[PUBLIC] VBI Vaccines (VBIV) GUPTA Investment Thesis

Version 1/3/21

This is a writeup of my investment thesis for VBIV. In writing this up, I hope to crystallize my thoughts, sharpen my DD (Due Diligence) on the value of VBIV as a company and how it will perform near and long term in the market as an investment. This doc is very thorough intentionally and may feel too dense or like it’s unbearably long for some people. You’ll quickly realize reading it will take you hours to go through all the material including all the references. I recommend you use the outline to decide what is most useful to you.

I provide a summary page up front, while also covering in depth the company’s history, management, their assets and pipeline, IP coverage, and why I believe they are likely to get acquired/do a partnership to buyout deal soon. I believe the company is undervalued and probability of success is not priced into their market cap, and independent of M&A it will be a valuable investment. However note that this company has a lot of red flags in its history including the involvement of Phillip Frost and series of odd actions by a historically successful team of vaccine/immunology experts/institutes that imply either they have a plan they are sticking to for M&A or somehow are profiting by scamming. I believe they have a plan and make my case while trying to acknowledge the red flags in this company as neutrally as possible.

Note I haven’t had a chance to summarize concisely my analysis of pipeline (I know its dumb to share this without that). I still think there’s good DD here and folks can dig in themselves. I hope to finalize the science analysis writeup this weekend and post update on this to various channels. I’ve done literature reviews on every aspect of the landscape for the areas they are focused on to make my judgement in general though feedback is welcome.


I am not liable for any decisions you make based on the above and nothing above is meant to be construed as financial advice. Investing in penny stocks is a risky decision and one you should make after consulting your financial advisor. I am also not associated with VBIV the company and am writing this up as a retail investor to put my thesis for investing in this company public for further feedback.

I am not an immunologist or medical professional, but I do work in the tech industry and have done my research as thoroughly as possible trying to validate the scientific theories presented as well as understand the market landscape. I write with my POV on how I interpreted different things, and attempt to provide references/evidence wherever I can to statements made while acknowledging where I speculate. Any place you see potential for correction, you are welcome to flag to me.

Any and all feedback on the investment thesis, either challenging points or providing more data and perspective is welcomed! Long live the art of conducting research and due diligence based investing!


Thanks to numerous people who have taught me on my journey into biotech investing/company appraisal. Especially bmkb24 and everybody from reddit/discord/stocktwits. You’re all great to discuss and bounce ideas off of and unravel these puzzles bit by bit.


Market Cap: 666M

Shares Outstanding: 242.3M shares

Insider Ownership (top insiders): ~33%
Institutional Ownership (top owners): ~30-33%

Short Interest/Float: 42M shares short (17% of company), assume retail is 15% ownership, means float is near 19% and 80-90% of that is short

Cash: 120M as of 9/30/2020, with a 44M grant for COVID program

Burn Rate: Anticipated 12-13M a quarter, assuming low offering risk

Enterprise Value: 502M

Employees: 128 (~10 executive, ~84 manufacturing, ~34 R&D)

Management Team Appraisal (R&D, M&A, Sales): World class all star team across management, board of directors, and scientific/commercial advisory boards

Pipeline: Multiple assets that have proven successful in Ph1/2 (CMV), are approaching combo Ph2b (Hep B Tx), Pivotal Ph3 combo (GBM), or regulator approval soon (Hep B Vaccine), with COVID ph1 initiating any day
Assets: LPV platform, eVLP platform, pipeline IP, Israeli manufacturing facility

IP Coverage: 90% of VBIV assets/pipelines have been granted strong defensive patents or have resolved IP ownership in collaborations

Core Thesis/Summary: 

  1. VBIV is a company that has high potential value assets across Chronic HBV immunotherapy, CMV+ tumor immuno-oncology therapeutics, infectious disease (Covid, CMV, HepB with IP for Zika/Flu), eVLP and LPV platforms etc

  2. With strong management and leadership in BoD/advisory boards, along with two of the best biotech firms in the industry (Arch/Perceptive) involved with high stakes here (insiders collectively own 33% of company) for multiple years, it adds conviction that management can succeed in realizing the potential of their assets and ensure a strong exit (and mitigates the major red flag of Phillip Frost’s involvement between 2015-2018)

  3. VBIV has demonstrated it’s eVLP platform works better than existing protein subunit vaccine solutions with its CMV ph1 trial, and success in COVID should repeat such behavior demonstrating how best in class eVLP platform really is when applied to the right problems

  4. Their success in recurrent GBM already at early stages demonstrates large potential to be a blockbuster for other solid tumor designations and solve unmet need in GBM between the outlier median overall survival, partial responses, and high stable disease rate for the most aggressive cancer known to man.

  5. Their success in reactivating immune responses in chronic HBV patients despite historical failure with therapeutic vaccines offers potential for them to be a combo therapy with other complementary HBV virality reduction therapies, unlocking a massive market globally.

  6. With COVID trials commencing soon, and being the Canadian equivalent to Moderna with their NRC/Canadian Covid Task force connections, it is likely they will see supply agreements for Canada that will drastically raise valuation from current levels. This offers potential post-data to see them usurp the role of numerous other two dose protein based vaccines like GSK/Sanofi/CSL in supplying global governments with their single dose temperature stable scalable vaccine.

  7. The odd increase in institutional ownership, odd insider trading patterns, and various other signals indicate a high potential for M&A activity with VBIV (whether licensing deal/partnership to buyout or buyout) in the near future (I suspect in January though possible it extends to Q1)


1. COVID vaccine data + speculation of Canadian supply agreements in Q1 2021

2. GBM 2 year survival data + additional tumor data for newer cohorts in Q1 2021

3. Hep B high dose therapeutic vaccine data in Q1 2021 (likely Jan/early Feb)
4. Potential M&A transaction (license or merger) in Q1 2021 (high possibility of January news)

PT: Depending on COVID results and success as well as whether Chronic HBV functional cure is proven, I can see VBIV trading near 30-40$ by end of 2021

History of VBIV/Variation Biotechnologies Inc.

