8-K: VBI Vaccines Announces First Quarter 2024 Results and Strategic Updates

VBI Vaccines reports a 105% year-over-year increase in PreHevbrio global net revenue for the first quarter of 2024, alongside encouraging early data from its VBI-1901 glioblastoma study.

Summary

• VBI Vaccines reported a 105% increase in global net revenue for PreHevbrio, their hepatitis B vaccine, reaching $1.0 million in Q1 2024 compared to Q1 2023.
• U.S. sales of PreHevbrio in the first five months of 2024 exceeded 80% of the total volume sold in 2023, indicating strong growth.
• The company is expanding its market reach through Integrated Delivery Networks (IDNs), hospital systems, and national and regional pharmacies.
• PreHevbrio is now available for purchase under the CDC Adult Vaccine Contract, boosting public sector access.
• VBI has partnered with Valneva SE to launch PreHevbri in several European countries, including the UK, Sweden, Netherlands, Belgium, Denmark, and Norway.
• Initial data from the Phase 2b study of VBI-1901 in recurrent glioblastoma (GBM) showed a 40% disease control rate in the VBI-1901 arm, compared to 0% in the control arm.
• Additional tumor response data from the VBI-1901 study is expected mid-year 2024, with initial survival data anticipated by year-end 2024.
• VBI is advancing its novel mRNA-launched eVLP (MLE) technology platform, with ongoing evaluations by potential partners.
• A series of agreements with Brii Biosciences could provide VBI with up to $33 million, significantly reducing its debt to $17 million by mid-year 2024.
• VBI's cash position was $12.6 million as of March 31, 2024, which does not include approximately $2.8 million in gross proceeds from subsequent financing activities.
• Net loss for Q1 2024 was $17.9 million, or $0.73 per share, compared to a net loss of $27.8 million, or $3.22 per share, in Q1 2023.
• Net loss excluding foreign exchange loss was $13.6 million, or $0.55 per share, for Q1 2024, compared to $20.9 million, or $2.43 per share, for Q1 2023.

Sentiment

Score: 7

Explanation: The document presents a mix of positive and negative aspects. The strong revenue growth and encouraging clinical data are positive, but the ongoing net loss and cash burn are concerning. The strategic moves to reduce debt and expand market access are also positive, but the company's reliance on external funding and partnerships is a risk. Overall, the sentiment is cautiously optimistic.

Positives

• The 105% increase in PreHevbrio revenue demonstrates strong market demand and commercial success.
• The rapid growth of PreHevbrio sales in the U.S. market is a positive indicator of future revenue potential.
• The encouraging early tumor response data from the VBI-1901 study suggests potential for a successful cancer treatment.
• The strategic partnership with Brii Biosciences is expected to significantly reduce VBI's debt and strengthen its financial position.
• The decrease in net loss and net loss per share compared to the same period last year indicates improved financial performance.

Negatives

• The company still reported a net loss of $17.9 million for the quarter, indicating ongoing financial challenges.
• The cash position decreased from $23.7 million at the end of 2023 to $12.6 million by the end of Q1 2024.
• Cost of revenues, while decreased from the previous year, still exceeded net revenues for the quarter.
• The company is reliant on strategic partnerships and external funding to advance its pipeline and reduce debt.

Risks

• The company's ability to regain and maintain compliance with the listing standards of the Nasdaq Capital Market is a risk.
• The consummation of the transactions with Brii Biosciences is subject to certain conditions, which may not be met.
• The company's ability to comply with its obligations under its loan agreement with K2 HealthVentures is a risk.
• The impact of general economic, industry, or political conditions could affect the company's performance.
• The company's ability to successfully manufacture and commercialize PreHevbrio/PreHevbri is subject to risks.
• The company's ability to obtain future funding for developmental products and working capital is a risk.
• The company's ability to secure and enforce legal rights related to its products is a risk.

Future Outlook

VBI expects additional tumor response data from the VBI-1901 Phase 2b study mid-year 2024, with initial survival data by year-end 2024. The company also anticipates completing the full transaction with Brii Biosciences by mid-year 2024, which will significantly reduce its debt. Further data from the Phase 1 study of VBI-2901 is also expected in 2024.

Management Comments

• To date in 2024, our focus has centered around pipeline execution, expanding access and increased uptake of PreHevbrio in targeted market segments, and execution of strategic partnerships to drive opportunity for our portfolio assets, create shareholder value, and strengthen our balance sheet, said Jeff Baxter, VBIs President and CEO.
• We remain committed to creating opportunities for our vaccines, candidates, and technologies to meaningfully impact public health and the lives of patients, providers, and families.

Industry Context

The announcement reflects the ongoing efforts of biopharmaceutical companies to develop and commercialize innovative vaccines and immunotherapies. The focus on expanding market access for PreHevbrio and advancing the VBI-1901 cancer vaccine aligns with broader trends in the healthcare industry towards preventative and targeted treatments. The partnership with Valneva SE for European distribution is a common strategy for companies seeking to expand their global reach.

Comparison to Industry Standards

• The 105% year-over-year revenue growth for PreHevbrio is a strong performance compared to many other commercial-stage biotech companies, though the absolute revenue figure is still relatively low.
• The 40% disease control rate in the VBI-1901 arm of the GBM study is encouraging, especially when compared to the 0% rate in the control arm, but further data is needed to assess its competitiveness against other GBM treatments.
• The reduction in operating expenses and net loss is a positive trend, but the company's cash burn rate remains a concern, which is common for companies in the clinical stage.
• The strategic partnership with Brii Biosciences to reduce debt is a common strategy for biotech companies facing financial challenges, similar to how companies like Novavax have restructured their debt.
• The expansion of PreHevbrio into European markets through a partnership with Valneva is a typical approach for companies seeking to leverage existing distribution networks, similar to how companies like Moderna have partnered with other companies for global distribution.

Stakeholder Impact

• Shareholders may be encouraged by the revenue growth and clinical progress, but concerned about the ongoing net loss and cash burn.
• Employees may be affected by the organizational changes and the company's financial situation.
• Customers and patients may benefit from the increased availability of PreHevbrio and the potential development of new treatments.
• Suppliers and creditors may be affected by the company's financial situation and debt reduction efforts.

Next Steps

• VBI will continue to execute its commercial strategy for PreHevbrio, focusing on expanding access and increasing uptake.
• The company will continue to enroll patients in the Phase 2b study of VBI-1901 and expects to release additional data mid-year and year-end 2024.
• VBI will continue to evaluate potential partnerships for its MLE technology platform.
• The company expects to complete the full transaction with Brii Biosciences by mid-year 2024.
• VBI will continue to advance the Phase 1 study of VBI-2901 and expects to release additional data in 2024.

Key Dates

Keywords

VBI Vaccines, PreHevbrio, Hepatitis B Vaccine, VBI-1901, Glioblastoma, Cancer Vaccine, mRNA-launched eVLP, MLE Technology, Brii Biosciences, Financial Results, Debt Reduction, Immunotherapy