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BVXV: Positive Results in NIH-Sponsored Phase 2 Trial of M-001; Raising Valuation to $81…

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By David Bautz, PhD



Business Update

Topline Results from Phase 3 Trial of M-001 Expected by End of 2020

BiondVax Pharmaceuticals, Ltd. (NASDAQ:BVXV) is a biopharmaceutical company developing a universal influenza vaccine (M-001) designed to protect individuals from all strains of influenza. The company’s strategy for commercializing M-001 involves testing it in a pivotal Phase 3 program as a standalone influenza vaccine to assess its clinical efficacy. The ongoing Phase 3 trial is being conducted in Europe following feedback about the trial design and approval to initiate it from the European Medicines Agency (EMA). The EMA also stated that “a single pivotal efficacy trial that provides a robust demonstration of efficacy against laboratory-proven influenza like illness (ILI) could suffice for an approval”.

In November 2019, the company announced that the second cohort of the Phase 3 trial was fully enrolled. A total of 12,463 adults aged 50 years and older have been randomly assigned to receive either M-001 or placebo with 4,042 enrolled in Cohort 1 and dosed prior to the 2018/2019 influenza season and 8,421 enrolled in Cohort 2 prior to the 2019/2020 influenza season. The primary outcome of the trial is safety and reduction of illness rates. All participants were monitored for influenza-like illness (ILI) symptoms throughout the influenza season and swabs were collected from any participant with ILI symptoms and influenza infection confirmation was conducted by a qualified laboratory. In addition, cell-mediated immunogenicity markers of M-001 are being evaluated in a subset of participants. An overview of the trial is given below.

Laboratory analysis of specimens collected from any study participants presenting with ILI have been completed for the first cohort of 4,094 participants. Of those 4,094, a total of 1,135 ILI cases were reported and of those there were 137 laboratory confirmed influenza cases. The trial remains blinded, so we will not know how those cases were distributed between those receiving M-001 and placebo until next year, however it is important to note that there have been no treatment related safety concerns.

Thus far, there has been no significant impact to the trial due to the ongoing coronavirus epidemic. Most of the swab samples had been collected prior to epidemic breaking out in the countries where the trial is being conducted. So long as the situation does not deteriorate further, we anticipate topline results will be available before the end of 2020, at which time the company will have data on 12,463 individuals to determine if M-001 is effective in reducing influenza illness against all naturally encountered influenza strains for one influenza season. We anticipate that additional trials aimed at extending the indication to more than one year are likely once M-001 reaches the market.

While the development of M-001 is not directly related to the current coronavirus outbreak, what the COVID19 pandemic shows is that an effective universal influenza vaccine could help to alleviate the overall burden on healthcare systems around the world, thereby making it easier to handle novel viral outbreaks, such as SARS-CoV-2. In the current environment, an effective universal influenza vaccine could both reduce the number of individuals experiencing influenza-like illnesses, thus making it easier to identify those suffering from the novel coronavirus, and reduce the rates of hospitalization for those suffering from influenza, thus freeing up valuable hospital resources.

Primary Endpoints Achieved in Phase 2 Trial of M-001

On June 10, 2020, BiondVax announced the completion of the study report for the Phase 2 clinical trial of M-001 sponsored by the National Institute of Allergy and Infectious Diseases (NIAID), a part of the National Institutes of Health (NIH) and conducted by NIAID Vaccine Treatment and Evaluation Units. The study results can be found here. The trial enrolled 120 participants between the ages of 18-49 at three centers in the U.S. Each participant received two doses of M-001 in the Spring and then a dose of the seasonal quadrivalent influenza vaccine in the Fall. The length of time between immunizing with M-001 and the seasonal influenza vaccine was much longer in this trial (~ six months) compared to approximately three weeks in previous trials. The primary objectives of the trial were to assess the safety of M-001 and the T cell responses to M-001 component peptides. Secondary objectives of the trial included assessing serum antibody responses to the seasonal influenza vaccine target viruses.

