10-Q: Vaxart Secures Dynavax Deal, Extends Runway Amid Nasdaq Delisting

Vaxart reported a significant increase in government contract revenue and a reduced net loss for Q3 2025, bolstered by a new $30 million upfront deal with Dynavax, which alleviates prior going concern doubts, despite its recent Nasdaq delisting and reduced scope of a key BARDA contract.

Summary

• Total revenue for the nine months ended September 30, 2025, increased by 884% to $133.0 million, primarily driven by government contracts.
• Net loss for the nine months ended September 30, 2025, decreased by 30% to $38.7 million, compared to $55.0 million in the prior year.
• Research and development expenses surged by 203% to $156.4 million for the nine months ended September 30, 2025, mainly due to COVID-19 and norovirus vaccine clinical trials.
• Cash, cash equivalents, and short-term investments totaled $28.8 million as of September 30, 2025.
• A new Exclusive License and Collaboration Agreement with Dynavax Technologies Corporation, effective November 4, 2025, includes a $25.0 million upfront license fee and a $5.0 million common stock purchase by Dynavax.
• The Dynavax agreement, along with updated operating plans and cost-management initiatives, extends the company's cash runway into the second quarter of 2027, alleviating previous going concern doubts.
• The company's common stock was delisted from The Nasdaq Capital Market on September 19, 2025, due to noncompliance with minimum bid price requirements and now trades on the OTCQX Best Market under the symbol VXRT.
• The 2024 ATI-RRPV Contract with HHS BARDA, initially up to $460.7 million, saw a second stop work order in August 2025, halting screening and enrollment for the 10,000-person COVID-19 Phase 2b study, with funding likely to be reduced in line with approximately 5,000 enrolled participants.
• Positive topline results were reported from a Phase 1 clinical trial (Study VXA-109) for second-generation bivalent norovirus vaccine constructs, showing statistically significant increases in NBAA titers.
• Positive topline results were also announced in April 2024 for a Phase 1 norovirus bivalent vaccine study in breastfeeding mothers, showing significant increases in serum and breast milk antibodies.
• Preclinical data for a new avian influenza vaccine candidate demonstrated 100% protection against death in a ferret challenge model.
• Legal proceedings include a settled securities class action for $12.0 million and a pending appeal in a Section 16(b) disgorgement lawsuit.

Sentiment

Score: 6

Explanation: The significant upfront payment and extended cash runway from the Dynavax deal, coupled with reduced net losses and positive clinical data for other programs, are strong positives. However, the Nasdaq delisting and the reduced scope of the critical BARDA COVID-19 contract introduce substantial uncertainty and liquidity challenges, balancing the overall sentiment to moderately positive but with high risk.

Positives

• Total revenue for the nine months ended September 30, 2025, increased significantly to $133.0 million, up 884% from $13.5 million in the prior year, primarily due to government contracts.
• Net loss for the nine months ended September 30, 2025, decreased by 30% to $38.7 million, compared to $55.0 million in the prior year, indicating improved operational efficiency or higher revenue offsetting costs.
• The company secured an Exclusive License and Collaboration Agreement with Dynavax Technologies Corporation, receiving an upfront license fee of $25.0 million and a $5.0 million common stock purchase, totaling $30.0 million.
• The Dynavax agreement, combined with updated operating plans and cost-management initiatives, has extended the company's cash runway into the second quarter of 2027, alleviating previous substantial doubt about its ability to continue as a going concern.
• Positive topline results from a Phase 1 clinical trial (Study VXA-109) demonstrated that second-generation bivalent norovirus vaccine constructs showed statistically significant increases in norovirus blocking antibody assay (NBAA) titers (141% for GI.1 and 94% for GII.4) compared to first-generation constructs.
• A Phase 1 norovirus bivalent vaccine study in breastfeeding mothers yielded positive topline results, showing significant increases in serum antibodies (5.6-fold for GI.1, 4.4-fold for GII.4) and breast milk antibodies (4.0-fold for GI.1, 6.0-fold for GII.4), with a favorable safety profile.
• Preclinical data for a new avian influenza vaccine candidate (clade 2.3.4.4b) showed 100% protection against death in a robust ferret challenge model, compared to 0% survival in placebo-treated animals.
• The company's H1N1 flu vaccine candidate previously demonstrated a 39% reduction in clinical disease relative to placebo in a Phase 2 challenge study, outperforming Fluzone (27%).
• Vapendavir, an antiviral licensed to Altesa Biosciences, announced positive topline results from its Phase 2 study in May 2025 and intends to proceed with a randomized, double-blind, placebo-controlled study in September 2025.