A company that has been around since 2001 (possibly co-founded by the current CSO and CMO, seeing conflicting reports of this) with various efforts in vaccines, but which does not appear to have stood out much as far as I can tell barring their connections to the Canadian NRC. I speculate Steven Gillis started to become involved in 2006 soon after joining Arch, and helped recruit the current CEO and Chief Scientific Officer in 2009. Through the experience of Gillis/Baxter/Anderson and very intelligent experienced people, they invested in vaccines over many years resulting in valuable assets and IP, while hiring a rockstar team with potential to capture large market share in infectious disease, immuno-oncology, and vaccine therapeutics for chronic viral infections.

I divide the company into three phases, the initial foundational asset/pipeline development period from 2009->2014, the growth into a public more visible company period from 2015-2017, and then the pipeline maturation period from 2018->present day

Initial asset/pipeline development (2009-2014)

TLDR; This period is characterized in my opinion by the beginning of VBIV investing in its foundational assets (LPV, eVLP) that define its value prop while attempting to develop unique pipelines of interest to the industry (CMV)

LPV: The first asset was VBIV’s proprietary developed LPV technology which allows you to store vaccines outside a cold-chain (often a concern due to loss of potency from moisture/temperature instability), extremely useful for extending distribution/logistics into developing nations and reduce cold chain related expenses for infra. See here for detailed analysis around this asset’s value.

eVLP: The second asset was acquired in 2011, acquired ePixis for their eVLP platform that lets them leapfrog to the theoretically most advanced protein subunit vaccine tech in industry, which at the time was unproven, but has since been the core for their developed pipeline assets. See here for more details analysis around this asset’s value.

CMV pipeline: I believe around this period they attempted to develop vaccines/therapies for numerous indications (often in collaborations or on grants from the NRC using their HEK293 cell lines with eVLP), including HIV, RSV, Hepatitis C with varying results, until they managed to hit an area of long term success with CytoMegaloVirus (CMV), a target that is applicable both for vaccination purposes as well as therapeutic purposes in cancer and has been their key pipeline asset from eVLP to today in my opinion. 

Public visible company evolution (2015-2017)

TLDR; This period is noteworthy as the company grew and hired more people including some key people on their BoD (Gillis, De Wilde), advanced their pipelines across multiple indications (CMV, Hep B Vaccine) into human clinical trials, went public via reverse merger adding late stage pipeline assets, gained institutional interest (Perceptive/Opko), and saw some large pharma collaborations materialize and fade (Sanofi/GSK)

SciVac Reverse Merger: However, the biggest event of this period in my opinion is the reverse merger with SciVac (Official PR) starting in 2015, finishing in 2016 which combined the two company’s expertise/platform/pipelines with SciVac’s Israeli manufacturing facilities, cash, and their powerful Hepatitis B Vaccine SciBVac. This additionally enabled them to go public on the US capital markets (while VBIV management remained in control/execution position), and with the public eye focused on Gillis and Phillip Frost joining hands, institutional awareness grew. The value of SciVac was not limited to a HBV vaccine, but also was based on a potential future application for chronic HBV therapeutic vaccines. Frost’s fame in biopharma investing also helped put a lot more eyes on VBIV and grow institutional awareness. 

BOD/Tute Visibility: It is noteworthy that around this time I believe they managed to have Gillis and De Wilde both officially join the board of directors for VBIV (I think De Wilde was a consultant for them originally), along with OPKO individuals (representing Frost), all great visibility adds for the company. Additionally, Perceptive Advisors, one of the best biotech investment firms out there (similar pedigree to Arch) also became invested in VBIV (I believe in 2015), along with Frost’s company OPKO.

LPV:They managed to get their LPV platform to be evaluated around this time frame by Sanofi (2015) and GSK (2016) in collaborations for applications to flu, though both appear to have terminated their evaluation agreements with VBIV since then.

eVLP progress: The two other main events that are exciting are VBIV initiating their ph1 trial in CMV, while also beginning pre-clinical investigation into a CMV+ immunotherapeutic candidate for treating glioblastoma (GBM) tumors that gradually was given regulatory approval to initiate. In addition, they also worked on a Zika vaccine in 2016 during the Zika crisis. They also demonstrated positive interim data for CMV in 2017.

SciBVac: They also evaluated and began conversations about pushing for FDA approvals of SciBVac while building a case for the medical need of a better Hep B vaccine. This culminated in them initiating two ph3 trials for SciBVac that would demonstrate their vaccine outperforming Engerix-B, the standard of care. 

At this point, VBIV had institutional ownership, a strong BoD, multiple pipeline assets including a late stage ph3 asset and eVLP based ph1 assets, it was a completely different company from the 2009 company Baxter/Anderson joined. 

Frost Red Flags: However Frost’s involvement was becoming a liability and we note that during this period Frost routinely used VBIV in pump and dump schemes with paid promoters (including for their Zika vaccine). In my opinion Frost is the worst thing associated with this company and causes a huge negative stigma that warrants everything about this company and their assets be scrutinized very carefully to validate their claims and confirm whether or not the company is being truthful or not. I endeavor in this document to verify the claims both on the science and on the market potential of their assets (tl;dr I think aside from their Hep B vaccine’s commercial future, the rest checks out from my review of the scientific literature and their own results). Note there are extensive short reports put out that hammer the point on how big a red flag Frost is (see Culper Research’s June 2nd 2020 report). I personally agree with the report’s claims that VBIV has a sketchy past with Frost as well as that the company’s SciBVac asset isn’t likely to see much commercial value, though I believe this for different reasons you can view here. I disagree that the company is worthless and SciBVac is worthless IP.

