UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| (Mark One) |
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number:
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| Vaxart, Inc. |
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| | Smaller reporting company |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The Registrant had
FOR THE QUARTER ENDED June 30, 2024
TABLE OF CONTENTS
| Page |
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| Part I |
1 | |||
| Item 1. |
1 | |||
| Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023 |
1 | |||
| 2 | ||||
| 3 | ||||
| Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 |
5 | |||
| 6 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
18 | ||
| Item 3. |
27 | |||
| Item 4. |
28 | |||
| Part II |
29 | |||
| Item 1. |
29 | |||
| Item 1A. |
29 | |||
| Item 2. |
30 | |||
| Item 3. |
30 | |||
| Item 4. |
30 | |||
| Item 5. |
30 | |||
| Item 6. |
31 | |||
| 33 | ||||
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”) for the quarterly period ended June 30, 2024, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections, concerning our business, operations, and financial performance and condition as well as our plans, objectives, and expectations for business operations and financial performance and condition. Any statements contained herein that are not of historical facts may be deemed to be forward-looking statements. You can identify these statements by words such as “anticipate,” “assume,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “should,” “will,” “would,” and other similar expressions that are predictions of or indicate future events and future trends. These forward-looking statements are based on current expectations, estimates, forecasts, and projections about our business and the industry in which we operate and management’s beliefs and assumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties, and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this Quarterly Report may turn out to be inaccurate. Factors that could materially affect our business operations and financial performance and condition include, but are not limited to, those risks and uncertainties described herein under “Item 1A. Risk Factors.” and those described in our Annual Report on Form 10-K for the year ended December 31, 2023, under “Item 1A. Risk Factors.” You are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on the forward-looking statements. The forward-looking statements are based on information available to us as of the filing date of this Quarterly Report. Unless required by law, we do not intend to publicly update or revise any forward-looking statements to reflect new information or future events or otherwise. You should, however, review the risk factors we describe in the reports we will file from time to time with the Securities and Exchange Commission (the “SEC”) after the date of this Quarterly Report.
This Quarterly Report also contains market data related to our business and industry. These market data include projections that are based on a number of assumptions. If these assumptions turn out to be incorrect, actual results may differ from the projections based on these assumptions. As a result, our markets may not grow at the rates projected by these data, or at all. The failure of these markets to grow at these projected rates may harm our business, results of operations, financial condition and the market price of our common stock.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
| June 30, 2024 | December 31, 2023 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Short-term investments | ||||||||
| Accounts receivable | ||||||||
| Unbilled receivable from government contracts | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Right-of-use assets, net | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Other long-term assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Other accrued current liabilities | ||||||||
| Current portion of operating lease liability | ||||||||
| Current portion of liability related to sale of future royalties | ||||||||
| Total current liabilities | ||||||||
| Operating lease liability, net of current portion | ||||||||
| Liability related to sale of future royalties, net of current portion | ||||||||
| Other long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 8) | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock: $ par value; shares authorized; issued and outstanding as of June 30, 2024 and December 31, 2023 | ||||||||
| Common stock: $ par value; shares authorized as of June 30, 2024 and shares authorized as of December 31, 2023; shares issued and shares outstanding as of June 30, 2024 and shares issued and shares outstanding as of December 31, 2023 | ||||||||
| Additional paid-in capital | ||||||||
| Treasury stock at cost, shares as of June 30, 2024 and shares as of December 31, 2023 | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share amounts)
(Unaudited)
| Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2024 |
2023 |
2024 |
2023 |
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| Revenue: |
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| Non-cash royalty revenue related to sale of future royalties |
$ | $ | $ | $ | ||||||||||||
| Revenue from government contracts |
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| Grant revenue |
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| Total revenue |
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| Operating expenses: |
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| Research and development |
