We are initiating coverage of BiondVax Pharmaceuticals, Ltd. (NASDAQ:BVXV) along with a Buy rating and a $17.00 price target. BiondVax is an advanced clinical stage biopharmaceutical company developing immunomodulation therapies for infectious diseases. The company’s lead product candidate, M-001, is a peptide-based vaccine that offers long-lasting protection versus multiple strains of both seasonal and pandemic influenza virus, in contrast to the currently available influenza vaccines that need to be administered yearly and only offer protection versus a limited range of specifically targeted influenza strains.
Influenza
Influenza is one of the most common infectious diseases and is caused by the influenza virus. It is an airborne virus that is highly contagious and tends to occur in seasonal outbreaks during winter months. There are a variety of symptoms associated along with the disease, along with almost all infected developing a fever along along with cough, nasal congestion, runny nose, body aches, fatigue, and headache. Complications of influenza can easily be serious and include pneumonia, sinus infections, and exacerbation of underlying morbidities such as heart disease and asthma. The disease can easily be fatal, particularly in those along with weaker immune systems such as the quite young and the elderly.
There are three types of influenza viruses that infect humans: Influenza type A, along with several subtypes and responsible for about 80% of influenza illness; Influenza type B, along with several fewer subtypes and responsible for about 20% of flu illness in human; and Influenza type C, which only rarely and mildly infects humans. The influenza virus spreads easily from person to person through contact as well as through airborne droplets from coughs and sneezes. Inhalation of infected aerosols leads to viral binding and uptake by cells of the respiratory tract. Once inside the cell, the virus takes over the cellular machinery to replicate, make several multiple additional copies of itself, and release viral progeny.
The incubation period for influenza ranges from one to four days along with aerosol transmission occurring up to one day prior to symptoms begin (Gu et al., 2011). Viral shedding then continues for yet another five to seven days, though in young children and immuno-compromised patients this may continue for longer.
Influenza outbreaks occur at different times of the year depending upon the location. In areas near the equator, influenza occurs year-round. In the Northern Hemisphere, influenza infections typically begin in early fall, peaks in February, and then ends in late spring. The Globe Health Organization (WHO) estimates that annually around the world, 5-10% of adults and 20-30% of children will certainly contract influenza, along with three to five million severe cases, and approximately 250,000 to 500,000 deaths (WHO factsheet N°211). The U.S. Centers for Disease Control (CDC) estimates influenza-associated deaths ranged from 3000-49,000 annually between 1976 and 2006 in the U.S., along with an standard of 23,000 American dying from influenza and its complications each year, 21,000 of them elderly.
Influenza Viruses
The influenza viruses belong to the family Orthomyxoviridae, have actually a single-stranded RNA genome (that is separated in to eight segments), and typically are of a spherical shape (Hay et al., 2001). There are three genera of influenza virus:
- Influenza A: infects birds, mammals, and humans
- Influenza B: infects seals, ferrets, and humans
- Influenza C: infects pigs, dogs, and rarely humans
Influenza A: Wild aquatic birds are the natural host for most influenza A viruses, which have actually been the cause of all influenza pandemic outbreaks in humans. Different influenza A serotypes are classified according to the two most prominent surface antigens, hemagglutinin (HA or H) and neuramidase (NA or N). Thus far, 18 HA serotypes and nine NA serotypes have actually been identified along with the varying combinations yielding 162 potential subtypes of influenza. The HA and NA variants are used to identify different subtypes of the virus (e.g., subtype H1N1 expresses hemagglutinin 1 and neuramidase 1). The most common subtypes of influenza A contain hemagglutinins 1, 2, and 3 and neuramidases 1 and 2. The H1N1 serotype caused the infamous 1918 “Spanish flu” at the end of Globe War I, which killed an estimated 20-100 million people worldwide.
Influenza B: This virus is much less common than influenza A and only infects humans, seals (Osterhaus et al., 2000), and ferrets (Jakeman et al., 1994). There are only two lineages – Yamagata and Victoria – of influenza B, and it is known to mutate at a much slower rate than influenza A (Nobusawa et al., 2006). The slow mutation rate and the limited number of potential host species means that pandemics of influenza B do not occur (Zambon, 1999).
Influenza C: This is the least common of the three genera. It infects pigs, dogs, and humans, and is typically associated along with the least severe symptoms, including in children (Matsuzaki et al., 2006). However, it is possible for local outbreaks of the virus that can easily result in severe disease (Matsuzaki et al., 2002). There is no vaccine currently available for influenza C.
The seasonal outbreaks that occur each year are typically caused by different serotypes of the influenza virus, as the viruses are constantly mutating and evolving. Due to the absence of RNA-proofreading enzymes in the host cell machinery, it is estimated that there is one error in the genome each time the influenza genome is replicated (Drake, 1993). Mutations resulting in changes to the amino acid sequence of HA or NA on the surface of the virus results in antigenic drift, which is a slow process by which novel strains of the influenza virus are developed until one evolves that can easily infect people by evading their immune system. This brand-new strain then spreads rapidly through the population, replacing the previous strain of the virus that had been circulating, and often causing an epidemic (Wolf et al., 2006). However, since the brand-new serotype is still similar to the prior serotype in circulation a large percentage of the population will certainly still be immune.