Mature pipeline evolution (2018-present)

TLDR; This period is notable in my opinion because we finally see clinical data for the eVLP platform assets (CMV/GBM), development of a new Hep B Therapeutic for chronic infected patients, patent publications covering 90% of their assets, the departure of Frost and his associates from the company (very positive), significant dilution as the company funds its pipeline trials (not so positive), continued pharma collabs (GSK, Brii), significant hiring focused on M&A experience to exec team + BoD, formation of advisory boards (science, clinical, commercial), and interesting patterns with the company’s insiders hinting at attempts to sell the company (corroborated by significant institutional adds)

CMV: In clinical data, the company demonstrated positive CMV ph1 results that were 3-4x greater immune response than recombinant vaccine attempts by Sanofi/GSK for the same anti-gen targets (ie evidence eVLP was the main cause and works). They designed their ph2 study with plans of initiation late 2019, engaging with the FDA on study design exploring much higher doses, however mysteriously halted further progress into ph2 of CMV citing lack of resources. An odd move given their results were some of the best in the landscape at extremely low doses with potential to improve further. 

GBM: They also began dose range finding for recurrent GBM therapy and demonstrated interesting survival data that doubled the standard expected survival for such patients even in their early dose finding study, while also initiating a collaboration with GSK to use their adjuvant with VBIV’s therapy (a nice validation the results are meaningfully interesting). Since then, VBIV has demonstrated incredible results with multiple partial responses (50% tumor reduction) in their follow on trials, and are exploring a pivotal study in combo with anti-PD1 treatments for 2021. 24 month survival results for the initial dose range finding study was likely collected as of Dec 2020 (the complete enrollment date being 2018 December) and is anticipated in Q1 2021 (note 24 month survival would be extremely unusual as its 2-3x the mOS with rGBM SoC).

SciBVac: The company ran two trials over this multi-year period, the CONSTANT and PROTECT studies that were geared towards demonstrating safety and improved immune response in adult populations. While the company failed to meet the bar of a 2 dose vaccine that could replace the 3 dose standard of care with just 2 doses, it did demonstrate significantly improved results head to head. However, I think the 2 dose vs 3 dose vaccine debate is a red herring, even if it did demonstrate this, I personally don’t think the company has a strong commercial future in SciBVac sales unless it can make HepB vaccination a greater priority for adults that are immuno-compromised (lack of success from previous attempts by DVAX with a 2 dose approved HBV vaccine and a 2 year lead causes me to be bearish on meaningful commercial returns here). However I think the value of this asset is significant for its potential in Chronic Hep B therapy, discussed below. See here for details of their HBV oriented pipelines.

Chronic Hep B Therapy: The company utilized their SciBVac asset to develop a therapeutic vaccine that would help serve as part of a future combo for curing Chronic HBV, a condition that requires immunologic restoration of antibody and T-cell activity to clear the infection completely. SciBVac in my opinion was a means to an end for chronic HBV, as you need a solution that is both extremely safe/well tolerated as well as with ability to induce immune responses in extremely immunocompromised patients (ie what SciBVac is). They licensed the Chinese rights to their vaccine to Brii Biosciences (another Arch company) in December 2018 after which Brii owned development and ran a dose range finding ph1 trial that demonstrated antibody generation as well as restoration of T-cell responses. Brii is advancing the therapy into a ph2 combo trial with another one of their assets licensed from Vir to test the concept of a functional cure in Q1 2021. They will also report additional high dose data in Q1 2021.

Covid-19 Vaccines: The company took a slow and steady approach to COVID, aiming to develop a vaccine that would not be part of the wave one vaccines, but instead be able to solve the long term need for a reliable high efficacy, safe vaccine that could handle mutations from seasonal drift in COVID. This pan-coronavirus program resulted in two candidates, one that targets broad covid immunity and is strain agnostic (targeting SARS, MERS, and COV-19) as well as a simpler pure COV-19 focused candidate. They are collaborating with the NRC, received Canadian grants for ph1/2 trials, disclosed strong pre-clinical results (2-4x immune response of high titer COV-19 patients in a single adjuvanted dose, with pan-corona demonstrating broad immune response) for their candidates, signed manufacturing agreements for their trials with Therapure (acquired by Resilience an Arch company launched in November 2020), and are imminently initiating trials in Canada for their COV-19 candidate (not pan corona). With their LPV capability removing cold chain, their broad corona mutation agnostic immunity from eVLP based pan-corona vaccine, single dose (2-5mcg), scalable manufacturing, and proven safety/efficacy in historic enveloped virus vaccines, I believe they can be one of the gold label vaccines people use annually to avoid corona seasonal infections.

BoD Transitions: The company has seen numerous additions to its BoD, including Blaine McKee, Joanne Cordeiro, and Damian Braga. The former two are noteworthy for being Gillis’ partners in crime in selling Shire to Takeda and have significant M&A experience. The latter is a well known flu vaccine Sanofi exec who retired in 2015. For a brief time Pontifax and Perceptive were also on the BOD but both left the BoD along with OPKO reps (though Perceptive remained heavily invested). In general, reducing Frost influence and replacing it with Gillis influence, while adding more M&A focused BoD is positive news in my opinion indicating the company was preparing itself for a sale. 

Advisory Boards: The company in this time formed a scientific/clinical advisory board for their pipelines as well as a commercial advisory board. The former has a lot of experienced industry and academic figures who are experts in their fields for CMV, GBM, and Hepatitis B. The latter is a similarly eclectic group of individuals all well experienced in flu vaccine GTM as well as immunization policy campaigns. 

Expanded Exec Team: The company also hired a permanent CFO with more M&A experience, Christopher McNulty, as well as recently hired Aaron Rak from Seqirus as VP of Immunization Policy. At the same time, they also recruited John Dillman from Sanofi to lead their SciBVac commercialization efforts at Syneos Health (who they partnered with)

IP Coverage Expands: Can browse through their patents here, but I find it interesting that the company has effectively seen significant advancement in their assets/IP being secured with patents granted for every asset they have (though CMV vaccine still has ongoing patent appeals). Majority of these began in 2018 and through 2020 were granted for more and more of their matured pipeline. 

