VBI Vaccines, Inc.

VBIV Details

VBI Vaccines, Inc. (NASDAQ: VBIV) is a biopharmaceutical company that uses its unique enveloped virus-like particles (eVLP) platform technology to create next-generation vaccines to address unmet needs in infectious disease prevention and immuno-oncology. VBIV aims to cure key infectious diseases, including Hepatitis B, COVID-19, Cytomegalovirus (CMV), and aggressive cancers like Glioblastoma (GBM). It earns money by marketing its 3-Antigen Prophylactic Hepatitis B vaccine, Sci-B-Vac, in Israel. It completed pivotal Phase III trials in the US, Europe, and Canada in January 2020. However, it is undergoing regulatory authorization for commercialization.

New CPT Code for 3-Antigen Prophylactic HBV: The American Medical Association (AMA) Current Procedural Terminology (CPT) Panel approved a unique CPT code for VBIV's 3-antigen (S, Pre-S1, Pre-S2) Hepatitis B (HBV) vaccination on July 1, 2021. If authorized, the 3-antigen HBV vaccination candidate will be published under the unique code, distinguishing it from existing single-antigen HBV vaccines. It is now undergoing regulatory clearance in the US and Europe.

Positive Phase-1 Data for eVLP Drug Against COVID-19: VBIV released successful Phase 1 data from its Phase 1/2 study of VBI-2902a, the first of its eVLP COVID-19 vaccine candidate, in healthy people aged 18-54 years on June 29, 2021. The next phase of the Phase 1/2 trial with VBI-2905a against the COVID-19 Beta (B.1.351) variant is anticipated to begin in Q3FY21.

H1FY21 Results: The company reported a 26.04% decline in revenue to USD 0.44 million in H1FY21 (ending June 30, 2021) compared to USD 0.60 million in H1FY20, due to a decrease in R&D services revenue for VBI-2601, hepatitis B immunotherapeutic candidate. Net loss for H1FY21 increased to USD 35.12 million vs. USD 17.87 million reported during H1FY20. The company exited the quarter with a cash balance of USD 135.03 million and total debt of USD 27.45 Million.

Key Risks: At present, VBIV's only commercial product is Sci-B-Vac, which it sells in Israel. If the rest of its product pipeline fails to reach the commercialization stage, which usually takes a long time, the company's revenues might take a significant hit in the long run. Further, for the production of its 3-antigen preventive HBV vaccine, VBIV relies on a single supplier for vials and raw materials. If this supplier fails to supply the raw materials timely, it could hurt VBIV's operating performance and cash flows.

Outlook: As of August 02, 2021, VBIV expects the next phase of the continuing adaptive Phase 1/2 research, which will test VBI-2905, VBIV's eVLP vaccine candidate aimed against the COVID-19 Beta variant, to begin in Q3FY21. For H1FY22, it anticipates starting the first clinical trial of its multivalent vaccine candidate, aimed at improving protection against known and new COVID-19 variants.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

VBIV Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: VBIV's share price has surged 21.81% in the past month and is currently leaning towards the mid-band of the 52-week range of USD 2.07 to USD 4.83. The stock is currently trading above its 50 and 200 DMA levels, and its RSI Index is at 71.01. We have valued the stock using the EV/Sales multiple-based relative valuation methodology and arrived at a target price of USD 3.35. Considering the rise in the stock price, we believe the current trading levels adequately reflect the decent business fundamentals. Hence, we recommend a "Sell" rating on the stock at the current price of USD 3.63, up 2.25% as of August 31, 2021, 11:26 AM ET.

* The reference data in this report has been partly sourced from REFINITIV.

*All forecasted figures and industry information have been taken from REFINITIV.  

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