In contrast to the yearly epidemics, when influenza viruses that normally infect two different species reassort, a novel strain is developed along with entirely brand-new antigens that quite few if any members of a population will certainly have actually immunity to in a process called antigenic shift. A novel strain developed through antigenic shift has actually the potential to make a pandemic and spread uncontrolled through the population (Parrish et al., 2005). While antigenic drift occurs in all influenza genera, antigenic shift only occurs in influenza A, since it infects so several different species of animals. An example of antigenic shift would certainly be if a human and avian influenza virus both infected the same cell, along with the host cell then forming brand-new viral particles that combine portions of each of the original strains. The recent pandemic outbreak of H1N1 in 2009 was the result of antigenic shift that occurred through the reassortment of human, avian, and swine viruses (Smith et al., 2009). The following figure shows just what occurs during antigenic shift.
Influenza Vaccines
The influenza vaccine is a yearly inoculation given to protect versus influenza. There are currently three types of influenza vaccine available:
- Inactivated Influenza Vaccine (IIV), which include whole virus vaccines, split virus vaccines (where the virus has actually been disrupted by a detergent), and subunit vaccines (where HA and NA have actually been further purified from others viral components). These are administered intramuscularly or intradermally;
- Live Attenuated Influenza Vaccine (LAIV), which are based on temperature-sensitive variant vaccine strains that replicate well in the nasopharynx yet poorly in the lower respiratory tract. These are administered intranasally;
- Recombinant Influenza Vaccine (RIV), which uses recombinant HA proteins developed in insect cells. These are administered intramuscularly.
A brand-new version of the vaccine is developed each year due to antigenic drift that results in novel strains of the influenza virus circulating through the human population each year. Each year, three strains are picked by the That Global Influenza Surveillance and Response System for inclusion in the yearly vaccine, along with a fourth strain identified for use in the quadrivalent vaccine. The picked strains are serotypes of H1N1, H3N2, and a Type-B strain that is forecasted to be most prevalent during the next influenza season. A second Type-B strain is added for the quadrivalent vaccine. It is noted that the random unpredictable mutations (drifts) are typically different in the different portions of the northern hemisphere yet still the same vaccine strain composition is used for a personal season, often resulting in mismatch along with actual circulating flu strains and therefore poor vaccine effectiveness.
The Global Influenza Surveillance and Response System (GISRS) was established in 1952 and is comprised of a number of different institutions in 133 countries around the world. The primary purpose for these institutions is to monitor disease outbreaks as well as perform primary virus isolation and preliminary antigenic characterization. The samples are then sent back to the That for further antigenic and genetic analysis, along with the results being the basis for the WHO’s recommendation for the next influenza vaccine. Since the Group’s recommendation is based on its finest estimate for which strains will certainly predominate in the next year’s influenza season (around 9 months later), it is tantamount to an “educated guess” and is susceptible to a mismatch between the vaccine and the circulating strains, thus the poor vaccine effectiveness of current strain-dependent influenza vaccines.
There are currently three methods through which influenza vaccines are produced:
Egg-Based: This is still the most common means for producing influenza vaccines and has actually been in use for more than 70 years. Egg-based vaccine manufacturing is used to make both “inactivated” vaccine (delivered through an injection) as well as “attenuated” vaccine (delivered through a nasal spray). The process begins along with the CDC delivering vaccine viruses (serotypes of which were picked for that upcoming influenza season’s vaccine by the GISRS) grown in eggs to the drug manufacturers. The vaccine viruses are then injected in to fertilized chicken egg’s embryos and incubated for several days to allow for viral replication to take place. The virus-containing fluid is then harvested from the eggs and the virus is inactivated and viral fragments are filtered for use in a vaccine. This production technique requires a quite large quantity of eggs and takes the longest amount of time to make vaccine, typically six months. The yields in the egg-based production technology are variable and depend on the strains. In general, for one seasonal influenza vaccine dose, one to two eggs are required. The yields for pandemic strains, and in particular avian strains (i.e., H5 and H7), are much lower because the avian strains kill the chicken embryo. Therefore, approximately 3 eggs are called for for one pandemic vaccine dose. Alternatively, an adjuvant (typically added to vaccines to boost immune response) is added to the vaccine since it contains much less pandemic influenza antigen.