Financials Change Drastically: The biggest issue and gripe I have aside from the company’s involvement with Frost, is the historically massive dilution the company has conducted over the last three years, increasing shares outstanding significantly (by my estimate from 50M shares outstanding to roughly 243M). Additionally, a noteworthy item is the company has shifted from their line of credit from Perceptive to K2HealthVentures. Currently the company has 120M cash as of 9/30/2020 with a run rate that implies 1.5-2 years of runway. What’s noteworthy is the company clearly has valuable assets yet has not licensed them out instead diluting repeatedly with large dilutions in December 2018, September 2019, and April 2020 that insiders bought (barring April 2020, more on this below)

Frost Departs: From 2018 onwards, the influence of Frost at the company waned, with the end of paid promotion pump and dumps with VBIV, increased ownership and influence of Perceptive on the company’s BoD as well as in terms of control of the company (with large dilutions reducing OPKO stake to the point it’s now worth <3% of the company today). Additionally, Frost has not bought or taken additional stakes in VBIV in any of the offerings, has settled with the SEC in December 2018, and also has had his BoD seats replaced with more reputable figures connected to Gillis the Chairman of the Board. The company is now a Perceptive/Arch company exclusively in my opinion. 

Odd Insider Trading Patterns: The company has demonstrated an odd pattern of insider trading where multiple blackouts have commenced (Dec 2018 – June 2019) and (October 2019-Present). This is noteworthy because not only did all insiders including Arch take significant stakes in the company at 50c cost basis, between the two blackout periods, but despite the stock hitting an all time high of 6.96 since it was listed in 2016, not a single insider has sold. Additionally, only Perceptive bought the April 2020 offering. The fact Pontifax made some odd insider trades right before the December 2018 blackout began, in my speculation, indicates that they were trying to help sell VBIV to MRK (look at Pontifax history of selling bios to MRK, ie ARQL and others) in that 2018-2019 blackout and departed the BoD when that failed. Later, this pattern repeating right after insiders bought huge positions, and continuing through the April 2020 offering with neither Arch nor management buying implies to me they have continued M&A negotiations ongoing and cannot buy or sell as insiders. Perceptive can buy because they are not on BoD and merely have a 22% ownership stake in the company, hence they can likely avoid the pitfall of insider knowledge unlike Gillis and insiders. If the insiders/Arch/Perceptive lost faith in the company, even if they didn’t buy April 2020 offering, it’s very odd to not take any profit in July when it hit 6.90+ which is 1300-1400% on their 50c buys and also is 300-400% profit on their cost basis overall for their position. 

Significant Institutional Ownership Increases: What is notable is that not only is there odd insider trading patterns, institutes have been loading up big time over the last 1.5 years, with more and more firms known for M&A investing coming in such as Blackrock, State Street, Viking Global Capital, Vanguard. On top of this, despite the stock hitting 5 year highs in Q3 2020, the institutional ownership only went up, with many of the above institutes initiating or adding large positions. This is an odd move paired with insider trading patterns and implies that many more firms also believe M&A is likely to come (or some large price appreciation in the near future). 

Who is the VBI Vaccines Team

Management Team

Jeff Baxter (CEO) 

He was at GSK for 4 years (‘02-’06) as SVP of R&D, finance, and operations. This included being chairman of the R&D operating board, managing the inhouse SROne 130M Venture Capital fund, running finance, BD, and pipeline development.

He then went to the Column Group where he helped with the formation of Immune Design (IMDZ), a company that was founded by Steven Gillis’ co-founder from Corrixa, Steven Reed. Note that IMDZ was acquired in 2019 by MRK for 300M

I suspect his work with IMDZ is what got him on Gillis’ radar as he was soon after hired as the CEO to run VBI, taking over for Francisco Mitoma who had been CEO of VBI until 2009 (when Baxter took over).

Additionally, I suspect but am unable to confirm that Jen Baxter (SVP at GSK) is connected to him.

I view Baxter as an expert for the science/R&D side of things as well as operations, however it is worth noting he is mainly a vaccines expert, not necessarily an oncology expert

David Anderson (Chief Scientific Officer)

He is a co-founder of VBI like Francisco-Diaz Mitoma, however also being stated on the official website as having joined VBI in 2009 (when he left his Associate Professorship at Harvard Medical school) as VP of their Immunology/Research efforts and becoming CSO sometime in 2014-2015. It’s unclear the discrepancy for how he could have co-founded but officially join in 2009, I think this may have to do with him officially leaving Harvard full time for VBI.
In my view, David Anderson is the literal “brains” behind VBI Vaccines from what I can tell, as not only is he a glioma expert who has spent numerous years studying how brain tumors work as well as immunotherapeutic approaches, but he is connected to almost every single piece of IP in this company’s portfolio of inventions.

On top of that, his expertise in immuno-oncology and neuroscience/oncology has been critical in my opinion to the strategic direction of the company that has borne the most fruit for their assets, ie in developing CMV positive tumor therapeutics that have proven successful at treating recurrent glioblastoma. 

He is firmly an expert from a science/R&D pov in my opinion

Christopher McNulty (CFO, Head of Business Development)

This is a very interesting role, because when Chris joined VBIV in 2018, as I understand it, there already existed a Chief Business Officer (Nell Beattie) who had joined the company in 2015 though they needed a proper CFO.

This marks the first major addition to the VBIV team as part of a series of additions that beef up VBIV’s M&A functional roles with strong experienced BD/M&A executives.

Now in general it appears that Chris has been involved in M&A in biotech for many many years in his career, having handled licensing deals, acquisitions of companies, and general partnerships. The magnitude of his deals appear to be smaller than the rest of the Board of Directors (tens of millions vs billions), so I’m unsure if his primary focus is meant to be on CFO related work, however he is likely doing both as he is also head of Business Development despite there being an existing Chief Business Officer. 

