The advent of Covid-19 also bought with it the rise of the coronavirus stocks. The phenomenon saw shares of previously unknown companies attain improbable heights in 2020, based on the potential to bring to market solutions to blunt the pandemic’s impact.
For a while, hardly soared any higher than Vaxart (VXRT). The small vaccine maker boasts one big USP – its potential Covid-19 vaccine is in pill form, a godsend for the needle-shy.
But Vaxart has fallen way behind in its vaccine’s development after reporting disappointing early-stage results and has not only been beaten to market by its competitors, but the recent news that Merck has developed an inexpensive antiviral oral drug to treat Covid-19 has seemingly further dampened its prospects.
That said, B. Riley analyst Mayank Mamtani does not agree with the market’s downbeat reaction to Merck’s announcement.
“We believe the macro C-19 vaccine sector weakness driven by MRK’s oral anti-viral is unwarranted since costly therapeutic modalities represent a second line of defense, and particularly complementary to VXRT’s platform,” the analyst said.
Despite the disappointing early results – the candidate didn’t generate neutralizing antibodies although it did increase immunity in other ways – Vaxart has continued with the vaccine’s development and just recently began recruiting for a global Phase 2 clinical study.
The company also had some encouraging news last week, when a Duke University-led study funded by the Gates Foundation showed that in an animal model, the vaccine diminished the airborne transmission of the virus.
As such, Mamtani has a “cautiously optimistic view” on the shares, but a lot depends on the vaccine program’s progress.
“While we note an improving NT catalyst profile, i.e., NHP immunogenicity data release within 4Q, we continue to look for granularity on execution timelines for Ph. II program, anticipated to expand meaningfully ex-US in coming months,” the analyst summed up.
As such, Mamtani rates VXRT stock a Neutral (i.e. Hold). But the analyst might as well have said “buy” — because he thinks the stock, currently at $6.89, could zoom ahead to $9 within a year, delivering ~31% profits to new investors. (To watch Mamtani’s track record, click here)
Over the past 3 months, only one other analyst has thrown the hat in with a Vaxart review, although it is decidedly positive and makes for a Moderate Buy consensus rating. Combined with Mamtani’s objective, the average price target clocks in at $13.50, suggesting shares could almost double over the coming months. (See VXRT stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.