When billionaire biotech entrepreneur Dr. Philip Frost, Chairman of Opko Health Inc. (NASDAQ:OPK), and Dr. Stephen Gillis, managing director of renowned biotech fund Arch Venture Partners, team up to take a position in a young biotech company, markets take notice.
The recent gains in VBI Vaccines, Inc. – Ordinary Shares (NASDAQ:VBIV) highlight this fact. The company is up 71% since the beginning of May. The gains came on the back of investors recognizing the potential of the company’s development pipeline, product portfolio and the operational support that comes with backers of the caliber of Frost and Gillis.
VBI has a hepatitis B vaccine called Sci-B-Vac, which is approved and licensed in 15 countries globally, and a proprietary technology that allows it to create a generation of vaccines that looks set to render the current generation redundant with each disease it targets. It’s also developed a platform that promises to wipe up to 20% off the cost of existing vaccines.
Here’s a look at each of these assets, and what they mean for the company going forward.
As mentioned, this is a hepatitis B vaccination, and its approved in Israel, Japan, Africa and other region across the globe. There are currently two generations of hepatitis B vaccine (excluding Sci-B-Vac) on the market. The first generation is what’s called a plasma derived vaccine, and it hit markets in the early 1970s. The producers of the vaccine would harvest the hepatitis B surface antigen from the plasma of individuals with the infection, and use these to create the vaccine. Because it’s plasma derived, it requires a booster every 15 years, and there is a risk of infection on administration. The second generation, and the most used globally today, is what’s called a recombinant vaccine. Priducers create these artificially by inserting the dna that codes for a particular antigen into a mammalian cell. The DNA goes to work in the cell and the latter starts to express the antigen on its surface. When introduced to the body, the immune system recognizes the antigen and forms a natural immunity. This is much safer, and more effective, than the plasma derived generation. VBI has gone a step farther, however. It’s third generation version is recombinant production, so it’s as safe as the second generation, but the DNA introduced in the cell codes for two more antigens than its predecessor. This mimics the HBV virus more closely, and affords much higher rates of immunogenicity.
VBI is targeting an approval in Europe as a first step, and then the same in the US. There’s already plenty of data available to the company as the drug is administered regularly in its marketing-approved countries, so chances are the EMA and the FDA will require just a straight pivotal trial in their respective markets, rather than a full length clinical development program. VBI believes this to be the case, and is targeting early next year as a start date for the trial in Europe, with the US start to follow during the second half of 2017.
This is going to be the company’s bread and butter for the next couple of years, while it works on developing vaccines using its proprietary technology, the eVLP Platform.
allows for the design of enveloped (e) virus-like particle (VLP) vaccines. Just as with Sci-B-Vac, this technology is all about mimicking the structure of viruses in order to produce a safer and more potent vaccine. The image below shows the structure of a vaccine created using the eVLP platform.
Image 1 – eVLP vaccine
As the image shows, the vaccine comprises the antigenic protein at the surface (this is what the immune system recognizes), a natural lipid bilayer for structure and, at its center, the genetic material that produces the antigen in question. The applications of this structure are pretty much limitless. So long as the company can isolate the genetic material to produce the required antigen protein, it can use the eVLP platform to create a vaccine that expresses that antigen.
This is currently under investigation in two separate indications – Cytomegalovirus (CMV) and Glioblastoma multiforme (GBM). The former just began enrollment in a phase I trial in Canada, designed to evaluate the safety and tolerability (primary) and the immunogenicity (secondary) of what’s called VBI-1501. VBI-1501 is a vaccine created using the eVLP platform that expresses the antigens associated with CMV. Primary completion is estimated at August next year, with topline expected by December the same year.
The GBM indication is still preclinical as things stand, but VBI expects to ramp up the program into development across the next 24 months.
Finally, the LPV platform. As things stand, vaccinations need to maintain a temperature between 4° C and 8° C across their entire lifespan. If they cool to below 4° C or hear to above 8° C, their immunogenicity becomes compromised. The process and infrastructure put in place to ensure that vaccines remain within this range is called the cold chain, and it accounts for around 20% of the total cost associated with vaccinations. If a company can produce vaccinations that are viable even having been removed from the cold chain (i.e. have spent time outside the acceptable temperature range), it could wipe 20% off the price of its vaccines. It’s easy to see how quickly a company that does this could penetrate a market and gobble up market share. Well, VBI has done just that. The company hasn’t revealed exactly how it has achieved this (for obvious reasons) but it involves the using lipids to increase the amount of water that remains after a process called lyophilization, which is a type of freeze drying. By minimizing the water ingress, the company I sable to produce vaccines that can not only survive outside the 4-8 temperature range, but can withstand some pretty extreme (relative) temperatures. It’s proof of concept studies have shown the influenza vaccine to have remained viable for 12 months at 40°, the rabies vaccine for 18 months at 40° and the MMR vaccine for 8 weeks at 37°.
The next step, having these proof of concepts in place, is to partner with big pharma and try to apply the technology to some of the leading vaccinations in the market. VBI is well on its way with this strategy, having struck deals with both Sanofi SA (ADR) (NYSE:SNY) and GlaxoSmithKline plc (ADR) (NYSE:GSK) to work on the application of LPV to their portfolios.
So there we go. Through its technologies, VBI is changing the way vaccines are created, stored and administered. It’s got a way to go before commercialization of a vaccine built on its two proprietary technologies, but in the mean time its got a next generation hepatitis vaccine to provide capital to fund development. It’s also got the financial and operational backing of the two biotech success stories mentioned in the introduction to this piece. Due diligence required, as ever, but off all the disruptive juniors in the biotech space right now, VBI stands out.