E VBI Vaccines: Hidden Vaccine Gem

The part that makes VBI Vaccines an appealing investment is the market cap at only $200 million while the company and other sources like Benzinga have listed the market opportunity at above $500 million. Other vaccine stocks like Dynavax Tech (DVAX) trade for a valuation of $450 million despite failing to get its Hepatitis-B vaccine Heplisav-B approved. 

One reason for the higher valuation is the larger following for Dynavax. A popular investment site like StockTwits shows over 6,000 followers for Dynavax while VBI Vaccines only has close to 700. The vast difference in followers highlights the lack of visibility for VBI. 

As with a small biotech, finances play a big role in the risk equation. VBI Vaccines ended Q1 with a cash balance of about $23.5 million. Based on the cash burn rate, the company probably ended Q2 with roughly $15 million.

Per the conference call to discuss the Phase III trials, the projection is that the 4,800 patients will cost around $8,000 to $10,000 per person. At the upper end, the budget is roughly $48 million for the 15 months of clinical trials and doesn't include other costs for the company.

VBI has already clearly stated the need to raise more funds after the December equity raise. The current stock price approaching $5 is definitely more preferable than raising funds back in the $3 range.  

The risks remain standard for a small biotech. The company needs to raise additional funds and despite previous trial results on Sci-B-Vac, an approval by the U.S. Food and Drug Administration or the European Medicines Agency isn't guaranteed even with positive results.

A prime example of the risk is Dynavax that plunged from a high of $17.50 last year to a low of $3.20 this year on the negative outcome with the FDA. The stock has rebounded recently due to positive outcomes from another drug candidate showing the prime reason that VBI Vaccines is similarly attractive with the additional pipeline drugs. 

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Disclosure: No position. 

Additional disclosure: Please consult your financial advisor before making any investment decisions.

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Comments

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Grayson Brown 2 years ago Member's comment

Cool. This is a very informative article which deserves a better publicity. I would like to see how their Phase III trials go. Probably a good time to buy and hold. Maybe? $VBIV

Samuel Kaufman 2 years ago Member's comment

I have been an investing veteran of #pharma companies for years. For the first time, I am truely amazed by the scale of the trials #VBI has been conducting. $VBIV

Bill Johnson 2 years ago Member's comment

Grayson Brown and Samuel Kaufman, you left very similar comments at the same time. Same person perhaps trying to pump up this stock? $VBIV