On March 2, 2021 VBI Vaccines Inc. (Nasdaq: VBIV) (VBI), a biopharmaceutical company driven by immunology in the pursuit of powerful prevention and treatment of disease, reported financial results for the fourth quarter and twelve months ended December 31, 2020 (Press release, VBI Vaccines, MAR 2, 2021, View Source [SID1234575915]). The Company also provided a corporate update and its outlook for 2021.
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Annual Note from Jeff Baxter, President and CEO:
"2020 was, unfortunately, a historic year, marked by unprecedented disruption, with severe public health, societal, and economic consequence. Every single person, worldwide, felt the devastating effects of the ongoing COVID-19 pandemic. Industries and companies went through extraordinary change and, amidst the temporary adjustments, new normals were established. The impact of this pandemic is likely to be felt for years, if not decades, to come.
The events of 2020 led to impressive collaboration, progress, and transformation across the biotechnology industry, governments, and foundations. We added two new vaccine candidates to our pipeline in 2020 – a multivalent pan-coronavirus vaccine candidate, VBI-2901, and a monovalent COVID-19 vaccine candidate, VBI-2902. To support the advancement of these candidates, we received an award from the Strategic Innovation Fund of the Government of Canada and partnered with both the National Research Council of Canada (NRC), Canada’s largest federal R&D organization, and Resilience Biotechnologies, a Contract Development and Manufacturing Organization. The preclinical results of these two candidates continue to excite us and we are working hard to get these candidates into the clinic in forms that are optimized both for clinical outcome and long-term commercial viability. We recognize the possibility that COVID-19, in some form, may be here to stay, especially with the recent emergence of additional variants, and we are committed to the long-term control of known and emerging coronaviruses.
Our 2020 achievements and progress, however, extend well beyond our coronavirus programs. We successfully completed the pivotal Phase 3 program for our 3-antigen prophylactic hepatitis B (HBV) vaccine candidate and submitted applications for approval in the U.S. and Europe. We believe this vaccine candidate has the potential to be a meaningful intervention for adults in the fight against HBV and we look forward to working with both the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA) throughout 2021 as they conduct their review.
In addition to the advancement of these prophylactic vaccine candidates, we continue to see meaningful data generated by the clinical studies of our therapeutic vaccine candidates targeting both chronic HBV infection, VBI-2601, and recurrent glioblastoma (GBM), VBI-1901. With both of these candidates, we are seeking to address diseases that are challenging and aggressive, with few, if any, effective treatment options available to patients. Based on the positive data seen to-date, we and our partners expect to initiate subsequent clinical studies in both indications in 2021.
These achievements are a result of the continued hard work, dedication, and flexibility of every member of the VBI team. Our team remains united across the US, Canada, and Israel in our mission to protect and enhance human life, and we thank our shareholders and partners for their support. With $119.1 million in cash, cash-equivalents, and short-term investments on-hand at the end of 2020, we entered 2021 well-positioned to achieve meaningful milestones across all of our lead pipeline programs over the next 12 months, and beyond."
