Vaxart, Inc. (VXRT) Earnings Call Transcript

Greetings, and welcome to the Vaxart Third Quarter 2026 Stockholder Fireside chat. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the webcast over to David Carey of FINN Partners.

Good afternoon, and welcome to today's call. Joining us from Vaxart are Steven Lo, Chief Executive Officer; Mark Watson, Lead Independent Director and member of the Board's Stockholder Engagement Committee; Dr. Rocky Bonno, Independent Director and Chair of the Stockholder Engagement Committee; Dr. Sean Tucker, Founder and Chief Scientific Officer; Dr. James F. Cummings, Chief Medical Officer; and Jeroen Grasman, Chief Financial Officer. Before we begin, I would like to remind everyone that during the conference call, Vaxart may make forward-looking statements, including statements about the company's financial results, financial guidance, its future business strategies and operations, any partnerships with third parties, timing of any anticipated regulatory milestones or clinical data readouts, the company's future cash runway, ability to raise capital and its product development progress. Actual results could materially differ from those discussed in these forward-looking statements due to a number of important factors, including the uncertainty inherent in clinical development and regulatory processes and other risks described in the Risk Factors section of Vaxart's most recently filed annual report on Form 10-K and periodic reports filed with the SEC. Vaxart undertakes no obligation to update any forward-looking statements after the date of this call. I'll now turn the call over to Steve Lo. Steve?

Thanks, David. Good afternoon, everyone, and thank you for joining us today for our third quarter 2026 fireside chat, the fifth quarterly fireside chat and sixth overall fireside chat we've hosted. These discussions are an important part of our ongoing commitment to maintaining transparency and visibility for our stockholders. The third quarter and recent weeks have been a productive period for Vaxart across our clinical programs, pipeline validation and corporate governance. Our primary operational focus remains executing the main cohort of our phase 2b COVID-19 trial. Following the encouraging 12-month head-to-head safety data we reported in July from our 400-participant sentinel cohort, our clinical operations and trial site teams have been actively advancing the approximately 5,000 participant main cohort. We expect to report efficacy and safety data by midyear 2027. In addition to our clinical momentum, we have taken important steps to strengthen our Board leadership and corporate oversight. To speak more about our governance initiatives and introduce our newest director, I'd like to turn the call over to our Lead Independent Director, Mark Watson. Mark?

Good afternoon everyone. On behalf of the entire Board, I want to take a moment to directly acknowledge and thank you, our stockholders. Your ongoing support and continued engagement are fundamental to everything we do at Vaxart. We value the perspectives you share with us and look forward to continuing that dialogue into the future. To that end, our Board has formed a dedicated stockholder engagement committee consisting of Steve, myself and our newest Independent Director, Dr. Bono, retired Vice Admiral of the U.S. Navy. The committee provides an additional form for direct engagement between the Board and our shareholders, ensuring investor feedback informs our oversight of the company's strategy and execution. We are pleased to have Dr. Bono serving as Chair of this committee. She has also joined the Clinical and Regulatory Affairs Committee and the Nominating and Governance Committee. Rocky brings a distinguished track record of military, surgical and public health leadership, having served as a three-star Vice Admiral in the U.S. Navy and as former Director of the Defense Health Agency. Her focus on operational discipline makes her an ideal leader for our engagement efforts and an ideal team member with this Board. I'd like to invite Rocky to share a few words. Rocky?

Thank you, Mark. Good afternoon, everyone. Throughout my career, whether serving as a Navy trauma surgeon, leading the Defense Health Agency, coordinating Washington State's health system response during COVID-19 or directing global health operations for Viking Cruises, I've seen firsthand the limitations of traditional needle-based vaccines. That operational reality is why I believe so firmly in Vaxart's mission. My experience leading large-scale military and public health organizations has also reinforced the importance of trust, accountability and open communication. I believe effective governance is vital to success and starts with listening, asking the right questions and ensuring that different viewpoints are considered as decisions are made. These principles will be central to my approach as Chair of the Stockholder Engagement Committee. I intend to thoroughly integrate stockholder perspectives into our Board discussions, helping keep the Board connected to these priorities as we oversee management's execution of Vaxart's strategy and work to build lasting value. I look forward to engaging directly with our stockholders and working alongside the entire Board to support Vaxart's long-term success. With that, I'll hand the call over to our Chief Medical Officer, Dr. James Cummings, to walk through our clinical updates. James?