Negatives

• The company's common stock was suspended from trading on Nasdaq effective July 8, 2025, and subsequently delisted on September 19, 2025, due to noncompliance with the minimum bid price requirement.
• The delisting from Nasdaq prevents the company from leveraging its March 2025 At-the-Market (ATM) offering facility, which had approximately $48.4 million of common stock available for issuance.
• A second stop work order was issued in August 2025 for the 2024 ATI-RRPV Contract, halting screening and enrollment for the 10,000-person COVID-19 Phase 2b clinical study, with funding likely to be reduced.
• Cash and cash equivalents decreased to $16.88 million as of September 30, 2025, from $25.23 million as of December 31, 2024.
• Short-term investments decreased to $11.91 million as of September 30, 2025, from $26.49 million as of December 31, 2024.
• Total stockholders' equity significantly decreased to $26.76 million as of September 30, 2025, from $58.93 million as of December 31, 2024.
• Accounts payable increased substantially to $53.08 million as of September 30, 2025, from $6.96 million as of December 31, 2024, with 86% attributable to one contract research organization (CRO).
• Other accrued current liabilities increased to $44.88 million as of September 30, 2025, from $11.38 million as of December 31, 2024, with 80% attributable to one CRO.
• The FDA requested new clinical data for the norovirus program before proceeding with further review of potential correlates of protection, indicating a potential delay in regulatory pathway.

Risks

• Dependence on government funding, particularly from HHS BARDA, for the COVID-19 vaccine candidate, with the risk of further reductions, delays, or termination of the 2024 ATI-RRPV Contract.
• The delisting from Nasdaq and trading on the OTCQX Best Market may result in substantially less liquidity, decreasing the ability to issue additional securities or obtain financing.
• Loss of 'covered securities' status due to Nasdaq delisting subjects the company to state blue sky laws, introducing additional compliance requirements and potentially negatively impacting trading liquidity.
• Inability to retain coverage by securities or industry analysts due to trading on OTCQX, which could adversely impact share price.
• Uncertainty regarding the realization of potential benefits from the collaboration with Dynavax Technologies Corporation, as success depends on Phase 2b clinical trial results, FDA meetings, and Dynavax's election to assume continued development.
• The company's cash, cash equivalents, and investments were not sufficient to fund planned operations for 12 months from the report issuance date, necessitating further capital raises.
• Inability to raise additional capital on acceptable terms could lead to delays, reductions, or termination of product development or commercialization efforts.
• The process of conducting clinical trials is costly and time-consuming, with no guarantee of achieving marketing approval for vaccine candidates.
• Potential for material adverse impact from current or future legal proceedings, regardless of their merits, due to substantial costs and diversion of management attention.
• Changes in the regulatory environment for vaccines, including increased FDA involvement and changes to ACIP, could create new or heightened requirements, slower review timelines, or altered recommendations for use.
• Concentration of credit risk with financial institutions holding cash and investments, and concentration of accounts receivable, accounts payable, and accrued liabilities with single CROs.

Future Outlook

The company expects to incur significant research and development expenses as it advances its tablet vaccine candidates through clinical trials, pursues regulatory approval, and prepares for potential commercial launch, requiring substantial investment in manufacturing and inventory. Future funding requirements are dependent on successful commercialization, collaboration agreements, and government programs. The company anticipates its cash runway to extend into the second quarter of 2027, reflecting updated assumptions and recent financing activities.

Management Comments

• Management concluded that the conditions and events that previously raised substantial doubt about the company's ability to continue as a going concern have been alleviated.
• Management believes that revenue for periods not yet audited has been recorded in amounts that are expected to be realized upon final audit and settlement for government contracts.
• Management is currently evaluating the effect of the August 2025 stop work order on its liquidity and capital resources.

Industry Context

Vaxart operates in the highly competitive and capital-intensive biotechnology sector, specifically focusing on oral recombinant vaccines for infectious diseases like norovirus, COVID-19, and influenza. The recent Dynavax collaboration for its COVID-19 candidate highlights the ongoing interest in novel vaccine delivery platforms, even as the COVID-19 vaccine market matures and shifts. The challenges with the BARDA contract reflect the inherent uncertainties and evolving priorities in government-funded pandemic preparedness programs. The delisting from Nasdaq to OTCQX is a significant setback, impacting visibility and access to capital, contrasting with the broader trend of biotech companies seeking major exchange listings for enhanced liquidity and investor access. The positive preclinical and Phase 1/2 data for its norovirus and avian influenza programs indicate continued innovation in areas with unmet needs, but regulatory pathways remain complex and demanding, as evidenced by the FDA's request for more norovirus data.

