$0.08
$0.40
bear $0.08
base $0.24
bull $0.40
margin of safety $0.06
market price* $0.45
Business condition attached to the margin of safety
Both: (1) the Phase 2b ~5,000-participant topline efficacy/safety data (guided H1 2027) read out positive, and (2) Dynavax formally exercises its right to pay Vaxart the additional $50M fee to assume continued development.
Vaxart is a clinical-stage biotech (oral pill vaccine platform) with no sustained owner-earnings history over the trailing decade - CFO-Capex-SBC was negative in essentially every year from FY2013-FY2024, funded almost entirely by continuous equity issuance: diluted shares outstanding grew from 38.6M (2016) to 242.8M (Jul 2026), a >6x dilution over the period. FY2025 is a one-time anomaly (positive net income +$16.3M, positive CFO +$7.7M) driven entirely by a non-refundable $25.0M upfront license fee plus a $5.0M equity purchase from Dynavax under the November 2025 License and Collaboration Agreement for Vaxart's oral COVID-19 vaccine candidate; this is not repeatable and is excluded from any growth-DCF framing. A standard 10-year Buffett owner-earnings DCF is therefore not meaningful here - instead, value is anchored to net cash/investments per share. As of December 31, 2024 the company carried explicit 12-month going-concern substantial-doubt language; the Dynavax cash infusion alleviated that doubt in the FY2025 10-K (runway guided into Q2 2027), reaffirmed on the August 2026 Q2 earnings call with $64.0 million of cash/ST investments as of 6/30/26 and zero debt, i.e. $0.26/share on 242.8M shares.
Bear case ($0.08/share) assumes the Phase 2b main-cohort readout (guided H1 2027, BARDA-funded) disappoints or Dynavax declines its $50M continuation election, forcing heavily dilutive financing on OTCQX (VXRT was delisted from Nasdaq in July 2025) to fund operations beyond mid-2027.
Base case ($0.24/share) applies only a modest ~10% haircut to today's cash position for expected near-term dilution funding operations to the H1 2027 catalyst, given burn has moderated substantially (H1 2026 CFO-Capex-SBC approximately -$2.5M) with BARDA now directly funding expanded trial analytics.
Bull case ($0.40/share) is cash/share plus an explicitly-labeled, speculative premium of roughly $0.12/share for the contingent $50M Dynavax milestone plus a small premium for out-licensed legacy assets (Vapendavir/Altesa Biosciences) - this premium is not derived from owner earnings and should not be treated as a reliable value estimate. Given the binary, cash-anchored nature of this security, the margin-of-safety price ($0.06) is set below even the bear case. Current price of $0.50 (Yahoo Finance, OTCQX) trades roughly 2x above even the bull-case cash-based estimate, indicating the market is pricing substantial speculative/optionality value the owner-earnings/cash framework does not support.