Inarguably few influential figures have had as topsy-turvy a week as Green Bay Packers quarterback Aaron Rodgers. At the start of the month, Benzinga staff writer Chris Katje noted that an excited Rodgers was partnering with CashApp, a unit of Square Inc. (NYSE: SQ), with the marquee announcement that he was going to accept part of his NFL salary in Bitcoin.
Shortly thereafter, the Packers announced that Rodgers will miss at least 1 game due to testing positive for COVID-19. As it turned out, the quarterback did not get vaccinated, although he had coyly indicated earlier in the season that he had been immunized. This refusal — and the explanation of such — added more fuel to the raging debate regarding responsibility for the whole versus individual liberties.
Needless to say, the vaccination rollout — one of the Trump administration’s clear, universally lauded achievements — has hit a fundamental roadblock in the court of public opinion. That’s the tricky narrative that biotechnology firm Vaxxinity Inc. finds itself on the cusp of with its initial public offering (IPO).
High in potential, Vaxxinity offers long-term solutions not only for the current COVID-19 pandemic but for myriad other diseases. But will the American people in particular give the firm a chance?
When Is the Vaxxinity IPO Date?
One of the larger raises among private enterprises inking their way into the IPO calendar for the tail end of the week beginning Nov. 8, Vaxxinity represents a highly watched public market debut. That’s because one of the company’s most clinically progressed pipeline products — the UB-612 vaccine for COVID-19 — is caught in an awkward circumstance.
As of this writing, daily new cases of the disease have come down substantially from this year’s highs. Additionally, the welcome news encouraged and incentivized several jurisdictions to relax their mitigation protocols. This circumstance doesn’t necessarily bode well for more vaccine choices since the urgency no longer exists in the magnitude it once did.
True, Vaxxinity aims to democratize health, a core tenet within the company’s guiding ethos. Therefore, the broader objective for the company has been to deliver COVID-19 vaccines to underserved parts of the world. However, international cases of new infections have also declined conspicuously from their peaks, implying a timing challenge for the company.
Nevertheless, management remains optimistic about disrupting the underlying market in an accretive manner, focusing on bringing a protein peptide-based platform alternative rather than outright replacing the currently popular messenger-RNA (mRNA) approach.
On Oct. 8, 2021, Vaxxinity filed its IPO prospectus with the U.S. Securities and Exchange Commission (SEC). Under the terms of the deal, the company aimed to raise $101 million through the distribution of 6.7 million shares at a price range between $14 and $16 per unit. At the midpoint of the estimate spectrum, Vaxxinity would command a valuation of $2.1 billion.
Shares will trade on the Nasdaq exchange under the ticker symbol VAXX and are set to launch on Nov. 11. Bank of America Corp (NYSE: BAC), Jefferies Financial Group Inc (NYSE: JEF) and Evercore Inc (NYSE: EVR) are serving as joint bookrunners for the IPO.
Although the initial details, along with the scientific backdrop for VAXX stock were promising, management declared in the pre-market hours of its launch day that it will downsize its offering to 6 million shares at $13 per unit. This shift doesn’t necessarily impugn Vaxxinity’s long-term potential if you’re a patient investor, but it’s something to keep in mind before placing a heavy order.
Vaxxinity Financial History
As a clinical-stage biotech firm with a majority of its drug pipeline at phase I trials or below, Vaxxinity is not for the faint of heart. While no one can predict the future of VAXX stock, it’s almost certain that prospective investors will encounter bouts of volatility.
According to scientific research published by the National Institutes of Health, the “observed success rates of academic drug discovery and development were 75% at phase I, 50% at phase II, 59% at phase III and 88% at the new drug application/biologics license application (NDA/BLA) phase.”
Two of Vaxxinity’s programs under its drug pipeline are in phase II trials, which barring all other factors unique to the indications, gives it a baseline success probability of merely a coin toss. Further, 2 of the company’s products are in the preclinical stage, which give them far odds for progress. Therefore, any disappointing clinical studies could really damage VAXX stock.
Readers should pound this concept into their heads because it’s absolutely critical: clinical-stage biotech firms are incredibly risky. Much of the reason stems from the many disappointments that can occur through the clinical phases before a drug receives the regulatory green light.
