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VBIV: Notable Investors and Multiple Upcoming Catalysts Make VBIV a Stock to Watch in 2017



VBI Vaccines Inc. (NASDAQ:VBIV) is a commercial stage biopharmaceutical company developing treatments for infectious disease and immuno-oncology. The company produces a third-generation hepatitis B vaccine, Sci-B-Vac™, which is currently marketed in 15 countries, including Israel where it has 50% market share. The pipeline consists of a Phase 1 vaccine against cytomegalovirus (CMV), and preclinical vaccines against the Zika virus, respiratory syncytial virus (RSV), along with immuno-oncology vaccines targeting glioblastoma multiforme (GBM) and medulloblastoma. For a detailed overview of the company’s pipeline, please see this article, while below we present an update discussing the company’s advancements over the past six months, including obtaining financing from high profile investors that in our opinion extended the company’s cash runway into 2018 and releasing interim Phase 4 data on Sci-B-Vac™ showing robust seroconversion for patients after only two injections.

Notable Investors in VBI

In December 2016, VBI announced it had raised $23.6 million in an equity and debt financing with Perceptive Advisors, one of the leading biotech hedge funds in the world. The equity portion of the financing consisted of selling 3.475 million shares of common stock at a price of $3.05 per share for gross proceeds of approximately $10.6 million. In addition, Perceptive increased the credit facility agreement with VBI with an additional $13 million in secured debt. In connection with the debt funding, Perceptive received warrants to purchase approximately 1.3 million shares of common stock at an exercise price of $3.36 per share.

The transaction increased Perceptive’s ownership of the company to 15.8% of issued and outstanding shares on an undiluted basis and represented approximately 20% of VBI’s then current market cap. Since its inception in 1999, Perceptive has posted annualized gains of 19.3% (HSBC), with the fund’s current top holdings including Sarepta Therapeutics (SRPT), Neurocrine Biosciences (NBIX), and Amicus Therapeutics (FOLD).

In addition to Perceptive Advisors raising their stake in VBI to over 15%, OPKO Health, Inc. (OPK), which is led by billionaire investor Dr. Phillip Frost, owns 25% of the company. Investments such as these by top biotech money managers shows confidence in VBI’s management team and should be viewed quite favorably by investors.


Sci-B-Vac™ is VBI’s third-generation hepatitis B virus (HBV) vaccine that is currently marketed in 15 countries around the world. In contrast to currently used second-generation vaccines that only target one antigen of HBV, Sci-B-Vac™ is composed of three HBV surface antigens, which results in a more robust immune response from a wider range of patients, particularly those that are immunocompromised and do not respond as well to the currently available HBV vaccine.

In November 2016, VBI announced results from a Phase 4 post-marketing study of Sci-B-Vac™, which is an open label, single arm, single center study currently ongoing in Israel. The study is being conducted for quality control purposes to support the existing licensure of Sci-B-Vac™ in Israel. A total of 88 healthy, HBV-seronegative individuals between the ages of 20 and 40 were vaccinated three times with 10 μg/mL of Sci-B-Vac™ at zero, one, and six months. An interim analysis found that the vaccine was well tolerated and incited rapid seroprotection against HBV with 91.9% of participants seroprotected at Month 2 and 98.9% of participants seroprotected at Month 3, which was prior to the third dose of vaccine. Since compliance rates for vaccines decrease with each additional booster immunization, the fact that almost all of the patients were seroprotected after just two doses is a clear differentiator for Sci-B-Vac™ compared to current second-generation hepatitis B vaccines that require three doses. These interim results are highly encouraging and we anticipate final results from the study in the second half of 2017.

In regards to attaining additional approvals for Sci-B-Vac™, the company is currently awaiting feedback from regulatory authorities in Europe and the U.S. in regards to the Phase 3 development plan for Sci-B-Vac™ in those jurisdictions. We anticipate two studies will be necessary in each jurisdiction, one in healthy volunteers and another in immunocompromised patients, however we await additional details regarding the size of the trials. According to PharmaPoint, the U.S. HBV vaccine market is currently worth $280 million, however Sci-B-Vac™ could expand this market due to its effectiveness in at-risk populations including those with diabetes and end stage renal disease.

