Science stocks aren't exactly Warren Buffett's usual fare for investment. Aside from the high risks involved with trying to make new medicines and technologies, many companies that work at the cutting edge of human knowledge haven't proven their value by generating revenue. So, it shouldn't surprise anyone that Buffett doesn't have any biotechnology companies in his portfolio. 

Nonetheless, the small-cap vaccine maker Vaxart (VXRT -4.79%) might eventually have what it takes to win a spot in the Berkshire Hathaway stock roster. As outlandish as it might sound -- and it's definitely a long shot -- there's a path for the company to reach Buffett-stock status.

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Vaxart's product could be a natural draw for Buffett 

Today, Vaxart's claim to fame is its coronavirus vaccine candidate, which is still in early-stage clinical trials. Taken in isolation, its coronavirus candidate isn't something that would attract Berkshire Hathaway, nor are any of its other projects. Instead, its draw is that it makes vaccine doses in the form of convenient tablets using a proprietary technique that it calls VAAST (Vector-Adjuvant-Antigen Standardized Technology). At the moment, it's unclear whether existing vaccines will still work if they're adapted into pill form with VAAST. But, if they will -- and so far, it looks like that's the case -- Vaxart will be sitting on a gold mine. Buffett might also be pleased to hear that the gold mine has a competitive moat as a result of intellectual property protections and trade secrets that others can't easily imitate.

Furthermore, Buffett and other value investors tend to favor companies that make products for which there's consistent demand and little pressure to match competitors, like the credit rating firm Moody's.

Vaxart's pills fit the same mold, as the demand for vaccines isn't about to go anywhere. Plus, the majority of the research and development (R&D) work is in the rearview mirror, assuming the company seeks only to license VAAST rather than developing new vaccines in-house. And, outside the context of a global pandemic, vaccine sales should continue to grow predictably alongside rising populations and the appearance of new infectious diseases. That will also remain true even if the company's technology only works for a subset of vaccinations.

As a bonus, Buffett would like that Vaxart has only $7.21 million in debt, which is minimal in comparison to its $126.87 million in cash.

Don't expect a Berkshire Hathaway investment any time soon

While the products made using VAAST could make Vaxart into the kind of company that Buffett is known to appreciate, it's important to recognize that it doesn't conform to his standard from today's perspective. 

Early-stage biotech companies simply don't have the proven business model, strong profitability, consistent revenue growth, and ever-increasing cash flows of the Buffett favorites. Nor do they have low capital expenditures or low R&D costs. And, especially for a company like Vaxart that's developing new medicines as well as its platform, money spent on R&D is very risky and has no guarantee of future returns.

The fact that they could eventually have the right properties for Buffett is unlikely to be enough for a conservative and long-term-oriented investor to take the plunge. After all, the Oracle of Omaha's strategy isn't to place a lot of long-shot bets in the hopes that one of them works out. It's to place a lot of bets that are as close to surefire wins as is knowable.

What needs to change for Vaxart to be a Buffett pick

If Vaxart can demonstrate that licensing VAAST to other vaccine manufacturers can generate reliable revenue, it'll be most of the way toward being more appealing to Buffett. To reach that goal, it will need to succeed with the commercialization of at least one of its pipeline projects. That could be its coronavirus vaccine candidate, or it could be something targeted at a similar market, like its influenza vaccine project. 

Either way, having a revenue-bearing proof of concept for VAAST will also serve to vet its management, both of which will be instrumental in making the stock into a long-term value pick.