As if that wasn’t enough to sober up prospective buyers of VAXX stock, the underlying company’s financials leave much to be desired. In the 6 months ending June 30 of last year, Vaxxinity posted revenue of only $440,000. However, because of sizable research and development expenses, along with general and administrative outlays, net loss amounted to $10.8 million.
In the same comparison for this year, the company is only looking at $17,000 in top-line sales. However, research and development expenses ballooned to $30.6 million, a 621% increase year-over-year. As well, general and administrative expenses more than tripled to $14.4 million, ultimately resulting in a net loss of $58.6 million.
To be fair, running a net loss is par for the course for many clinical-stage biotech companies. Indeed, Vaxxinity does well for even generating a non-zero number on the top line. But that only serves to articulate the risk behind VAXX stock.
Yes, you can make substantial money if the underlying company hits it out of the park, potentially resulting in a buyout from a larger company. However, your funds will essentially subsidize a money-losing operation on the hopes — not the guarantee — that Vaxxinity indeed has the right stuff.
Admittedly, the compelling nature of VAXX stock is that the underlying science could represent the key for next-generation medical solutions. In short, Vaxxinity believes that incorporation of its synthetic peptide vaccine platform has the potential to catalyze a new class of therapeutics.
One of the key advantages of a peptide-based approach is provenance: bioengineers have used the underlying technology to develop a vaccine for foot-and-mouth disease in livestock. Moreover, another pivotal benefit specific to Vaxxinity is that its proprietary peptides are “immunosilent,” thereby avoiding an inflammatory response. Better yet, its synthetic peptides can turn body into its own “antibody drug factory.”
Because of the claimed efficacy relative to contemporary platforms, Vaxxinity aims to leverage its innovations to address chronic diseases and conditions like Alzheimer’s, Parkinson’s, migraine headaches, hypercholesterolemia and others by vaccinating against them. Anyone who has witnessed loved ones suffer through these debilitating conditions will immediately recognize what such a breakthrough will mean.
But before you load up on VAXX stock, it’s imperative that you perform due diligence. As scientific literature points out, peptide-based approaches are not new. What’s more, they’re not without disadvantages. Studies demonstrate that peptides “frequently fail to induce an effective immune response.” If so, Vaxxinity may run into a credibility problem regarding its tackling of diseases that have perplexed prior attempts at treatment.
How to Buy Vaxxinity IPO (VAXX) Stock
With VAXX stock set to launch shortly, investors must acquire shares at the open, which is a straightforward process if you know how to buy stocks. If not, just follow the steps below.
Step 1: Pick a brokerage.
With immense interest and the cost reductions associated with rising technology, most brokerages offer similar financial incentives to join. Use this dynamic to your advantage by narrowing your list of best brokers to platforms that suit your investing style.
Step 2: Decide how many shares you want.
IPOs are always risky because of multiple shifting variables. To mitigate downside movements, choose a balanced share count.
Step 3: Choose your order type.
Before investing, understand these market concepts.
- Bid: The buyer’s best offer for a stock.
- Ask: The seller’s lowest acceptable price.
- Spread: The difference between the bid-ask price, the spread indicates market risk as this is also the profit margin for market makers.
- Limit order: Buy or sell requests at a predetermined price, limit orders provide transparency but no execution guarantees.
- Market order: Market orders guarantee fulfillment but only at the current rate.
- Stop-loss order: Stop-loss orders automatically exit your position at either a predetermined price or anything lower.
- Stop-limit order: Stop-limit orders only leave positions at a specified price, but they also carry non-fulfillment risks.
Step 4: Execute your trade.
Follow these steps to execute a market order:
- Select your action type (buy or sell).
- Enter the shares you want to acquire (or sell).
- Hit the Buy (or Sell) button.
Follow the same sequence for limit orders (but include your execution price).
VAXX Restrictions for Retail Investors
Review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons before participating. Avoid investments in which you have privileged (non-public) information.
As VAXX is set to launch shortly, it’s not possible to acquire pre-IPO shares or new issues at their initial offer price. However, for future public market debuts, you should consider opening an account with ClickIPO, which provides such opportunities for select enterprises.
A Compelling But Risky Shot
Amid the rancor behind the battle against COVID-19, the fact remains that vaccines have a long and established history of efficacy. But can the underlying platform — through the latest biotech wizardry — solve the chronic diseases that plague humanity? That’s the alluring nature of VAXX stock but also a reason for caution.
About Joshua Enomoto
His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.