Biotechnology company VBI Vaccines (NASDAQ:VBIV) gave markets two major updates during July. Both have the potential to inject some real strength into the company going forward and both relate to developments that shareholders have been looking to as core indicators of the company's long term valuation.
Here is a look at both bits of news, what they mean for VBI right now and how each plays into the company's potential for long term growth.
Before getting into the detail and for those not familiar with VBI, let's start with a brief introduction to the company. VBI Vaccines is a US based biotechnology company that is working to bring a variety of drugs to market both in the US and internationally. Its lead asset is a hepatitis B vaccine called Sci-B-Vac (we'll get to this one in a little more detail shortly) and its pipeline includes development stage drugs targeting cytomegalovirus (CMV), glioblastoma multiforme (GBM) and Zika, among others.
The company generates revenues from the Sci-B-Vac asset right now, with the latter already having picked up approval in 15 countries globally including Israel, where it's a standard of care vaccine in newborn babies.
VBI has also developed a proprietary technology designed to remove the necessity for vaccines to be stored at between 4° C and 8° C to preserve their integrity (called the Cold Chain). This isn’t something we'll go into in any detail here, but for those interested, it's well worth a look. There's an overview available here.
The company trades on the NASDAQ and is headquartered in Cambridge, Massachusetts.
So, to the news.
The first release came back on July 11, when VBI announced the detail so a phase III program designed to asses its hepatitis B asset, the above mentioned Sci-B-Vac. The program is a global program that will be conducted across the US, Europe and Canada and is designed to underpin registration application sin each of these three regions on conclusion.
The program will be split into two separate phase III studies; one that will look at the safety and efficacy of the vaccine as compares to a standard of care vaccine in the space, GlaxoSmithKline plc (GSK)'s Engerix-B, and another that will compare various different lots of Sci-B-Vac with one another, designed to demonstrate manufacturing consistency (and in turn, quality assurance) across different batches of the drug.
The hepatitis B market is expected to grow to $3.5 billion in revenues by 2021 and an approval in the three above discussed regions would give VBI access to a considerable portion of these revenues. If the company can get a positive outcome in its phase III program, therefore, and if it can subsequently pick up a regulatory green light for Sci-B-Vac in its target markets, sales of the vaccine alone have the potential to outstrip current market capitalization substantially.
That's the first announcement. The second came on July 27 and relates to a program set up to investigate one of the company's early stage development assets, a drug called VBI-1501A. This one is another vaccine, built using VBI's proprietary eVLP technology (a platform that can be used to create third generation vaccines that express multiple antigens associated with the target virus) and it's targeting CMV.
CMV is a real problem in the US but it's a problem that often goes unmentioned – primarily because there exists no real treatment or vaccine for it right now in the market. Each year, approximately 5,000 U.S. infants will develop permanent problems due to CMV, some of them severe, including deafness, blindness, and mental retardation. It affects more live births than Down Syndrome or Fetal Alcohol Syndrome and analysts expect that the market for an effective vaccine could reach $1 billion annually.
VBI is trying to capitalize on this opportunity/unmet need with VBI-1501A and the news that just hit press suggests it's having some success doing so. Specifically, the company put out interim data from an ongoing phase I study of the drug in healthy patients. The study is primarily geared towards establishing safety (as is pretty much always the case in phase I studies) but there exists an opportunity to get a glimpse at potential clinical benefit based on certain immunogenicity metrics built into the protocol.
As far as design is concerned, patients were vaccinated at zero, two, and six months, and by mid-May 2017, all patients had received the third and final dose. The latest read out takes us up to day 84, meaning the numbers address the first three months post initial vaccination.
The main news, then, is that the vaccine was well tolerated at all doses, with no safety signals from any of the 128 patients enrolled in the study. That's key to the advance of this asset but it's not what markets are really interested in; instead, shareholders wanted to get an idea of efficacy.
And get an idea they did. As per the latest release, the vaccine induced antibody responses against the CMV glycoprotein B (gB) antigen with clear evidence of dose-dependent boosting after the second vaccination. Further, immunization with the highest dose of the vaccine induced seroconversion in 100% of subjects after just two vaccinations.
In other words, patients are forming an immunity to the CMV virus on the back of their receiving of this vaccine and almost as importantly, they are doing so relatively quickly.
The next major event to watch on this trial is the release of final three-dose data, which the company expects will happen during the first half of 2018.