Vaxart, Inc. (NASDAQ:VXRT) Q2 2023 Earnings Call Transcript

Vaxart, Inc. (NASDAQ:VXRT) Q2 2023 Earnings Call Transcript August 3, 2023

Vaxart, Inc. misses on earnings expectations. Reported EPS is $-0.16 EPS, expectations were $0.19.

Operator: Greetings, and welcome to the Vaxart Business Update and Second Quarter 2023 Financial Results Conference Call. A question-and-answer session will follow management’s opening remarks. Individual investors may submit written questions to ir@vaxart.com. As a reminder, this conference is being recorded. I would now like to turn the webcast over to your host, Brant Biehn, Senior Vice President and Business Operations. Thank you. You may begin.

Brant Biehn: Good afternoon, and welcome to today’s call. Joining us from Vaxart are Andrei Floroiu, our Chief Executive Officer; Dr. Sean Tucker, our Founder and Chief Scientific Officer; Dr. James Cummings, our Chief Medical Officer; and Phil Lee, or Chief Financial Officer. 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 and its product development and regulatory progress, including statements about its ongoing or planned clinical trials. Actual results could differ materially 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 risks described in the Risk Factors section of Vaxart’s most recently filed Annual Report on Form 10-K and also on other periodic reports filed with the SEC.

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Vaxart undertakes no obligation to update any forward-looking statements after the date of this call. I’ll now turn the call over to Andrei Floroiu. Andrei?

Andrei Floroiu: Thank you, Brant, and thank you to all of you for joining us today. On today’s call, we will highlight the recent progress we have made on our norovirus oral pill vaccine program. We’ll also look ahead for remaining planned milestones for the second half of the year, and briefly discuss our COVID program before opening the call to your questions. During the second quarter, we are pleased to report positive preliminary top line results from our Phase 2 dose ranging study for our bivalent norovirus oral vaccine candidate within our stated timeline. James will provide a review of that data and what it means for this potentially groundbreaking vaccine. It is important to point out that this data builds on the growing body of evidence that validates Vaxart’s platform as we explore the potential advantages of mucosal vaccination.

All our vaccines are designed to trigger mucosal immunity. And this is a very important distinctive feature of our platform. The clinical data we have generated thus far across our multiple programs suggests that mucosal vaccination could provide several important advantages; broader, cross-variant protection, reduction in viral transmission, more durable protection, and a broader immune response through the activation of both serum and mucosal immunity. The other important distinctive feature of our vaccines is the oral pill format. The potential advantages of oral pill vaccines are so fundamental that making them a reality could radically change how we think about vaccines and vaccination globally. Oral pill vaccines would allow us to vaccinate a lot more people faster, more easily and painlessly than we are doing today with injectable vaccines.

This vision is the future of vaccination that we are working so hard to achieve. Across Vaxart, we are excited about the potential of our norovirus vaccine program. We believe we have the most advanced norovirus vaccine candidate in clinical development that is both formulated for oral administration and designed for delivery to the gastrointestinal system. Norovirus is a significant public health issue in developed countries, and there is no approved vaccine. More than 21 million people are infected in the U.S. each year, resulting in an annual disease burden of more than $10 billion in the U.S. alone. And the virus continues to be a leading subject of infectious disease story across the country this summer, as the number of cases has spiked to at least a three-year high.

We believe our norovirus vaccine program has the potential to address this myth and the significant tremendous disease burden that norovirus carries. Looking ahead, we have two important clinical milestones this year, and we remain on track to achieve them both. First, we anticipate reporting top line data from the ongoing Phase 2 challenge study of our G11 norovirus vaccine candidate in the third quarter of this year. And then we look forward to initiating this year the Bill & Melinda Gates Foundation funded clinical trials to evaluate the ability of our norovirus vaccine candidate to induce antibodies in breast milk and transfer of antibodies to young infants. Before I turn the call over to James, I want to provide a brief update on our COVID program.

To date, Vaxart’s COVID-19 vaccine construct has demonstrated a favorable immune profile. Vaxart continues to make progress on this program. And we believe based on the mucosal cross reactivity data we have seen in our time constraints, that there may be a pathway to develop an oral and better Coronavirus vaccine. We’re assessing next steps and will provide updates as they become available. Recently, the White House announced the new Office of Pandemic Preparedness and Response Policy. We’re very encouraged by the U.S. government’s proactive approach to pandemic preparedness and strongly support global efforts to get ahead of the next global health crisis. As we cope with a post emergency phase of the pandemic, we must build stronger defenses against future infectious diseases and other stress we face [ph].

Vaxart believes a cross-protective vaccine could improve our ability to fight future pandemics and is committed to that effort. As you can see, we strongly believe in the potential of our technology and what it could mean for global public health and are excited for the opportunities that lie before us. Now, I’ll turn the call over to James for a more detailed review of our norovirus program.

James Cummings: Thanks, Andrei. We made significant clinical progress in the second quarter, highlighted by the positive preliminary top line data that we reported from the Phase 2 dose ranging study for our bivalent norovirus oral vaccine candidate. We believe these data we have seen to date show promise for this vaccine candidate and more broadly, our vaccine platform. Recall that this candidate contains two genotypes, G11 and G24, both of which have caused the majority of norovirus disease in humans over the past 20 years. As a reminder, this study enrolled 135 healthy adults at three sites in the United States. The first 10 sentinel subjects received open-label, high-dose vaccine, and the remaining subjects were randomized to high or low dose vaccine or placebo.

