Vaxart (VXRT 0.60%) is a coronavirus vaccine drugmaker that has polarized investors for much of the last year. If you bought its stock in January 2020, your investment would be up a whopping 500% over the past 12 months -- and at one point, it would have boasted returns as high as 1,500%. But those who bought at that high point would currently be sitting on an ugly 61% loss. 

The controversy surrounding Vaxart stems entirely from its ability to bring a coronavirus vaccine to market. Is the company on track to complete such an achievement? Let's find out below. 

Gloved hand holding coronavirus vaccine vial.

Image source: Getty Images.

A potential new kind of coronavirus vaccine 

Among coronavirus vaccine developers, Vaxart has a rather unique candidate. Its experimental vaccine is an oral tablet that is stable at room temperature and can be taken anywhere. The candidate is currently in phase 1 clinical testing, with data expected as early as this month. Vaxart anticipates moving its coronavirus vaccine candidate into phase 2 by the end of the first quarter if the data looks good.

Not without prior success

This isn't the first time that the company tried to develop an oral vaccine. During phase 2 testing, its oral influenza vaccine managed to reduce infection rates by 39% compared to placebo. Keep in mind, a leading high-dose flu vaccine only reduced illness rates by 27% against placebo. Furthermore, since the company's vaccine candidate is an oral formulation, there were no adverse events such as pain at the injection site associated with traditional injection-based vaccines.

In the past, Vaxart has had two drugs that received regulatory clearance, both with the aid of collaborative partners. In 1990, the company licensed its patent rights for influenza treatment zanamivir to GlaxoSmithKline. Japanese drugmaker Daiichi Sankyo markets Vaxart's other out-licensed flu treatment, laninamivir.

Aside from tackling COVID-19 and influenza, the company also has a vaccine candidate in phase 1 targeting the norovirus, colloquially known as the "winter vomiting bug." If successful, Vaxart expects it will be able to capture part of a $3 billion market in the U.S. alone. Despite all of its spending on research and development efforts, Vaxart has only lost $135 million since its inception in 1969.

What's the verdict?

Right now, Vaxart's COVID-19 vaccine candidate is still in the early stages with no preorders. In addition, Vaxart received a grand jury subpoena from federal authorities in October for allegedly overstating its involvement in Operation Warp Speed, the U.S. government's program to accelerate coronavirus vaccine development. That said, its oral vaccine platforms have achieved efficacy in non-COVID illnesses, and it has a history of developing products that made it to commercialization through partnerships. 

Vaxart's market cap is only $717 million, and it has a further $133 million in cash to fund expenses. Assuming it can steer its experimental vaccine to regulatory clearance, the stock would be very undervalued. This is especially considering that competing coronavirus vaccine drug makers could bring in as much as 11 figures in sales from their vaccine deployment.

But the odds of that aren't a given for Vaxart. Investors should understand that the company is an extremely high-risk, high-reward stock only for the most seasoned of investors who are comfortable with such a binary outcome. If you aren't a fan of the shares' volatility, check out these biotechs instead.