Vaxart Announces Fourth Quarter and Year-End 2018 Financial Results and Provides Corporate Update

Initiation of Two Norovirus Vaccine Trials Expected in 1H 2019

SOUTH SAN FRANCISCO, Calif.–(BUSINESS WIRE)–Vaxart, Inc., a clinical-stage biotechnology company developing oral
recombinant vaccines that are administered by tablet rather than by
injection, today announced financial results for the fourth quarter and
full year ended December 31, 2018.

“As we execute on our objective of building a leading oral vaccine
company, we continue to expand our understanding of the unique
properties of our oral vaccine platform and the important advantages we
believe it can offer over conventional injectable vaccines, particularly
for mucosal pathogens such as norovirus, flu and RSV,” said Wouter
Latour, M.D., chief executive officer of Vaxart. “We are focused on our
lead product candidate, the first oral vaccine against norovirus, a
disease with a $34 billion economic impact in high income countries
including the United States, Europe and Japan. After laying the
groundwork in 2018, we expect to initiate our norovirus Phase 1 bivalent
study and Phase 2 monovalent challenge study during the first half of
2019. In parallel, we are advancing our first therapeutic vaccine
targeting HPV-associated dysplasia and cancer toward the clinic.”

2018 Highlights:

Corporate:

  • In February, Vaxart commenced trading on the Nasdaq Capital Market
    under the symbol “VXRT” following the closing of its merger with
    Aviragen Therapeutics.
  • In October, at ID Week in San Francisco, the Company presented data
    from its H1 influenza Phase 2 challenge study demonstrating that its
    oral H1 flu vaccine, while providing 39% reduction in flu illness
    compared to 27% for Fluzone®, protected primarily through
    mucosal immunity, in contrast to Fluzone which primarily protected
    through serum antibodies. This finding provides evidence that Vaxart’s
    oral vaccines may deliver better protection against mucosal pathogens
    than injectable vaccines.
  • In July, Vaxart announced the publication of the comprehensive results
    of the previously disclosed Phase 1 clinical trial with its norovirus
    oral tablet vaccine in the Journal of Clinical Investigation Insight.
    As reported in the article, the vaccine generated robust systemic and
    mucosal immune responses, including mucosal IgA, memory B cells, and
    serum blocking antibody titers (BT50), all potential correlates of
    protection.
  • In October at the 32nd International Papillomavirus
    Conference, the Company presented preclinical data on its human
    papillomavirus (HPV) vaccine trial. The Vaxart HPV vaccine created CD8
    tumor-infiltrating T cells and eliminated or significantly reduced the
    majority of tumors with or without a checkpoint inhibitor.
  • In June, the Company announced the publication of preclinical results
    from its oral F-protein based Respiratory Syncytial Virus (RSV-F)
    vaccine in Vaccine. As described in the article, the oral RSV-F
    vaccine candidate provided complete sterilizing protection against RSV
    infection in the cotton rat challenge model at the target dose.

Financial Results for the Three Months and Year Ended December 31,
2018

  • Vaxart reported a net loss of $4.9 million for the fourth quarter of
    2018 compared to a net loss of $1.1 million for the fourth quarter of
    2017. For the year ended December 31, 2018, the net loss was $18.0
    million compared to a net loss of $9.6 million for 2017.
  • Vaxart ended the year with cash and cash equivalents of $11.5 million
    compared to $17.9 million at September 30, 2018. The decrease was
    primarily due to cash used in operations.
  • Revenue for the quarter was $1.8 million compared to $0.8 million in
    the fourth quarter of 2017. The increase was due to royalty revenue
    resulting from our merger with Aviragen, offset by lower revenues from
    the contract with BARDA, which ended on September 30, 2018.
  • Research and development expenses were $4.5 million for the quarter
    compared to $1.9 million for the fourth quarter of 2017. The increase
    was mainly due to higher clinical and manufacturing costs incurred in
    the Company’s norovirus program and amortization of intangible assets
    acquired in the merger with Aviragen, offset by lower expenditures
    incurred under the BARDA contract.
  • General and administrative expenses were $1.2 million for the quarter
    compared to $1.5 million for the fourth quarter of 2017. The decrease
    was a result of significant one-off costs incurred in the 2017 period
    in connection with the merger with Aviragen.

