VBI Vaccines Inc. (NASDAQ: VBIV) (TSX: VBV) CEO Interview

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VBI Vaccines Inc.
President and CEO: Jeff Baxter


About: VBI Vaccines Inc. (Nasdaq: VBIV) is a commercial-stage biopharmaceutical company developing a next generation of vaccines to address unmet needs in infectious disease and immuno-oncology. VBI’s first marketed product is Sci-B-Vac™, a hepatitis B (“HBV”) vaccine that mimics all three viral surface antigens of the hepatitis B virus; Sci-B-Vacis approved for use in Israel and 14 other countries. VBI’s eVLP Platformtechnology allows for the development of enveloped (“e”) virus-like particle (“VLP”) vaccines that closely mimic the target virus to elicit a potent immune response. VBI is advancing a pipeline of eVLP vaccines, with lead programs in cytomegalovirus (“CMV”) and glioblastoma multiforme (“GBM”). VBI is also advancing itsLPV™ Thermostability Platform, a proprietary formulation and process that allows vaccines and biologics to preserve stability, potency, and safety. 


WSA:  Good day from Wall Street.  This is Juan Costello, Senior Analyst at the Wall Street Analyzer.  Joining us today is Jeff Baxter, the CEO for VBI Vaccines Incorporated.  The Company trades on NASDAQ, ticker symbol is VBIV and on the Toronto Stock Exchange as VBV.  Thanks for joining us today there, Jeff.

Jeff Baxter:  Great.  Thanks very much, Juan, and thanks very much to the Wall Street Analyzer for the opportunity.

WSA:  Good to have you on.  So starting off can you give us a history and overview there?

Jeff Baxter:  Sure.  So VBI Vaccines, as you said, is a publicly traded company on NASDAQ.  We’ve actually become public through a number of mergers and transactions, the most recent of which led us to acquiring a commercial-stage prophylactic Hepatitis C vaccine, which is approved in a number of markets outside North America and Europe and that was our recent announcement, which I’m sure we’ll talk about later.  Prior to achieving the acquisition of that asset, we are a company that focuses on both prophylactic and therapeutic vaccines in the infectious disease and the immuno-oncology space.  And we do that through the use of our proprietary vaccine platform which is a third generation enveloped virus-like particle platform.

WSA:  Great.  So please bring us up to speed on some of the recent news including the meeting with the FDA regarding your IND.

Jeff Baxter:  Yes, so we’re really excited to have the opportunity to bring Sci-B-Vac, a third generation prophylactic Hepatitis B vaccine, to the North American markets and the European markets.  This product has been approved for a number of years in Israel where the product was actually invented and spun out at the Carl Weizmann Institute, a world-leading center of immunology research and development.  So the product was invented in Israel and has been used very successfully in over 300,000 individuals in Israel hospitals, newborn children.  In that section in those 300,000, the vaccine has proved to be very safe and, most importantly, highly effective.  It’s also approved in a number of minor export markets — really we only sell the product currently in Israel and Hong Kong.

But therein lies with the opportunity because this is a highly effective vaccine which has achieved a high 90% zero conversion, so in other words protection rates post-second vaccination.  So a significant advantage of the current standard of care in group c in terms of speed to protection — speed of immunity — and it’s particularly effective in older adults.    And also it’s particularly effective in those groups who may be at risk such as chronic kidney disease, end-stage renal failure, overweight, diabetics, et cetera.  So we’re really excited about the opportunity to bring this vaccine to the US, Canada, and the European Union.  And as such we’ve been working since the transaction completed, which led us to acquiring this asset last summer.

We’ve completed a macro analysis of all of the clinical data thus far and have submitted that to the European Medicines Agency and the FDA.  We’ve been given the green light to be Phase III ready now in all three of those regions, so Europe, Canada and the FDA.  And the announcement early this week was a very important announcement for us because the FDA announced that we do not need to complete any more clinical trials in Phase II and essentially it is Phase III ready.  So we’re ready to enter into a global program, which would be pivotal registration trials, to hopefully and successfully bring this product to market approval in the US, Canada and the European Union.

WSA:  Great, so can you talk about some of the current trends right now in the HB sector and how the product positions you to capitalize?