Francisco-Diaz Mitoma (CMO)

Mitoma co-founded VBI in 2001 with David Anderson, acting as CEO until he left in 2009 and focused on other ventures. He is renowned for his work in vaccines and virology and is the clinical development expert of the team while also having a hand in the science and heavy ownership of the SciBVac side of things. He’s also very entrepreneurial based on founding VBI in Canada and also various organizations in the Quebec region. 

His primary expertise I view as a mix of clinical development strategy as well as scientific advisory role for their RnD.

Aaron Rak (VP, Immunization Policy and Regulator)

This is a great hire, as Aaron from what I can tell not only was at Novartis + Seqirus for years and hence an expert of flu vaccinations, but also because VBI was very silent about him being hired, not releasing any PR or even posting him on the company’s website in any capacity (an odd move considering they’ve done PR for strong hires/promotions previously). Considering he may have been someone given a 100k options grant based on the 10-Q comments, this seems like an odd move (that is a considerable grant size considering how large that is relative to other C-suite execs on the team).

His expertise I assume to be on government relations, regulatory approvals, and policy alignment for immunization program rollouts.

Board of Directors

Steve Gillis Ph.D (Chairman of Board) (Primary expertise: R&D + M&A)

He founded and built Immunex (pretty much establishing biotech in Seattle) as well as inventing GM-CSF, anti-CD20, and TNF-inhibitor, which led to Amgen acquiring them for 16B in 2001. Enbrel, their lead product for Rheumatoid Arthritis treatment, is notable as even twenty years later it still sells 6-7B in annual sales despite generic competition (and has likely sold over 100B over the course of its lifetime, making it a truly brilliant acquisition deal by Amgen).

He then went on to found and run Corixa, with Steven Reed, which was acquired by GSK for 300M in 2003 to own their MPL adjuvant and adjuvant manufacturing facilities in Montana (used to this day as a key facility). This acquisition was critical to making GSK relevant for over 20 years in vaccines, with the MPL adjuvant forming the backbone of their patented adjuvant technologies which they used to great success in various vaccines targeting malaria, tuberculosis, Shingles, and COVID-19. The beauty of MPL is it is also intended to be used in cancer vaccines, based on its potent ability to enhance CD4 and CD8 activity. AS01B, a unique formulation of MPL and QS-21, has proven a hit for their Shingrix shingles vaccine and is also being tested with VBI’s glioblastoma immuno-therapeutic to enhance CD4 activity.

After selling Corixa, he joined Bob Nelsen’s Venture Capital Firm as a venture partner in 2005 before becoming a Managing Director. Reuters places him as beginning to be associated with the VBIV private company from December 2006. I suspect he was responsible for helping recruit Jeff Baxter as CEO in 2009.

He also supported Trubion Pharmaceuticals as executive chairman and acting president until it was sold in 2010 and joined the Shire BoD in 2012 along with a variety of other companies over the next several years. Over time he guided VBI Vaccines through its development, helping them reverse merger with Frost’s SciVac as well as connecting them to other Arch companies such as Brii Biosciences, Resilience, and more.

Very recently, he assisted in the sale of Shire to Takeda in May 2018 for 62B setting records for the largest ever Japanese bio-pharma merger conducted, after which he joined the Takeda BoD. Shire also sold its oncology business for 2.4B in April 2018 prior to the Takeda merger. 

He’s the strongest person on this team of rockstars, being a luminary from a science/RnD POV, a master of M&A deal negotiations, and I suspect the key factor that helped recruit the majority of this company’s rockstar team (across Executive Management + Board of Directors + Advisory Boards).

Damian Braga (Director, Chair of Commercial Advisory Board) (Primary expertise: Sales + Operations)

First connected to VBIV through his consulting service in November 2019 that VBIV used for commercialization support, its interesting to note that Damian Braga helping VBI with commercialization of Hep B is a very odd move. What’s even weirder is that he joined the BoD after this in the middle of a COVID pandemic , while being retired for almost 5 years now after a 27 year career at Sanofi..
He was at Sanofi for 27 years rising to a final position of President of the North Americas business while also managing commercial operations, helping grow their vaccines business from 760M to 3.1B in his time there including through the launch of some new flu vaccines that generate 1.5B in sales.

He’s also apparently the advisor for a life sciences consulting firm that assists big pharmaceutical companies with commercialization, strategy definition, and M&A related planning. 

What I find more noteworthy is his primary expertise is in flu vaccines especially pandemic responses like the 2009 Swine flu pandemic and other seasonal shortages (where he has great ties to the CDC) (along with meningitis + various children's group vaccines). Him driving Hep B vaccination seems an odd choice given the opportunities he likely has and the greater priority of covid related work right now.

I believe he also helped recruit John Dillman to Syneos from Sanofi for VBIV given their ties as he helped promote Dillman and advance his career previously. 

Michel De Wilde Ph.D (Director, Senior Scientific Advisor) (Primary expertise: R&D)

Michel de Wilde joined VBIV as far as I can tell sometime in 2015 as part of their Board of Directors. He later also joined as Senior Scientific Advisor for each of VBIV’s Scientific and Clinical Advisory Boards contributing to the core R&D strategies.

Previously, he was VP of R&D at GSK for 21 years (1978-1999) where he first started out as a research scientist researching how recombinant DNA can be used to create the first recombinant Hep B vaccine in 1986. He later also helped develop GSK’s Malaria vaccine candidate and then went to be VP at Sanofi Vaccines from 2001 to 2013. While there, he helped develop their Dengue vaccine, while also driving acquisition and merger of Acambis and VaxDesign. 

It’s also worth noting that Michel De Wilde is on the Canadian COVID Task Force, relevant for VBIV’s relationship with Canada during the COVID pandemic.

I view MDW’s primary role from a scientific/R&D perspective, though it’s possible he is also supporting M&A given previous experience. 

Blaine McKee, Ph.D (Director) (Primary expertise: M&A)

Blaine is the first new major addition to the BoD in quite a while, joining in Jan 2019 in an odd move of beefing up their M&A capacity.

