The recent surge in COVID-19 cases caused by the new and more contagious omicron variant of the coronavirus has taught us at least one thing: There's still a dire need for effective vaccines against this potentially deadly disease. Here's why this matters for investors.
Several companies are still looking to enter the coronavirus vaccine market, even though Pfizer and Moderna currently dominate it. One biotech that is slowly advancing a coronavirus vaccine candidate is Vaxart (VXRT 1.51%).
The San Francisco, CA-based company has significantly lagged the market in the past year, but could its lofty ambitions help it reverse course?
The appeal of Vaxart's vaccine
Vaxart is just one of the many companies looking to grab a small slice of the multibillion-dollar coronavirus vaccine market. However, it has a potential advantage over its peers. Vaxart's candidate is an oral vaccine, a factor that confers multiple perks. First, oral tablets can be stored at room temperature. That also makes them easier to transport. By contrast, traditional vaccines administered intramuscularly have stringent storage requirements; for instance, Moderna's vaccine needs to be stored in a freezer or refrigerator at particular temperatures.
Second, an oral vaccine is less painful, and that alone may entice some otherwise hesitant people to take the vaccine. Increasing the percentage of the population inoculated against COVID-19 is a critical step to ending this pandemic, and Vaxart's approach could help in that regard.
In April 2021, Vaxart reported the results of a poll conducted in the U.S. showing that nearly a third of those who planned on not getting a COVID-19 vaccine (as many as 19 million people) would change their minds if they could take the vaccine in the form of a pill. This means that Vaxart could carve out a niche in the vaccine market for itself if its candidate earns regulatory approval.
Slow and steady wins the race, but how slow?
Vaxart's oral vaccine is a fascinating concept, but its unique approach won't yield any benefits unless the company can launch its candidate on the market soon. In October, the company started a phase 2 clinical trial for its potential coronavirus vaccine. The first part of the trial will enroll 96 subjects in the U.S.
Vaxart will also run a second part of this study that will include more participants recruited from different countries. The study will test the safety, efficacy, and immunogenicity (the ability to trigger an immune reaction in the body) of two oral doses of the vaccines taken roughly 28 days apart. The biotech expects to report some of the data from this study during the first quarter.
Vaxart's investigational vaccine produced encouraging results in preclinical studies as well, but obviously, it still has a long way to go before even starting a phase 3 study, let alone making it onto the market. Vaxart's chances will improve as the pandemic continues to drag on. The company recently announced that it would test the cross-reactivity of its coronavirus vaccine candidate against the omicron variant.
At this point, no one can tell whether Vaxart's vaccine will prove effective against any of the circulating variants -- or any new ones that emerge. That's why Vaxart's prospects in the coronavirus vaccine market, although intriguing, look uncertain at best. The company does have other pipeline candidates, but all of them are still very early in their developmental stages.
Vaxart is currently developing vaccines against influenza and against norovirus, which causes stomach pain, vomiting, diarrhea, and tiredness. There's a need in both of these markets. For instance, according to some estimates, noroviruses cause 20 million illnesses in the U.S. every year. Vaxart sees a $10 billion opportunity for its norovirus vaccine in the U.S. alone.
While that seems promising, too much can go wrong for the company. As with other clinical-stage biotechs, its shares would crash if it fails to deliver solid clinical and regulatory updates since it has no products on the market. That's why even with a $784 million market cap, Vaxart seems far too risky to invest in right now. Thankfully, there are plenty of better biotech stocks to consider.