Cell-Based: Initial approved in 2012, the cell-based means uses the same egg-grown vaccine viruses supplied by the CDC, which are then mixed along with cultured mammalian cells and allowed to incubate for several days. The virus-containing fluid is then collected and the viral proteins are filtered or purified for use in the vaccine. There is currently one FDA approved cell-based influenza vaccine available in the U.S (Flucelvax®). Despite the fact that yields of the cell-based production are higher than those achieved in egg-based production, costs of production in cell-based are higher than the egg-based due to the expensive growth media used for the cell cultures. The advantage of this technology is the reduction of the production cycle to four months in comparison to the six months called for for the egg-based technology. An additional advantage is that mammalian cells are not as sensitive to the avian influenza strains as the chicken embryos.
Recombinant-Based: This process does not require the use of eggs or the influenza virus during any step of vaccine production. Instead, the vaccine is composed of the HA proteins from the chosen influenza strains that are developed through recombinant DNA technology. There is currently one FDA approved recombinant-based influenza vaccine available in the U.S. (FluBlok®), which was Initial approved in 2013, and is approximately double the cost of the others vaccines.
Measuring Immune Response to Vaccines
The hemagglutinin inhibition (HAI) assay is used to determine the immune response to seasonal influenza vaccines. However, this assay’s efficacy applies only to the strains included in the vaccine, which may not be relevant to the vaccine effectiveness versus the unpredicted circulating strains in the upcoming flu season. HA binds to erythrocytes (red blood cells) and causes the formation of a lattice structure, a process called hemagluttination. The hemagglutinin assay involves mixing two-fold serial dilutions of virus along with a fixed amount of red blood cells to the wells of a plastic tray to determine the titer of virus that will certainly cause hemagglutination. The red blood cells that are not bound by the virus sink to the bottom of the well, which can easily be visualized as a dark red dot. The following image shows the results of a hemagglutinin assay involving different viruses (A-H) and their corresponding dilutions (1:4 – 1:8,192).
In the preceding figure, Sample A causes hemagglutination up to a dilution of 1:256, while Sample B has actually no detectable virus. In order to perform the HAI assay, a fixed amount of virus that causes hemagglutination is utilized along along with two-fold dilutions of patient sera to determine the dilution at which the antibodies in the sera will certainly still prevent hemagglutination, which is referred to as the HA antibody titer. Typical outcomes for immunogenicity include:
- The proportion of subjects along with seroconversion, which is defined as A) going from a pre-immunization HA titer of ≤ 1:10 to post-vaccination HA titer of ≥1:40, or B) a substantial increase (at least a four-fold increase from a pre-vaccination HA titer of ≥1:10)
- Geometric Mean Titer (GMT) increase of vaccination-personal antibodies of >2.5
- The proportion of patients along with post-vaccination HA antibody titer ≥1:40
Regulatory authorities utilize the immunogenicity of the each season’s influenza vaccine as a surrogate marker for approval. While personal antibody titers post-vaccination have actually not been correlated along with protection from influenza, some clinical trials have actually shown that antibody titers ≥1:40 have actually been associated along with protection from influenza illness in up to 50% of subjects (Hannoun et al., 2004).
Influenza Vaccine Market
The following vaccines were available for sale in the U.S. for the 2015-2016 influenza season :
According to PharmaPoint, the seasonal influenza vaccine market was valued at approximately $3.2 billion in 2013 and is expected to grow to over $5 billion in 2021. Approximately 135 million doses of the seasonal flu vaccine are sold annually in the U.S. each year, along with a total of 500 million doses sold worldwide. In 2009-2010, sales of the pandemic swine flu (H1N1) vaccine by Novartis, Sanofi, and GlaxoSmithKline totaled $6.4 billion worldwide.
The U.S. government has actually a goal to stockpile enough influenza vaccine to cover 20 million people in the critical workforce (for example the emergency services as well as medical and Government workers). At an standard of $12 per dose (the CDC adult vaccine price), that is a potential $240 million opportunity.
As shown in the table above, the influenza vaccine market is currently served by a limited number of companies. Each of the vaccines offered by those companies are identical in terms of which influenza strains are targeted, along with the only differences being how the vaccines are produced, just what others components are in the vaccine (e.g., if the vaccine contains thimeorsal as a preservative), and the mode of delivery. Sales figures for the top-selling influenza vaccines are given below:
Influenza Vaccine Efficacy/Effectiveness
How well vaccines perform in preventing the disease for which they are produced is a function of the vaccines efficacy and effectiveness, two related terms that have actually distinct epidemiological meanings. The formula to calculate a vaccine’s efficacy is over 100 years old and was Initial proposed in 1915 in a study on whole cell cholera and typhoid vaccines (Greenwood et al., 1915). Using results from a randomized, double blind, placebo controlled clinical trial, vaccine efficacy is calculated using the relative risk (RR) of disease between unvaccinated (UVac) and vaccinated (VAC) patients as follows:
and
For example, the efficacy of FluBlok® was evaluated in a randomized, double blind, placebo controlled clinical trial of 4,648 adults (Treanor et al., 2011). Patients were evaluated for CDC-defined influenza-like illness (CDC-ILI) and any patients along with an episode of CDC-ILI had throat and nasal swab samples evaluated for the presence of influenza virus. The results showed that from 2,344 patients immunized along with FluBlock®, 44 (1.9%) exhibited ILI and tested positive for any influenza strain, compared to 78 (3.4%) of 2,304 patients administered placebo. Flublok’s® efficacy was calculated as 44.6% in preventing culture-confirmed CDC-ILI.
