Vaxart Inc. investors who stuck by company shares Feb. 3 had to swallow a bitter pill – watching shares of the oral vaccine developer (NASDAQ:VXRT) fall 57.8% to $9.85. Driving the trade in part was news that, during a phase I trial, neutralizing antibodies to SARS-CoV-2 were not detected in most of the five subjects given two doses of VXA-CoV2-1, its oral recombinant protein vaccine for the potential prevention of SARS-CoV-2 infection. Furthermore, the company concluded it was "unable to evaluate" a study of the candidate organized by Operation Warp Speed (OWS).

Perhaps buried in the volatile trade that followed was the company's main report that the candidate, albeit in a small trial, triggered "multiple immune responses against SARS-CoV-2 antigens" and was generally well-tolerated.

In particular, Vaxart Chief Scientific Officer Sean Tucker told BioWorld, the tablet vaccine appeared to elicit strong CD8+ cytotoxic T-cell response to the viral spike protein, even at low doses, a factor that could be especially important for elderly people who generally don't mount significant enough T-cell responses to the virus. The candidate also induced a high percentage of responding CD8+ T cells against the SARS-CoV-2 virus' highly conserved nucleocapsid, or N, protein, evidence of a cross-protective T-cell response, that could allow it to continue providing protection even in contexts where S proteins have mutated, he said.

A first step

The South San Francisco-based company initiated its COVID-19 vaccine development program in January 2020. Phase I testing of VXA-CoV2-1, a non-replicating Ad5 vector vaccine using its Vector-Adjuvant-Antigen Standardized Technology (VAAST) platform, began in October 2020. The small size of the 35-participant trial was due in part to the company having to compete for limited supplies of the vector it employs, Tucker said.

Sean Tucker, chief scientific officer, Vaxart

Among the 35 participants, the first cohort of five subjects received two low doses of vaccine 29 days apart. The remaining cohorts, 15 subjects each, received a single low or high dose of the vaccine.

Tucker said the lack of neutralizing antibodies in the serum of the first cohort was somewhat surprising because it diverged from what investigators had seen in an earlier trial of the company's influenza vaccine, when it was able to induce some antibody responses, though not at the level of injected vaccines. Speaking to the experience in the COVID-19 trial, he said it's possible that the two lower doses used in the first cohort might explain the difference or that expressing the N protein drove up the T-cell responses to the S protein or improved the antibody response. "That's something that we're looking into. But from the standpoint of making cross-protective vaccines, we think this vaccine still has a lot of merit" from the strong responses seen in the other two cohorts testing the low and high doses.

The company also cited an increase in plasmablast cell number and an up-regulation of the mucosal homing receptor, indicating activation of B cells that will home to the mucosa, and an increase in proinflammatory Th1 cytokines, responsible for orchestrating the immune response to viral infection, it said.

Though the phase I results were described as preliminary, the study is basically complete, Tucker said. The next step is to do a phase II dose-ranging study with more subjects, testing both higher and multiple doses. If the profile looks good, he said, the company would pursue a larger ex-U.S. efficacy trial or noninferiority study.

Speaking to the OWS study, funded by the Biomedical Advanced Research and Development Authority, Tucker described a situation in which the challenges of dosing nonhuman primates (NHP) with oral vaccines may have stood in the way attaining interpretable results.

Since Vaxart has significant previous experience with the NHP model and the difficulties of oral administration in NHPs, the company said in an SEC filing, it asked that an active control arm be included in the study. The control was a norovirus vaccine that has previously shown high immunogenicity in both NHP and clinical studies, it said. Since the control antigen didn't work, "we don't think this study is interpretable," Tucker said.

News of the preliminary phase I results build on histology data from a recent SARS-CoV-2 hamster challenge study that showed that animals that received two doses of the oral tablet vaccine had reduced lung inflammation in comparison to unvaccinated hamsters.

The company also reported data, published in Nature Medicine, from a collaboration with Stanford University scientists on its COVID-19 vaccine candidates. Stanford’s in vitro human organoid system generated immune responses to three of the company’s candidates, enabling Vaxart to narrow its selection of a vaccine construct.

Updating investors on its financial condition on Feb. 3, Vaxart reported that its cash and cash equivalents as of Dec. 31 was about $126.9 million.

In July 2020, the U.S. Attorney’s Office for the Northern District of California provided a grand jury subpoena to the company seeking information pertaining to the NHP study of its COVID-19 vaccine as well as “certain corporate, financing and stock transactions.” The investigation was later transferred to the Office of the U.S. Attorney for the Eastern District of New York and the Fraud Section of Main Justice, triggering a similar grand jury subpoena from DOJ, the company reported in its most recent 10-Q filing.

Also, in August 2020, the Enforcement Division of the SEC requested that the company provide information relating to its participation in the NHP, advising Vaxart that the “informal, non-public fact-finding inquiry should not be construed as an indication that we or anyone else has violated the law or that the SEC has any negative opinion of any person, entity or security,” the company disclosed.

The current status of the investigation wasn’t immediately clear and hasn’t been discussed in further company regulatory filings.