VBI Vaccines (NASDAQ: VBIV) CEO Interview Update


VBI Vaccines
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 with The Wall Street Analyzer. Joining us today is Jeff Baxter, CEO and President of VBI Vaccines Incorporated.  The company trades on NASDAQ, ticker symbol is VBIV.  Thanks for joining us today there, Jeff.

Jeff Baxter: Hi, Juan. Thanks very much indeed, and thank you for giving me the opportunity to give you and your followers an update.

So, I think the last time we spoke to you it was early October. A lot has happened for the company since early October. And before we get into the fantastic progress we’ve been making with our pipeline projects, just to step back and corporately give you an update. At the end of October, we completed a very successful financing.  We raised as a CMPO, which then was flipped public, and we raised $72 million. And that was absolutely pivotal and critical for the company given the success that we’d had in the prior months in 2017 in gaining regulatory approval to start a pivotal registration program for our prophylactic Heb B vaccine, Sci-B-Vac.  So, in that raise of $72 million, we are absolutely delighted and very proud to say that our insiders participated significantly, including our largest shareholder, Prospective Life Science Advisors, who own now about 17% of the company, as did our other significant insiders.

We also had the opportunity to bring in some very high quality, fundamental biotech company investors, such that today probably about 60%-65% of the company is now owned by long, significant, fundamental biotech-only company investors – amongst the very best names in North America and Israel, actually, so we are very excited about that raise.  That raise gave us enough runway to finance this pivotal registration trial for Sci-B-Vac, and gets us into mid-2019 when the top line results are expected for Sci-B-Vac. So, if you go through our programs, our lead asset as I mentioned, Sci-B-Vac, prophylactic Hep B vaccine with an extremely impressive efficacy and safety record. This product has now been {administered} to over half a million people in Israel where the product was originally invented and is still manufactured.

So, given that it’s been {administered} to over half a million people and it’s been 100% safe and 100% effective as per the Israeli Ministry of Health public records, obviously we’re very excited about the probability of success for a positive outcome from this Phase 3 program, which is now underway in the U.S., Canada, and Northern Europe.

So, we publicly announced last week that we have completed enrollment of the PROTECT study, 001, with 1,600 subjects, 800 subjects in each arm, 800 Sci-B-Vac versus the current standard of care, Engerix-B from GSK, and delighted to say that that is now fully enrolled.  So last patient last-stage occurred a couple of weeks ago.  That study is now on track to give us top line results by mid-2019.

Then we’re also enrolling in a second study, called CONSTANT, which is a lot-to-lot consistency study of three consecutive batches of Sci-B-Vac, 800 in each arm versus one control arm against Engerix-B from GSK of 800, so that’s 3,200 subjects, which is currently enrolling.  So once that study is fully enrolled in both clinical studies we’ll be in a position to close out the safety database, lock the database in terms of efficacy versus Engerix-B, and submit the BLA, the Biologics License Application, at the end of 2019.

So, we’re really excited about this vaccine.  It really has – it’s just proven to be a better and better prospect for both – importantly for non-responder patients who need a new generation vaccine, better prophylactic Hep B vaccine, and particularly those who require protection quicker, in particular those in the older age groups of 44 and over, so we are excited about that.

Our second most advanced clinical program is for congenital CMV. Now this study has been underway for about 18 months. And the last patient last dose was in the fall of last year, such that in mid this year, i.e., 2018, we expect to announce the final study results. We really do not know how well the vaccine has performed following the interim readout, which we publicly announced mid-last year, in the summer, July.  And the final data will give us post third vaccination, and importantly give us lots of further information across the two main cell types that’s responsible for the transmission of CMV across the placenta from the mother to the developing fetus. And those two cell types are fibroblast and epithelial cell. Epithelial cells are the ones – are the cell type where it has been more difficult to provide protection.

So we feel enormously successful in initial immunological human proof of concept data that we announced last summer, we’re expecting to see a boost in the seroprotection and neutralizing antibodies and antibody binding types of this post-third vaccination, such that we can demonstrate that it’s behaving in a way in which you would expect a prime-boost three-dose regimen infectious disease vaccine to behave. So that’s exciting, we’re blinded, and obviously it’s been a long trial period and a long data analysis period, and assay readout period.  So we’re excited, as are a lot of followers of our company over the last two to three years.

The final program is much more time-efficient, and in some respects much more capital efficient.  But perhaps more significantly for these unfortunate patients, this is in the area of glioblastoma which is the most deadly form of cancer. So, we began enrollment in January of this year in recurrent GBM patients. And recurrent GBM, really there’s no current standard of care.  And so it is an open label study.  And really for these very poor unfortunate people, with average survival times of five to 10 months, unfortunately we will know whether or not this vaccine is working or not. Clearly, if it’s working it’s fantastic news for the company and fantastic news for these people where there is really no other option at this point in time.

So, it’s a Phase 1/Phase 2a rolling adaptive study design, which means that we can titrate the dose as necessary – escalate or titrate the dose as necessary.  The first cohort of six subjects were enrolled in the first few months. We’re delighted to be in partnership with Columbia in New York with this project.  And Columbia has done a great job for us enrolling six subjects as the DSMV review from the low-dose initial cohort six subjects which was publicly announced last week to be positive.  And as such, that means that we can go on and recruit the next cohort of six subjects that will get a higher dose than the first six people, so really, really excited about this GBM trial.