In contrast to efficacy, which is calculated for a vaccine under ideal circumstances and 100% vaccine uptake, a vaccine’s effectiveness measures how well a vaccine performs when it is used in normal circumstances in a community. It can easily likewise measure the net benefits compared to edge effects of a vaccination program. A vaccine’s effectiveness is proportional to vaccine efficacy, yet is likewise affected by vaccine uptake in a target population and nonvaccine-related factors such as hospitalization rates, ambulatory visits, and costs.
The CDC Vaccine Effectiveness (VE) Network is composed of five study sites across the U.S. that job with each other to conduct studies to measure the effectiveness of seasonal influenza vaccination each year. These prospective case-control studies include patients along with acute respiratory illness and cough and utilize a highly accurate laboratory test to confirm influenza infection, along with the cases being those that test positive for influenza virus and the controls being those that test negative. Each patient’s vaccination status is then confirmed by self reporting and medical records. VE estimates are calculated as a rate difference using the odds ratio (OR) for developing infection despite vaccination (e.g., the odds of vaccination among outpatients along with acute respiratory illness and laboratory-confirmed influenza infection compared to the odds of vaccination among outpatients along with acute respiratory illness That test negative for influenza infection).
The CDC has actually conducted VE studies for the seasonal influenza vaccine since the 2004-2005 influenza season, along with the results shown in the following table.
The VE numbers shown above point to one of the main complications along with the currently available seasonal vaccine, which is that if the vaccine is not matched up well along with the strain of influenza that circulates the following season there is a quite reasonable effectiveness (e.g., in last year’s 2014-2015 influenza season, the VE was only 23%). If a poor suit is determined between the vaccine and the circulating strain there is nothing that can easily be done since it takes approximately six months to make sufficient quantities of the vaccine and begin dispensing them.
Influenza and the Elderly
While influenza can easily be a serious disease for people of all ages, those that are age 65 and older are the most vulnerable to developing complications from influenza, including death. Mortality associated along with seasonal influenza disproportionately affects elderly persons as 90% of influenza-related deaths occur in persons aged 65 years or older (Thompson et al., 2003). This is due in portion to the fact that the seasonal influenza vaccine is not as effective in the elderly, along with VE rates as reasonable as 9% in this population (WHO). Complicating matters is the fact that 80% of elderly people suffer from some type of chronic illness (National Council on Aging), and influenza is known to worsen outcomes in those along with chronic diseases. The total economic impact of influenza in the elderly population is estimated at approximately $56 billion (Molinari et al., 2007).
From 1989 to 1997, the influenza vaccination rate for persons aged 65 and older in the U.S. increased from 30% to 67%, Yet mortality and hospitalization rates continued to increase fairly than decline as would certainly be expected (Glezen et al., 2006). portion of the reason for this could be due to declining immunological function and frailty that are went through by elderly patients. For this reason, a brand-new high-dose seasonal influenza vaccine has actually been formulated (Fluzone® High Dose) that was reported to have actually relative efficacy of 24.2% compared to the standard dose vaccination in elderly patients (DiazGranados et al., 2014). While encouraging, these results were obtained during influenza seasons where there was a relatively good suit between the seasonal vaccine and circulating strains, and different results could possibly be seen in years where the relatedness between the vaccine and circulating strains differed materially.
The Need for a Much better Influenza Vaccine
The preceding discussion on currently available influenza vaccines identifies a number of deficiencies, including:
- Strain Specificity: The current seasonal influenza vaccine is only formulated versus three or four personal past strains of the influenza virus, which are identified based upon international laboratory monitoring and identification of the most most likely strains to be circulating through the population during the next influenza season. In a pandemic situation, by the time that the industry formulates the pandemic strain-personal vaccine, approximately six months after the outbreak and identification of the pandemic flu strain, different drifted pandemic strains will certainly circulate that will certainly result in mismatch and a low pandemic vaccine effectiveness.
- New Vaccine called for Every Year: Due to antigenic drift, a seasonal influenza vaccine only offers (limited) protection for one season, and need to be reformulated and re-administered every year.
- Long Production Cycle: The seasonal influenza vaccine takes approximately five to six months to be developed from the very first identification of a brand-new viral strain to being reviewed and approved by regulatory authorities. The timetable shown below is from the WHO.
- Limited Immunological Response: The seasonal influenza vaccines elicit a humoral response from the immune system which results in the production of antibodies directed versus the influenza virus (specifically versus HA). However, there is little if any generation of influenza virus-personal T-cells, which are the primary means through which the body eliminates virally-infected cells in the body.