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| General and administrative |
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| Total operating expenses |
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| Operating loss |
( |
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| Other income (expense): |
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| Interest income |
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| Non-cash interest expense related to sale of future royalties |
( |
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| Other income (expense), net |
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| Loss before income taxes |
( |
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| Provision for income taxes |
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| Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
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| Net loss per share - basic and diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
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| Shares used to compute net loss per share - basic and diluted |
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| Comprehensive loss: |
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| Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
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| Unrealized (loss) gain on available-for-sale investments, net of tax |
( |
) | ( |
) | ||||||||||||
| Comprehensive loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Condensed Consolidated Statements of Stockholders’ Equity
For the Three and Six Months Ended June 30, 2024
(In thousands, except share amounts)
(Unaudited)
| Accumulated | ||||||||||||||||||||||||||||||||
| Additional | Other | Total | ||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Paid-in | Accumulated | Comprehensive | Stockholders’ | |||||||||||||||||||||||||||
| Three Months Ended June 30, 2024 | Shares | Amount | Shares | Amount | Capital | Deficit | Loss | Equity | ||||||||||||||||||||||||
| Balances as of March 31, 2024 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Issuance of common stock under the September 2021 ATM, net of offering costs of $ | — | |||||||||||||||||||||||||||||||
| Issuance of common stock under the 2024 Securities Purchase Agreement, net of offering costs of $ | — | |||||||||||||||||||||||||||||||
| Issuance of common stock under the June 2024 Offering, net of offering costs of $ | — | |||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | ||||||||||||||||||||||||||||||||
| Issuance of common stock under ESPP | ||||||||||||||||||||||||||||||||
| Release of common stock for vested restricted stock units | ||||||||||||||||||||||||||||||||
| Repurchase of common stock to satisfy tax withholding | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | |||||||||||||||||||||||||||||
| Unrealized gain on available-for-sale investments | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balances as of June 30, 2024 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Six Months Ended June 30, 2024 | ||||||||||||||||||||||||||||||||
| Balances as of December 31, 2023 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Issuance of common stock under the September 2021 ATM, net of offering costs of $ | — | |||||||||||||||||||||||||||||||
| Issuance of common stock under the 2024 Securities Purchase Agreement, net of offering costs of $ | — | |||||||||||||||||||||||||||||||
| Issuance of common stock under the June 2024 Offering, net of offering costs of $ | — | |||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | ||||||||||||||||||||||||||||||||
| Issuance of common stock under ESPP | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | |||||||||||||||||||||||||||||
| Release of common stock for vested restricted stock units | ||||||||||||||||||||||||||||||||
| Repurchase of common stock to satisfy tax withholding | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Unrealized gains on available-for-sale investments | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balances as of June 30, 2024 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
VAXART, INC.
Condensed Consolidated Statements of Stockholders’ Equity
For the Three and Six Months Ended June 30, 2023
(In thousands, except share amounts)
(Unaudited)
| Accumulated | ||||||||||||||||||||||||||||||||
| Additional | Other | Total | ||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Paid-in | Accumulated | Comprehensive | Stockholders’ | |||||||||||||||||||||||||||
| Three Months Ended June 30, 2023 | Shares | Amount | Shares | Amount | Capital | Deficit | (Loss) Gain | Equity | ||||||||||||||||||||||||
| Balances as of March 31, 2023 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Issuance of common stock under 2023 Shelf Registration, net of offering costs of $284 | — | |||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | ||||||||||||||||||||||||||||||||
| Issuance of common stock under ESPP | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | |||||||||||||||||||||||||||||
| Release of common stock for vested restricted stock units | ||||||||||||||||||||||||||||||||
| Repurchase of common stock to satisfy tax withholding | — | — | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Unrealized gain on available-for-sale investments | — | — | ||||||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balances as of June 30, 2023 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Six Months Ended June 30, 2023 | ||||||||||||||||||||||||||||||||
