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Three Different Exposures To A Large Unmet Need In Global Healthcare

By Samuel RaeStock MarketsMar 29, 2017 02:01PM ET
www.investing.com/analysis/three-different-exposures-to-a-large-unmet-need-in-global-healthcare-200180591
Three Different Exposures To A Large Unmet Need In Global Healthcare
By Samuel Rae   |  Mar 29, 2017 02:01PM ET
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The respiratory syncytial virus (RSV) is one of the most common viruses in the world, both in the developed and developing world. It's so common that most children have been infected by the age of two. The good thing is, in most of these cases, it's not that serious. Common symptoms of infection include colds, coughing, some respiratory issues – things generally associated with the more commonly known rhinovirus.

There are some cases, however, in which it can be incredibly serious. The elderly and the very young are susceptible to severe side effects if infected, sometimes even death.

There's also a problem with prenatal infection. Pregnant women that are exposed to the virus can – in turn – infect their unborn babies, and this can create serous problems when the child is born. Globally, RSV is responsible for 6.7% of deaths in infants one month to one year old, more than any other single pathogen except malaria.

Despite its prevalence, and its potential severity, there's no vaccine on the market, anywhere.

This should change over the next five years, with a number of companies currently working on the development of vaccines designed to fill this unmet need. Of course, with such a common virus, there's a large market potential for the company that wins the race. With this in mind, here are three of the front runners.

Novavax Inc (NASDAQ:NVAX)

A list like this wouldn’t be complete without the inclusion of Novavax, Inc. (NVAX). Many reading will already be familiar with the trials and tribulations Novavax has already encountered on its path to try and commercialize its RSV vaccination – RSV F. For those not familiar with the situation, the company reported the failure of a phase III study of RSV F back in September 2016. The study failed both of its primary endpoints, and markets pretty much wrote the asset off immediately post-failure. Shortly after the news hit press, however, reports started to come in detailing some degree of immunogenicity, and suggesting that a combination of the trial design and a relatively weak season (this is very much a seasonal vaccine) may have been to blame for the failure, not the drug itself.

Since then, Novavax management has released data to reinforce this suggestion, and has initiated two programs to try and get the platform back on track. The first is a phase II study that's looking at elderly patients (it failed in this group with the phase III), but this time designed to try and identify a more potent, and by proxy effective, dose. The second is a study supported by way of an $89 million grant from the Bill & Melinda Gates Foundation, which is looking at the vaccine in pregnant women, in an attempt to protect infants through maternal immunization.

The program might be back on track, but there's risk here as well. The company is going to run out of cash mid 2018, and it's going to have to raise to fund the continued development of RSV F whatever the trial progress. Data from the elderly patient study won't hit press before the end of next year, and the prenatal study is going to read out until 2020.

While shareholders are waiting for these data readouts, there are other players working hard to get a jump on Novavax, and these aren’t small timers, which brings us to our second addition to the list…

Astrazeneca PLC (NYSE:AZN)

AstraZeneca announced earlier in March that it is teaming up with Sanofi (PA:SASY)'s vaccines arm Sanofi Pasteur on the development and commercialization of an asset called MEDI8897. This one's being aimed directly at the viral infection of newborns and infants, and is engineered in such a way that its half life translates to a single dose potentially providing immunity for an entire season. This is similar in concept to the flu vaccine that is currently available, but it's been an elusive quality in terms of reproducing it in an RSV vaccine to date.

As per the latest announcement, Sanofi Pasteur will make an upfront payment of €120 million euros to AstraZeneca, and the latter is also eligible for up to €495 million as and when it achieves certain development and sales-related milestones. Outside of these numbers, both parties will share all costs and profits equally.

The deal is structured so that AstraZeneca, through MedImmune, will develop the drug to approval, and then MedImmune will manufacture it while Sanofi markets it. In terms of progress on this one, there's a phase IIb happening right now in preterm infants (it's a passive immunity asset) and, once this completes, the asset will move into a phase III in healthy full term infants. Which brings us to the final company on the list…

VBI Vaccines Inc (NASDAQ:VBIV)

VBI's lead program is a hepatitis B vaccine called Sci-B-Vac, which is already approved in a number of regions globally and for which the company is pushing to get approval in the US and Europe within the next twelve months. The technology that VBI used to build Sci-B-Vac allows for the creation of a vaccine built using animal cells (hamster cells, in fact) as opposed to the traditional yeast cell used in most vaccines that are commercially available (and being developed) today. The use of hamster cells allows for a much higher degree of mimicry between the vaccine and the virus it's trying to work against, which in turn, leads to higher immunogenicity and – by proxy – increased, and faster, efficacy as a preventative vaccine.

VBI has taken this concept (which it's calling its eVLP technology) and applied it to the RSV space. The company has teamed up with National Research Council-Industrial Research Assistance Program (NRC-IRAP), which is a Canadian government-sponsored organization that supports the development and commercialization of innovative technologies, to carry this application through the clinic and towards commercialization.

The science that underpins this asset is rooted in what's called pre-fusion RSV-F protein expression. The way these vaccines work is through the neutralization of proteins expressed by the virus; the most prevalent of which for the RSV virus is a pre-fusion RSV-F protein. By developing an RSV vaccine that expresses pre-fusion conformations of the RSV-F protein, the theory is that it should be far more potent at lower doses, which could translate to a dosing regimen similar to that described above for the AstraZeneca asset, or better. Couple this with the eVLP structure of the vaccine, and there are clear immunogenicity and administration benefits over anything that's in development.

The risk on this one, of course, is that this is all theory right now. Well, it's supported by some characterization data, and we know the eVLP construction works based on the success of the Sci-B-Vac asset, but as far as it's applied to RSV, it's still pre-clinical.

Longer term, therefore, the technological benefits of this asset over the above discussed might give it the edge. If they can prove efficacy in their respective studies, however, Neovax and AstraZeneca are going to be first to market.

Three Different Exposures To A Large Unmet Need In Global Healthcare
 

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Three Different Exposures To A Large Unmet Need In Global Healthcare

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