Blaine as you can see from his career is a life long M&A/corporate development/BD guy. Since he was at Genzyme, where he worked from the ground up (‘96-’11) til he became global head of their BD pipelines, where he did acquisitions from Bayer for cancer assets, and likely helped sell the company when Genzyme was acquired in 2011 by Sanofi for 20B.

He was also at Shire and headed BD/corporate development, selling Shire’s’ oncology business for 2.4B in April 2018 and likely assisting in the sale of Shire to Takeda in May 2018 for 62B.

Joanne Cordeiro (Director) (Primary expertise: M&A)

Joanne joined in April 2019, becoming the second major BoD addition in a short period of time to the VBIV Board of Directors (Blaine McKee, another heavily BD/M&A experienced biotech veteran, joined in January).
Baxters’ comments are interesting, as while she was on the executive team as head of HR at Shire (having been with Shire since 2011), her primary contributions go beyond HR and more into M&A and strategic partnership development, from the perspective of ensuring regulatory approval and retention of key personnel are assured. It’s important to recognize the post-merger process is critical to ensuring a BP realizes the value of an acquisition, hence the HR aspect of M&A is crucial for deal resolution.

She has a career chequered with various M&A activity in pretty much every company she has been in, where I believe she has gained solid experience in how to manage the M&A HR aspects as well as the various regulatory angles and partnership aspects required.

Sybase (‘91-’97) – She is a Senior HR director here and likely involved in integration of the numerous acquisitions which included PowerSoft, MicroDecisionWare and PowerAMC

Avid (‘98-’99) – She was an HR director here, and the company had two acquisitions (SoftImage and NewStar)

Covansys (‘00-’04) – Of particular note, she “Participated in the preparation of public securities filings, and support for divestitures, pre-and post merger and acquisition activity” and of course there was an acquisition that occurred in ‘02 of PDA Software Service. Additionally, Covansys was acquired three years later by CSC for 1.3B

Terradyne (‘04-’07) – Worked here helping with strategic leadership training/development
Shire (‘11-’19) – As mentioned earlier, Shire was a UK based biotech acquired in 2019 by Takeda for 62B. She was a “Member of the Integration Management Office (IMO) Steering Committee leading strategic direction for mergers & acquisitions and divestitures.”

She marks the third major addition to the company’s M&A capacity after CFO Christopher McNulty and BoD Blaine McKee. She also appears to have joined in the middle of what appears to be a 6 month insider buying freeze between December 17, 2018 and June 17, 2019.

Advisory Boards

It’s incredible the sheer amount of talent spread across the advisory boards, with a significant number of VPs/execs that used to work at the key vaccine companies, including GSK, Sanofi, and MRK.

Scientific/Clinical Advisory Board

In September 2018, we saw VBI announce formation of various advisory boards for the R&D as well as the clinical programs they were running in Hep B, CMV, and GBM/immuno oncology.

This seems like a rather eclectic board of talented individuals who span both industry and academia with acclaimed success in both research and commercialization, I encourage you to check it out yourself, for now I’ll highlight a few interesting industry profiles I noticed that again re-iterate the trend of GSK and Sanofi execs being deeply connected to VBIV

My apologies if there are much more interesting people I overlooked on the advisory board, I don’t have a great sense how to compare non-industrial organizations like WHO/CDC/various academic institutes etc and would love feedback.

  1. Stefan Thoelen, M.D

    1. He has over 20 years of experience in industry overseeing clinical development and vaccines operations

    2. He was at Sanofi Pasteur (unclear exact timing) as well as at GSK fromboth Sanofi Pasteur as well as GSK, having managed clinical development and operations for the vaccines divisions of both companies

  2. Nadia G. Tornieporth, M.D. 

    1. She was at GSK from ‘97-’05 as VP of Prophylactic Vaccines clinical development

    2. She was at Sanofi as VP and head of global clinical research and development from ‘05-’15

Commercial Advisory Board

Interestingly, right after the K2 Health Ventures agreement was announced, we saw the announcement that VBIV has formed their Commercial Advisory Board

What’s noteworthy, is every person on this list of members is an expert at selling flu vaccines and has strong links to companies like Sanofi/MRK who have historically been focused on vaccine products that are interestingly enough, not Hepatitis B necessarily, but are broader and cover things like Flu as well as other key health needs. Note Damian Braga heads this advisory board (I have skipped him here as we covered him previously on BoD). The most notable part is every person here has government connections and ties on this advisory board and would be more relevant for a task force around pandemic response or COVID global vaccination rollout, rather than something that is viewed as a low priority like Hepatitis B vaccination. Especially as only one member here has Hepatitis B specific experience.

Lastly, I find it interesting to note while two of these folks are ex-Sanofi and left a few years ago, the other two are ex-MRK and both left not too long before the formation of the advisory board, around end of 2019 in December or Jan 2020 while having pneumococcal experience (a big area for Pfizer’s Prevnar).

John D. Grabenstein, Ph.D., R.Ph.

Not only is he well experienced with military affairs and government mandated vaccination program rollouts, he was at MRK for 13-14 years and oddly enough just left MRK end of 2019, where he was responsible in operational distribution of vaccines for global welfare causes, especially in pneumococcal (pneumonia bacterial vaccine).

His background demonstrates solid expertise in operations and distribution logistics for global immunization issues. 

He’s an interesting hire especially for a company like Pfizer who has a very strong pneumococcal vaccine, Prevnar, but which needs help gaining market share.

Michael D. Decker, M.D., M.P.H.

Not only does he have CDC experience, he was at Sanofi for 16 years doing various roles in medical affairs including being the chief medical officer during the H1N1 2009 pandemic

He likely is another example of extensive operational experience with government connections and mass immunization strategy development.

Eddy A. Bresnitz, M.D., M.S.C.E.