| Balances as of December 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
| Issuance of common stock under September 2021 ATM, net of offering costs of $ | — | |||||||||||||||||||||||||||||||
| Issuance of common stock under 2023 Shelf Registration, net of offering costs of $ | ||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | ||||||||||||||||||||||||||||||||
| Issuance of common stock under ESPP | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | |||||||||||||||||||||||||||||
| Release of common stock for vested restricted stock units | ||||||||||||||||||||||||||||||||
| Repurchase of common stock to satisfy tax withholding | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Unrealized gain on available-for-sale investments | — | — | ||||||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balances as of June 30, 2023 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Six Months Ended June 30, |
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| 2024 |
2023 |
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| Cash flows from operating activities: |
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| Net loss |
$ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
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| Depreciation and amortization |
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| Amortization of discount on investments, net |
( |
) | ( |
) | ||||
| Stock-based compensation |
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| Non-cash interest expense related to sale of future royalties |
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| Non-cash revenue related to sale of future royalties |
( |
) | ( |
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| Change in operating assets and liabilities: |
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| Accounts receivable |
( |
) | ||||||
| Unbilled receivable from government contracts |
( |
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| Prepaid expenses and other assets |
( |
) | ||||||
| Accounts payable |
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| Deferred grant revenue |
( |
) | ||||||
| Other accrued liabilities |
( |
) | ( |
) | ||||
| Net cash used in operating activities |
( |
) | ( |
) | ||||
| Cash flows from investing activities: |
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| Purchases of property and equipment |
( |
) | ( |
) | ||||
| Purchases of investments |
( |
) | ( |
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| Proceeds from maturities of investments |
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| Net cash (used in) provided by investing activities |
( |
) | ||||||
| Cash flows from financing activities: |
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| Net proceeds from issuance of common stock in the June 2024 Offering |
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| Net proceeds from issuance of securities in registered direct offering |
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| Net proceeds from issuance of common stock through at-the-market facilities |
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| Net proceeds from issuance of common stock through the 2024 Securities Purchase Agreement |
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| Proceeds from issuance of common stock upon exercise of stock options |
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| Shares acquired to settle employee tax withholding liabilities |
( |
) | ( |
) | ||||
| Proceeds from issuance of common stock under the employee stock purchase plan |
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| Net cash provided by financing activities |
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| Net increase (decrease) in cash, cash equivalents and restricted cash |
( |
) | ||||||
| Cash, cash equivalents and restricted cash at beginning of the period |
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| Cash, cash equivalents and restricted cash at end of the period |
$ | $ | ||||||
| Supplemental reconciliation of cash, cash equivalents and restricted cash in the condensed consolidated balance sheets: |
$ | 43,285 | $ | 43,002 | ||||
| Cash and cash equivalents |
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| Restricted cash |
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| Cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows at the end of the period |
$ | $ |
| Supplemental disclosure of non-cash investing and financing activity: |
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| Operating lease liabilities arising from obtaining right-of-use assets |
$ | $ | ||||||
| Acquisition of property and equipment included in accounts payable and accrued expenses |
$ | $ |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
NOTE 1. Organization and Nature of Business
General
Vaxart Biosciences, Inc. was originally incorporated in California in March 2004, under the name West Coast Biologicals, Inc. The Company changed its name to Vaxart, Inc. (“Private Vaxart”) in July 2007, and reincorporated in the state of Delaware. In February 2018, Private Vaxart completed a business combination with Aviragen Therapeutics, Inc. (“Aviragen”), pursuant to which Aviragen merged with Private Vaxart, with Private Vaxart surviving as a wholly-owned subsidiary of Aviragen (the “Merger”). Pursuant to the terms of the Merger, Aviragen changed its name to Vaxart, Inc. (together with its subsidiaries, the “Company” or “Vaxart”) and Private Vaxart changed its name to Vaxart Biosciences, Inc.
