Apr. 4 at 8:33 PM
$VXRT Looking into my ‘Cocrystal’ Ball for Q2…
Welcome to Q2, where the writing on the wall says that the more things change, the more they stay the same… for now. Let me explain…
#1.
The Change: COCP gets fast-track designation for their Noro antiviral.
The Same: COCP is still in P1B, far away from approval even with fast-track designation. If approved, they will likely be a reactive treatment deployed to those who are ill or in high-risk outbreak situations and not a broader means of protection for the general population.
The Verdict: Much like Tamiflu exists alongside the flu vaccine and isn’t a direct competitor, expect COCP to be a complimentary solution to Noro and not an all-encompassing solution. It sounds like an excellent way to address breakthrough infections if/when a working vaccine reaches market.
#2.
The Change: Sentinel data will almost certainly arrive in Q2, and I’m optimistic that it’s going to be positive and encouraging.
The Same: While there might be an initial spike in share price, I don’t expect a sustained price of >
$2 max (and more likely expect to settle at
$1-
$1.50 over the few months following the disclosure). Why? I’m not convinced that this HHS is going to allow for a lot of hype to build around a new vaccine at this stage. I expect Vaxart will be limited by BARDA in how much they can promote the results, and will continue to follow the “safety, not yet efficacy” talking points we’ve seen in recent weeks. I also don’t see any upside in Sanofi confirming that they will support a P3 at this stage when there is no risk for them to instead wait until the full P2 results are out in Q4/Q1.
The Verdict: Don’t be discouraged if you don’t see the share price jump in a sustained way on good sentinel data. And don’t be angry if it seems like Vaxart is underselling the efficacy at this stage. HHS has built a strong narrative of vaccine skepticism, and I don’t foresee them going out on a limb for ANY vaccine with only sentinel data. I remain hopeful that HHS will ultimately be supportive because of the non-mRNA narrative, but not until full P2B and/or P3 results are in. And if I were in Sanofi’s shoes, I would wait until the last possible moment per the contract to commit to the next milestone or trial funding. The longer they wait, the lower their risk level drops as more data and info become available.
#3.
The Change: Expect Vaxart’s annual meeting this quarter, and that there will be all sorts of rumbling on StockTwits about how the BOD will be removed/replaced/imprisoned and whatever other conspiratorial nonsense folks can come up with.
The Same: The BOD is firmly entrenched, Lo has strong support among the board, the company, and the legacy Dynavax team, and it is unlikely that there will be board change in a material way other than potentially adding a board member to replace Finney.
The Verdict: It seems that even the ‘concerned shareholders’ have realized it is a fruitless and counterproductive effort to fight against the BOD, as they have gone nearly silent and have ceased their fundraising efforts and attacks. This is a good thing, and I commend them for it. Over the past year, we’ve seen the stock rebound by 70+% (yes still a loooooong way to go but at least we are seeing positive momentum), secured a runway-extending partnership without diluting shareholders, overcame two trial pauses when our PNG peers did not, completed a Noro P1 with impressive results that continue to get press in medical publications, and completed a stunning preclinical for Avian Flu with a 100% success rate (and a 100% fail rate for the ferrets who didn’t get the Vaxart vaccine). It would be very unwise to pivot to new leadership at this moment in time, and we will see minimal disruption to the current BOD.
So my prognostication (which admittedly is worth only the paper it’s printed on)…. is to expect slow and steady progress at a pace that frustrates long-suffering shareholders but still moves the ball forward in a meaningful way. I expect the usual crop of crazies to then say that the BOD is suppressing share price, the market makers are out to get them, the institutions are rigging the system, etc etc. Don’t get caught up in the emotional nonsense that isn’t grounded in reality. The question to ask yourself at the end of Q2 is if we’ve made meaningful progress in furthering trials/science since Q1. The answer will be yes, but the share price won’t fully catch up for some time to come.
Vaxart continues to be an asymmetrical high risk, high reward play with far greater upside potential than downside potential. I plan to continue buying and holding, and hope you will too. This company is onto something special, and in time our patience will be rewarded. Or at least that’s what I keep telling myself… 😁
Good luck and cheers to an exciting Q2!