In 2023, Vaxart halted work on its oral vaccine for Covid-19, and didn’t even have enough money to finish 2024.
Now, the US government is lending a big hand.
The Biomedical Advanced Research and Development Authority (BARDA) awarded the company up to $453 million to help fund a Phase 2 study of its oral Covid-19 vaccine, according to an early June announcement. That same day, Vaxart announced a $40 million public offering which, combined with the federal award, pushed its cash runway into 2026. The large nine-digit award followed a smaller, nearly $10 million contribution from BARDA announced in January.
The BARDA effort, dubbed Project NextGen, has become an oasis of capital for many smaller infectious disease biotechs tackling Covid-19 that may otherwise have trouble attracting private investors. It’s part of the $4.7 billion at the agency’s disposal for the initiative, meant to design new products to address Covid with funds for everything from vaccines to diagnostics.
In an interview with Endpoints News, BARDA Director Gary Disbrow said the agency is concerned with more than one virus.
“[W]e do know if these technologies are developed that they will have applications for other emerging infectious diseases,” Disbrow said. He used injectable vaccines as an example, saying BARDA has been asking companies to provide data on additional proteins beyond just the spike protein on the SARS-CoV-2 virus.
Beyond Vaxart, the most recent tranche of Project NextGen funds included $34 million to CastleVax, a Mount Sinai spinout unveiled in 2022, and $40 million to CyanVac, which is developing an intranasal vaccine.
Since the project was announced in April 2023, BARDA has awarded $2.58 billion, roughly 73% of which has gone toward vaccine development. Another $326.5 million has gone toward Covid therapeutic development and $377.8 million for “enablers,” which largely includes manufacturers, according to data provided by BARDA’s parent agency, the Administration for Strategic Preparedness and Response.
“When we look at companies, we’re not looking at the size of the company,” Disbrow said. “We’re looking at the technology that they have.”
Disbrow said none of the companies that receive NextGen funds owe BARDA anything; they aren’t equity investments or contingent on future procurement rights.
“But we look at every investment that we make as a true partnership, where we’re working with the company to help give them the best chance of success to move those products forward,” he said.
Steven LoFor Vaxart, that means weekly calls with BARDA staff as the two work to get the Phase 2 study off the ground. CEO Steven Lo compared it to collaborating with a large pharmaceutical company, bouncing ideas off each other.
BARDA’s involvement has already enhanced clinical trial design, with the government planning to supply weekly swab tests for all of the 10,000 expected participants to test for asymptomatic infection. BARDA expects around a 3% asymptomatic Covid attack rate, according to Vaxart founder and CSO Sean Tucker.
“It’s an incredible expense … and we’re grateful,” Tucker said about the cost of the testing plan.
The specific testing investment reflects BARDA’s aspirations for with these vaccine bets, according to Disbrow, who said, “The hope is that we would not have to continually do strain changes.”
Federal de-risking
More money could soon be on the way. A spokesperson for ASPR said additional awards are coming down the pike and BARDA will be soliciting project proposals for on-demand manufacturing projects that slot under NextGen’s enablers umbrella in the third quarter. The goal is to have “flexible, mobile facilities” and build off a previous Broad Agency Announcement (BAA) from October 2022 to September 2023.
In a January presentation, BARDA staff detailed how the less than $750,000 award ceiling from that BAA “may be insufficient to support significant advancements in [on-demand manufacturing] technology.” Project NextGen’s ceiling is much higher.
The potential for large-scale manufacturing investments hearkens back to blunders by Emergent BioSolutions. The BARDA-backed company faced significant woes after its Baltimore-area facility was flagged by FDA inspectors months before cross-contamination cost millions of doses of Johnson & Johnson’s vaccine in 2021, hampering the one-shot rollout. Disbrow said that while BARDA was given enough money to build up Emergent’s manufacturing facilities, it wasn’t given enough “to sustain a true capability.”
“The issue … was because [Emergent] didn’t have sufficient people to run the facility, [it] had to hire a lot of people at the beginning,” he said.
BARDA aims for its latest manufacturing-related solicitation to spur “smaller production volumes, more distributed facilities [and] faster production,” according to the presentation.
Beyond NextGen, Disbrow says interest has grown in BARDA’s handful of accelerator programs. One such effort, Blue Knight, has now supported 46 companies since launching four years ago in collaboration with Johnson & Johnson’s incubator arm, JLABS. Those companies have gone on to raise almost $1 billion in cumulative follow-on funding after the program, according to data through April.
“It was a little slow to start because a lot of the innovators don’t think of the US federal government as a good partner to support innovations,” Disbrow said.
But he believes private investors ultimately see federal funding as derisking, whether it’s for Blue Knight or Project NextGen.
“The goal of [Project NextGen] is that … hopefully these companies will be able to get additional follow-on private investor support and take those [products] to commercialization,” he said.
Editor’s note: This story was updated to correct the share of Project NextGen funds allocated to vaccines.