CMV Update

VBI is developing a prophylactic CMV vaccine targeting glycoprotein B (gB) utilizing the company’s enveloped virus-like particle (eVLP) technology. The eVLP platform allows for the creation of products that closely mimic the structure of viruses but without the necessity of using a live or attenuated virus. This leads to a more robust immune response, with preclinical results showing that the CMV product candidate results in a higher neutralizing anti-gB titer than using a recombinant gB protein.

In September 2016, VBI announced that it completed enrollment and initial dosing of all participants in the Phase 1 clinical trial of the company’s preventative CMV vaccine (NCT02826798). The study enrolled 128 healthy, CMV-negative adults and will examine the safety and tolerability of the CMV vaccine candidate. In addition, secondary endpoints include examining the immune response generated by the vaccine and comparing those results to naturally acquired CMV resistance, thus potentially providing an early proof-of-concept and dramatically increasing the program’s worth. We anticipate the results from an interim analysis to be released in the first half of 2017, with final results from the trial available in the first half of 2018.

CMV is not a serious risk for healthy individuals, however for pregnant woman, those with weakened immune systems, and organ transplant recipients CMV infection is cause for concern. In immunocompromised individuals, CMV infection can cause fever, pneumonia, diarrhea, and hepatitis. While the risk of passing the virus on to their offspring is low in pregnant woman who contract CMV, if it is a primary infection the risk is much higher, which increases the risk for long-term complications in the unborn child. There is currently no approved CMV vaccine on the market and few others in development, which is a significant public health issue given the fact that children born in the U.S. with congenital CMV resulting in long-term complications outnumber infants born with fetal alcohol syndrome or Down’s syndrome.

We view the most likely target groups for the CMV vaccine being young CMV seronegative females (to prevent the spread of the virus in utero), infants and toddlers (to prevent the spread of the virus to their mothers), and immunocompromised patients (bone marrow and solid organ transplant patients are at an increased risk of CMV disease). With pricing similar to Gardasil® (approximately $140 per dose), the CMV vaccine candidate could generate peak revenues of hundreds of millions of dollars.

GBM Update

In October 2016, VBI announced the completion of a Pre-IND meeting with the U.S. Food and Drug Administration (FDA) for the company’s GBM immunotherapy candidate. This meeting was conducted so that the company could gain insight from the FDA related to the preclinical data and planned clinical trial design along with the requirements needed in order to file an IND. The company is planning to submit an IND in the first half of 2017 such that a Phase 1/2a clinical trial in patients with GBM could be initiated shortly thereafter.

VBI’s GBM immunotherapy candidate is based on the CMV vaccine, which utilizes the company’s eVLP platform and targets gB, with the addition of the CMV pp65 protein. While the gB portion of the product can elicit strongly neutralizing anti-CMV antibodies, the pp65 portion results in a robust T cell response, which consists of both CD4+ and CD8+ T cells.

Standard of care for GBM currently consists of surgery, radiation therapy, and chemotherapy, however this regimen only results in median survival of approximately 16 months following diagnosis, thus there is a pressing need for more effective treatment options. There are a number of reports in the literature indicating that GBM cells express CMV antigens, and a 2015 study using dendritic cells pulsed with CMV protein pp65 following preconditioning with tetanus toxoid resulted in three of six GBM patients being progression free at the time of survival analysis (>36 months). Results such as these provide excellent proof-of-concept results that warrant further investigation with a CMV-targeted GBM treatment.

Temodar® (temozolomide) is a chemotherapeutic agent originally approved in 1999 for the treatment of GBM that had peak sales of over $1 billion. Temozolomide is now off patent, thus sales of Temodar® have declined to $312 million in 2015 (EvaluatePharma), however it is clear that although there are only approximately 9,000 cases of GBM diagnosed in the U.S. each year, GBM treatments can attain blockbuster status.


Since our first article on the company, VBI has executed on a number of milestones, including attaining additional financing from high profile investors, meeting with regulators regarding the regulatory pathway for attaining approval of Sci-B-Vac™ in the U.S. and E.U., finishing enrollment of the Phase 1 clinical trial of the CMV vaccine candidate, and holding a pre-IND meeting with the FDA regarding the GBM immunotherapy candidate. Upcoming catalysts for the stock include an interim data readout from the Phase 1 CMV trial, details regarding the Phase 3 program for Sci-B-Vac™ in the U.S. and E.U., and the initiation of a Phase 1 clinical trial in GBM patients. With a solid core of institutional investors and plenty of cash for getting the company through key milestones, 2017 could prove to be a breakout year for VBI.

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