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Vaxart, Inc. (NASDAQ:VXRT), a biotech firm specializing in the development of vaccines with a market capitalization of $162 million, has been directed to halt work on a significant government-funded project. According to InvestingPro data, the company faces challenges with weak gross profit margins and rapid cash burn. On Monday, the company disclosed that it received stop work orders from Advanced Technology International (ATI) on February 21, 2025.
The orders mandate Vaxart to cease all activities related to a project agreement with ATI, except for specific follow-up efforts for a 400-person cohort. This agreement, initiated on June 13, 2024, was part of a consortium managed by ATI and funded by the Biomedical Advanced Research and Development Authority (BARDA), a U.S. Department of Health and Human Services agency. Despite operational challenges, InvestingPro analysis shows the company maintains more cash than debt on its balance sheet, though its short-term obligations currently exceed liquid assets.
The stop work directive will be in effect for 90 days from the date of notice. During this period, ATI will decide, under government direction, whether to cancel the stop work order, extend it, or terminate the project as outlined in the agreement.
The company’s press release included forward-looking statements regarding the potential outcomes of this suspension, including the possibility of receiving additional funding under the project agreement or actions by the U.S. government concerning the work stoppage. However, it also cautioned investors about the risks associated with the company’s ability to meet the project’s milestones and deliverables.
Vaxart’s most recent Annual Report on Form 10-K and other filings with the U.S. Securities and Exchange Commission detail the risks and uncertainties the company faces, including ongoing operating losses.
This news is based on a press release statement and the company has not provided any further details on the reasons behind the stop work orders or the potential impact on its operations. Vaxart’s stock performance and investor sentiment may be influenced by this development and the subsequent decisions by ATI and the U.S. government. Currently trading at $0.71, InvestingPro analysis suggests the stock is undervalued, with analyst price targets ranging from $2.50 to $8.00. InvestingPro subscribers have access to 10 additional key insights about Vaxart, along with comprehensive financial analysis in the Pro Research Report.
In other recent news, Vaxart, Inc. has secured an additional $105.9 million in funding for its Phase 2b clinical trial of an oral COVID-19 vaccine candidate, bringing total funding to approximately $240.1 million. This funding, facilitated through an amendment to the company’s agreement with Advanced Technology International, will support the evaluation of Vaxart’s oral pill vaccine against an FDA-approved mRNA vaccine. An independent data safety monitoring board has recommended the continuation of the trial, which plans to enroll 10,000 participants in its next phase. Additionally, Vaxart has been granted a 180-day extension to meet Nasdaq’s minimum bid price requirement. The company is exploring options to comply, including a potential reverse stock split. In leadership developments, Vaxart appointed Kevin Finney to its Board of Directors, bringing extensive healthcare expertise to the company. The company is also advancing its norovirus and avian influenza vaccine programs, with a Phase 1 trial for the former set to begin in the first half of 2025. Vaxart’s financial outlook remains strong, with funding expected to sustain operations into 2026, as it continues to develop its oral vaccine platform.
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