Having a widely available coronavirus vaccine will undoubtedly put an end to this devastating pandemic. Countless lives would be saved; economies could safely reopen; and masks and social distancing would no longer be necessary. That is why many companies in the biotech sector are trying their luck to become the first to find a cure.
There is a coronavirus stock that everyone is talking about right now. Although VBI Vaccines (VBIV) is in the early stages of developing a COVID-19 vaccine, it has significant advantages over other pure-play vaccine players. Let's take a look at what they are.
Image Source: Getty Images.
Part of the fight against the coronavirus
Together with the National Research Council Canada, the company is investigating a COVID-19 vaccine candidate called VBI-2900 in preclinical models. The candidate is under development as a vaccine that defends against all types of coronavirus, such as MERS and SARS-CoV-1 and not just the SARS-CoV-2.
The Canadian government awarded VBI Vaccines CA$56 million for the experimental vaccine's research and development expenses through phase 2. Preclinical data for VBI-2900 will be available within the current quarter. VBI Vaccines expects to push its candidate to clinical studies by the end of 2020 and has secured a manufacturing source, although financial terms have not been disclosed. Meanwhile, the company is making rapid advancements in other areas of its portfolio.
A hardy pipeline
Earlier this year, the company's HBV vaccine Sci-B-Vac met its primary endpoint in phase 3 clinical trials. Of participants who received three doses of the vaccine candidate, 99.3% developed protection against HBV, compared to 94.8% of patients who received a standard of care vaccine.
That is good news, as the HBV vaccination market opportunity is likely to grow to $2.13 billion by 2026 worldwide. The company will submit a biologics license application (BLA) with the U.S. Food and Drug Administration (FDA) for Sci-B-Vac's approval in the fourth quarter of 2020.
Besides, the company is also running a preclinical study to investigate its cancer vaccine VBI-1901 against glioblastoma. There has been one case of a patient's tumor size reducing by over 50% after receiving the experimental vaccine.
Glioblastoma is the most invasive form of brain cancer. Only 6% of seniors who develop the condition survive after five years. Hence, good results at this early stage in the clinical process are encouraging. By next year, the company expects to move VBI-1901 into the phase 1 stage.
Rich in funding
As of June 30, the company has approximately $86 million in cash and equivalents, which is more than enough to offset a quarterly cash use of $15.5 million. Part of its capital comes from a $50 million debt-financing deal with K2 Health Ventures.
Currently, the company's market capitalization is just north of $700 million, which is considerably smaller than multi-billion dollar coronavirus vaccine companies such as Moderna (MRNA -8.59%) and Novavax (NVAX -10.07%). Its small-cap valuation does give investors an advantage, as there is more room for shares to appreciate. However, the company has the disadvantage of its coronavirus vaccine candidate not progressing as fast as other competitors.
At the end of the day, investors who missed the rally in coronavirus vaccine stocks may wish to purchase a small stake in VBI Vaccines. Even if VBI-2900 fails clinical studies or does not enter commercialization promptly, investors still have the company's HBV and glioblastoma vaccine candidates to fall back on to prevent a total wipe-out of their capital. Year to date, shares of VBI Vaccines rallied by more than 400% as of August 24.
