined oversight, and constructive engagement with our shareholders. As part of these governance enhancements, we reorganized Board leadership and appointed new committee chairs with Kevin Finney leading our Nominating and Governance Committee and Dr. Jim Breitmeyer chairing our Compensation Committee. Additionally, we are forming the Stockholder Engagement Committee and the Clinical and Regulatory Affairs Committee. We are also in the search process for an additional independent director to be added to the Board, working closely with the shareholder group as outlined in our collaboration agreement. We believe these actions significantly strengthen Board oversight and reinforce our commitment to shareholder dialogue. I'll turn the call over to James to walk us through the details of the COVID-19 data readout. James?

Thanks, Steve, and thanks to everyone there for tuning in. As Steve mentioned, in July, we were pleased to report positive 12-month safety data from the 400 participant sentinel cohort of our Phase IIb COVID-19 trial, and that's funded under BARDA's Project NextGen initiative. To help put this in context, a sentinel cohort, it's really a smaller group of participants vaccinated first to evaluate safety before you expand to a much larger study population. This cohort served as our first direct head-to-head test comparing the safety of Vaxart's oral pill vaccine against an approved injectable mRNA vaccine. In this group, vaccines were targeted against the XBB variant of SARS-CoV-2, the virus that causes COVID-19, with 201 participants receiving our pill and 199 receiving the injectable mRNA vaccine. On safety and tolerability, which were the primary focus of this cohort, the results were very encouraging. There were 0 vaccine-related serious health complications and 0 severe or long-lasting adverse events in either group. When we look at everyday side effects, our pill demonstrated a very favorable profile. The most common side effects reported with our pill vaccine were mild to moderate fatigue, at about 20.9%, headache at 18.9%, and a loss of appetite at about 10%. Fewer than 10% of participants experienced, really, any other side effects. In contrast, participants who received the mRNA injection experienced higher rates of side effects at the injection site and throughout the body. Over 60% of the mRNA recipients reported injection site pain. 40.2% reported injection site tenderness, 35.2% reported fatigue, 33.2% reported muscle pain, and 28.6% reported headaches. Additionally, 10% to 15% of mRNA participants reported also joint pain, chills, nausea, diarrhea, and arm swelling. These findings align with what we would expect from our technology. Taking a pill eliminates the injection site pain. There's no injection. So local swelling, systemic discomfort, these things are typically associated with needle-based mRNA vaccines, but not a pill vaccine. Regarding COVID-19 cases in this 400-person study, 33 participants in the oral pill arm and 30 in the mRNA arm experienced symptomatic COVID-19. That means they have the typical symptoms of COVID-19. In each group, 12 participants had asymptomatic cases, which means they tested positive for SARS-CoV-2 virus, the virus that causes COVID-19, even though they didn't have any symptoms. It's important to emphasize that this 400-person sentinel group, this was intentionally designed to understand, really, only the safety profile to get a safety signal rather than to scientifically prove a statistical difference in protection between the 2 vaccines. Our main study cohort, which consists of about 5,000 participants vaccinated against the KP.2 variant is large enough to distinguish between random events and events related to the type of vaccine administered. This main group is fully sized and powered to provide statistically significant answers on both safety and relative efficacy. Thanks to our June contract modification with BARDA, we are equipped to perform a much deeper dive into our trial data. This includes evaluating mucosal immunity, which measures anti-body protection right where the virus enters the body in the nose and in the mouth, alongside the broader immune and safety measures. We're actively advancing these detailed analytics, though we're not in a position to provide a reporting time line at this time. As I mentioned, it's part of our contract with BARDA. It provides the agency with authority over all the readouts. As Steve mentioned earlier, we look forward to reporting top line data from the approximately 5,000 participant main cohort in the first half of 2027. I'll now hand the call over to Jeroen for the financial update. Jeroen?

Thank you, James. So Vaxart ended the second quarter of 2026 with $64 million in cash, cash equivalents and short-term investments. Based on our current operating plan, we continue to project that our capital will fund the operations into the second quarter of 2027. Revenue for the second quarter of 2026 was $27.2 million compared to $39.7 million in the second quarter of 2025. This revenue was primarily derived from our BARDA government contract, along with $2.9 million of revenue from our license and collaboration agreement with Dynavax that we signed in November of last year. Our research and development expenses were $33.7 million for the quarter, down from $49.7 million in the prior year. This net decrease is primarily due to a decrease in clinical trial expenses related to Vaxart's COVID-19 vaccine candidate and reduction in personnel costs, facilities costs, as well as pre-clinical manufacturing costs. General and administrative expenses were $6.6 million for the quarter. Overall, Vaxart reported a net loss of $13.5 million or $0.06 per share compared to a net loss of $15 million or $0.07 per share in the second quarter of 2025. Additionally, our $25 million share purchase agreement with Lincoln Park Capital remains available, giving us flexible access to capital at our sole discretion. We remain focused on disciplined financial management and evaluating non-dilutive funding options such as government grants and non-dilutive partnerships as we work towards our upcoming clinical milestones. I'll now hand the call back to David to take your questions.