Comparison to Industry Standards

• The 39% reduction in clinical disease for Vaxart's H1N1 flu vaccine candidate in a Phase 2 challenge study compares favorably to Fluzone, a market-leading injectable quadrivalent influenza vaccine, which reduced clinical disease by 27%. This suggests a competitive efficacy profile for Vaxart's oral platform in influenza.
• The 100% protection against death in a ferret clade 2.3.4.4b challenge model for Vaxart's new avian influenza vaccine candidate is a strong preclinical result, indicating high potential efficacy, especially when compared to 0% survival in placebo-treated animals in the same model.
• The positive Phase 1 results for Vapendavir, licensed to Altesa Biosciences, in COPD patients challenged with rhinovirus, align with industry efforts to develop broad-spectrum antivirals, similar to other companies developing treatments for respiratory viruses, though specific comparable project results are not detailed in the filing.

Corporate Governance

Legal Proceedings

• Himmelberg v. Vaxart, Inc. et al. (securities class action) and Hovhannisyan v. Vaxart, Inc. et al. (related action) were partially settled for $12.0 million, with $2.0 million paid by the company and the remainder by insurers. Claims against the company and its officers/directors were dismissed with prejudice.
• Roth v. Armistice Capital LLC, et al. (Section 16(b) disgorgement claim) was dismissed by the district court on March 27, 2024. The plaintiff filed an appeal with the Second Circuit Court of Appeals, which is currently pending after a motion to stay and reinstate the complaint was denied by the district court.
• Chan v. Vaxart, Inc. et al. (purported shareholder opt-out lawsuit) has been stayed pending the resolution of the Putative Class Action.

Stakeholder Impact

• **Shareholders**: The Nasdaq delisting and move to OTCQX will likely reduce liquidity and potentially the share price, making it harder to trade shares. However, the Dynavax deal and extended cash runway provide some stability and potential for future value creation if milestones are met.
• **Employees**: The alleviation of going concern doubts and continued R&D activities, supported by government contracts and the Dynavax deal, provide greater job security and continuity for employees involved in vaccine development.
• **Customers (future)**: Continued development of vaccine candidates, particularly for COVID-19, norovirus, and influenza, could eventually lead to new products for public health, offering new prophylactic options.
• **Creditors**: The extended cash runway into Q2 2027, bolstered by the Dynavax upfront payment, improves the company's ability to meet its short-term and medium-term financial obligations, reducing immediate credit risk.
• **Government (HHS BARDA)**: The reduced scope of the 2024 ATI-RRPV Contract due to the stop work order indicates a shift in government priorities or concerns, potentially impacting future collaboration terms and funding levels.

Next Steps

• Continue per protocol follow-up for approximately 5,400 participants already dosed in the COVID-19 Phase 2b study under the 2024 ATI-RRPV Contract.
• Collect participant data over a 12-month period post-vaccination for the COVID-19 Phase 2b study.
• Perform primary efficacy analysis for the COVID-19 Phase 2b study when all participants have either discontinued or completed a study visit 12 months post-vaccination.
• Share additional data regarding the 12-month follow-up for the 400-participant sentinel cohort of the COVID-19 Phase 2b study in the first half of 2026.
• Advance the norovirus program to the next stage of clinical development in 2026, pending a partnership or other funding.
• Work with governments around the world to create pandemic monovalent influenza vaccines for emergency use or stockpiling, if requested.
• Continue development of the preclinical tri-valent seasonal influenza vaccine candidate.
• Make a regulatory filing to proceed with clinical trials for an HPV vaccine candidate.
• Altesa Biosciences intends to proceed with a randomized, double-blind, placebo-controlled study examining the safety and efficacy of Vapendavir to treat rhinovirus infections in patients with COPD.
• Dynavax will have the choice to assume responsibility for the continued development of the oral pill COVID-19 vaccine candidate after an end-of-Phase 2 meeting (EOP2 Meeting) with the FDA, which would trigger a $50 million fee.

Key Dates

Recommendation

The filing presents a mixed bag of significant developments. The new collaboration with Dynavax, including a $30 million upfront payment and potential milestones, is a strong positive, extending the company's cash runway and alleviating immediate going concern fears. This provides crucial funding for continued development. However, the delisting from Nasdaq to the OTCQX Best Market is a major negative, likely impacting liquidity, investor visibility, and future capital-raising capabilities. The reduced scope of the BARDA COVID-19 contract also introduces uncertainty regarding a key funding source. While the company shows progress in its pipeline with positive norovirus and avian flu data, the overall risk profile remains high due to its clinical-stage nature, reliance on external funding, and the challenges associated with an OTC listing. A 'hold' recommendation is appropriate as investors should monitor the execution of the Dynavax collaboration, the impact of the OTCQX listing, and further developments in its clinical pipeline before making significant new investment decisions.

Keywords

Vaxart, Dynavax, COVID-19 vaccine, oral vaccine, norovirus vaccine, SEC 10-Q, biotechnology, clinical trials, BARDA contract, Nasdaq delisting, vaccine development, financial results, cash runway, pharmaceuticals, infectious diseases