Jeff Baxter:  Sure, so I think the opportunity here is that in settings where prophylactic HPV vaccines are used where compliance is strong for high-yield three vaccines and the current standard of care in the pediatric and in the adolescence setting, which is the current standard of care in group C from GlaxoSmithKline is perfectly adequate.  But that product in group C is less effective in older populations and less effective in those at-risk populations I mentioned earlier. Guidelines have recently been developed in the United States and are increasingly being adopted in Europe, recommending that all diabetics and pre-diabetics of these populations are vaccinated against HPV because these are the populations that are at most risk of metabolic and liver function challenge.

If that happens then clearly — if they’re exposed to Hepatitis B — there’s significant risk that they lead to end-stage renal failure, dialysis, et cetera.  So clearly prevention has always been the the cure and the health economics are overwhelmingly in favor of a more effective vaccine in those populations.  And that’s where Sci-B-Vac fits in, because this is a vaccine that, as I said, achieved in the high 90% protection rates post-second vaccination.  And this vaccination schedule is zero, one, and six months. Well what that means is that for people requiring rapid protection in all those immuno-compromised or immuno-suppressed groups, then our vaccine, by virtue of inclusion of additional antigens for the ones in GSK’s vaccine, makes it a more highly efficacious and immunogenic vaccine.

And as to say this rides on the back of the recommendations and guidelines that have been implemented for these at-risk patient groups in the US and in Europe.  Plus also there’s an increase in the need to provide a much more effective vaccine for those in an adult population who may not get the three vaccines or may require a protection much quicker.  So therefore, healthcare workers for example, some of whom cannot be exposed to the members of public until they achieve immunity from Hepatitis C, those populations have the opportunity to be protected much quicker by several months with our product Sci-B-Vac.

WSA:  And what are some of the other factors that you feel make the company and Sci-B-Vac unique from some of the other players in the sector?

Jeff Baxter:  I think Sci-B-Vac, from a scientific perspective, is really exciting because it’s the only approved vaccine which includes all three surface antigens of the Hepatitis B vaccine. And therefore it is much more highly immunogenic because it is more easily recognized by the human immune system.  But in particular inclusion of the pre-S1 antigen is particularly critical because as that scientific data recently has proved, it provides a more effective blocking and entry immunity for the Hepatitis B vaccine.  In addition, our vaccine only uses half the dose of other vaccines 10 micrograms and 20 micrograms and of course it’s always better to use a much lower active dose.  And last but not least, our vaccine includes alum as an antigen, which is recognized as being extremely safe, used in over a dozen approved vaccines, many of which are pediatric vaccines.

So I would say Sci-B-Vac differentiates both in terms of safety and tolerability against a known antigen and a lower active ingredient dose and as I say this improved immunogenicity through the scientific design and construct to the vaccine.  Another really exciting asset we have in this company is a prophylactic Congenital CMV vaccine in an overpowered or significantly-powered Phase I study.  Congenital CMV is the biggest cause of birth defects in seven major markets.  The annual health economic cost of a billion births in US is greater than $2 billion a year.  And it’s been recognized as one of the top three infectious disease targets by the ACIP and other public health bodies in the major markets.  We’re really excited about this vaccine.  It’s in a Phase I study now, 125 subjects.  Of course the primary endpoint is safety and tolerability, which we have reached and the report is the vaccine is safe and well-tolerated.

But we have as secondary end-points some initial indicators of immunological human proof of concept, due to the design of the candidates.  And we’re expecting an interim readout, which is a first look at the data in mid-year 2017, so a few weeks out from now.  And also the trial will complete and fully read out by the end of the year.

I think there is a lot of really fundamental biotech investors looking at this because this area has been an area that’s difficult to elicit a strong immunological response and pre-clinical data certainly has shown much more potent responses to our vaccines than previously published attempts.  So we’re really excited about this, it’s really a significant unmet medical need and we’re excited to have a strong looking candidate in this particular therapeutic area.  And last but not least our pivot into using our virus-like particle platform to generate an immuno-oncology candidate, we have a really interesting candidate for glioblastoma, the most common form of brain cancer and in fact the most fatal form of any cancer.