I think in summary if I was just to summarize our major achievements, we raised $72 million which is really important to finance to the endpoint these three clinical trials.  And I think interestingly, if you look at VBI we have three clinical programs, I like to think about the investment thesis as being prophylactic HBV, Sci-B-Vac is a very high probability of success we believe, and a very significant unmet medical need.  In the sort of middle of that investment prospect you have CMV where we’ve seen a very low dose probably a 10th of the final dose that we use, initial immunological human proof of concept, and importantly the product – the congenital CMV vaccine which was the first product or candidate from this, our new eVLP Platform proved to be safe and well tolerated. And which we should never take for granted particularly given that this looks like an extremely potent and flexible vaccine development platform.

And so, we have to choose this initial immunological human proof of concept at two micrograms, which is probably either a fifth or a tenth of the likely product candidate dose, which we would look to explore in the Phase 2a, should the results from the final readout mid this year be positive.  And last but not least, which is really a swing for the fences and it’s very difficult and tragic area for the people who suffer from GBM. A swing for the fences, glioblastoma vaccine, which I have to admit is a much, much higher risk factor than the previous two candidates.  But should it prove to be successful, we will know in the first quarter of next year what impact this vaccine has in terms of overall survival rate and progression-free survival.  In the back-half of this year we’ll be getting regular biomarker data, i.e., monthly with the testing these people in the trial for positive correlates such as CCL3, where there seems to be a high correlate of protection, or at least improved overall survival with GBM versus, of course, the negative correlates as well.

So, I think top line data, HBV mid-year next year, BLA at the end of next year, 2019. CMV really important readout mid-year this year, and GBM, through the back-half of this year, regular, biomarker data readouts and overall survival and progression-free survival data Q1 next year.  So I think, Juan, that’s probably the top line.

WSA: So, Jeff, what would you say are the key value drivers there that make VBI unique from some of the other players in the sector?

Jeff Baxter: Yeah, so I think it’s a good question.  I think the most important thing is that if you look at the, pivotal registration trials, Phase 3 registration trial in infectious disease at the moment I think there’s really only two that I’m aware of in terms of significant commercial opportunities.  One is Novavax’s RSV for maternal protection of the newborn baby from RSV, and then the next one is our prophylactic Hepatitis B Sci-B-Vac program.  So I think, first and foremost, there’s not many candidates as far advanced. But unlike the Novavax vaccine, our vaccine has been in over half-a-million people.  And as I mentioned earlier, 100% safe, 100% effective, which makes it a very high probability of success. I think the biggest risk factor to the essential approval of this product was the execution of the trial, and of course that’s down to us. I think we performed really well.  I think we laid out what we were going to do, and we’ve done what we said.  And we met our enrollment target for 001.

So, I really would put a very high probability of success on Sci-B-Vac.  And I think that makes it really unusual. I mean, I always summarize Sci-B-Vac as a diamond in a bucket of coal, i.e., it’s every biotech CEOs dream to find a scientifically and clinically differentiated product which is licensed in a highly regulated market and has the opportunity to be approved in North America and Northern Europe.  And that’s exactly what we have with Sci-B-Vac, i.e., that it’s clinically and scientifically differentiated. It’s safe, well tolerated, and extremely effective.  In under-44-year-olds this vaccine provides a 98% protection rate post second vaccination. It’s extremely safe and well tolerated.  And we have data on it in over half-a-million people in real life use from Israel.

And it’s just not that often that you find a product such as that, which has data such as that in a highly regulated market, such as Israel, but has not yet even begun the regulatory approval process in North America and Northern Europe.  And I think that – I can’t think of any other biotech company that has that type of asset, let alone in the infectious disease vaccine space.

WSA: Certainly.  And what are the key goals and milestones that you’re looking at over the next 6 to 12 months?

Jeff Baxter:  So as I mentioned earlier, I think the most important thing in, and obviously in the biotech world, as human use of any product in development is the most important data.  So, we have clinical data, as I mentioned earlier, in terms of chronological order, the first phase clinical data catalyst will be mid-year this year when the CMV Phase 1 trial reads out, and we have an opportunity to see what the effect of the third vaccine is on the positive interim data that we announced mid-year last year.  After that, through the second-half of this year and first-half of next year it would be GBM data around biomarker data.  And then, as I mentioned, survival data in Q1 next year.  And then last but not least, really the big massive data readout which would be mid-year next year for this Hep B vaccine.

WSA: Great. So once again, joining us today is Jeff Baxter, CEO and President for VBI Vaccines.  The company trades on NASDAQ, ticker symbol, VBIV.  Currently trading at $3.26 a share, market cap is about $210 million.  And 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: Yes, I think we really are on the brink of something great here. I’m really, really excited. I mean, every biotech company slogs through and works really hard in terms of getting their pipeline candidates into the clinic and into humans. And every biotech’s scientific and management team’s dream is to see products that they’ve created make a real difference in terms of human life and unmet medical need. And I think, as I mentioned, we are on the brink of 18 months of really important human clinical data readouts across three different programs that represent a very different spectrum of risk and return, i.e., we have the Hep B vaccine, which is extremely low risk and a very strong return. We have the CMV platform, which is in the middle, probably 50-50.

And then at the other end of the spectrum we have the GBM vaccine which is extremely high risk, but extremely important for people with this terrible disease, and could really be a “knock out of the park” in terms of financial return for investors. So yeah, I think 18 months clinical data from low-risk to strong returns to high-risk but extremely high returns.

WSA: Well, we certainly look forward to continue 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 investors on VBIV.  It was great having you on.

Jeff Baxter: Juan, thanks very much indeed. Enjoyed the discussion as always, and look forward to updating your followers and members again in the future.

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