Investment Thesis
Once a micro-cap beset by liquidity constraints, VBI Vaccines Inc. (VBIV), thanks to its COVID-19 vaccine program, has risen more than three-fold in value this year to become a small-cap. A late entrant to the crowded race, the company's unique vaccine technology targets three coronavirus strains simultaneously. Amid investor hype, the ongoing pre-clinical studies could attract readily available funding to ease the liquidity constraints as the company advances a rich pipeline towards vital milestones.
This year, both VBI-2601 and VBI-1901 are awaiting data readouts for their mid-stage trials, while the company's prophylactic hepatitis B vaccine, Sci-B-Vac, expects the regulatory approvals in the U.S. and Europe. Assuming even a small share of the hepatitis B vaccine market, our 2021 revenue projections with the current forward price to sales multiple highlight an undervalued stock. Given the risks of the experimental vaccine developer, the upside looks modest, but VBI is a 'Buy' for us as its COVID-19 vaccine program drives the stock's near-term momentum.
Source: Company Website
COVID-19 Vaccine Program Sparks a Rally
After failing to meet the minimum bid price requirement, VBI was on the verge of delisting from NASDAQ for months. The years of losses triggered liquidity concerns, and in March, VBI's auditor doubted its ability to operate as a going concern. The stock had lost nearly a third of value this year compared to the ~10.4% decline of the NASDAQ Biotechnology Index (NBI). That was until VBI broke the news of its entry to the coronavirus vaccine race. A collaboration with the NRC (National Research Council of Canada), the vaccine candidate is built upon the company's eVLP (enveloped virus-like particle) platform technology. The trivalent vaccine candidate targets not only SARS-CoV-2, the causative agent of the ongoing COVID-19 pandemic, but also SARS-CoV, and MERS-CoV, the other
