8-K: VBI Vaccines Reports Strong 2023 Revenue Growth and Positive Clinical Data

VBI Vaccines announced a 234% increase in PreHevbrio global net revenue year-over-year and encouraging early data from a Phase 2b study of VBI-1901 in recurrent glioblastoma.

Summary

• VBI Vaccines reported its financial results for the year ended December 31, 2023, showing significant revenue growth driven by PreHevbrio sales.
• PreHevbrio global net revenue increased by 234% from 2022 to 2023, reaching $3.1 million in 2023 compared to $0.9 million in 2022.
• Preliminary 2024 PreHevbrio U.S. sales are strong, with approximately 65% of the entire 2023 sales volume achieved in the first quarter of 2024.
• The company has expanded its market reach for PreHevbrio through various channels, including Integrated Delivery Networks, pharmacy networks, and government facilities.
• VBI-1901, a cancer vaccine candidate for recurrent glioblastoma, showed encouraging early tumor response data in a Phase 2b study, with a 40% disease control rate in the VBI-1901 arm compared to 0% in the control arm.
• VBI is also advancing its novel mRNA-launched eVLP (MLE) platform technology and expects to evaluate it with potential partners.
• The company has reduced its debt through a deal with Brii Biosciences, expecting to decrease its total debt principal with K2HV from $50 million to $17 million.
• VBI's total revenue for 2023 was $8.7 million, compared to $1.1 million in 2022.
• The company's net loss for 2023 was $92.8 million, or $6.03 per share, compared to a net loss of $113.3 million, or $13.16 per share, in 2022.
• Excluding impairment charges and foreign exchange loss, the net loss for 2023 was $61.7 million, or $3.96 per share, compared to $85.8 million, or $9.97 per share, in 2022.

Sentiment

Score: 7

Explanation: The document presents a mix of positive and negative aspects. The strong revenue growth and promising clinical data are positive, but the net loss and reduced cash position are concerning. The strategic moves to reduce debt and operating expenses are encouraging, leading to an overall positive but cautious sentiment.

Positives

• The company experienced a substantial increase in PreHevbrio sales, indicating strong market adoption.
• The early clinical data for VBI-1901 is promising, showing a clear difference in tumor response compared to the standard of care.
• The strategic partnership with Brii Biosciences is expected to significantly reduce debt and provide additional revenue.
• VBI has successfully reduced its operating expenses, particularly in sales, general, and administrative costs.
• The company's novel mRNA-launched eVLP (MLE) platform technology has potential for broad application across multiple indications.
• VBI has secured a licensing deal with Brii Biosciences for PreHevbri in the Asia Pacific region, excluding Japan.

Negatives

• The company reported a net loss of $92.8 million for 2023, although this is an improvement from the $113.3 million loss in 2022.
• VBI's cash position decreased from $62.6 million at the end of 2022 to $23.7 million at the end of 2023.
• The cost of revenues increased from $11.3 million in 2022 to $12.5 million in 2023.
• The company experienced a significant foreign exchange loss of $6.5 million in 2023.

Risks

• The company's ability to regain and maintain compliance with the listing standards of the Nasdaq Capital Market is a risk.
• The company's ability to satisfy all conditions to the Brii Biosciences transactions is a risk.
• The company's ability to comply with 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 faces risks related to the successful manufacturing and commercialization of PreHevbrio/PreHevbri.
• There are risks associated with the clinical trials and regulatory approvals of potential products.
• The company's ability to secure future funding for developmental products and working capital is a risk.

Future Outlook

VBI is focused on managing operational expenses and capital to fuel sustainable growth, with several near-term milestones expected across its lead programs, including additional data readouts from the VBI-1901 study and evaluation of the MLE technology by potential partners. The company expects PreHevbri to be made available in certain additional European Union countries in 2024.

Management Comments

• Jeff Baxter, VBI's President and CEO, stated that the company has seen continued progress across all of its lead programs, with increased use of PreHevbrio and positive clinical data announcements.
• Jeff Baxter also mentioned that the company has taken steps to improve its financial stability, including strengthening its balance sheet and reducing debt.

Industry Context

The announcement reflects the ongoing challenges and opportunities in the biotechnology sector, where companies are focused on advancing clinical programs while managing financial constraints. The increased revenue from PreHevbrio and the positive clinical data for VBI-1901 are significant developments in the competitive landscape of vaccine and cancer therapeutics development.

Comparison to Industry Standards

• The 234% year-over-year revenue growth for PreHevbrio is a strong performance compared to many other biotech companies in the vaccine space, although specific comparables are not provided in the document.
• The early clinical data for VBI-1901 showing a 40% disease control rate is encouraging, especially when compared to the 0% rate in the control arm, which is a standard chemotherapy treatment. This suggests a potential advantage over existing treatments for recurrent glioblastoma.
• The reduction in operating expenses and debt is a positive sign, as many biotech companies struggle with high burn rates and debt burdens. The deal with Brii Biosciences is a strategic move to improve financial stability.
• The development of the MLE platform is a novel approach, and its potential will be determined by future clinical data and partnerships. mRNA vaccine technology is a hot area of research, and VBI's approach is unique.

Related Party Transactions

• The company has entered into a licensing deal with Brii Biosciences for the development and commercialization of PreHevbri in the Asia Pacific region, excluding Japan.
• The company has an agreement to sell manufacturing capabilities and certain related assets to Brii Bio.

Stakeholder Impact

• Shareholders may be encouraged by the revenue growth and clinical progress, but concerned about the net loss and cash position.
• Patients may benefit from the development of new treatments for hepatitis B and glioblastoma.
• Healthcare providers will have access to PreHevbrio through expanded distribution networks.
• Employees may be impacted by organizational changes and workforce reductions.

Next Steps

• VBI expects additional interim data readouts from the Phase 2b study of VBI-1901 in recurrent GBM mid-year and year-end 2024.
• The company will continue to evaluate its novel mRNA-launched eVLP (MLE) platform technology with potential partners throughout 2024.
• VBI expects additional data from the Phase 1 study of VBI-2901 in 2024.
• The company will continue to expand the market reach of PreHevbrio in the U.S. and Europe.

Key Dates

Keywords

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