Thanks, Rocky, and welcome aboard. Before I get into our COVID-19 update, I'd like to highlight two notable developments across our broader pipeline. First, on norovirus. In late August of this year, the European Patent Office granted a patent extending protection for our oral norovirus vaccine technology to at least 2036 across 13 European nations. This directly complements our existing U.S. patent estate. Together, they provide multi-jurisdictional IP protection through 2036, which is now integrated into our data package for active discussions with prospective partners. Second, on H5N1 Avian influenza. In early October, we published a peer-reviewed data demonstrating 100% protection against a lethal challenge of H5N1 Avian flu in a ferret model. The ferret is widely recognized as the gold standard for preclinical work in human respiratory infection. This study demonstrates the agility and modularity of our vast oral platform, highlighting how we can engineer and deploy vaccine candidates against high consequence emerging threats with real pandemic readiness. Now turning to our Phase 2b COVID-19 trial. One of the questions that we receive most often centers on the clinical time line, specifically, what actually goes into running a study of this magnitude? And why are the clinical and the regulatory process? Why does it take the time that it does? So to further understanding, I'd like to walk you through some of the key components of a trial of this size and complexity to illustrate why a deliberate, precise approach is necessary to generate high-quality data that support the regulatory process. First, look at the operational scale. Now we're not doing a small early safety trial of 30 or 40 volunteers. This is a large-scale head-to-head comparative trial evaluating our oral tablet vaccine candidate against an approved mRNA injection across approximately 5,000 active participants at 140 clinical sites nationwide. Building out that network, making sure every single site adheres to exact clinical standards, and maintaining consistent regulatory-grade data collection across thousands of participants, that requires significant coordination. Second, there is a stringent screening process. To enroll 5,000 qualified participants, our clinical teams have to screen many thousands more. Because this trial measures comparative immune responses and real-world infection endpoints against the KP.2 variant of COVID-19, every single participant must fit strict protocol criteria regarding prior infection and vaccination history. Taking the time to properly screen participants ensures our final data set remains uncompromised and ready for regulatory scrutiny. Third, clinical time lines are fundamentally covered by required periods of observation. To accurately measure vaccine efficacy, durability, and both mucosal and systemic immune responses, participants are followed over a set protocol windows spanning months. These observation periods are essential to understanding how the immune system develops and sustains protection over time. The resulting clinical and laboratory data must then undergo review and source validation prior to being finalized, which takes months for a study of this size. Finally, once those patient visits are completed, there are thousands of mucosal swabs and blood samples that undergo standardized laboratory processing, assay validation, strict quality checks and regulatory data locking before any unblinding takes place. For this study, a significant share of the immunologic and viral laboratory testing is being conducted by BARDA Partner Labs, which helps to ensure a standardized approach and a more economical pathway for a program that's this large. Because these labs operate independently of Vaxart, testing and processing time lines are also subject to their schedules and the coordination with BARDA. We're working very closely with the numerous partners to manage these dependencies and keep the program moving forward in a very timely manner. Working alongside BARDA under Project NextGen has provided Vaxart with the nondilutive resources to execute a study of this scope and magnitude. Partnering with the federal government also means adhering to regulatory schedules as well as BARDA's established review processes and oversight time lines. For a study of this scale intended for federal partnership and regulatory submission, rigorous execution and alignment with federal requirements must remain the priority. We've already crossed critical milestones here, including the clean 12-month safety clearance from our 400-participant sentinel cohort. As we execute through the remaining follow-up windows, our team remains fully focused on delivering this clinical study, the readout by midyear 2027. With that, I'll hand the call over to Jeroen for our financial update. Jeroen?