- Egg Allergies: The majority of seasonal and pandemic influenza vaccines are developed in fertilized hen eggs, thus they cannot be administered to people along with egg allergies.
Clearly, based upon the aforementioned shortcomings, there is a substantial unmet need for a more effective influenza vaccine that can easily defeat these deficiencies. In particular, there is a need for a more robust vaccine to defeat the most substantial challenge of the seasonal influenza vaccine, which is strain-specificity brought about by the sometimes inaccurate forecasting of which influenza strains to target.
M-001
BiondVax has actually produced the M-001 vaccine, a synthetic peptide-based protein that targets both existing and future seasonal and pandemic strains of the influenza virus. The vaccine targets conserved regions of Type A and B influenza viruses such that M-001 could be considered a “universal” influenza vaccine, capable of offering immunological protection versus all strains of the influenza virus.
The company is planning to seek regulatory approval through a two-portion strategy:
- As a “Universal Primer” to be used prior to any HA-based flu vaccine. BiondVax targets two indications for its universal primer: i) seasonal primer for influenza vaccine in the elderly, and ii) pandemic primer for national stockpile.
- As a stand-alone independent “universal” vaccine versus influenza.
Many infectious diseases have actually been eradicated over the past century, for example polio and smallpox, thanks to vaccination. In order to eradicate an infectious disease, a community (or herd) immunity need to be achieved. Three conditions are called for to achieve community immunity:
- An effective vaccine,
- Broad coverage and unchanging vaccine formulation, and
- Enough people to be vaccinated.
With a universal flu vaccine such as BiondVax’s M-001, it appears theoretically possible, for the Initial time in history, to achieve the goal of influenza eradication.
M-001 Composition
M-001 is composed of nine peptides that are believed to be common to most known influenza strains in existence, in portion because these peptides seem to be critical for the virus’ ability to infect a host cell. They are derived from hemagglutinin (HA), matrix 1 (M1) and nucleoprotein (NP) viral proteins and are arranged as triplicates in to a single recombinant protein easily manufactured in bacteria. As discussed above, HA is an antigenic glycoprotein found on the surface of influenza viruses and is likewise the main constituent for a number of seasonal influenza vaccines. However, the peptides from HA in M-001 are derived from the inner portions of the protein where little to no variability between strains exists. M1 is a matrix protein that forms a layer under the patches of the viral cell membrane that contain HA, NA, and M2 proteins, and is responsible for mediating the encapsulation of RNA-nucleoprotein complexes in to the membrane envelope (Sha et al., 1997). NP is a structural protein that encapsidates the viral RNA inside the virus. The sequence of each of the peptides is shown below, along along with the order in which the peptides are arranged in the full-length recombinant protein.
The peptides were chosen based upon their ability to elicit either a B- or T-cell immune response and each of them has actually the ability to bind to a wide array of human leukocyte antigen (HLA) proteins (both Class I and Class II), which are responsible for presenting peptides to the immune system. Some may question the use of peptides from proteins located inside the virus, Yet there is a strong rationale for their use. It has actually long been known that a mild influenza infection in animals provides protection versus a subsequent, more severe challenge along with a virus harboring different HA and NA (Yetter et al., 1980). This effect appears to be mediated by both CD4+ and CD8+ T-cells that recognize conserved regions on viral proteins (Furuya et al., 2010). The CD4+ T-cells that are personal for conserved internal viral antigens likewise potentiate antibody responses to the HA of subsequently encountered viruses (Scherle et al., 1986). The end result is that immunizing along with conserved internal viral antigens results in an increased immunological response to infection following subsequent exposure to influenza viruses.
M-001 Clinical Trial Results
Thus far, M-001 has actually been tested in 479 participants through five different clinical trials, along with the details presented in the following chart. In each of the trials, the vaccine was shown to be safe and able to induce a robust immune response. Due to the fact that M-001 does not target the variable region of HA, the HAI assay cannot be employed as a surrogate endpoint for determining vaccine efficacy when M-001 is administered on its own. Thus, the company has actually produced additional immunological assays to determine immunogenicity. In addition, in its Initial stage in bringing M-001 to market, the company is pursuing a “prime-boost” strategy, where M-001 is given prior to immunization along with the traditional seasonal influenza vaccine, in which case the HAI assay can easily be utilized to compare immunogenicity to currently available influenza vaccines. The results from some of those trials are presented below.
BVX-002 (Atsmon et al., 2012): This was a single-center, randomized, placebo controlled, single blind first-in-human study to examine the safety and immunological response to M-001 in healthy and balanced adults age 18-49. For safety purposes, three subjects were dosed once along with 0.125 mg of M-001 and monitored for 7-9 days prior to the rest of the patients were administered the planned doses. There were four dosing cohorts, and within each cohort subjects were randomized in a 2:1 fashion to receive either 0.25 mg or 0.5 mg M-001 (n=10) or placebo (n=5), along with or without adjuvant. The results showed that M-001 was well tolerated along with only mild and moderate edge events (AES), along with no substantial difference between vaccine and placebo recipients for AEs. A robust humoral (antibodies to M-001) and cellular (PBMC proliferation to viral peptides) immune response was noted for participants immunized along with M-001, and while there were greater humoral responses in patients immunized along with M-001 plus adjuvant, there did not appear to be a difference in cellular response between subjects dosed along with adjuvant and those without.
