Over the last 12 months, I have kept an eye on biotechnology company VBI Vaccines Inc. (VBIV, Financial). I have discussed the company's cytomegalovirus, or CMV, program, with the coverage rooted in an ongoing study of a drug called VBI101. I highlighted VBI's glioblastoma multiforme (GBM) program as one of three different but very promising approaches to this deadly type of brain cancer.
In both pieces (but primarily the first of the two), I noted the programs under scrutiny represented secondary programs, with VBI's primary focus being on bringing a hepatitis B vaccine to the U.S., European and Canadian markets. The vaccine is called Sci-B-Vac and is already approved in 15 countries across the globe, one of which is Israel, where it is a standard-of-care preventative vaccine used in more than 50% of children.
For VBI, the real near-term value is rooted in the Sci-B-Vac program, but the path to a regulatory green light in any one of the above-mentioned target regions is often drawn out and progress can be slow. This translates to a general lack of catalysts.
Over the past several months, however, things have really started to heat up with this program. A number of press releases have detailed the advancement in their respective regions, each adding a piece to the puzzle toward commercialization for Sci-B-Vac in the three major developed markets it is targeting.
Just this week, VBI released what amounts to the final piece of this puzzle and – with that piece in place – has offered up some timeframes with which markets can form a bias on the company moving forward.
Here is what was just reported and what it means for VBI, its lead program and its shareholders.
Before getting to the release, it is necessary to serve up a bit of background on the Sci-B-Vac program. As noted, it is a hepatitis B vaccine and is an attempt to improve on the currently available standard-of-care (SOC) assets in the space. Primarily, the SOC landscape in hepatitis B is limited to a vaccine called Engerix-B, which is marketed by GlaxoSmithKline PLC (GSK, Financial). There are a couple of others available, specifically Merck & Co. Inc.'s (MRK, Financial) Recombivax HB and Elovac B, marketed by Human Biologicals Institute, which is a division of Indian Immunologicals Ltd., but Engerix-B is very much the market-leading asset.
Engerix-B is what is referred to as a second-generation vaccine. These are vaccines that combine a surface antigen with an adjuvant designed to elicit an immune response against a particular pathogen. In the instance of Engerix-B, the antigen is called the S-antigen and the adjuvant is aluminum. The vaccine enters the blood stream, where the antigen signals to the immune system that it is pathogenic; it tricks the immune system into thinking it is the HBV virus by expressing the same antigen as the latter.
Once tricked into interpreting the vaccine as pathogenic, the immune system creates antibodies that lay in wait for future infection of any virus expressing the same antigen (again, in this instance, HBV).
The number of antibodies created, and their ability to recognize the virus through antigen recognition, correlates with the speed and efficacy with which the immune system can neutralize a viral infection. Similarly, the number of antibodies a vaccine induces the immune system to create, and the speed with which it induces them to create them, correlates with the immunogenicity of the vaccine in question. Higher immunogenicity means higher neutralization speed.
With Sci-B-Vac, VBI has taken the concept of immunogenicity and manufactured a vaccine that can potentially improve on the immunogenicity of Engerix-B. A so-called third-generation vaccine, Sci-B-Vac expresses the S-antigen that Engerix-B does, but it also expresses two other antigens – S1 and S2 – both of which are expressed by the underlying HBV vaccine.
This three-antigen combination allows for the creation of antibodies that recognize all three vaccine-specific antigens, which has the potential to speed up the creation of an immune response and – just as importantly – do so over a reduced dosing schedule than is necessary with current standard-of-care drugs.
Additionally, it has the potential to induce seroprotection (which just means a patient is considered vaccinated against a particular virus) in patients for which vaccines like Engerix-B or Recombivax do not work. Immunocompromised patients, elderly patients, renal disease sufferers and chronic HBV patients often find current SOC therapies insufficient. The third-generation nature of Sci-B-Vac could resolve this issue and, if it does, this subset of the population is a substantial market for VBI to offer outside of the preventative vaccination space that Engerix-B dominates as things stand.
So that is the background. What just happened that makes this one worthy of note right now?
The company has put together a wealth of safety and efficacy data supportive of the thesis and use-case outlined above, but in and of itself, this data is not sufficient to underpin an approval in the U.S., Europe and Canada. These three markets, as mentioned, are the real revenue drivers for VBI going forward, meaning the company's primary focus in this program over the last six to 12 months has been to put together a strategy with which it can collect the data required to underpin registration submission in these regions.
In the U.S., the Food and Drug Administration dictates what gets on shelves in the health care space and what does not. In Europe and Canada, the FDA's counterpart agencies are the European Medicines Agency and Health Canada.
VBI's clinical trial plan is not sufficient in any of these regions to allow it to go into the clinic with Sci-B-Vac, even with the drug already having picked up approval elsewhere and having already amassed a wealth of safety data in live administrations. The company has to put together its plan, called a protocol, and then submit this protocol (along with the data collected to date, generally) to the relevant authorities as part of a pre-trial application. In the US, this is called an Investigational New Drug (IND) application. In Europe and Canada, it is called a Clinical Trial Application (CTA). VBI needs to submit an IND to the FDA and two CTAs, one to the EMA and one to Health Canada, and have each one approved by its respective agency before it can start human clinical trials with Sci-B-Vac.
If the agencies green light the applications, VBI can conduct a phase III (pivotal) trial and use the data from this trial (in combination with the data it already has in hand) to support a registration application in the regions in question (a New Drug Application (NDA) in the U.S. and a Marketing Authorization Application (MAA) in both Canada and Europe).
VBI wants to conduct one global phase III program and then use the data to submit its NDA and two MAAs. This should streamline the process and help keep the cost of getting the asset to market down.
Over the last three months, VBI has published two press releases detailing discussions with Health Canada and the EMA. In both releases, the company announced positive feedback from the two regulatory agencies, with positive feedback defined here as the outcome being suggestive of a willingness to accept protocol submissions, and eventually registrational submissions, based on the global phase III program.
With Europe and Canada on board, VBI was tasked with getting the FDA to agree to the same, or at least indicate this path forward should be acceptable.
With the latest release, we have learned the company has done just that.
As part of this press release, VBI announced it has completed a pre-IND meeting with the FDA and that, on the basis of this meeting, the FDA will not require any additional studies to support the global phase III clinical program. In other words, the FDA has fallen in line with its European and Canadian counterparts and indicated a single global phase III will be sufficient to submit for approval.
The importance of this cannot be understated.
If the company was to conduct three separate phase III trials, one in Canada, one in the U.S. and one in Europe, the cost would be far higher than for just one. Its shareholders would have to foot the bill for this added cost and this necessity could have weighed heavily on share price appreciation in the near term, even against the backdrop of regulatory advance for Sci-B-Vac.
With the latest update, VBI has confirmed this downside pressure will not be in place.
So what's next?
These are all pre-submission indications, so the company still has to submit the IND and two CTAs before heading into the clinic. As detailed by management in the FDA-related press release, VBI is putting these applications together right now and intends to have all three submitted during the second half of this year.
These submissions, therefore, are the next major catalysts to look out for from VBI. Beyond the submissions, a green light to initiate the global phase III (through the respective approval of the submissions in question) and the subsequent initiation of the trial are major events, each having the potential to inject some upside momentum into VBI across the coming 12 months.
Disclosure: The author does not own any of the stocks discussed in this article and does not intend to open a position in any stocks discussed within the next 30 days.