The results of the trial showed that M-001 was safe and well tolerated and induced significant polyfunctional T cell responses, which is in line with the six previously completed clinical trials of M-001. The following graph shows one of the positive endpoints, with patients immunized with M-001 and the seasonal quadrivalent influenza vaccine showing a statistically significant increase in the percentage of CD4+ T cells that express interleukin 2 (INTLK2), tumor necrosis factor (TNF), and interferon gamma (IFNG) compared to those administered only the seasonal quadrivalent influenza vaccine. We anticipate the full results being published in a peer-reviewed journal later this year.

The positive results from this trial are all the more encouraging given the fact that it was conducted independently by the NIH. BiondVax supplied M-001 and contributed to the design of the study, however the NIH sponsored, conducted, and performed all data analysis. We also believe it is important to note that the principal investigator of the trial, Dr. Robert Atmar, is currently serving on the Advisory Committee on Immunization Practices (ACIP), which is a 15-member board that is responsible for making vaccine recommendations to the Director of the Centers for Disease Control (CDC) regarding the use of vaccines for effective control of vaccine-preventable diseases in the civilian population of the U.S.

New Directors Elected to Board

In March 2020, BiondVax announced the appointment of three new directors to the company’s Board of Directors: Mr. Samuel Moed, Dr. Yael Margolin, and Mr. Adi Raviv.

Mr. Moed currently serves as Senior Vice President, Corporate Strategy at Bristol Myers Squibb (BMY). He previously oversaw strategy for Bristol’s Worldwide Pharmaceuticals Group and has also led a number of businesses including as President of U.S. Pharmaceuticals and as President of Worldwide Consumer Healthcare.

Dr. Margolin has over 35 years of experience in various roles in venture capital and the pharmaceutical and biotech industries. From 2005 to 2019 she served as President, CEO, and director of Gamida Cell Ltd. (GMDA). Prior to that, Dr. Margolin was Vice President of Denali Ventures LLC, a venture capital firm focused on healthcare, and a program manager at Teva Pharmaceuticals (TEVA).

Mr. Raviv has over 30 years of experience in the finance industry. Since 2016, he has been a Principal at Capacity Funding LLC, a company that provides working capital solutions to small businesses. He previously served as CFO for two companies that provide similar types of funding alternatives. Mr. Raviv has served on the boards of directors for many private and public companies and has extensive experience in the capital markets, cash management, corporate finance, and investor relations.

Financial Update

On June 12, 2020, BiondVax announced financial results for the fourth quarter and full year 2019. As expected, the company did not report any revenues during the fourth quarter or full year 2019. R&D expenses in the fourth quarter of 2019 were approximately $9.1 million compared to approximately $7.7 million in the fourth quarter of 2018. R&D expenses for 2019 were approximately $19.9 million compared to approximately $20.8 million in 2018.

BiondVax exited 2019 with approximately $20.9 million in cash and cash equivalents. In May 2020, the company announced the receipt of approximately $4.2 million since Jan. 1, 2020 through the exercise of warrants. The publicly traded warrants (BVXVW), had an exercise price of $6.25 and expired May 15, 2020. We estimate that BiondVax now has sufficient capital to fund operations at least through the end of 2020, and importantly past the release of topline data from the Phase 3 study of M-001.

In October 2019, BiondVax received an additional €4 million from the European Investment Bank (EIB) to support the ongoing Phase 3 clinical trial of M-001. The non-dilutive financing agreement with the EIB, which was first announced in July 2017, is structured as a 0% fixed interest rate loan. The original €20 million was disbursed over the course of 2018, and the additional €4 million was disbursed upon enrollment of the first participant in the second season of the Phase 3 clinical trial. All other terms of the agreement are the same for the €4 million as for the original €20 million.

BiondVax now has approximately 11.4 million ADSs outstanding and when factoring in stock options a fully diluted ADS count of approximately 12.0 million.

Background on M-001

BiondVax is developing 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 against all strains of the influenza virus.

M-001 is composed of nine peptides that are believed to be common to most known influenza strains in existence, in part 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 into a single recombinant protein easily manufactured in bacteria. HA is an antigenic glycoprotein found on the surface of influenza viruses and is also the main constituent for a number of seasonal influenza vaccines. However, the peptides from HA in M-001 are derived from the inner parts 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 into 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 with the order in which the peptides are arranged in the full-length recombinant protein.