Second Half 2020 Key Program Achievements and Projected Upcoming Milestones
3-Antigen Hepatitis B Vaccine Candidate
November 2020: Biologics License Application (BLA) and Marketing Authorization Application (MAA) submitted to U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA), respectively
December 2020 and February 2021: EMA acceptance of MAA filing, and FDA acceptance of BLA filing, initiating the review process
December 2020: Announcement of Syneos Health (Syneos) and VBI partnership for commercialization in the U.S., Europe, and Canada, pending regulatory approvals
November 30, 2021: U.S. Prescription Drug User Fee Act (PDUFA) target action date set by FDA
VBI-2900: Coronavirus Vaccine Program
August 2020: Two clinical candidates selected with the goal of bringing forward candidates that add meaningful clinical and medical benefit to those already approved – be it as a one-dose administration, more durable responses, and/or providing broader protection against known and future mutated strains of COVID-19
VBI-2901 : a trivalent candidate, expressing SARS-CoV-2, SARS-CoV, and MERS-CoV spike proteins
VBI-2902 : a monovalent candidate, expressing the SARS-CoV-2 spike protein
September 2020: Through its Strategic Innovation Fund, the Canadian Government agreed to contribute up to CAD$56 million to support VBI-2900 clinical development through Phase 2 studies, to be contributed as expenses are incurred
December 2020 : Broadened collaboration with NRC to include additional support for pre-clinical evaluation, optimization, and scale-up
March 2021: Phase 1/2 clinical study of VBI-2902 in adults expected to initiate in Canada
2021: Phase 1/2 clinical study of VBI-2901 expected to initiate
VBI-2601 (BRII-179): HBV Immunotherapeutic Candidate
November 2020: Positive interim Phase 1b/2a proof-of-concept data announced suggesting restoration of antibody and T cell responses
Q1 2021: Partner, Brii Biosciences, expected to initiate Phase 2 combination study to assess VBI-2601 (BRII-179) and BRII-835 (VIR-2218), a novel RNAi therapeutic, as potential functional cure in chronically infected patients
VBI-1901: Cancer Vaccine Immunotherapeutic Candidate
November 2020: Positive data announcement from ongoing Phase 1/2a clinical study of VBI-1901 in recurrent GBM patients, including 2 partial responses (PRs), observed with tumor reduction of more than 50%, and 7 stable disease (SD) observations
H2 2021: Expected initiation of a randomized, controlled clinical study with the potential to yield registrational data
Financing
Throughout the fourth quarter of 2020, VBI raised total gross proceeds of $15.9 million, issuing 4.8 million shares at an average price of $3.32 through its Open Market Sales AgreementSM, established July 31, 2020 with Jefferies LLC
Financial Results for the Three and Twelve Months Ended December 2020
Cash Position: VBI ended the fourth quarter of 2020 with $119.1 million cash, cash equivalents, and short-term investments compared with $44.2 million as of December 31, 2019.
Net Cash Used in Operating Activities: Net cash used in operating activities for the full year 2020 was $47.1 million, compared to $48.7 million for the same period in 2019.
Cash Used for Purchase of Property and Equipment: The purchase of property and equipment in 2020 was $1 million, compared to $3.7 million in 2019. The decrease is a result of the completion of the modernization and capacity increase at the manufacturing facility in Rehovot, Israel.
Revenue: Revenue for the three months ended December 31, 2020 and for the full year 2020 was $0.2 million and $1.1 million, respectively, compared to $0.6 million and $2.2 million for the same time periods in 2019, respectively. There was a decrease in product revenue due to limited product availability as we prepared for our U.S. and Europe regulatory submissions for our 3-antigen HBV vaccine candidate, which occurred in Q4 2020. Additionally, there was a decrease as a result of the license revenue earned as part of the License Agreement with Brii Bio in 2020 compared to 2019.
Research and Development (R&D): R&D expenses for the fourth quarter and full year 2020 were $4.8 million and $14.9 million, respectively, compared to $4.3 million and $26.3 million for the same periods in 2019, respectively. The decrease in R&D spend in 2020 was primarily due to a decrease in costs related to the Phase 3 clinical studies of our 3-antigen prophylactic HBV vaccine candidate, which were both completed in 2020, but were ongoing in 2019. The decrease in R&D expenses was offset by increased analytical development, manufacturing, and clinical costs associated with our eVLP vaccine candidates.
General and Administrative (G&A): G&A expenses for the fourth quarter and full year 2020 were $7.1 million and $20.7 million, respectively, compared to $3.8 million and $14.1 million for the same periods in 2019, respectively. The increase in G&A expense in 2020 was primarily due to an increase in pre-commercialization activities related to our 3-antigen prophylactic hepatitis B vaccine, increased insurance costs, and increased people costs.
Impairment Charge: There were no impairment charges in 2020, compared to a charge of $6.3 million in 2019 related to goodwill.
Net Loss: Net Loss and net loss per share for the year ended December 31, 2020 were $46.2 million and $0.21, respectively, compared to a net loss of $54.8 million and a net loss per share of $0.46 for the year ended December 31, 2019. The decrease in net loss resulted primarily from decreased R&D expenses offset by the increased cost of revenues and G&A expenses.