Thank you, James. I'll now review our third quarter 2026 financial results. As to cash position and runway, Vaxart ended the third quarter with $65.5 million in cash, cash equivalents and short-term investments. Based on our current operating assumptions, we continue to project that this cash balance will fund our operations into the second quarter of 2027. We continue to evaluate all opportunities to extend that cash runway. On the revenue front, total for the third quarter was $10.6 million compared to $72.4 million in the third quarter of 2025. Revenue recognized during the period was primarily driven by work performed under our BARDA Project NextGen contract alongside ongoing revenue recognition associated with our collaboration agreement. On the R&D side, our Research and Development expenses for the third quarter were $22.8 million compared to $75.9 million for the same period in 2025. Clinical trial expenditures primarily reflect our efforts in executing the Phase 2b COVID study. On the General and Administrative front, the G&A expenses were $5.1 million for the third quarter compared to $4.3 million in the same quarter of '25. Finally, on our net loss, we reported a net loss for the third quarter of $17.7 million or $0.07 per share compared to a net loss of $8.1 million or $0.04 per share for the third quarter of 2025. Additionally, through September 30, 2026, we generated $0.5 million from shares issued and sold under the April 2026 share purchase agreement with Lincoln Park Capital. The remainder of the $25 million commitment under this share purchase agreement remains available as a flexible source of capital at our sole discretion. We remain committed to strict financial discipline and continue to explore partnerships, grants and other nondilutive funding mechanisms as we advance towards our major clinical readouts. I'll now turn the call back over to David to begin our Q&A session. David?

Thanks, Jeroen. We'll now begin the Q&A session. And as with previous calls, we've collected pre-submitted questions from our stockholders, which we've organized by topic, and we'll also be monitoring live submissions throughout the webcast portal. So to begin, Steve, I'll direct this question to you. Do you think the recent election results will impact funding for the COVID Phase 2b trial or the timing of the release of the full trial results?

Thanks, David, and thanks for the question. We don't anticipate any changes. The short answer is no. As a reminder, when we were first awarded this trial, it was under a Democratic administration. And then under the trial, it went to a Republican administration. And I think the stockholders realize that in 2025, we were issued two stop work orders, and we were able to overcome them and continue the trial. So from our standpoint, we're pleased to be, frankly, the only company that survived those stop work orders. A lot of other vaccine companies received them and have not continued to complete a trial. And from our standpoint, we really enjoy our close working relationship with BARDA. We appreciate their partnership, and we continue to work together with them to finish out this trial.

Thanks, Steve. James, next question for you. You said the data readout for the full Phase 2b COVID trial is expected in the first half of 2027. Now you're saying mid-2027. Can you please discuss why you've updated timing?

Thanks, David, and thanks for the question. Sure. As I went over just a little while ago, when you're executing a registration quality clinical trial that's this large, evaluating about 5,000 active participants across the nation, the time line is fundamentally driven by deliberate protocol requirements rather than arbitrary spacing. So just to reiterate, the three primary drivers here that govern the calendar are the protocol-defined observation windows, and that's a comparative efficacy trial can compress essentially biological time. Participants have to be monitored over set multi-month observation windows to evaluate real-world variant infection endpoints and measure both mucosal and systemic immune response durability. I mentioned some details about the laboratory processing and assay validation. Once these visits and sample collections wrap up, there are thousands of mucosal swabs and blood samples that undergo centralized laboratory processing, strict assay validation and formal regulatory data locking before any unblinding can occur. It's important to note that this sample processing is being performed at BARDA's partner labs. And these labs dictate the timing and the prioritization of our samples in the context of work that they do to support other trials and programs for BARDA. Federal governance and review alignment is another piece of this. Executing this study under Project NextGen means working in close coordination with the partners of BARDA. We have to adhere to federal oversight and review processes that's part and parcel of that partnership, ensuring the data set meets BARDA program goals as well as every agency standard for regulatory review.

