Vaxart Inc. (NASDAQ:VXRT) has felt the full wrath of the COVID-19 pandemic despite being one of the companies working on a much-needed vaccine. The stock has come down tumbling after a 300% rally to record highs in July.
Pfizer Blow
The sell-off has come at the backdrop of investors questioning the company’s trials on experimental coronavirus vaccine candidate VXA-CoV2-1. The company is developing the vaccine using its proprietary oral vaccine platform, VAAST. While the company has made significant progress in trials, it is still playing catch-up to other advanced programs.
The company’s market sentiments have also taken a hit on Pfizer, beating it in the race for the first coronavirus vaccine. The giant drug maker has affirmed that its experimental coronavirus vaccine is highly effective in combating the deadly virus 90% of the time.
Pfizer has already confirmed that it will pursue emergency use authorization after trials showed that the vaccine does not cause adverse events. The company securing regulatory approval would be a major milestone that should allow it to hit the market running and enjoy the first-mover advantage.
While Vaxart has made progress on the development of its coronavirus vaccine, it still behind schedule compared to what other large biotech companies have achieved. It goes without saying that the company is highly unlikely to become the first to commercialize a coronavirus vaccine. This explains why the stock nosedived as soon as Pfizer confirmed a breakthrough on its experimental vaccine.
Regulatory Scrutiny
A confirmation that Vaxart is under grand jury investigation by the U.S federal attorney’s office in California is another tailwind that continues to take a toll on the company’s market sentiments. The investigation is in relation to the company’s engagement with the US. Government coronavirus vaccine program, Operation Warp Speed.
The clinical-stage biotechnology company is facing a wave of class-action lawsuits as shareholders insist the company misled and overstated the extent and nature of its participation in the government program.
Developments on the federal enquiry and lawsuit should continue to weigh in on the stock sentiments heading into year-end. Once the investigations clear up, it would be interesting to take a closer look on the stock, especially on the company making progress on the development of the COVID-19 vaccine.