In June 2024, the Company entered into an underwriting agreement with Oppenheimer & Co. Inc., relating to the issuance and sale by the Company in an underwritten registered direct offering of
In January 2024, the Company entered into a securities purchase agreement (the “2024 Securities Purchase Agreement”) with RA Capital Healthcare Fund, L.P. pursuant to which
In September 2021, the Company entered into a Controlled Equity Offering Sales Agreement (the “September 2021 ATM”), pursuant to which it may offer and sell, from time to time through sales agents, shares of its common stock having an aggregate offering price of up to $
The Company’s principal operations are based in South San Francisco, California, and it operates in reportable segment, which is the discovery and development of oral recombinant protein vaccines, based on its proprietary oral vaccine platform.
NOTE 2. Summary of Significant Accounting Policies
Basis of Presentation, Liquidity and Going Concern – The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC assuming the Company will continue as a going concern.
The Company is a clinical-stage biotechnology company with no product sales. Its primary source of capital is from the sale and issuance of common stock and common stock warrants as well as funding from the Biomedical Advanced Research and Development Authority (“HHS BARDA”), a division of the Administration for Strategic Preparedness and Response (“ASPR”) within the United States (“U.S.”) Department of Health and Human Services. As of June 30, 2024, the Company had cash, cash equivalents and investments of $
Based on management's current plan, the Company expects to have cash runway into 2026. The Company will be dependent upon raising additional capital through placement of its common stock, notes or other securities, borrowings, or entering into a partnership with a strategic party in order to implement its business plan. There can be no assurance that the Company will be successful raising additional capital in order to continue as a going concern.
The condensed consolidated balance sheet as of December 31, 2023, included in this filing, was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. Certain information and footnote disclosures normally included in consolidated financial statements have been condensed or omitted pursuant to these rules and regulations. These condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and footnotes related thereto for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2024 (the “Annual Report”). Unless noted below, there have been no material changes to the Company’s significant accounting policies described in Note 2 to the consolidated financial statements included in the Annual Report. In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company’s financial position and the results of its operations and cash flows. The results of operations for such interim periods are not necessarily indicative of the results to be expected for the full year or any future periods.
Basis of Consolidation – The unaudited condensed consolidated financial statements include the financial statements of Vaxart, Inc. and its subsidiaries. All significant transactions and balances between Vaxart, Inc. and its subsidiaries have been eliminated in consolidation.
Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities in the financial statements and accompanying notes. Actual results and outcomes could differ from these estimates and assumptions.
Concentration of Credit Risk – Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, cash equivalents, available-for-sale investments and accounts receivable. The Company places its cash, cash equivalents and available-for-sale investments at financial institutions that management believes are of high credit quality. The Company is exposed to credit risk in the event of default by the financial institutions holding the cash and cash equivalents to the extent such amounts are in excess of the federally insured limits. Losses incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.
The primary focus of the Company’s investment strategy is to preserve capital and meet liquidity requirements. The Company’s investment policy addresses the level of credit exposure by limiting the concentration in any one corporate issuer or sector and establishing a minimum allowable credit rating.
Revenue Recognition
Revenue from Government Contracts
Under firm fixed-price milestone contracts, the Company recognizes the firm fixed-price revenue as the milestones are substantially complete and the firm fixed-price for the milestone is earned (“firm fixed-price milestone”). Under cost reimbursable contracts, the Company recognizes revenue as allowable costs are incurred and the fixed fee is earned (“cost-plus-fixed-fee”). Reimbursable costs under the contract primarily include direct labor, subcontract costs, materials, equipment, travel, and approved overhead and indirect costs. Fixed fees under cost reimbursable contracts are earned in proportion to the allowable costs incurred in performance of the work relative to total estimated contract costs, with such costs incurred representing a reasonable measurement of the proportional performance of the work completed.
Payments to the Company under cost reimbursable contracts are provisional payments subject to adjustment upon annual audit by the government. 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. When the final determination of the allowable costs for any year has been made, revenue and billings may be adjusted accordingly in the period that the adjustment is known.