About Vaxart

Vaxart is a clinical-stage biotechnology company focused on developing
oral recombinant protein vaccines based on its proprietary oral vaccine
platform. Vaxart’s vaccines are designed to generate broad and durable
immune responses that protect against a wide range of infectious
diseases and may also be useful for the treatment of chronic viral
infections and cancer. Vaxart’s vaccines are administered using a
convenient room temperature-stable tablet, rather than by injection.
Vaxart believes that tablet vaccines are easier to distribute and
administer than injectable vaccines and have the potential to
significantly increase vaccination rates. Vaxart’s development programs
include oral tablet vaccines that are designed to protect against
norovirus, seasonal influenza and respiratory syncytial virus (RSV), as
well as a therapeutic vaccine for human papillomavirus (HPV). For more
information, please visit www.vaxart.com.

Note Regarding Forward-Looking Statements

This press release contains forward-looking statements that involve
substantial risks and uncertainties. All statements, other than
statements of historical facts, included in this press release regarding
our strategy, prospects, plans and objectives, results from preclinical
and clinical trials, commercialization agreements and licenses, beliefs
and expectations of management are forward-looking statements. These
forward-looking statements may be accompanied by such words as
“believe,” “could,” “potential,” “will” and other words and terms of
similar meaning. Examples of such statements include, but are not
limited to, statements relating to the Vaxart’s ability to develop and
commercialize its product candidates and clinical results and trial
data; the expected timing of the initiation of the Phase 1 bivalent
study and Phase 2 monovalent challenge study; and Vaxart’s expectations
with respect to the important advantages it believes its oral vaccine
platform can offer over injectable alternatives, particularly for
mucosal pathogens such as norovirus, flu and RSV. Vaxart may not
actually achieve the plans, carry out the intentions or meet the
expectations or projections disclosed in our forward-looking statements
and you should not place undue reliance on these forward-looking
statements. Actual results or events could differ materially from the
plans, intentions, expectations and projections disclosed in the
forward-looking statements. Various important factors could cause actual
results or events to differ materially from the forward-looking
statements that Vaxart makes, that Vaxart’s product candidates may not
be approved by the FDA or non-U.S. regulatory authorities; that, even if
approved by the FDA or non-U.S. regulatory authorities, Vaxart’s product
candidates may not achieve broad market acceptance; that Vaxart may
experience manufacturing issues and delays; and other risks described in
the “Risk Factors” sections of Vaxart’s Quarterly and Annual Reports
filed with the SEC. Vaxart does not assume any obligation to update any
forward-looking statements, except as required by law.

Vaxart, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

 
  December 31, 2018   December 31, 2017
(In thousands)
Assets
Cash and cash equivalents $

11,506

 

$ 1,571
Short-term investments 1,415
Accounts receivable 1,796 630
Prepaid and other assets 1,446 137
Property and equipment, net 1,066 730
Intangible assets, net   19,413     40  
Total assets $ 35,227   $ 4,523  
 
Liabilities and stockholders’ equity (deficit)
Accounts payable $ 962 $ 1,390
Accrued and other liabilities 1,675 1,605
Liability related to sale of future royalties 17,741
Secured promissory note 3,611 4,968
Convertible promissory notes, related party       35,282  
Total liabilities 23,989 43,245
Stockholders’ equity (deficit)   11,238     (38,722 )
Total liabilities and stockholders’ equity (deficit) $ 35,227   $ 4,523  
 

Vaxart, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

 
  Three Months Ended December 31,   Year Ended December 31,
2018   2017 2018   2017
(In thousands, except share and per share amounts)
 
Revenue $ 1,767   $ 760   $ 4,159   $ 5,839  
Operating expenses:
Research and development 4,474 1,905 17,275 12,355
General and administrative 1,226 1,544 6,681 3,499
Exit and impairment charges   253         1,959      
Total operating expenses   5,953     3,449     25,915     15,854  
Loss from operations (4,186 ) (2,689 ) (21,756 ) (10,015 )
Bargain purchase gain 6,760
Other income and expenses, net (736 ) 1,614 (2,902 ) 433
Provision for income taxes   (80 )       (109 )    
Net loss $ (4,902 ) $ (1,075 ) $ (18,007 ) $ (9,582 )
Net loss attributable to common shareholders $ (4,902 ) $ (1,800 ) $ (18,346 ) $ (12,460 )
Net loss per common share, basic and diluted $ (0.69 ) $ (13.16 ) $ (2.90 ) $ (91.65 )
Shares used in computing net loss per share, basic and diluted   7,141,189     136,829     6,316,065     135,953  

Contacts

Carl Mauch
Stern Investor Relations
212-362-1200
vaxart@sternir.com

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