In February, I put together this piece on Massachusetts based biotechnology company VBI Vaccines Inc. (VBIV). At the time, the company had just reported a 6.72% stake held by world renowned healthcare and technology fund, Clarus Ventures, by way of its Clarus Lifesciences arm.

As noted at that point, VBI enjoys a strong base of institutional interest, yet remained firmly under the radar, as illustrated by its then market capitalization of around $180 million. Subsequent to my highlighting of VBI, the company ran up from around $4.5 a share to mid-March highs of $6.46 – a gain of more than 40% across in a period of circa four weeks. Subsequent to these highs, however, markets have sold off on VBI, and the company now trades for $5 flat.

I think this correction is just representative of the shorter term operators taking profits off the table, and in turn, that it might be a nice opportunity to pick up an exposure to VBI ahead of a return to the longer term upside momentum I detailed as likely in my prevous coverage.

Supportive of this statement, and since I first highlighted this one as being one to watch, management has put out a few key updates regarding the company's lead product, and its underlying development and commercialization efforts. With this in mind, here's a look at what's changed between then and now, and how these changes impact my outlook going forward.

By way of a quick reintroduction to VBI, and for those that missed my initial coverage, the company's lead program is rooted in a hepatitis B vaccine called Sci-B-Vac. It's already approved in a host of countries, but not in the US, Europe or Canada. VBI is working to get it approved in these latter three markets (as these three markets represent the largest revenue potential for the company) and it's on this asset, and indeed the company's efforts in the just mentioned three regions, that markets are basing the majority of VBI's valuation right now.

The company has a pretty deep development pipeline that essentially takes the technology used to create the Sci-B-Vac vaccine (something I'll get to in a little more detail shortly) and applies it to various other indications – oncology, neurodegenerative disorders and viral infection to name three. While these are potentially valuable programs longer term, it's the hepatitis B asset I'm interested in for the purposes of this discussion.

So, as noted, it's called Sci-B-Vac, and it's built using a proprietary technology that allows VBI to create vaccines that look and act, from the perspective of a patient's immune system, almost exactly like the the virus against which they are trying to induce seroprotection. The improved likeness is rooted in the vaccine's expression of three separate antigens, each of which are expressed by the hepatitis B virus in its natural form – the S antigen, the Pre-S1 antigen and the Pre-S2 antigen. More antigens mean an increase in the immune system's response to the introduction of the vaccine, and in turn, an improved performance.

Current standard of care hepatitis vaccines generally use one of these antigens (the S antigen) and make use of an adjuvant to improve the performance (with performance defined as induced seroprotection) of the treatment. The incorporation of three antigens negates the necessity for an adjuvant of the type used by current SOC, and this helps VBI to avoid any of the potential side effects (or safety concerns) associated with their inclusion; for example, the autoimmune condition side effects that Dynavax Technologies Corporation (DVAX) is battling right now to prove to the FDA that its Heplisav-B development vaccine doesn’t induce.

So, let's get to the latest updates.

As mentioned, this program is all about getting approval in the US, Canada and Europe right now. Normally, to pick up said approval, a company would have to carry its asset through the standard development pathway – phase I, phase II, phase III, NDA submission, etc. That's what the just mentioned Dynavax is doing (struggling to do) with Heplisav-B. VBI is a bit of an outlier to this standard pathway, however.

Because the drug is already approved in fifteen countries, and based on the fact that it's one of two standard of care infant administration hepatitis B vaccines in Israel (50% of babies get Sci-B-Vac, the other 50% get Engerix), there's a wealth of safety and efficacy data available already. It's been used as a real world vaccine in more than 300,000 patients, and there's a wealth of clinically evaluated safety and efficacy data that includes more than 20 clinical trials, spread across more than 3,000 patients.

The hope was that VBI would be able to collate this data and use it as supportive of safety and efficacy in its registration applications to the respective regulatory entities in its target approval regions. If this was the case, a confirmatory efficacy study would be all that would be required to complete the application, and it would essentially mean that VBI could skip the early to mid stage clinical trial requirements of the standard approval pathway.

At the time of my previous coverage of this one, it was unclear whether this would play out as hoped.

Since that coverage, VBI has updated markets as to the progress of its regulatory pathways in both Canada and Europe, and these updates are supportive of the above discussed shortened development pathway.

First, the company announced that, on the back of discussions with the EMA, a phase III study, combined with the already available data, would be enough to support a registration application in Europe.  A few weeks, later, VBI put out a second release, detailing an almost identical situation in Canada.

Alongside both releases, management outlined the fact that it expects one phase III study will be enough to cover both applications, and that it is working to bring the program in the US up to speed with that of Canada and Europe parallel to its efforts in the two latter regions.

The takeaway here, then, is that VBI's hepatitis B program is progressing exactly in line with expectations. The next major catalyst is confirmation from the FDA that this is the case, which will bring the US in line with Europe and Canada, and will pave the way for initiation of the pivotal trial that's required to get the drug into these markets.