And we know that GBM has been a really difficult target to achieve a therapeutic intervention against.  Again the pre-clinical data for our candidate is really strong.  We had a very strong pre-IND meeting with the FDA last year and again our public guidance is that we expect to submit an IND mid-year this year and would expect to begin a role in an active Phase I / Phase IIa clinical development program in the second half of this year.  And due to the really unfortunate nature of glioblastoma, we’re going into recurrent GBM sufferers.  We expect to see some human proof of concept in 10 to 12 months after that for that trial.  But critically we setup panels of biomarkers within our clinical trial design, which particularly looks at those biomarkers.

The expression of certain chemokines such as CCL3 where the strong expression of these or the up-regulation of these are really important into treating glioblastoma.  So there are our three lead candidates we have many other earlier candidates but I think investors should be looking for our public guidance on these three leading candidates over the coming three to four months.

WSA:  Certainly and are there any other goals and milestones that you didn’t cover for the upcoming six to twelve months?

Jeff Baxter:  No, I think really there are a whole series in a number of catalysts and milestones around those three candidates.  And assuming we get positive feedback from the FDA then we would expect to submit an IND for the Hepatitis B vaccine for this global Phase III registration program in the second half of this year.

WSA:  And what are some of the key drivers that you wish perhaps investors better understood about you guys?

Jeff Baxter:  We came to the market via a number of reverse mergers.  We didn’t do an IPO and VBI very much flies underneath the radar. We have very strong institutional investors, Perceptive Life Science Advisors is our largest investors. And again holds some 17 or 18% of our common/outstanding shares.  Our second largest investor is Opko Health, which is a multi-billion dollar healthcare-based company.  And then behind that we have some very further strong institutional investors.  So some 50 or 60% of our stock is held by four investors and they are fundamental biotech investors.

So we’ve been in a quite strong position and we’ve never done a public offering but because of that we’re underneath the radar somewhat.  But I think for biotech investors they should draw a lot of confidence in the strength of those fundamental investors all of whom are represented on our board as being very, very smart money, which has been a great successful in the past.

I also think that Hepatitis B as the lead asset, some people think that Hepatitis B is done.  You know, universal vaccination has been in place in the US for a number of years and in a number of European markets, but it’s still a huge market.  Some 75% of over-20-year-olds in the US remain unprotected from Hepatitis B.  As I say, universal vaccination has only been in place in the seven major markets between the last 15 to 20 years. So it’s a huge opportunity, which is actually perfect for our product.  Our product is more effective in older and at-risk populations.

The second thing is that public awareness of Congenital CMV is very low, and severely impacts about one in one thousand live births.  Now that sounds like a low-instance rate, but when it happens the consequences to the newborn infants and the family are significant.  CMV infects immuno-compromised people, and the best example of that is a developing fetus, then it can be fatal and it would certainly lead to significant mental developmental issues.  And these poor children are often born with severe mental retardation and visual and hearing defects.

So in terms of investor opportunity for significant commercial unmet medical needs, with Hepatitis B and Congenital CMV, it’s not well known but it does represent a billion-dollar-a-year plus recurring opportunity in the US.  And in the US if you look at the public forecast for an improved Hepatitis B vaccine in these groups, the market forecast will publicize to anywhere between $400 million to $600 million.  So not only significant commercial opportunity but also a very important unmet medical need as far as people are concerned.

WSA:  Certainly, so once again joining us today is Jeff Baxter, CEO for VBI Vaccines, which trades on NASDAQ, ticker symbol VBIV, as well on the Toronto Stock Exchange as VBV.  It’s currently trading at $4.34 a share and market cap is north of $170 million US.  Before we conclude here, Jeff, to recap some of your key points, why do you believe investors should consider the company as a good investment opportunity today?

Jeff Baxter:  We’ve really made significant progress over the last two years with the advancement of our pipeline.  We’ve been largely beneath the radar, as I say, because of the lack of an IPO or public offering to get us to this point.  And therefore I think as the pipeline assets have progressed over the last couple of years, I think over the next six months as you’ll see from the publicly available information on our website, there are a number of very significant catalysts over the next 60 to 90 days.

WSA:  Well, we certainly look forward to continuing to track the company’s growth and report on your upcoming progress.  And we’d like to thank you for taking the time to join us today Jeff and update our investor audience on VBI.  It was great having you on.

Jeff Baxter:  Great, thanks very much Juan.  Thank you.


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