The peptides were selected based upon their ability to elicit either a B- or T-cell immune response and each of them has 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, however there is a strong rationale for their use. It has long been known that a mild influenza infection in animals provides protection against a subsequent, more severe challenge 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 specific for conserved internal viral antigens also potentiate antibody responses to the HA of subsequently encountered viruses (Scherle et al., 1986). The end result is that immunizing with conserved internal viral antigens results in an increased immunological response to infection following subsequent exposure to influenza viruses.

Previous Clinical Trial Results

M-001 had been tested in 698 participants through six different clinical trials, 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.

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 adults age 18-49. For safety purposes, three subjects were dosed once with 0.125 mg of M-001 and monitored for 7-9 days before 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), with or without adjuvant. The results showed that M-001 was well tolerated with only mild and moderate adverse events (AEs), with no significant 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 with M-001, and while there were greater humoral responses in patients immunized with M-001 plus adjuvant, there did not appear to be a difference in cellular response between subjects dosed 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 into 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 with secondary outcomes being humoral and cellular immune responses. The results showed that priming 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 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 with M-001. Blood serum samples from the participants in the BVX-005 trial were exposed to the ‘Swiss’ influenza strain, with results showing that greater than 60% of the M-001 vaccinated group had seroprotection against this new Swiss strain, compared to only 10% of those immunized with just the seasonal vaccine. This suggests that M-001 may offer a broader, long-lasting immune response not just to strains currently in existence, but to future strains that do not even exist yet!

BVX-007: In 2017, BiondVax announced results from the company’s Phase 2b clinical trial of M-001. The trial, which was funded through a grant from the European Union and was conducted in conjunction with the European UNISEC Consortium, enrolled a total of 219 participants aged 18 to 60 years. Each participant received two injections of 0.5 mg M-001, 1.0 mg M-001, or placebo prior to a partial dose of avian H5N1 pandemic vaccine.

The trial hit both primary endpoints for safety and immunological response. To test for immunological response, T cell activation was measured in in vitro assays through the release of the cytokines interleukin (IL)-2, interferon (INF)-γ, and tumor necrosis factor (TNF)-α. The following figure on the left shows that statistically significant T cell activation was found in participants that received 1.0 mg M-001 when compared to the placebo group. The following figure on the right shows that the there was a significant increase in T cells that expressed two cytokines, which have been shown to be functionally superior to single-cytokine producing T cells (Kannanganat et al., 2007).

The study’s secondary endpoint evaluated antibody response to avian H5N1 pandemic vaccination. In one of the four H5N1 strains tested there was a statistically significant increase in antibody response in those receiving M-001.


We have made a few changes to our valuation model based on the positive Phase 2 results from the NIH sponsored trial. We have increased our peak sales in the U.S. to approximately $1 billion (with approval in 2023) and $1.5 billion in the E.U. (with approval in 2022). While positive results from the Phase 3 trial currently being conducted in Europe may be sufficient to allow for a BLA filing in the U.S., we anticipate some type of bridging study will likely be necessary, thus pushing back approval in the U.S. by one year compared to the E.U. We believe that peak revenue forecasts for >$1 billion are justified based upon the clear advantages that M-001 has over the seasonal influenza vaccines, particularly in regard to efficacy without any limitations brought about by whichever influenza strain happens to be circulating. With a 13% discount rate and a 70% probability of approval, we value M-001 as a standalone vaccine at approximately $742 million.

Our model also includes the stockpiling of M-001 as a pandemic influenza vaccine. We estimate for approximately 60 million doses of the vaccine being stockpiled and 1/3rd of the stockpile being replaced annually (given an estimated shelf-life of three years). At $15 per dose (we believe a contract to stockpile would include a discount to the list price) that represents a $300 million annual opportunity. We apply a 13% discount rate and a 70% probability of approval to arrive at a net present value for M-001 as a primer for a pandemic vaccine of $376 million.

Combining the net present value for M-001 as a stockpiled and standalone vaccine along with the company’s current cash position and an additional 2 million ADS to account for future capital raises leads to a valuation of $81 per share.

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