Item 8.01. Other Events.
First Patient Dosing
On October 13, 2020, Vaxart announced that the first subject has been dosed in its Phase 1 study of VXA-CoV2-1, an oral tablet COVID-19 vaccine candidate.
The Phase 1, open-label, dose-ranging trial (NCT04563702) is designed to examine the safety and immunogenicity of two doses of VXA-CoV2-1 in up to 48 healthy adult volunteers aged 18 to 54 years old. Enrollment is expected to be completed by early November 2020, with participants receiving the low or high dose of the VXA-CoV2-1 oral tablet at days 1 and 29. Safety, reactogenicity and immunogenicity assessments will be performed at set times during the active phase.
Hamster Challenge Study Data
Results from the Company’s Hamster Challenge Study show that all hamsters that received two oral doses of COVID-19 vaccine candidate showed no systemic weight loss, a key indicator of protection against COVID-19 in this animal model.
The study evaluated Vaxart’s recombinant adenoviral vaccine, with doses given at 0 and 4 weeks. Animals were challenged with SARS-CoV-2 at week 8. Topline data demonstrated that all unvaccinated animals lost at least 8% of their body weight, and all showed evidence of lung disease as measured by relative weight gain in the lungs. By contrast, all animals vaccinated with two doses of the oral vaccine maintained or gained body weight by the end of the experiment, a statistically significant result (p<0.001). Additionally, these animals were protected against the lung weight gain seen in the unvaccinated animals (p<0.001). For unvaccinated animals, lung weight as a percentage of body weight was approximately twice that of the animals that received two oral doses of the vaccine. The experiment was designed to monitor systemic weight for 5 days before animals were assessed for lung disease. N=8 per group. Hamsters receiving one oral dose had partial protection. Full results from the study will be published when data analysis is complete.
Hamsters provide a very sensitive model for assessing COVID-19 infection since they can be infected via the intranasal route, and, if infected, they demonstrate pronounced clinical symptoms such as weight loss. They can also show signs such as labored breathing and ruffled fur. They also develop lung issues similar to those seen in humans. Images of hamsters infected with SARS-CoV-2 reveal severe lung injury similar to that seen in infected human lungs, including severe, multi-lobular ground glass opacity, and regions of lung inflammation and consolidation.
Legal Matters
In July 2020, Vaxart was served with a Grand Jury Subpoena from the U.S. District Court for the Northern District of California, in connection with an investigation by the Office of the U.S. Attorney for the Northern District of California (“U.S. Attorney’s Office”). The Company has provided documents called for by the subpoena, which broadly pertain to the Company’s participation in, and disclosure of, an Operation Warp Speed (“OWS”)-funded nonhuman primate study, and option grants, warrant transactions, and other corporate and financing matters disclosed since March 2020. We are cooperating with the U.S. Attorney’s Office regarding these requests and have provided documents and information in response.
In August 2020, the Enforcement Division of the Commission requested that the Company provide, on a voluntary basis, a variety of documents that broadly pertain to same subject matters of the documents provided to the U.S. Attorney’s Office, and related matters. The Company has voluntarily provided documents requested by the SEC and is cooperating with this informal inquiry.
On August 4, 2020, a purported shareholder derivative complaint was filed in the Superior Court of California, San Mateo County, entitled Godfrey v. Latour, et al. An amended complaint was filed on September 4, 2020, and the case was re-named Ennis v. Latour, et al. The amended complaint names certain of Vaxart’s officers and directors as defendants, asserting claims against them for breach of fiduciary duty, unjust enrichment, and waste and seeking, among other things, an award of unspecified damages, certain equitable relief, and attorneys’ fees and costs. The complaint also asserts claims for breach of fiduciary duty, unjust enrichment, and aiding and abetting breach of fiduciary duty against Armistice Capital, LLC (“Armistice”). The claims challenge certain stock options granted to certain of the Company’s officers and directors between March 24, 2020 and June 15, 2020 and certain amendments to two warrants held by Armistice, as announced on June 8, 2020. The amended complaint purports to bring the lawsuit derivatively on behalf of and for the benefit of the Company and names the Company as a “nominal defendant” against which no damages are sought. On October 14, 2020, all defendants in the action will file a demurrer with the court, seeking to have the entire case dismissed.
On September 8, 2020, a purported shareholder derivative complaint was filed in the Chancery Court in the State of Delaware, entitled Galjour v. Floroiu, et al. The complaint names as defendants certain of Vaxart’s current and former directors, asserting claims against them for breach of fiduciary duty, unjust enrichment, and waste and seeking, among other things, an award of unspecified damages and attorneys’ fees and costs. The complaint also asserts a claim for unjust enrichment against Armistice. The claims challenge certain stock options granted to certain of the Company’s officers and directors between June 8, 2020 and June 15, 2020 and certain amendments made to two warrants held by Armistice, as announced on June 8, 2020. The complaint purports to bring the lawsuit derivatively on behalf of and for the benefit of the Company and names the Company as a “nominal defendant” against which no claims are asserted and no damages are sought. On October 9, 2020, all defendants in this action filed a motion to stay the case pending disposition of the Ennis action in California. On that same date, defendants also filed a motion to dismiss.
On September 17, 2020, a purported derivative complained was filed in the U.S. District Court for the Northern District of California, entitled Stachowski v. Boyd, et al. The complaint names as defendants certain of Vaxart’s current directors, asserting claims against them for breach of fiduciary duty and unjust enrichment and seeking, among other things, an award of unspecified damages, certain equitable relief, and attorneys’ fees and costs. The complaint also alleges a violation of §14(a) of the Exchange Act for allegedly false statements or omissions in the Company’s April 24, 2020 proxy statement regarding the Company’s options practices. The complaint also asserts a claim for breach of fiduciary duty against Armistice. The claims are based on allegations that certain stock options granted to certain of the Company’s officers and directors between June 8, 2020 and June 15, 2020 were allegedly improper and that certain warrants held by Armistice were amended on June 8, 2020 allegedly for no consideration. The complaint purports to bring the lawsuit derivatively on behalf of and for the benefit of the Company and names the Company as a “nominal defendant” against which no claims are asserted and no damages are sought.
Two substantially similar securities class actions were filed in the U.S. District Court for the Northern District of California, the first, titled Himmelberg v. Vaxart, Inc. et al. was filed on August 24, 2020 (the “Himmelberg Action”), and the second action, titled Hovhannisyan v. Vaxart, Inc. et al. was filed on September 1, 2020 (the “Hovhannisyan Action,” and together, the “Putative Class Actions”). On September 17, 2020, the court issued an order that the Putative Class Actions were related and would proceed as one consolidated action. The Putative Class Actions both name as defendants certain of Vaxart’s current and former executive officers and directors, and Armistice. The complaint claims two violations of federal civil securities laws, violation of SEC Rule 10b-5, as against all defendants; and violation of Section 20(A) of the Exchange Act, as against all defendants except for Vaxart. The Putative Class Actions allege defendants violated securities laws by misstating and omitting information regarding the Company’s OWS involvement to deceive the investing public and inflate the market price of Vaxart securities. The Putative Class Actions seek to be certified as a class action for similarly situated shareholders and seek, among other things, an uncertain amount of damages and attorneys’ fees and costs.