Thanks, Jeroen. So we've received many questions from shareholders in advance, and we group those questions by topic. So we'll take the pre-submitted e-mail questions first, and then we'll move to live questions that are coming through the webcast portal. So the first set of questions are related to COVID-19. And James, could you please take this question? It's when should shareholders expect efficacy on the 5,000 participant study? When should we expect comparative immunogenicity data from the approximately 400 subject COVID study? So 2 questions there. And will data include meaningful comparisons with currently available mRNA vaccines?

Thanks for the question. So we expect to release the top line efficacy and safety data from the complete study set comprising the 400 participants in the sentinel safety cohort, and as I mentioned, the approximately 5,000 participants in the main cohort in the first half of 2027. As far as the immunogenicity data from the 400 or so sentinel cohort, the Phase IIb trial was structured under an award from BARDA. A core mandate of this BARDA-funded trial design is to directly evaluate the relative efficacy, safety, and the immunogenicity of Vaxart's oral pill vaccine against an active approved injectable mRNA vaccine comparator. We're actively advancing this process. So we aren't right now in a position to provide a specific reporting time line. And this is due in part as our contract with BARDA, as I mentioned, provides the agency with the authority over the time and the content of all the readouts that we release.

Thank you, James. Sean, could you please take the next question? With COVID rapidly mutating and in some circumstances, substantial mutations like from XBB to KP2 to XFG and Takeda, can IgA handle mutations with that much variance?

Yes. Thanks for the question. We know that IgA has a greater ability to handle variants than IgG, and we know our platform does elicit the strong mucosal IgA responses. As everyone knows, we previously reported that our oral COVID-19 vaccine demonstrated broad cross-reactivity with a variety of SARS-CoV-2 variants, but also with other coronaviruses. So we really do have confidence that our approach is going to work out better than an injected vaccine. Of course, ultimately, we will find out a lot more about the performance of our vaccine when we look at the analytical data for both the sentinel and the main cohorts of the COVID study that is currently enrolling and -- actually, finished enrolling and still in progress, there's a large amount of data we're going to get because the study is so large.

Thanks, Sean. Next question, back to James. You know how many total cases of COVID, both symptomatic and asymptomatic, have been seen in the larger 5,000 group so far. I know we don't have the details yet as they are still blinded. But just curious if you know the total with positive COVID infection.

Thanks, Dave. Thanks for the question. So we're still monitoring subjects and are accruing cases in that 5,000-person cohort, as I mentioned. Our plan is to provide that information as part of the release of data on the main cohort in 2027. As a reminder, and again, not to be a broken record, BARDA approval is required before any release of information, and we're aligning with BARDA on each data release.

Okay. Next question for Sean. Back to you, Sean. Dr. Cummings previously stated that for the COVID vaccine that low dose and high dose produce similar IgA. The NextGen construct high dose was not tested in humans. So was that based on the original Phase I trial data from 2020/2021? Or was it based on modeling to estimate the IgA response under different doses? Clearly, for noro, there was a material difference.

Yes. Thanks for your question. Well, earlier trials of our COVID-19 oral vaccine were used to guide dosing. For example, we found that the low dose and the high dose of our oral pill vaccine had a similar immune response when used as a booster in people that have previously received an mRNA vaccine. Obviously, everybody in this study has already received an mRNA vaccine at some point in their past, and we think that was a good guide for dosing. We'll have better insights in the immune response of the current vaccine once we've analyzed immunological data, and that will help us determine appropriate immune correlates, and again, guide us to whether a higher dose should be explored. I would point out in the question about the norovirus study that, yes, we did see a statistical difference between the old norovirus construct compared to the next-generation norovirus construct when you looked at just the high dose in the Phase I study. Again, this is the study we ran in 2025. And again, that was great. We know that the new constructs are better. However, the difference between the high and the low dose of the next-generation norovirus construct wasn't statistically different even if there was a slight numerical difference. These difference could be just resulting from randomness in human-to-human variation rather than true dose effect. I should also point out and let -- and remind you that dosing for one vaccine isn't necessarily going to be the same from each disease target, even if the vaccines are built on the exact same platform.

Thanks, Sean. James, back to you. Even though it wasn't powered for efficacy, are you surprised that Vaxart's improved NextGen product produced similar infections of mRNA, where we know it wanes quickly and is more lock and key, as you have stated. What happened to Vaxart's product providing cross-reactive immunity and more durable immunity?

