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VBL Therapeutics: A Speculative Play With An Enticing Risk-Reward Profile

Mar. 02, 2021 6:00 AM ETVascular Biogenics Ltd. (VBLT)14 Comments


  • While doing some speculative biotech window shopping, I came across VBL Therapeutics sitting on the sub-$100M market cap shelf. After a quick inspection, I am heading to the checkout.
  • The company's lead candidate, VB-111, is moving closer to the finish line in platinum-resistant ovarian cancer. So far, VB-111 has shown to have at least a 58% response rate.
  • I believe the VBLT's risk-reward profile favors a long position due to its potential upside and its current valuation.
  • I discuss my leading downside risks and will reveal how I plan to initiate a position in VBLT.

As we wait for the overall market to make up its mind, I have been on the lookout for speculative healthcare plays that could be worth a buy if the market decides to pick the "red-pill" and correct in the coming weeks. While I was rummaging through healthcare tickers, I came across VBL Therapeutics (NASDAQ:VBLT) and was impressed with their risk-reward profile. VBL is a late-stage clinical biopharmaceutical company that employs three innovative platform technologies to develop original oncology and immune/inflammatory therapies. The company’s lead candidate, VB-111, is their “anti-cancer gene-therapy program,” which has the potential to treat a broad range of solid tumors. VB-111 is moving closer to the finish line in platinum-resistant ovarian cancer, which if approved, will be a game-changing therapy for hard-to-treat cancer. In addition to VB-111, the company has advanced two ground-breaking antibody programs that are that utilize MOSPD2, which is a highly specific protein that has the potential to regulate directed cell movement of immune and tumor cells. In addition, VBL has developed “Lecinoxoids,” which are orally available anti-inflammatory small molecules, for chronic immune conditions.

Figure 1: VBLT Pipeline (Source: VBLT)

After a few hours of snacking on 10-Qs and clinical trial data, I was convinced VBLT was going to find its way into my speculative portfolio.

I intend to review VB-111 and will present why I think the company has an enticing risk-reward profile. In addition, I discuss my leading downside risk and my strategy for entering a speculative position in VBLT.

VB-111 Moving Closer to the Finish Line

VB-111 has some interesting characteristics that could change the way we treat cancer. First and foremost, VB-111 is a gene therapy candidate that is administered via IV infusion every 6-8 weeks. So, not only will VB-111 target the diagnosed cancer, but it is possible it will work

This article was written by

Biologics profile picture

Biologics is a full-time healthcare investor who developed a passion for biotech and life saving therapies after working in the medical field for years. His trade focus is around innovative companies developing breakthrough therapies and/or pharmaceuticals with catalysts for potential acquisitions.

He is the leader of the investing group Compounding Healthcare. Features of the group include: Several model healthcare portfolios, a weekly newsletter, a daily watchlist, and chat for dialogue and questions. Learn more.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in VBLT over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am/we are Long MRK

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (14)

Seems like the positive prospects for VB-111 are starting to get some attention. If momentum really starts to build this could be a big gainer. The current market capitalization is only about $130 million. If the global OVAL study goes as indicated and FDA (and other country) approval occurs the annual sales would be several multiples of that. Looking at other biopharma companies with FDA approved products, the multiple could potentially be 40X, 50X, 60X, plus. Always risk, but wow for a company with Phase 3 study that is more than half-way along it seems like a good opportunity. Do your research as Phase 3 is generally right before seeking FDA approval.
I liked your report which was very simple to understand for investors without expertise in biotech. If you want to dive deeper I suggest you check leading ovarian cancer forums as inspire.com or smart patient. You can read there testimonies of participants in the trial and most of them positive..
Beside that , as you know , Israel is a small country and good things spread very quickly. The trial in Israel ( 6 sites with tens of patients.) is considered very successful and many women wants to join it due to their understanding of its benefits and good ORR with multiple PR and CR cases
Biologics profile picture
grabbing some today
Warrior2323 profile picture
@Biologics thanks for the article. Any latest views? Thanks
Biologics profile picture
@Warrior2323 nothing really...just adding on dips and selling on rips to get a good cost average.
Warrior2323 profile picture
@Biologics I see thanks looks like it is trending up. any reason or is it due to coming quarterly announcement
This excerpt summaries my views:

"Despite my bullish outlook, I am not expecting to “load-up” at this point in time due to the lack of a clear completion date for OVAL and the looming threat of dilution."

I do hope it works though. We need all the help we can get against cancer.
Didn't VBLT have some Phase 3 failed brain cancer treatment, vaccine, etc 2 or 3 years ago?

If yes, then is this current medicine related?
Is 58% good enough for approval?
Biologics profile picture
@Coolflippers for a response rate? It can be... obviously additional data will be needed to see OS, PFS, Safety... if it shows some benefit with limited risk it is always a possibility in such a hard to treat population.
Tim Harrison profile picture
@Coolflippers and yes given that the standard of care response rate is 10%-20%.
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