Vaxart’s Vaccine Candidate Is a Pill, Not a Shot. Does It Matter?

If you’ve ever ordered a piping hot pizza to your door, you already know that convenience is king. It’s no secret that people are willing to pay for products that make their lives easier or less painful. But does that same principle hold up for products that consumers uniformly expect to be literally, physically painful, like getting vaccinated against the coronavirus?

Vaxart is betting that, yes, people will prefer to avoid the pain of a jab if they have the option of taking its oral-pill vaccines. Its coronavirus candidate is shelf-stable, and intended for self-administration, making it significantly easier to distribute widely. However, that’s assuming there will be a real market for vaccine tablets which will endure beyond the present phase of the pandemic, not to mention the assumption that tablets will be proven safe and effective in the clinical trials process. Now that there are a plethora of other coronavirus vaccines that are already approved for sale and actively gaining market share, can Vaxart still deliver for its investors?

Vaccine hesitators could be the key

According to a (questionably rigorous) survey that Vaxart commissioned recently, 32% of the people in the U.S. who are not currently intending to get vaccinated for COVID-19 would be likely to do so if they could take a pill instead of getting an injection. Vaxart’s stock soared by 17% shortly after the announcement of the survey’s results, though its worse-than-expected earnings report on Monday sent it right back down. Still, the idea that jab-reluctant individuals could constitute a discrete and accessible market is potentially a game-changer for the company.

Based on the survey of 1,501 people, the number of those willing to take a vaccine pill but not a shot could be as large as 18.7 million in the U.S. Given that major competitors like Pfizer and Moderna have jabs and not pills, this market of vaccine hesitators might be beyond their reach — but not beyond Vaxart’s. That’s a critical consideration which could enable the small biotech to find a home in the coronavirus vaccine market despite a very late potential entry.

Of course, Vaxart’s survey also reiterated the obvious: Nobody likes needles, and the convenience of a pill is an attractive feature. Per the results, seven out of 10 people in the U.S. would prefer to get vaccinated from the comfort of their homes, without a jab, and on their own schedule. But that doesn’t exactly change the fact that the company’s pill-based vaccination projects are nowhere near being ready for a widespread rollout. Vaxart will only start phase 2 clinical trials for its coronavirus vaccine in the second half of 2021.

World Coronavirus Full Vaccination Rate data by YCharts

With competitors surging, Vaxart’s advantages aren’t as impressive now

In light of vaccine supplies starting to saturate the U.S. market, my opinion on Vaxart’s merit as an investment has shifted. I still agree with the idea that the company’s tablets are logistically superior to the competition, which require refrigeration or specialized freezers to transport and store, not to mention the time of trained medical staff and an abundance of associated clinical goods like syringes to administer. These factors will be especially important in less-developed international markets, where clinical resources are tightly constrained.

But, at least in the U.S., these would-be competitive advantages aren’t as useful anymore, because so many Americans will already be vaccinated by the time Vaxart’s product ever hits the market — if it ever does. And those advantages aren’t relevant to accessing management’s new target market of vaccine hesitators in the U.S. — which, by the way, is a population that will probably not rush to get the company’s pill even if it is approved in the next couple of years, assuming that COVID-19 caseloads continue to drop. Targeting hesitators could still work, but it’s a long shot.

Vaxart is still a company I think will succeed in the long term, provided that it can prove in clinical trials that its candidate (and by extension, its oral vaccine technology) is effective. Indeed, there’s still a tremendous global need for the kind of logistically easy-to-handle product that it’s developing. Nonetheless, I believe its window of opportunity to address the American market has firmly closed, and its recent aspirations to vaccinate the unwilling with its tablets are probably not going to end as well as investors might wish.