Thanks. So first off, from an efficacy standpoint, our pill vaccine candidate compared very favorably to an approved injectable mRNA comparator, demonstrating similar efficacy in this sentinel cohort. That said, this overall data set is exciting. It's important to emphasize that this 400 participant group was primarily designed to evaluate safety. And it really lacks the statistical power, as I said, that's required to draw definitive conclusions about how efficacy or cross-reactive immunity is present in the study. Assessing true mucosal protection and long-term durability, the second part of your question, David, requires really a much larger clinical trial population monitored over time. But we're going to gain some greater insight into the duration of response, the broad cross-reactivity, and the relative efficacy or comparative efficacy once we receive and we analyze the complete data readout from the main 5,000 -- approximately 5,000-person participant cohort.

Thank you, James. Here's another question for you. The release of the sentinel cohort data took longer than management initially anticipated. As you look ahead to the full Phase IIb efficacy readout expected in the first half of 2027, are you confident that the processes and agreements with BARDA are now in place to support a timely release of those results?

Thanks for the question. The delay of the sentinel cohort was primarily driven by standard BARDA partnership protocols, which require the initial data package to flow through government review as well as modification of our contract I mentioned a little earlier, to reflect the scope of the trial following the pause and stop work orders. So with these foundational protocols and contract framework fully established, our team is applying those -- really, those key operational learnings directly to the execution of this main study. That said, it's important to reiterate that under the terms of the contract, BARDA has final approval on timing and content of all readouts. Integrity of our data is critical. Really, it's why it's so important we follow those protocols. But we have an experienced team that's managed this process, and we will continue to do so. The main study of about 5,000 participants is already fully enrolled and actively being advanced. And I look forward to reporting top line data in the first half of 2027. We're all fully focused on achieving this core milestone as fast as we can for such a large and complex study with the highest fidelity data possible.

Thanks, James. Sean, the next question is for you. It appears your oral COVID vaccine may have use as a therapeutic in long COVID. Is this something worth considering? Obviously, a large percentage of the population is affected. Have you ever sat in your car at a turning arrow and missed the turn because of a driver ahead of you has a lack of attention, while working on this as a therapeutic may ease the acceptance requirements.

Yes. Thanks for your question, and it's certainly very interesting to us. Again, we're very bullish about the potential of our COVID vaccine for treatment of long COVID. Obviously, the causes of long COVID continue to be evaluated, but there is evidence that some people experiencing long COVID may have low levels of viral replication and small pockets of replication within their body. It's not clear why the immune system can't clear the infection from the rest of the body by leaving these small pockets, but we do know that there's been some studies out there that said they exist. We do know these pockets can occur in the intestinal tract. And obviously, our oral intestinal targeting approach could potentially do something to address those small pockets of replication. I also would point out, of course, this is clear that this is obviously just a hypothesis, and we would need to conduct another clinical trial of people with long COVID and determine if our oral pill could eliminate or do some things to improve those people's lives. Ultimately, as I pointed out before, Sanofi holds the final decision whether they [indiscernible] in advance of the clinical trial, specifically to long COVID.

Thanks, Sean. Okay. Let's move on to norovirus. A few questions -- actually, several questions came through. So Steve, can you take this question? With Moderna's norovirus program currently on hold and Vaxart having generated encouraging safety data from approximately 400 participants, have discussions with potential pharmaceutical partners become more active? Without disclosing confidential information, can management provide a sense of the valuation range being discussed for a partnership?

Thanks. I'll go ahead and address the Moderna's norovirus program first. So what we saw in the news was that Moderna needs another season to complete enrollment in their trial. So it's not on hold, but it's been extended, essentially, for another season, which, of course, extends the timing of the trial. From our standpoint, it's a mixed blessing. On one end, we see them as competition. And the sooner we can get our Phase II trial to move forward, the closer we can stay close to them in terms of being in the marketplace. So having them delayed, of course, provides a little bit of a competitive advantage. So that's a positive. The not so positive, which, again, we'll do our best to always mitigate, is that now we have another data point in the norovirus marketplace where there was a company that failed, HilleVax. There is Moderna, which is extending its time line. So when we're talking to potential partners, they also keep that in mind as well when they're looking at, is this a good opportunity? In terms of the question around the valuation range, we normally don't communicate that primarily because we don't want to negotiate against ourselves. I will say that we, at Vaxart see high value in norovirus, which is why we continue to have discussions with potential partners. We think this is a huge unmet need. And as a result, we still continue to promote this to other potential partners. And the Moderna data as well as the fact that we do have the positive safety data with the sentinel cohort, I'll say that it's allowed us to reach out to companies that, let's say, haven't responded in quite some time, and it's helped us to at least make them aware of here's the latest data if you haven't been paying attention. So I would say in that regard, it's been helpful.

Okay. Thank you, Steve. The next question is kind of similar. I'll read through the entire question. And I think Sean, if you could answer this and then Steve, if you have any follow-up. The question is management has previously indicated that partnering interest in Vaxart's norovirus program could increase following Moderna's interim analysis of its Phase III norovirus study. Moderna recently announced that its trial did not meet the statistical criteria for early success and that it plans to enroll an additional cohort. Does management view this outcome as favorable or as an obstacle to Vaxart's competitive and partnering position?