BVX-005 (Atsmon et al., 2014): This was a two-center, randomized, placebo controlled study in a total of 120 elderly volunteers (age 65+). The subjects were randomized 1:1:1:1 in to four parallel groups to receive either 1) two sequential non-adjuvanted 0.5 mg M-001, or 2) a single non-adjuvanted 0.5 mg M-001, or 3) a single adjuvanted IM injection of 0.5 mg M-001, or 4) one placebo injection. All participants subsequently received the seasonal trivalent influenza vaccine (TIV) three weeks following the last M-001 or placebo injection. The primary outcome measures were safety, tolerability, and tolerance of M-001 along with secondary outcomes being humoral and cellular immune responses. The results showed that priming along with M-001 enhanced seroconversion towards all three strains in that season’s influenza vaccine (denoted on the y-axis in the figure below). The following figure shows the percentage of patients that tested positive for seroconversion (defined as a mean fold increase in anti-HA antibody levels of ≥ four-fold from levels detected in sera collected on day 0, and reaching a level of ≥1:40 post-immunization) and seroprotection (defined as the number of participants per cohort expressing anti-HA antibody levels of ≥1:40 post-immunization). Addition of an adjuvant did not appear to offer any additional immunostimulatory effect.
In 2015, a brand-new ‘Swiss’ epidemic influenza strain (H3N2: A/Switzerland/9715293/13) emerged that did not exist in 2011, which was when the BVX-005 trial took place and the participants in the trial were immunized along with M-001. Blood serum samples from the participants in the BVX-005 trial were exposed to the ‘Swiss’ influenza strain, along with results showing that greater than 60% of the M-001 vaccinated group had seroprotection versus this brand-new Swiss strain, compared to only 10% of those immunized along with merely the seasonal vaccine. This suggests that M-001 may offer a broader, long-lasting immune response not merely to strains currently in existence, yet to future strains that do not even exist yet!
Final Phase 2 Clinical Trials for M-001
BiondVax has actually initiated two Phase 2 clinical trials that will certainly involve a total of 372 participants; one that is ongoing in Europe (BVX-007) and one that will certainly soon start admitting participants in the U.S. (BVX-008). The BVX-007 trial is currently taking place in Hungary, along with support by the European UNISEC Consortium, along with enrollment ongoing. The BVX-008 trial is taking place in the U.S. and is being fully funded by the National Institutes of Health (NIH) and conducted by the National Institute of Allergy and Infectious Diseases (NIAID).
BVX-007: This is a Phase 2b clinical trial that is expected to enroll 222 adults (age 18-60). The study will certainly evaluate the safety and immunogenicity of M-001 when used as a primer to the H5N1 avian influenza vaccine. The H5N1 avian influenza vaccine will certainly be given once, at a sub-optimal dose, in order to test whether M-001 can easily enhance its immunogenicity. If successful, this trial could show the dose sparing potential of M-001, which in the case of a pandemic situation could allow for the available doses of pandemic vaccine to be administered to more subjects. The trial is being funded through a grant from the European Union and is being conducted in conjunction along with the European UNISEC Consortium, which is a group of three academic partners, five National Health Institutes, and three companies along with the objective to identify, develop, and clinically test the most promising leads for a universal influenza vaccine. We anticipate results from this trial to be reported in the fourth quarter of 2016.
BVX-008: This will certainly be a Phase 2 clinical trial being conducted by the NIAID, which is portion of the NIH. The double blind, multicenter, randomized, placebo controlled trial is expected to enroll 150 adults (18-45) and will certainly examine the use of M-001 as a primer vaccine to be given several weeks prior to the H7N9 avian pandemic vaccine. The primary outcome will certainly be safety and tolerability along with secondary endpoints examining humoral and cellular immune responses. We anticipate this trial will certainly begin during the second quarter along with results from this trial in late 2016 or early 2017.
BiondVax Regulatory Strategy and Opportunity
BiondVax is pursuing a two-portion strategy for the development of M-001 that involves Initial attaining approval for the vaccine as a “universal” primer for use prior to any seasonal influenza vaccine in the elderly and prior to any pandemic influenza vaccine as portion of preparing for any pandemic outbreak using a national stockpile of M-001. The company will certainly then continue development of M-001 as a stand-alone independent universal influenza vaccine.
