Vaxart Halts COVID-19 Vaccine Trial, Lays Off Staff Following HHS Order

Vaxart, a South San Francisco-based biotech company, has been forced to lay off 10% of its workforce and halt its COVID-19 vaccine pill trial following an unexpected order from the U.S. Department of Health and Human Services (HHS). The company, which had been developing an oral COVID-19 vaccine candidate, received the directive on February 21, 2023, throwing its research plans into disarray.

Government Halts Vaccine Trial

The HHS instructed Vaxart to "stop work on all its efforts on the COVID-19 phase 2b trial," with the exception of continued follow-up for the initial 400-person cohort. This order came as a surprise to the company, which had recently completed enrollment for this initial group in November and was poised to begin a larger 10,000-participant study extension.

Vaxart CEO Steven Lo expressed confusion over the decision, stating on a March 20 earnings call that the company was "not provided a reason for the stop-work order." The directive initiated a 90-day window during which Vaxart will learn whether the order will be canceled, extended, or if the project will be terminated entirely.

Financial Implications and Future Plans

The unexpected halt has had immediate financial consequences for Vaxart. The company has been forced to reduce its workforce by 10% in response to the stop-work order. As of the beginning of the year, Vaxart reported $51.7 million in cash reserves, which it expects to sustain operations into the fourth quarter of 2023.

Despite this setback, Vaxart is continuing work on other projects. The company has another oral vaccine in clinical trials, targeting norovirus. Results from a phase 1 study of this candidate are expected later this year.

Broader Industry Implications

Vaxart's situation reflects a wider trend of uncertainty in government-funded vaccine research. In February, reports emerged that HHS was reevaluating a $590 million contract with Moderna for bird flu vaccine studies and the development of new influenza vaccines.

An HHS spokesperson commented on the broader situation, stating that "four years of the Biden administration's failed oversight have made it necessary to review agreements for vaccine production." This suggests a potential shift in government priorities and funding allocation for vaccine research and development.

As the pharmaceutical industry navigates these changes, companies like Vaxart are left to reassess their research pipelines and funding strategies. The coming months will be crucial in determining the future of COVID-19 and other vaccine development programs that rely on government support.