Each of the double blinded vaccine arms had 50 subjects and the placebo arm had 25 subjects. The primary endpoints were safety and immunogenicity in order to determine a dose level for Phase 3 development. Now let’s take a moment to review the results. As we described in detail in our July announcement, the preliminary results of the trial showed robust serum immune responses across all doses at day 29 relative to day one. Both vaccine doses showed a similar increase in serum antibody responses, with no statistical difference between the medium and high dose arms. At day 29, increases in serum IgA, serum IgG, and BT50, for both the G24 and G11 strains in the vaccine arms were similar to those seen in previous norovirus studies conducted by Vaxart.

The results also demonstrate that the bivalent norovirus vaccine candidate was well tolerated with a favorable safety profile that included no vaccine-related serious adverse events or SAEs, and no dose limiting toxicity. Adverse event rates for both doses were similar to placebo. I’d like to point out that the preliminary data were for serum responses. Mucosal and cell-based assay data will be available at a later date. The totality of the data from this bivalent study and the data we expect from our ongoing norovirus challenge study will help inform our selection of dosage levels in a larger Phase 2b study and could support an end of Phase 2 meeting with the U.S. FDA, potentially in 2024. I’ll now turn to the Phase 2 G11 norovirus challenge study, which is measuring the safety, immunogenicity and efficacy of our monovalent norovirus vaccine candidate.

This study may also help identify a correlative protection between immune responses to the vaccine and a reduction in the risk of norovirus infection and/or acute gastroenteritis secondary to norovirus. Enrollment in this ongoing double-blinded study is now completed, and we continue to expect to unblind the study and report top line data during the current third quarter of 2023. We continue to believe in the potential of our bivalent norovirus candidate as we proceed toward a BLA submission. We look forward to updating you on our progress in the coming months. I’ll now hand the call over to Phil Lee, our CFO for a brief discussion of our financials. Phil?

Phil Lee: Thanks, James. The details of our financial results for the second quarter of 2023 are summarized in today’s press release. Revenue for the second quarter of 2023 was $1.4 million compared to no revenue in the second quarter of 2022. Revenue in the second quarter of 2023 was primarily from revenue recognized for work performed under Vaxart’s grant from the Bill & Melinda Gates Foundation. Vaxart ended the second quarter of 2023 with cash, cash equivalents, restricted cash and marketable securities of $67.9 million compared to $71.8 million as of March 31, 2023. The decrease was primarily due to cash used in operations as we advanced our norovirus program, which was partially offset by $13.6 million of net proceeds from a public offering completed in June 2023.

The offering extends the company’s expected cash runway into the third quarter of 2024. On behalf of all of us at Vaxart, I’d like to thank you for your time today. We will now open the call for your questions.

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Q&A Session

Operator: Thank you. At this time, we’ll be conducting a question-and-answer session. [Operator Instructions]. Our first question comes from Charles Duncan with Cantor Fitzgerald. Please proceed with your question.

Charles Duncan: Hi, Andrei and team. Congratulations on the quarterly progress. So earlier this quarter, you announced a preliminary top line data from the Phase 2 dose ranging study for the bivalent norovirus vaccine candidate that you touch on during the prepared remarks. When you look at the immunogenicity data generated by this study and you compare it to the responses observed, let’s say, after a natural infection to either strain, how do you feel about the response? And do the data suggest that you need to go lower or higher in dose, or do you believe you have the right dose in hand?

James Cummings: I’ll take that one. Thanks. So we’re fairly pleased that the data from that study to date is consistent with previous norovirus study results. You recall in the preliminary top line data we announced in July, we showed robust serum immune responses across all doses at day 29 relative to 21. The mucosal and the cell-based assay data, that’s pending. That will be available at a later date. Once we’ve assessed that data, I think we can make a stronger decision moving forward.

Charles Duncan: All right, James. Thanks. And also, what are your thoughts on a one dose regimen versus a two dose regimen for this program?

James Cummings: I think for adults, a one dose regimen.

Charles Duncan: All right. And as we move into 3Q, we’re anticipating seeing data from the norovirus challenge study. Just wondering if you can sort of lay out what you would like to see perhaps from a qualitative perspective rather than quantitative that you would find encouraging and would like to take to the agency for the end of Phase 2 meeting?

James Cummings: I don’t want to project the data results before we have them. Certainly, if we stay on track with what we’ve seen in previous studies and note robust responses from mucosal or cell-based assays, that would be very encouraging. And then also, we’re looking forward to the data that we should announce later in Q3 of this year in terms of the noro G11 challenge. So that will be inclusive of that for a decision we made as well.

Charles Duncan: Okay. And just last question sort of — again, I know that you have to have your Phase 2 meeting, but when do you sort of anticipate or expect to operationalize the next study? And do you see Vaxart driving the program alone forward, or you have thoughts of bringing in a partner?

James Cummings: I’ll take the first half and I’ll pass the second half off to Andrei, if that’s okay. I think that from my standpoint, again, we’d like to see the data from this study as well as the 201 challenge study before going to the FDA. The second portion of a larger study would then lead us to a Phase 2 — would lead us to the end of Phase 2 discussions with the FDA. And as I mentioned before, that could be as soon as 2024. Andrei, do you want to comment on the second section of that question?

Andrei Floroiu: Sure. So [indiscernible] as our closest competitor in the norovirus space, Vaxart has noted earlier this year late stage vaccine assets such as the norovirus programs are of interest to many large pharmas and medium-sized pharmas and will obviously entertain those discussions once we have the data. And as you can appreciate, there are advantages and disadvantages to partnering and going it alone. And we’re open to evaluating the options and decide which ones will maximize value and bring the vaccine sooner to patients.

Charles Duncan: All right. I look forward to the challenge study data, and thank you for taking our questions.