Vaxart’s Revenue Surge Signals a Turn in Biotech’s Grant-Driven Growth Model

Biotech investors often face a paradox: companies in clinical trials must prioritize R&D over profits, leading to losses that can deter short-term traders. But what if revenue growth—driven by strategic grants and partnerships—could signal a path to sustainable profitability? Vaxart, Inc. (NASDAQ: VAXR) is now at this inflection point. With its $20.9 million revenue surge in Q1 2025, the company has demonstrated the scalability of a grant-funded model, even as it navigates the risks of clinical-stage development. For biotech bulls, this is a call to prioritize pipeline momentum over near-term losses—and position VAXR as a strategic buy.

The Revenue Breakdown: Grant-Funded Growth

Vaxart’s revenue in Q1 2025 was entirely derived from government contracts, specifically the Biomedical Advanced Research and Development Authority (BARDA) Project NextGen award. This $460.7 million program, which began in 2024, has already delivered $85.6 million in payments to Vaxart as of March 2025, with $240.1 million still available. This contrasts sharply with Q1 2024’s paltry $2.2 million revenue, which came from an earlier BARDA grant. The jump underscores a strategic shift: Vaxart is no longer reliant on smaller grants but is instead leveraging large-scale, milestone-based partnerships to fuel its pipeline.

Pipeline Momentum: The Key to Scalability

The BARDA funding directly supports Vaxart’s lead programs:
1. Oral COVID-19 Vaccine: The Phase 2b trial, paused briefly in early 2025, resumed screening for its 10,000-participant cohort in April. If successful, this oral formulation could disrupt the needle-based vaccine market.
2. Norovirus Program: A Phase 1 trial for its second-generation vaccine began in 2025, with topline data expected in mid-2026. BARDA’s support here positions Vaxart to address a $2.5 billion global norovirus vaccine market.
3. RSV Vaccine: A Phase 1 trial launched in Q3 2025 aims to test an oral formulation for respiratory syncytial virus, a major unmet need in pediatric care.

These programs are not just clinical milestones—they are deal catalysts. BARDA’s involvement signals government validation, while partnerships with pharma giants (not yet realized but hinted at in Q3 updates) could amplify revenue streams.

Financial Health: Narrowing Losses, Extended Runway

Despite the revenue jump, Vaxart reported a Q1 2025 net loss of $15.6 million, down from $24.4 million in Q1 2024. This narrowing loss reflects cost discipline:
- R&D expenses rose to $30.7 million in Q1 2025 (vs. $19.0 million in Q1 2024) as trials ramped up, but G&A costs dropped to $5.1 million (from $7.2 million) due to lower administrative spending.
- As of September 30, 2025, cash reserves stood at $20.9 million, sufficient to fund operations into early 2027, even with a $1.9 million net loss in Q3 2025 and minimal revenue ($0.2 million) from collaborations.

The cash runway, extended by BARDA’s non-dilutive funding, buys Vaxart time to execute. Investors should view this as a strategic advantage, not a liability.

The Investment Case: Revenue Velocity > EPS Today

Critics may dismiss VAXR’s losses, but this misses the bigger picture:
- Revenue velocity matters. The $20.9 million Q1 revenue—up 850% year-over-year—demonstrates BARDA’s confidence in Vaxart’s science. Such grants are predictable and scalable, unlike volatile biopharma partnerships.
- Pipeline risk is being mitigated. The lifted stop-work order on the Phase 2b trial and the RSV trial’s launch in 2025 reduce execution risks, while norovirus data in 2026 could unlock partnerships.
- Valuation is undemanding. With a market cap of ~$300 million and a pipeline addressing multi-billion markets, VAXR trades at a fraction of peers with similar programs.

Conclusion: A Biotech Buy for the Next Wave of Growth

Vaxart’s journey mirrors the broader shift in biotech finance: grant-funded models are proving sustainable for companies with clear clinical paths. The $20.9 million revenue milestone isn’t just a number—it’s proof that government partnerships can drive scalable growth. For investors, this is a high-reward, strategic play: VAXR’s oral vaccine platform targets massive markets, its BARDA-backed pipeline is advancing, and its cash runway buys time to capitalize on milestones.

Act now: The next catalyst—RSV Phase 1 data or norovirus Phase 2b initiation—could ignite a rerating. VAXR is positioned to turn grant-funded momentum into long-term value.

Investment thesis: Buy on dips below $2.50; target $5–$7 by mid-2026.