Another expert at developing programs for large scale immunization, this time with experience in pneumococcal vaccines, hepatitis B vaccines (relevant for VBIV stated plans), and other vaccines. He was at MRK for 12 years as an executive director owning medical policy implementation for vaccinations, and left in Jan 2020 to start his own consultancy. He is also noteworthy for being an advisor to the New Jersey State Department Covid Response team.

Notable Entities/People of Interest

John Dillman (Syneos Health, VBI Commercialization Lead)

Ex-Sanofi VP of sales that I believe Damian Braga helped convince to join Syneos Health to be the commercialization lead for VBIV. He had Braga’s support to advance his career previously, and was at Sanofi for 17 years, with his most recent role being to manage 3B in annual sales. I definitely find it odd that someone with this kind of background joins a contract commercial sales organization, let alone for a product like SciBVac where the peak sales potential if everything was taken from GSK would be 300M in sales (unlikely as VBIV only goes for adult market not the pediatric). No matter how you look at it, this is a big drop in responsibility and an odd career move, especially when you listen to the conference call and how Baxter talks about the partnership with no clear disclosed financial terms and discussing possibilities like rev share models, while also stating they will sell cheaper than the SoC vaccine Engerix-B.

What’s interesting about Syneos is that the company has had some odd behavior the last year. In March/April there were rumors that they were looking to sell the company, then they ended up aggressively cutting back their spend during the pandemic, delaying hiring/cutting benefits/salaries etc. Soon after this we see Pfizer extend their partnership for another 3 years with undisclosed terms in July, followed by some really odd behavior in the Fall as the company began aggressively doing partnerships such as AI + real world evidence for oncology trials with Concert AI and acquisitions including Synteract for dermatology + oncology + small scale early stage bio trials, and Illingworth for decentralized at home clinical trial services. While these seem valuable, its a very odd move for a company that just six months ago was trying to sell the business and was concerned about financial solvency. Additionally, they raised 600M of debt and insiders with massive positions have twice now sold significant stakes in the company on the open market in September and in December. Yet the share price remains high and strong, despite significant insider institutional selling, high spend of cash on acquisitions, and no end to the pandemic crisis

I am speculating that the company made these deals specifically for Pfizer (perhaps Pfizer is exploring acquisition of them in the future)? Given concerns that their dermatology pipeline could be too late to market, as well as the CEO’s emphasis of improvement of clinical trial success rates for oncology and other focus areas at JPM20, some of these acquisitions for Syneos could be relevant for Pfizer’s pipelines. Aside from dermatology, pfizer needs ways to accelerate the variety of onco trials they want to run from their various acquisitions like Array Biopharma. Real world evidence + at home trials are generally both beneficial to allow more diverse panels of trial participants and ensure greater speed of trial progress allowing faster iteration to identify ways to optimize trial success quickly.

K2 HealthVentures

Provided a loan to VBIV in May 2020 with interesting milestone requirements to unlock additional loan tranches. While it appears as a front for debt/equity based liquidity support for life sciences company, the true purpose appears to be more related to acting as a sell-side advisor for M&A deals, given multiple companies that have taken on K2 loans have become involved in M&A inevitably (Companion Medical by Medtronic, SURF with GSK, Evelo merger, etc)

Additionally, their focus on evaluation of deals with DealCloud implies deal making is a larger focus than one would think.

What makes the loan tranche really interesting is no other loan tranche requirements from K2 in filings I’ve searched for have alluded to any transactional milestone like with VBIV, only clinical milestones. The timing of this also is interesting, as the first milestone is technically only fully possible after the trial measures final endpoint end of Dec 2020, the third one should technically be reportable by end of March 2020 given thats when the initial cohort of Part B fully enrolled, and the second condition technically has no fixed timeline and implies an explicit M&A deal.

Hence VBIV picking K2 to provide them a loan right after they raised 55M with an offering in April 2020, and just a day before their commercial advisory board was announced, while they also made interesting moves with their patent portfolio, implies in my opinion they are acting as sell side advisors not purely as financiers.

National Research Council of Canada

This is the Canadian equivalent of the NIH as far as I can tell, and has worked with VBIV for many years providing their mammalian HEK293 cell lines (which NRC pioneered and popularized) for various vaccine efforts to pair with VBIV’s eVLP, including CMV, RSV, Zika, and most recently COVID 

Canadian COVID Task Force

The equivalent of the Operation Warp Speed team as far as I can tell, except for Canada

Notable people on the task force with links to VBIV include:

  1. Michel De Wilde, the BoD member for VBI Vaccines

  2. Joanne Langley, one of the co-chairs who has worked on VBI Vaccines work at her university, being principal investigator for their CMV vaccine research as well as assisted in their SciBVac trials as well

  3. J. Mark Lievonen, who I speculate is associated with Damian Braga considering Braga was President of Sanofi Pasteur’s Canadian Division (which was overseen by Damian Braga most likely as he was President of Sanofi Pasteur’s entire Americas unit)

  4. Lorne Tyrell, another member of the Canadian COVID task force who was the supervisor for Francisco Diaz-Mitoma’s PhD

Given so many people connected to VBIV (3 confirmed of which one is a co-chair, and another who is suspected to be connected) I would anticipate it to be very likely that VBIV gets further funding and supply agreement support from the Canadian COVID task force. 

Resilience (FKA Therapure)

Therapure, a canadian CDMO, signed a manufacturing deal in August 2020 to support VBIV’s COVID trials in Canada, it was expected they’d begin manufacture of doses in September, however what’s noteworthy is Arch, the same fund that is represented by VBIV Chairman of Board, acquired Therapure’s manufacturing CDMO business in October as part of a new startup (Resilience) that just exited stealth mode. Resilience aims to be the AWS of bio-manufacturing, providing quality scalable biologic manufacturing capabilities for not only vaccines, but also a variety of therapies including cell and gene therapies as well. They made a second undisclosed acquisition which is in the US also that I suspect could be related to the Center for Breakthrough Medicines who is making the world’s largest center for cell/gene therapy CDMO in the US.

