Trump admin revokes order that prompted Bay Area company to cut staff

LATEST April 28, 12:10 p.m. Vaxart, a small San Francisco biotech company, caught a major break on Thursday when it learned that Robert F. Kennedy Jr.’s Department of Health and Human Services had lifted the stop work order imperiling Vaxart’s COVID-19 vaccine. 

Vaxart announced the update in a Monday filing with the Securities and Exchange Commission, writing that it can now proceed with screenings for the oral vaccine pill’s planned 10,000-participant trial. Kennedy’s stop work order in February halted most progress on the trial, caused a 10% layoff at Vaxart and threw the future of the company into question — Vaxart’s original contract for the COVID-19 vaccine came with $460 million in funding.

The company’s Monday filing said it plans to reactivate field sites and screen participants for enrollment in the trial, as well as keep up talks with HHS’s Biomedical Advanced Research and Development Authority regarding its costs and plans. In a Monday statement to SFGATE, Vaxart CEO Steve Lo said the company is now “evaluating our cost structure accordingly” — it isn’t clear whether that means the company is fully rolling back its 10% layoff.

March 21, 3:30 p.m.Robert F. Kennedy Jr.’s confirmation as Secretary of Health and Human Services is already leading to layoffs in the Bay Area’s biotech industry.

Vaxart, a small South San Francisco company that focuses on oral vaccine research, announced Thursday that it had to lay off 10% of its workers after the U.S. government issued a stop work order on its major COVID-19 vaccine trial. Vaxart had 105 workers at the end of 2024, per a filing, so the cuts are likely to hit around 10 staff members; local biotechs have been shedding staff left and right this year.

The stop work order is a major blow for a company that had already seen its stock price dwindle. Vaxart got a positive reception to the vaccine study’s initial data from a safety board, and was planning to begin a larger trial after the FDA provided input. Instead, the study and company have been thrown into limbo — Vaxart will learn within 90 days whether the trial and its massive contract are canceled for good.

Vaxart’s latest trial was set to compare its oral COVID-19 vaccine pill against an already-approved injectable version, with 5,200 people receiving each. The company signed a contract in June for $460 million in funding to conduct the 12-month study as well as manufacture a vaccine targeting COVID-19’s KP.2 variant, with the money coming from HHS’s Biomedical Advanced Research and Development Authority. The award ran through the Biden Administration’s Project NextGen, an initiative meant to fight coronavirus strains and make easier-to-administer vaccines.

On Jan. 14, CEO Steven Lo hyped up Vaxart’s pill in a press release, saying that the company was “well-positioned” to begin the 10,000-participant, phase 2b trial. But then, a new grant-slashing administration with a new vaccine-skeptic secretary took charge of HHS. Kennedy was confirmed for the role on Feb. 13; Vaxart received the demand to stop all work on the phase 2b trial just eight days later.

“We were not provided a reason for the stop work order,” Lo said in a call with analysts on Thursday. He added that it’s in effect for 90 days, within which “the stop work order will either be canceled, extended or work on this project will be terminated.”

Asked about whether he’s running the company differently in a new political environment, Lo praised the success of vaccines before seeming to acknowledge that, under the new administration, they might require further justification.

Vaxart’s oral vaccines, he said, have “demonstrated a clean safety profile to date that’s similar to placebo. And it’s that type of differentiator that we believe could assist with the acceptance of vaccines, allowing consumers and physicians to have more options.”

Kennedy has long endorsed debunked ideas that blame vaccines for autism. During his confirmation process, he promised senators he is not “anti-vaccine,” the Associated Press reported, but avoided reassuring parents that the hepatitis B and measles vaccines don’t cause autism.

Kennedy gave comments to Fox News Digital on Feb. 25 that explained his thinking on the Vaxart order.

"While it is crucial that the Department [of] Health and Human Services support pandemic preparedness, four years of the Biden administration’s failed oversight have made it necessary to review agreements for vaccine production, including Vaxart’s," he said, per the outlet.

"I look forward to working with Vaxart and medical experts to ensure this work produces safe, effective, and fiscal-minded vaccine technology,” he reportedly added.

Vaxart isn’t alone in seeing ongoing research be suddenly upended by Kennedy and others in the Trump Administration. The Atlantic reported that HHS’s National Institute of Health has already terminated dozens of contracts, including several looking into vaccine hesitancy. The administration has also delayed many grant decisions, casting doubt on research into breast cancer, Alzheimer's, diabetes and more.

This story has been updated.

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