VBI Vaccines Inc.

VBIV Details

Promising Developments from VBI-1901 Clinical Study:  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. The company currently has a market capitalisation of ~$904.14 million. On 22 June 2020, the company announced the data from its study of VBI-1901, the company’s cancer vaccine immunotherapeutic candidate. The data suggest that patients with a normal baseline CD4+/CD8+ T cell ratio may be more likely to experience delayed progression or tumor reduction, reflected as a tumor response. The baseline CD4+/CD8+ T cell ratio might be used in the next phase of clinical development to help identifying patients most likely to respond to VBI-1901.

Strengthening Financial Position: The company is currently focused on advancing its pipeline candidates through their next clinical and regulatory milestones, including the potential commercial launch of Sci-B-Vac® in the U.S., Europe, and Canada. In order to this, the company has strengthened its financial position and flexibility by completing a $57.5 million equity raising and by entering into debt financing facility for up to $50 million with K2 HealthVentures (K2HV), a healthcare-focused specialty finance company. Under the debt financing facility, the company has already received the first tranche of $20 million. The next tranche of $20 million will be received after achieving certain regulatory and developmental milestones, and a final tranche of up to $10 million will be available at the discretion of K2HV. With a strengthened balance sheet, the company is now well-placed to capitalize on the growth and value-driving opportunities ahead.

Developing Coronavirus Vaccine: On 31 March 2020, the company announced that it has joined hands with National Research Council of Canada (NRC) to develop a pan-coronavirus vaccine candidate, targeting COVID-19, SARS, and MERS. The company and NRC will work together to evaluate and identify promising vaccine candidates with the goal of having clinical study material available in Q4 2020. 

March Quarter Highlights: For the March 2020 quarter, the company reported revenue of $415k, as compared to $360k reported in pcp. For the quarter, the company reported a net loss of $8.35 million, lower than the loss of $14.6 million reported in pcp. The net cash outflow for operating activities stood at $7.648 million. At the end of the March quarter, the company had a cash balance of $35.8 million. 

March Quarter Financials (Source: Company Reports)

Key Risk and Challenges: The company’s results are dependent on timing and its ability to obtain and maintain regulatory approvals for its clinical trials, products and pipeline candidates. Further, the company also faces 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. The company is currently involved in the development of a pan-coronavirus vaccine candidate, targeting COVID-19, SARS, and MERS. The development 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.

Stock Recommendation: Over the last three months, the stock of VBIV generated a substantial return of 323.96%. In the last one month, the stock price has increased by 86.7% and is currently inclined towards its 52-week high price of $4.4. The company’s asset/equity ratio and debt/equity ratio currently stand at 1.38x and 0.17x, respectively. On a trailing twelve months basis (TTM), the stock is trading at a price to book value multiple of 12.6x, higher than the industry average of 5.3x. Considering aforesaid facts, company’s nascent stage and uncertainty surrounding the impacts of Covid-19, sharp movement in share price in the last one and three months valuation on TTM basis, we are of the view that most of the positives are factored at the current levels and investors should wait for more catalysts that can drive the stock further. Hence, we have a wait and watch stance on the stock at the current market price of $3.92, down by 3.69% on 10 July 2020.

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

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