VBI Vaccines, Inc.

VBIV Details

Material Definitive Agreement with Variation: VBI Vaccines Inc. (Nasdaq: VBIV) is a commercial-stage biopharmaceutical company, focused on developing the next generation of vaccines and immunotherapeutics to address unmet needs in infectious disease and immuno-oncology. As at 25 September 2020, the company had a market capitalisation of $712 million. The company recently entered into a Material Definitive Agreement with Variation Biotechnologies Inc., a Canadian federal corporation, to develop a novel, broadly reactive coronavirus vaccine against COVID-19 in or before the first quarter of 2022. Under the agreement, 75% cost of the whole project will be contributed by the Minister of Industry and the company will also receive around CAD$55.98 million.

June 2020 Quarter Results: For the June 2020 quarter, the company reported total operating expenses of $8.3 million, lower than $12.9 million in pcp, mainly due to a decline in research and development expenditure. As a result of this, the company’s net loss has reduced to $9.5 million in June 2020 quarter, as compared to the loss of $11.42 million in pcp. At the end of June quarter, the company’s current asset stood at $88.9 million, significantly higher if compared to the $46.9 million as at 31 December 2019.

June 2020 Quarter Highlights (Source: Company Reports)

Upcoming Scientific Conferences: The company recently announced various presentations where it is going to present data from multiple clinical programs. At the World Vaccine Congress Washington 2020 and ID Week 2020™, the company is going to highlight data for its various upcoming vaccines including Sci-B-Vac®, the company’s 3-antigen hepatitis B vaccine; VBI-2900, the company’s coronavirus vaccine program; and VBI-1901, the company’s cancer vaccine immunotherapeutic. Recently, at the European Society for Medical Oncology (ESMO) Virtual Congress 2020, the company presented data biomarker data from its ongoing Phase 1/2a study of its cancer vaccine immunotherapeutic candidate -VBI-1901.

Key Risks and Challenges: It is worth noting that the development of COVID-19 vaccine is still in the early stages and there is a possibility that the company might not be able to produce a vaccine that successfully treats the virus in a timely manner, if at all. The company continues to face challenges from the emerging competition and rapidly advancing technology that may outpace its technology. In its reports, the company has admitted that recent coronavirus outbreak has caused interruptions to its business plan and it may have a significant adverse effect on its business.

Stock Recommendation: The stock has provided a return of 227.68% in the last six months but has corrected by 22.8% over the last one month. The stock is currently trading below the average of its 52-week price band. On the technical analysis front, the stock has a support level of ~$2.85 and a resistance level of ~$4.11. Considering the company’s recently signed Material Definitive Agreement with Variation Biotechnologies Inc for the development of COVID-19 vaccine, its pipeline of potential vaccines unmet needs in infectious disease and immuno-oncology, reduction in losses and cash position, we are of the view that the stock might witness further upside in the coming times. Hence, we give a “Speculative Buy” recommendation on the stock at the closing price of $3.08, up by 5.04% on 25 September 2020.

VBIV Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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