James. Sean, next question for you. While top line safety and side effect profiles from the Sentinel group was impressive, investors are interested in underlying data such as immunogenicity, viral load, shedding and severity of infections. So has Vaxart, BARDA, Sanofi or any other entity seen this more detailed Sentinel data yet? And what about detailed full Phase 2b data? And second part of this is with the long wait for the full Phase 2b data expected now in mid-2027, can shareholders at least expect to see more detailed Sentinel data before end of the year? And if not, is it being withheld by BARDA? Or is it Vaxart's decision to withhold it?

Thanks, David, for the question. Just to address your question directly, neither Vaxart nor any external entity is withholding data. Following the contract modification #7, the study samples were submitted to an independent or two independent analytical laboratories for processing. Because these assays are handled externally, we can't predict the exact time line for when labs will complete their analysis and provide the data. We have not seen it or anybody else, the underlying immunogenicity data. Furthermore, under our contractual framework, any public dissemination or timing of these results is strictly contingent upon BARDA's formal review and approval. While we understand the desire for detailed sentinel readouts before year-end, we are certainly as anxious as you are, we cannot commit to a specific release date until the lab data is finalized, delivered and cleared for disclosure through our established partner protocols.

Okay. Thanks, Sean. James, this is kind of a similar question, but I'll ask it to you as well. So you previously said that you'll share additional data cuts. So when are you going to do that?

Thanks, David. We're actively advancing these detailed analytics, but we're not in a position to provide a specific reporting time line, as Sean mentioned, for additional interim data cuts right now. Our contract with BARDA provides the agency with authority over all trial readouts. So any disclosure time line is dependent on that ongoing collaboration and approval process. We continue to maintain a strong positive working relationship with the folks at BARDA, and we value their ongoing partnership as we advance this program together. Regarding overall trial milestones, we look forward to sharing efficacy and safety data from the main study cohort by midyear 2027. Back to you, David.

Thanks, James. Sean, another question for you. Can you provide more detail on the XBB immunology data and what it tells us about the mucosal and systemic immune response?

Thanks, David, for the question. As we've mentioned before, we don't have XBB clinical immune data yet, so we can't talk about it. And I can just tell you that in animals, we know the vaccine was immunogenic.

Thanks, Sean. Steve, back to you. Many shareholders continue to believe that a norovirus vaccine would be among the most valuable advancements for the company and the stock. Can you provide an update on where you stand with respect to partnering?

Sure thing. And it looks like a few other questions just trickled in that are very related to this. So thanks, everybody, for asking the question on where we stand with the norovirus partnerships. I'll make three points here. So first, we are navigating a broader biopharma market headwinds where many of the partners that we have been speaking to, they're tightening their capital allocation. They've had to deal with things such as most favored nations, et cetera. They are lengthening the diligence time lines a bit, and they're also getting increasingly selective. With that said, there does and continues to be interest in our norovirus Phase 2-ready candidate, and we are having conversations with potential partners. In addition to that, global public health entities, government stakeholders, et cetera. We are trying to secure a structure that advances norovirus without, of course, compromising any long-term value for the company. And thirdly, if we end up with no one interested at all remaining at the table, we will, of course, communicate that clearly to the shareholders rather than prolong your expectations. We do have nondisclosure agreements in place as well as the SEC requirements that preclude us from sharing interim negotiations or even naming the companies that we are speaking to. But please be assured that advancing and finding a way to fund norovirus remains one of the top priorities for the leadership team, and we will certainly share significant updates when we have definitive agreements reached. So again, thank you, everybody, for the interest there.

