On March 19, 2020 Vaxart, Inc., a clinical-stage biotechnology company developing oral recombinant vaccines that are administered by tablet rather than by injection, reported financial results for the fourth quarter and full year ended December 31, 2019, and provided a corporate update (Press release, Vaxart, MAR 19, 2020, View Source [SID1234555707]).

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"SARS CoV-2, the coronavirus that causes COVID-19, is primarily transmitted by viral particles that enter through the nose, mouth or eyes, and cause a respiratory infection," said Wouter Latour, MD, chief executive officer of Vaxart Inc. "Unlike injectable vaccines, our oral vaccines have been shown to protect against respiratory infection based on mucosal immunity, the first line of defense for such infections. This could be essential for an effective vaccine that protects the population from COVID-19. In addition, the Vaxart vaccine would be administered using a room temperature-stable tablet, an enormous logistical advantage in large vaccination campaigns."

"This outbreak is a call to duty for all of us here at Vaxart and we are highly focused on the development of the COVID-19 vaccine," Dr. Latour continued. "Accordingly, we have put several vaccine programs on hold, including the norovirus vaccine program for which we recently successfully completed a Phase 1 study and for which we are actively seeking a development partner, as well as our therapeutic HPV vaccine program. The Janssen-partnered Universal Flu program is fully active and on track to be completed in the coming weeks."

All Vaxart vaccines are based on its oral Vector-Adjuvant platform, VAASTTM. In a recent clinical study published in the Lancet Infectious Diseases, the Company demonstrated that the Vaxart oral H1 influenza tablet vaccine primarily protected against infection based on mucosal immunity, in contrast to the injectable flu vaccine that protected primarily through systemic immunity.

In January, Vaxart initiated a program to develop a coronavirus vaccine candidate based on its VAASTTM platform and is currently producing multiple research grade COVID-19 vaccine candidates to be evaluated in a preclinical model. In addition, Vaxart announced this week that it had entered into an agreement with Emergent BioSolutions Inc. Per the agreement, development services are to begin immediately and upon Vaxart’s election, Emergent is expected to produce bulk cGMP vaccine in time for a Phase 1 clinical study to begin early in the second half of 2020.

Other Corporate Updates:

The Universal Influenza vaccine collaboration with Janssen is proceeding as planned and remains on schedule to provide results in 1H 2020, barring delays due to the Coronavirus outbreak.

Published results from the H1 seasonal influenza oral tablet vaccine challenge study in the Lancet Infectious Diseases. The study demonstrated that Vaxart’s oral tablet influenza vaccine generated a 39 percent reduction in clinical disease relative to placebo, compared to a 27 percent reduction by Fluzone. It also reduced infection rates by 47 percent, compared to 43 percent by Fluzone.

Restructured the manufacturing and process development departments resulting in, among other things, a reduction in headcount.

Raised approximately $9.8 million in net proceeds from the exercise of Warrants during the first quarter of 2020 to date.

Completed a registered direct offering in March 2020, through which Vaxart raised aggregate gross proceeds of $10.0 million from the sale of 4.0 Million shares of common stock and warrants to purchase 2.0 million shares of common stock that are exercisable for $2.50 per share.

Regained compliance with the continuing listing standards of The Nasdaq Capital Market.

Financial Results for the Three Months Ended December 31, 2019

Vaxart reported a net loss of $6.4 million for the fourth quarter of 2019 compared to $4.9 million for the fourth quarter of 2018. The principal reason for the increase was a charge of $4.9 million for restructuring, partially offset by an increase in revenue and a reduction in research and development expenditure.

Revenue for the quarter was $3.9 million compared to $1.8 million in the fourth quarter of 2018. The increase was mostly due to non-cash royalty revenue related to the sale of future royalties.

For the quarter ended December 31, 2019, royalty revenue from Inavir increased by $2.2 million, or 148%, compared to the quarter ended December 31, 2018.

Financial Results for the Full Year 2019

Vaxart reported a net loss of $18.6 million for 2019 compared to $18.3 million for 2018. The principal reason for the increase was the absence of a bargain purchase gain of $6.8 million, partially offset by an increase in revenue of $5.7 million.

Revenue for the year was $9.9 million compared to $4.2 million in 2018. The increase was mostly due to $3.5 million of 2018 revenue having been recorded in the pre-Merger period of January 1-February 13, 2018 and increased royalty revenue from Inavir in the fourth quarter of 2019.

Research and development expenses were $14.5 million for 2019 compared to $17.3 million for 2018. The decrease was mainly due to the absence of clinical trials costs for teslexivir and HHS BARDA contract costs and a reduction in pre-clinical research costs, partially offset by higher manufacturing and clinical trial costs incurred in Vaxart’s norovirus program.

General and administrative expenses were $6.2 million for the year compared to $6.7 million for 2018. The decrease was mainly due to reductions in legal fees and other costs associated with becoming a public company.

Other operating expenses were $4.9 million for 2019 due to restructuring costs related to the suspension of Vaxart’s manufacturing operations, compared to $2.0 million for 2018, which related to the impairment of intangible assets related to teslexivir and the sublease of Vaxart’s premises in Georgia.

Vaxart ended the year with cash and cash equivalents of $13.5 million compared to $11.5 million at December 31, 2018. The increase was primarily due to funds raised via issuances of equity totaling $19.8 million during 2019, partially offset by cash used in operations totaling $13.1 million and the repayment of debt for $3.8 million.