Over the past week, investors optimistically pushed Vaxart’s (VXRT) share price up by over 100%. High short-interest and anticipation of positive Phase 1 results from the study of the company’s oral Covid-19 vaccine candidate VXA-CoV-1, appears to be a particularly potent combination.
However, speculation on the results of clinical trials is a risky business, and investors were left disappointed when Vaxart’s were made public on Wednesday. Since the news broke, shares crated by ~60%.
So, what happened? While the vaccine was well-tolerated and caused multiple immune responses against SARS-CoV-2 antigens, it failed to produce neutralizing antibodies in the study’s participants. It is believed that a lack of neutralizing antibodies lowers the vaccine's potential to fend off COVID-19.
While the market’s reaction was unequivocally negative, B. Riley analyst Mayank Mamtani looks on the bright side.
“We remain intrigued with the unequivocally robust benefit noted on T cell responses, including relative to its in-class peers in the form of adenoviral vector-based C-19 vaccine candidates, particularly as it relates to the potential role in demonstrating long-lasting cross reactive immunity,” the 5-star analyst said. “In addition, we are also encouraged by safety profiles with no serious AEs noted to date and a very low event rate of solicited GI symptoms with a majority of events noted on high doses and generally reported as mild and transient.”
Mamtani also says Merck’s recent discontinuation of its own oral VSV-platform based vaccine candidate was “likely safety-related.” This implies VXRT's data having “favorable readthrough to the broader platform as well as VXRT's dose optimization efforts.”
Vaxart’s offering has several advantages. One being its tablet form, which could appeal to needle-shy people. It is also stable at room temperature, compared to the EUA approved vaccines’ cold storage requirements. To this end, Vaxart said it plans to advance its Covid-19 vaccine program into a Phase 2 study.
All in all, Mamtani remains behind VXRT, and sticks to his Buy rating. The $16 price target remains, as well, suggesting upside of 78% from current levels. (To watch Mamtani’s track record, click here)
Vaxart has only 2 other recent reviews, but both agree with Mamtani’s assessment. The 2 additional Buys add up to a Strong Buy consensus rating. The average price target is an optimistic one, and at $17.67, implies gains of 96% could be in the cards over the next 12 months. (See VXRT stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.