Okay. Thanks, Steve. Sean, another question for you. Can you provide more color on the implications of the norovirus European patent on Vaxart's business? Are there plans in place for commercialization in Europe? And how might this advance your partnering efforts?

David, thanks for the question. The European Patent Office issued a patent in August of 2026, covering Vaxart's room temperature stable needle-free tablet vaccine technology against norovirus. We see immense value in ensuring our intellectual property is protected and also ensures this oral vaccine could be available globally. Europe, of course, represents the second largest market outside the United States, making a critical strategic territory for our portfolio as we look at broader worldwide commercialization. This patent expands our global intellectual property portfolio and extends protection through at least 2036 across 13 European nations. These include key markets like Germany, France, Italy, Spain and the U.K. It also directly complements Vaxart's existing U.S. patent estate creating multi-jurisdictional patent protection.

Another one for you. Management previously stated G217 strain dominance was an obstacle for partners. The latest CDC CalciNet Data seemed to show exactly the reversal those partners were waiting for. In the latest reporting period through September 2026, GII.4 Sydney has rebounded to approximately 46%, while G2.17 has declined to 17.5%. Given that GII.4 is once again the leading reported norovirus genotype, has this development led to any meaningful progress in those discussions? Also, can shareholders expect any GII.4 or GII.17 cross-reactivity data in the near term?

Yes. Thanks for the question. Strain prevalence continues to inform our discussions with potential partners for the norovirus program. the shift toward increased G2.4 prevalence might potentially improve the program's value proposition for the simple reason that we have G2.4 clinical data but have not evaluated the G2.17 strain yet in the clinic. Having said that, Vaxart does have the ability to add strains quickly if necessary. We have not seen interference in animal studies or human trials, and our platform is relatively easy to adapt for each new antigen. One of the other things, of course, is that the key strength of our norovirus vaccine is that we have seen cross-reactive immune responses to many G2 strains in adults. Some of these data were presented in 2025 at the International Calicivirus Conference.

Thanks, Sean. Steve, a question for you. What progress has management made towards securing a meaningful pharmaceutical partnership, licensing agreement or strategic transaction?

Yes. In terms of meaningful pharmaceutical partnerships and license agreements, I'll say that in the last two years, we've actually made some meaningful progress. As an example, we entered into an exclusive worldwide license agreement with Dynavax for our COVID vaccine program. We secured $25 million upfront as well as a $5 million direct equity investment at a premium to the market price. And in the future, should Sanofi opt in since they bought Dynavax, we're eligible for up to $670 million in future clinical, regulatory sales milestones and tiered royalties. So that's certainly, for us, a very meaningful partnership because on top of that, this is a study that we entered into a partnership with BARDA under Project NextGen, where they delivered hundreds of millions of dollars in nondilutive clinical funding to get us to the point where we are almost at the clinical trial results in mid-2027. So certainly, those are examples of meaningful partnerships and agreements that the company has entered into in the last two years. Beyond COVID, as we were talking about earlier, the leadership team is actively engaging in speaking to pharmaceutical, global health stakeholders to consider partnerships for norovirus. And as an example of how much we believe in the value of norovirus, as Sean was talking about, we made the investment to prosecute the patents in Europe because if there is a global partner who is interested, seeing that we have patent protection to 2036 is also very meaningful. So we are making investments in our pipeline and specifically actively looking for a reasonable partner on the norovirus program.

Okay. Thanks, Steve. Steve, another question for you. Has Vaxart submitted or are you considering submitting a proposal for BARDA's NPIVS program?