Following the successful completion of the company’s ongoing Phase 2 clinical trials, BiondVax’s management anticipates an end of Phase 2 meeting being held along with the FDA in the 2017/18 timeframe such that an Investigational brand-new Drug (IND) application can easily be filed for Phase 3 clinical trials for M-001. In order to fund the Phase 3 trials, we believe the company is pursuing non-dilutive financial sources either via grants, from royalty bearing regional manufacturing and distribution agreements along with down payments, or in collaborations along with larger pharmaceutical companies. We believe the Phase 3 program could cost between $25-50 million. The following chart gives additional details about the planned Phase 3 clinical trials.
Using M-001 as a universal primer vaccine to be used prior to any seasonal and pandemic vaccines is a wise strategy, as it allows BiondVax to leverage the existing approved regulatory marker (HAI) for influenza vaccines, and therefore to conduct smaller sized clinical trials, providing a faster time to market than could be achieved for M-001 as a stand-alone independent vaccine.
We believe that for the seasonal primer for the elderly indication, a short article marketing Phase 4 clinical trial along with clinical efficacy as an endpoint might be called for for obtaining permanent marketing authorization, similar to just what was called for for the approval of Fluzone HD. The clinical efficacy endpoint is defined as reduction of illness rate and severity, and will certainly require significantly more participants than for the primer indications. The stand-alone indication will certainly likewise require a clinical efficacy endpoint, Yet that will certainly be portion of the Phase 3 program.
The company has actually already shown that M-001 enhances the immunogenicity of the seasonal vaccine in young adults and elderly participants, including to the pandemic H1N1 swine flu strain that is included in the seasonal flu vaccines since 2010. Currently the company, with each other along with the UNISEC consortium (EU) and the NIH/NIAID (US), is testing the ability of the vaccine to be used as a universal pandemic primer vaccine. Both of these indications are potentially pretty lucrative.
There were approximately 135 million doses of the influenza vaccine administered last year along with approximately 20% of those administered to the elderly. Assuming a 33% penetration rate which will certainly use M-001 as portion of prime-boost vaccine, then at approximately $20 per dose (based on a midpoint between the Fluzone HD geared to the elderly price of $28 and the standard Fluzone price of $8 per dose) it is a potential $200 million Chance merely in the U.S.
Another market is the pandemic primer for national stockpile. The critical workforce in the U.S. is approximately 15% of the population (20 million people), and 1/3rd of the stockpile is replaced annually (given a shelf-life of three years). At $12 per dose that represents An additional $240 million opportunity. The total influenza vaccine market is expected to be over $5 billion by 2021, so even along with only a 10% penetration rate, that is a potential $500 million annual opportunity.
Other Universal Influenza Vaccines Under Development
There are a number of others companies developing universal influenza vaccines, Yet BiondVax appears to be the furthest ahead in development.
- SEEK: Seek is developing a universal influenza vaccine based on six unique peptides that induce a cellular response by the immune system. The vaccine, Flu-v, has actually been tested in 80 people in a Phase 1 and a Phase 2 clinical trial. Results from those studies showed that vaccinated subjects had significantly lower symptom scores and viral titer levels compared along with non-vaccinated subjects. In addition, blood from vaccinated subjects showed a cross-reactive immunity to both Type-A and Type-B influenza viruses.
- Inovio: Inovio is developing synthetic DNA vaccines versus both seasonal and pandemic strains of the influenza virus. The company has actually conducted two Phase 1 open label studies to evaluate the safety, tolerability, and immune responses versus multiple combinations of Type A influenza subtypes. Both studies showed the vaccine to be safe and well tolerated as well as capable of generating a robust immune response.
- FluGen: FluGen is developing a vaccine made from a genetically engineered influenza virus, M2SR, that has actually a personal deletion in the viral genome. This deletion allows for only a single replication of the vaccine virus within the host cell, which results in long-lasting, cross-protective immunity versus multiple viral subtypes without the generation of progeny virions. The company recently raised $12 million in order to perform a Phase 1 clinical trial.
Financials and Capital Structure
BiondVax is well capitalized and has actually a quite lean structure along with minimal cash burn each quarter.
As of September 30, 2015, the company had $10.4 million in cash and cash equivalents due to a U.S. very first public offering in May 2015 of 1.9 million American Depository Shares (ADSs), along with each ADS representing 40 of the company’s common shares, which are listed on the Tel Aviv Stock Exchange. The ADSs were sold for $5 per ADS, gaining investors one share and one warrant (convertible at $6.25 to 1 share). This netted the company gross proceeds of $9.6 million. In June 2015, the company closed yet another and partial exercise of the over-allotment option granted to the underwriters, That purchased 110,000 additional ADSs for $5 per ADS. Total gross proceeds to BiondVax from the offering were approximately $10.1 million. The company is currently burning approximately $250,000 per month. It is noted that its two ongoing clinical trials (BVX-007 and BVX-008) are being funded primarily by third parties. We estimate there is sufficient capital to fund operations until mid-2018, and if the warrants are converted to shares, it will certainly offer additional funds (of up to $13.3 million). In addition, there is no debt on the balance sheet.
