Well, VBI Vaccines (VBIV) did. For now, at least. The population had collapsed in June after it was reported that despite reaching all primary endpoints, two doses of the Sci-B-Vac hepatitis B vaccine failed to achieve statistically non-priority standard care Engerix-B after three doses. for all patients. Although this was a secondary endpoint that did not affect the chances of approval, so investors doubted whether the vaccine could acquire a market share in view of competition from Dynavax (DVAX) Heplisav-B, which is a two-dose vaccine .
In my previous coverage of these incidents, which I recommend to review for newcomers to this case, I pointed out that Sci-B-Vac still had a chance to overcome the lack of minority in the younger subgroup 1
VBI expressed it in this way in its press release:
According to the commonly used statistical margin for non-inferiority for vaccines1, defined as the lower limit of 95% CI is above -10%, this analysis did not demonstrate subordination after two doses of Sci-B-Vac® (on day 168) compared to three doses of Engerix-B® (on day 196).
In addition, the new data released from a second Sci-B-Vac Phase III trial CONSTANT passed all primary and secondary endpoints as expected. The primary end point was consistency from mass to lot, which is necessary for vaccines to show consistency in strength and production. The secondary endpoint was the superiority of Sci-B-Vac after 3 doses over Engerix B at 3 doses. These end points were a necessity for Sci-B-Vac to have a chance of approval. Without passing them, the stock would crater. Once again, no safety signals were observed, as in the previous PROTECT phase III trial.
There is still a significant question as to why the stock has climbed back to its previous level. This is because nothing about these results was unexpected, not even that statistical non-diminution was achieved in patients aged 18-44 years. In fact, the gap between seroprotection [SPR] after 3 doses of Engerix B versus 2 doses of Sci-B-Vac in this last CONSTANT study was even greater in favor of Engerix B than in the subgroup 18-44 of the PROTECT study. In PROTECT, the difference was 3.9% (87.2% for Sci-B-Vac vs 91.1% for Engerix B), and in the CONSTANT study the difference was 4.4%. (90.4% for Sci-B-Vac vs 94.8% for Engerix B). Because of that, nothing has changed at all, so why has VBI recovered at all?
There are two possibilities, both of which probably contribute to some extent. The first is simply that the vast majority of investors just do not go over headlines and perhaps the first few lines of press releases and immediately address knee-jerk reactions. This may have led investors to just dump the stock without thinking back in June, resulting in extremely oversold conditions. At the time, the headlines said that Sci-B-Vac after 2 doses was straight, failed compared to Engerix B after three, and technically this was true because the data for 45 and older subgroups and subgroups 18-44 were pooled, which resulted in an overall error being reported. See the graph below from the previous paragraph about this. The top result is the overall data for both age groups, which means that in 45 and older subgroups, three doses of Sci-B-Vac appear to be needed.
However, as can be seen above, even in the PROTECT study, the younger subgroup achieved noninferiority after 2 doses compared to Engerix B after 3, by the technical definition of noninferiority. Nothing new here, then. So this revaluation upward may be partly investors who just say "oops".
The other possibility may have something to do with what CEO Jeff Baxter said at the end of the company's last conference call. The last question in the Q&A session about the recording had to do with the Immunization Practice Advisory Committee [ACIP]. This is a regulatory body under the auspices of the Centers for Disease Control and Prevention [CDC] not the FDA. ACIP has no strict procedural or regulatory obligations, and the Committee may in some cases grant exemptions from the FDA's labels regarding immunization course. The most significant of these cases cited by Baxter is Merck's (MRK) HPV vaccine Gardasil. The FDA label for this vaccine classifies it as a 3-dose vaccine, although the ACIP recommendation is that 2 doses be sufficient for ages 14 and under. Could such an exemption be given to Sci-B-Vac as well as to the younger age group, although it is likely to be given a 3-dose label by the FDA? Possibly, and that may be what investors are wondering about.
At least it seems like those 45 years and older, along with the immunocompromised, need all three doses of Sci-B-Vac to ensure maximum seroprotection. Still, according to Baxter, vaccination compliance for all three doses in this subgroup is less of a problem than the younger subgroup. When this is the case when Sci-B-Vac reaches the market, the older group may have a choice. Either Heplisav B in two doses, or Sci-B-Vac in three doses. This gives Heplisav B an advantage, but still Sci-B-Vac has virtually no security problems while Heplisav B does. This is a critical point especially for weaker, immunocompromised patients. Plus, VBI plans to price Sci-B-Vac lower than Heplisav B.
The best case for Sci-B-Vac then would be ACIP which recommends two courses for those 18-44, and Sci-B-Vac which chops out a market in the immunocompromised and elderly population on the basis of safety and cost. The worst case, assuming approval that seems to be mostly secured, is that ACIP recommends 3 doses, which will give Heplisav B an advantage across all age groups when it comes to dose planning, but Sci-B-Vac will still benefit from security and costs.
Despite positive things here, VBI is still a speculative stock with considerable risk. Sci-B-Vac will continue to be a headline generator, but keep in mind that sales for competitor Heplisav B in 2019 were only $ 10.2 million. We are not talking about a blockbuster here, but rather a springboard for VBI to focus more on the other assets, where the most exciting is a CMV vaccine in my opinion. A phase II trial in this candidate should begin shortly, although it is difficult to say exactly when. Success with Sci-B-Vac should generate investor interest in the company in general, although I would not say that Sci-B-Vac itself will push the stock much higher. The time to buy VBI on Sci-B-Vac merits alone was last year when it was oversold.
The disadvantage seems rather limited from this point, so I would say that these levels are a safe purchase, but capital growth from here is another matter. Whether the stock climbs significantly on Sci-B-Vac news depends mostly on ACIP recommendations after Sci-B-Vac approval, and generally excludes increased investor interest in Sci-B-Vac approval. Those who want to buy it as a long-term attitude must keep in mind that significant gains from these levels may await more news about the CMV program and others.
Disclosure: I am / we are a long time VBIV. I wrote this article myself, and it expresses my own opinions. I do not receive compensation for it (other than Seeking Alpha). I have no business relationship with any company mentioned in this article.