Yes. I'll first say, as we were saying earlier, we enjoy a very good working relationship with BARDA. So that always keeps the dialogue going. What the management team does is we always monitor and we're pretty aggressive in pursuing nondilutive grants, other agency partnerships, and this is across respiratory and pandemic preparedness indications. Obviously, this is a good way to support our clinical pipeline, as you've seen with the COVID study. At the same time, right, we want to be very cognizant of being capital efficient. So we do spend a lot of time looking at all of these opportunities. Any of these contract awards or new federal partnerships that are announced publicly, we stick to our disclosure requirements. We do not publicly state what or when we apply for these because we don't want to jeopardize our chances of getting the award because oftentimes, that could impact it. And on top of that, because we are in a competitive environment, we don't want to share information so that a competitor is aware now of a very similar grant, and then now they're also applying for it as well. So these are the reasons why we may not get into specific details. But I do want to say that we monitor for all of them. We're very diligent, and we're certainly aware of all the opportunities there. So thanks for reminding us of that.

Okay. Thanks, Steve. A question from -- that we just received on the portal. And Jeroen, I'll direct this to you. When do we expect the milestone payments from Altesa Biosciences?

Yes. Thank you, David. And just for context for people on this call, I guess, the Altesa reference is to an out-license agreement we did for one of our assets historically as a company called Vapendavir. It's a clinical stage broad-spectrum antiviral that Altesa is developing and is currently in a Phase 2b study. The agreement calls, I guess, as we disclosed in 2021 for up to $130 million in development and commercial milestones. as well as tiered royalties. Now this program is not under our control, clearly. Altesa is developing this. It's in Phase 2b. None of the milestones are due at this time. So as the question is around timing, since we don't control the study ourselves, it's impossible for me to speculate on the timing of advancement. And we have not previously disclosed what exactly triggers those milestones, and I'm not going to do so now. But clearly, it's a great question, to at least make everybody aware that, that's something that is actively in development and there's potential future dollars due to our company.

Thanks, Jeroen. Steve, back to you. Has the Sanofi relationship expanded beyond COVID to discussions around Vaxart's broader platforms, such as influenza, norovirus or any other assets?

Our current Sanofi agreement, and as a reminder, this is something that Sanofi acquired in their acquisition of Dynavax, when we did the original COVID-19 collaboration and licensing deal. That is only for the COVID-19 vaccine program. So we actually are interacting with Sanofi quite a bit as well as through regular joint steering committee meetings, but they are solely focused on the Phase 2b study, delivering a robust clinical data package so that we can ensure a high chance of opt-in. And as a reminder to our stockholders, if Sanofi opts in, that results in a $50 million payment to the company. So I think you can imagine why we are spending a lot of time making sure that we build that relationship, but also executing on the study, as James had highlighted very well. Now with a very close working relationship with Sanofi, I think it's safe to say that they're becoming more increasingly aware of our platform, the science behind it, which Sean has gone over. And from that standpoint, I can say that they're certainly aware of other programs we have in the pipeline.

Thanks, Steve. And another one for you, actually. To the extent allowed, can you give shareholders more visibility into current partnership and nondilutive funding discussions?

Sure. I think I answered a very similar question, but I'll certainly talk a little bit more about this, right? So we're always looking for Yes, opportunistic ways to leverage our platform to create more value. Our current priorities are we want to execute on the Phase 2b COVID study, right? As I was sharing earlier, it'd be nice to have a $50 million opt-in payment. And so we want to do this correctly, execute the right way in conjunction with our current partner, BARDA, and hopefully, we'll have a great partner in Sanofi. So with that said, right, we continue to look for other nondilutive funding opportunities as the team was talking about earlier, whether it's government agencies, and these are agencies even outside the United States. We speak to global pharma companies. We speak to regional pharma companies as well. So we look at territories that are outside the United States. We look at the United States, of course, and then we also look at the European territory as evidenced by, once again, the work that Sean and our IP team have done to secure patents for norovirus in Europe. So those are the types of discussions that we have. For obvious reasons, when we enter into deeper discussions, we have to go under an NDA, a nondisclosure and therefore, it prevents us from naming companies and, of course, providing any details into them. But please be assured that if we obviously end up in a very good situation where a deal is signed, we will disclose that immediately, very similar to what we did when we disclosed our deal with Dynavax last year.