10-Q: VBI Vaccines Reports Q1 2024 Financial Results and Provides Business Update

VBI Vaccines reports its financial results for the first quarter of 2024, highlighting revenue growth and strategic partnership developments.

Summary

• VBI Vaccines Inc. reported a net loss of $17.9 million for the three months ended March 31, 2024, compared to a net loss of $27.75 million for the same period in 2023.
• Revenues, net, increased to $1.21 million from $0.485 million year-over-year, driven by higher product revenues.
• Research and development expenses decreased to $2.57 million from $3.15 million in the prior year.
• Sales, general, and administrative expenses decreased to $7.67 million from $13.28 million year-over-year.
• The company's cash position was $12.59 million as of March 31, 2024.
• VBI faces substantial doubt about its ability to continue as a going concern and needs to raise additional capital.
• The company entered into agreements with Brii Bio, potentially receiving up to $33 million to reduce loan obligations.
• VBI received an extension from Nasdaq to regain compliance with the minimum bid price requirement until October 28, 2024.
• A registered direct offering in April 2024 generated net proceeds of approximately $1.7 million.

Sentiment

Score: 4

Explanation: The document presents a mixed picture. While there are positive developments such as revenue growth and strategic partnerships, the company's financial instability and need for additional capital raise significant concerns. The overall sentiment is cautiously negative.

Positives

• Revenue increased by 150% compared to the same period last year.
• Operating expenses decreased due to organizational changes.
• The company secured an extension to regain compliance with Nasdaq listing requirements.
• The Brii Bio partnership could provide significant financial relief.
• The company completed a registered direct offering in April 2024, raising $1.7 million.

Negatives

• The company has an accumulated deficit of $600.345 million.
• There is substantial doubt about the company's ability to continue as a going concern.
• The company needs to raise additional capital in the near term.
• The company has a working capital deficit of $51.23 million as of March 31, 2024.
• The company was not in compliance with the minimum Net Revenue covenant for the measurement periods ended September 30, 2023 and December 31, 2023.

Risks

• The company's ability to obtain regulatory approvals for its clinical trials and products.
• The company's ability to achieve and sustain commercial success of PreHevbrio in the U.S. and PreHevbri in Europe.
• The company's ability to manufacture its 3-antigen hepatitis B vaccine and pipeline candidates at a commercially viable scale.
• The company's ability to complete the Brii Transactions on a timely basis.
• The impact of the COVID-19 endemic on the company's clinical studies, research programs, and manufacturing.
• The company's ability to regain and maintain compliance with the Nasdaq listing standards.
• The company's history of losses and ability to generate revenues and achieve profitability.
• Emerging competition and rapidly advancing technology in the industry.
• The company's ability to obtain adequate financing in the future on reasonable terms.

Future Outlook

VBI anticipates continuing to incur substantial operating expenses as it continues its research and development and clinical studies, and as it continues the commercialization of PreHevbrio in the U.S., and PreHevbri in Europe. The company will require additional funds to conduct clinical and non-clinical trials, achieve and maintain regulatory approvals, and, subject to such approvals, commercially launch and sell its products.

Industry Context

VBI competes in the vaccine and immunotherapeutic market, targeting infectious diseases and oncology. The company's focus on hepatitis B, COVID-19, CMV, and GBM aligns with significant public health needs and market opportunities. The competitive landscape includes established players like GSK, Merck, and Dynavax, as well as emerging companies developing novel vaccine technologies.

Comparison to Industry Standards

• VBI's PreHevbrio competes with Engerix-B (GSK), Recombivax HB (Merck), and Heplisav-B (Dynavax) in the hepatitis B vaccine market.
• The adult HBV vaccination rates remain persistently low at only about 30% of all adults aged 19 years and older.
• VBI-1901 targets CMV proteins present in tumor cells, similar to other cancer vaccine immunotherapeutic programs.
• The current standard of care for GBM is surgical resection, followed by radiation and chemotherapy.
• VBI's VBI-2901 induced broad and durable protective titers against variants of concern, with enhanced persistence of neutralizing responses.

Legal Proceedings

• SciVac is involved in two civil claims in Israel regarding Sci-B-Vac, with preliminary hearings ongoing.
• SciVac is also named as a defendant in another tort claim in Israel, with preliminary hearings not yet scheduled.

Stakeholder Impact

• Shareholders face the risk of dilution and potential delisting from Nasdaq.
• Employees may experience uncertainty due to organizational changes and potential facility transfer.
• Customers may be affected by changes in manufacturing and supply agreements.
• Suppliers may be impacted by the transfer of the Rehovot facility.

Next Steps

• Continue the commercialization of PreHevbrio in the U.S. and PreHevbri in Europe.
• Complete certain activities as part of the partnership with Brii Bio and preparation to transfer the Rehovot, Israel manufacturing facility to Brii Bio pursuant to the Rehovot Purchase Agreement.
• Manufacture the 3-antigen HBV vaccine at commercial scale to meet demand in the U.S., Europe, and Israel.
• Continue the Phase IIb clinical study of the GBM vaccine immunotherapeutic candidate, VBI-1901, in the recurrent GBM setting.
• Continue the Phase I clinical study of the multivalent coronavirus candidate, VBI-2901.
• Prepare for further development of VBI-1501, the preventative CMV vaccine candidate.

Key Dates

Keywords

VBI Vaccines, PreHevbrio, VBI-2601, Brii Bio, Financial Results, Hepatitis B, Going Concern, Nasdaq, Clinical Trials, Vaccines