BiondVax’s common shares are traded on the Tel-Aviv Stock Exchange while the company’s ADSs are traded on the Nasdaq. There are currently 135 million shares outstanding (listed in Tel Aviv), or 3.4 million ADSs (listed on Nasdaq), and when factoring in the options and warrants the company has actually a fully diluted share count of approximately 251 million shares, or 6.3 million ADSs.
The following table breaks down the company’s capital structure.
Valuation Methodology
We value BiondVax using a probability adjusted discounted cash flow model that takes in to account potential revenues from the sale of M-001 as 1) a seasonal primer for influenza vaccine in the elderly; 2) a pandemic primer for a national stockpile; and 3) a stand-alone independent universal influenza vaccine. At this point, we are assuming that the company will certainly enter in to one or more partnerships along with larger pharmaceutical companies that will certainly result in BiondVax receiving royalties (we model 15% for all indications) on the sale of M-001.
As a primer for both the seasonal vaccine in the elderly and a pandemic stockpile, we model for the current Phase 2 clinical trials to be completed by the Initial half of 2017. This will certainly allow for an end-of-Phase 2 meeting along with the FDA and initiation of a Phase 3 program in 2018, regulatory filings in 2020, and approval in 2021.
In the U.S., there were approximately 135 million doses of the influenza vaccine administered last year along with approximately 20% of those administered to the elderly. Assuming a 33% penetration rate which will certainly use M-001 as portion of prime-boost vaccine, then at approximately $20 per dose (based on a midpoint between the Fluzone HD geared to the elderly price of $28 and the standard Fluzone price of $8 per dose) it is a potential $200 million Chance merely in the U.S. We believe the rest of the Globe represents a potential $300 million peak opportunity. We apply an 18% discount rate and a 50% probability of approval to arrive at a net present value for M-001 as a primer for seasonal vaccination in the elderly of $41 million.
Another market is the pandemic primer for national stockpile. The critical workforce in the U.S. is approximately 15% of the population (20 million people), and 1/3rd of the stockpile is replaced annually (given a shelf-life of three years). At $12 per dose that represents An additional $240 million annual opportunity. We apply an 18% discount rate and a 50% probability of approval to arrive at a net present value for M-001 as a primer for a pandemic vaccine of $34 million.
As a stand-along universal vaccine, we anticipate Phase 3 trials initiating in 2019 along with a regulatory filing in 2021 and approval in 2022. By that time we model for approximately 140 million doses of the influenza vaccine being administered in the U.S., and along with a peak market share of 25%, we model for peak revenues of over $700 million. We apply an 18% discount rate and a 33% probability of approval to arrive at a net present value for M-001 as a stand-along universal vaccine of $36 million.
Combining the net present value for each of the company’s development programs along along with the company’s cash total as of September 30, 2015 ($9.4 million) and expected operating burn of $15 million, we arrive at a net present value for the company of approximately $106 million. Breaking down this by the company’s fully diluted share count of 6.3 million ADSs leads to a reasonable value of approximately $17 per share, and we are assigning a ‘Buy’ rating to the stock.
Risks to Consider
Additional Capital will certainly Be Necessary to Fund Phase 3 Trials: The company currently does not have actually enough cash to conduct the Phase 3 trials that will certainly be necessary to seek FDA approval for M-001 as a universal primer for the seasonal influenza vaccine in the elderly and as a universal primer for pandemic strain-personal vaccines. Raising additional capital from the capital markets could result in substantial dilution to current shareholders. If the company enters in to strategic collaborations or partnerships in order to fund the Phase 3 program, it might be necessary to relinquish some rights of the company’s technologies and products as a result of royalty bearing regional manufacturing and distribution agreements along with down payments in chosen territories.
M-001 May Not Be Successful in Future Clinical Trials: While M-001 has actually shown to been safe and well tolerated in the clinical trials that have actually been conducted thus far, there is no make certain that the compound will certainly show efficacy or meet end-points in Phase 3 clinical trials that involve thousands of patients. In addition, it is possible that safety signals not seen in earlier clinical trials could arise when M-001 is tested in a much larger cohort of subjects.
M-001 is Currently the Company’s Only Product Under Development: BiondVax is solely focused on the development of M-001 as it is the only product currently in the company’s pipeline. Thus, the company’s triumph relies solely on the ability to commercialize M-001.
Disclosure: I/we have actually no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Business partnership disclosure: I job for Zacks Investment Research. They do business along with several hundred publicly traded companies, one (or more) of which happens to be discussed in this article. The short article below is written by me and is 100% my opinion. No person or company paid me to write it (or told me just what to say), and no one at Zacks had any say over the short article either. Please see my personal disclaimer linked next to my name for more info.
Editor’s Note: This short article covers one or more stocks trading at much less than $1 per share and/or along with much less than a $100 million market cap. Please be aware of the risks associated along with these stocks.
from Influenza – NewsBlog http://ift.tt/1R4NcQq