A few things that are interesting here about Resilience, is not only that they acquired VBIV’s partner for Covid manufacturing, but that Pfizer shares two common BoD members with Resilience

  1. Scott Gottlieb, former FDA commissioner is on both Pfizer and Resilience BoD. Under his terms, he pushed for advances in gene and cell therapies as well as reducing processes to allow faster development of drug treatments.

  2. Susan Desmond-Hellmann, former Gates Foundation CEO is on Pfizer and Resilience BoD and has a strong past in clinical development as well as business development at both BMY and Genentech previously in addition to Google Ventures

  3. This is interesting because of Pfizer’s investments and focus on scaling manufacturing for gene and cell therapy as well as comments by the CEO at JPM20 around importance of strong manufacturing

In addition, some of the key employees at Therapure have now moved to the NRC of Canada and are supporting efforts as Chief Technical Officer and General Director of the project to develop a state of the art manufacturing facility for vaccine production which has 126M in funding, originally intended to supply both doses for trials as well as mass production post-approval. 

What’s interesting however is these efforts were a complete failure as reported here as of the Fall, with the trials focused portion being pivoted completely towards mass production plans. I speculate that Resilience acquiring Therapure, as well as Therapure employees supporting Canada’s domestic vaccine manufacturing capacity problem are linked, especially when we consider some of the censored content in VBIV’s official agreement with Canada that hints at involvement of a third party that is un-named and involves them entering an ecosystem (I presume entering the Canadian manufacturing ecosystem). See more details here around VBIV’s Canadian agreement

Brii Biosciences

Another Arch company that has licensed assets from other Arch companies (Vir, VBIV) for Hep B and has a pipeline of assets for a variety of areas, focusing on the Chinese market’s unmet needs. They own rights to VBIV’s Chronic Hep B Therapy for China through their license agreement and are running development of this asset in China.


A big pharma that VBIV is collaborating with, utilizing their adjuvant technology (developed originally by Steven Gillis at Corixa which he sold to GSK), to enhance responses to VBIV’s GBM therapeutic treatment. They are noteworthy as they have multiple joint ventures with Pfizer (Consumer Health Care as well as for HIV/AIDS in ViiVHealthCare), compete in flu vaccines, and have the current standard of care Hepatitis B Vaccine, Engerix-B. Its notable however that they don’t have a true vaccine development platform of their own having acquired most of their assets from Novartis in 2015 when Novartis spun off their vaccines business splitting it between CSL of Australia and GSK in UK (CSL took flu and GSK took everything else). 

Phillip Frost (CEO OPKO, BoD)

Frost, once regarded as a biotech success, is now regarded as a master of biotech manipulation through numerous pump and dump schemes. He had to undergo a settlement in 2018 December after several months of ongoing court action which resulted in him paying a fine and agreeing to never be associated with penny stocks again. He had a vested interest in SciVac (where he owned 45% of the company through his company OPKO) and remained connected with VBIV after it merged with SciVac. He used it for pump and dump schemes like with the Zika virus outbreak, however since 2018, his influence has been reduced and his ownership has been diluted down to below 5% insider levels at <3%. Additionally his BoD seats have been replaced with Gillis’ team from Shire.

Company Ownership Composition/Activity

Summary of Tute + Insider Ownership and Activity

  1. As of Q3 2020, my estimate has ownership near 63%

    1. Full detailed ownership breakdown details here https://docs.google.com/spreadsheets/d/1JxISpgHxRIk_JjzvmS5Um7UCjHkHulqH1JRI_NjDo6c/edit?usp=sharing 

  2. Q3 2020 saw the largest recent increase in ownership activity, eclipsing buys over the last two quarters of 2020 at approximately 28M net share increase in ownership

    1. I’ve confirmed since Q3 filing, at least state street has added an additional 3M shares (via XBI from 15.6M to 18.6M), I anticipate more institutes also have loaded

  3. What’s notable about this increase in ownership is State street added 15.6M shares after multiple quarters of owning at 3M shares, and VIking Capital initiated a new ~9M share position

    1. I believe given short interest jump that the purchases were largely made in the last two weeks of September (implying large Market Makers filled huge institutional buying via massive shorting)

    2. https://www.nasdaq.com/market-activity/stocks/vbiv/short-interest 

  4. Also worth noting the top positions are held by institutes that are all either very well regarded for success in Biotech M&A or general M&A (Arch, Perceptive Advisors, Blackrock, State Street, and Viking Capital)

  5. What is additionally notable is not only do insiders (Arch and Perceptive) own 27% of the company and have been invested here between 5-15 years, but insiders have not bought or sold shares since October 2019 despite a large offering in April 2020 on top of shares hitting all time highs (more on this later in signals of M&A activity ongoing)

Note many sources like holdingschannel or whale wisdom are lacking reference to older positions that are 13-D/13-G only found on fintel, I aggregated it manually plus insider positions to get to the above ownership percentage. 

Tute Ownership & Activity

  1. Find below a summary of the top institutional owners below and added notes on the institute (why it is of note and relevance for bio/M&A), as well as the interesting patterns with their purchases

  2. Note that between all of the below noteworthy tutes who are either 5% holders or connected to insiders, there is over 50% ownership, a critical tute ownership level to be able to immediately approve a merger deal for a Delaware incorporated company 

What is noteworthy is all the 5% holders combined amongst tutes below + insiders/OPKO comprise 50% ownership of the company…which is noteworthy for being the necessary ownership percent to immediately approve a merger deal


Shares Owned

Percent Owned

Tute Notes

Trade Notes

Perceptive Advisors 



Renowned for Edelman’s track record with a significant number of investments getting M&A exits, very positive sign. Been with company since 2015, basically an insider

Insider, invested since 2015, has continued to add and maintain ownership to 20-25%, used to be on BoD. Has continued to add on every offering.

Arch Ventures



Not only is Arch one of the industry best for biotech investments with a high M&A exit success rate on investments, but Gillis specifically has an extremely strong track record of incredible M&A exits. I speculate he has been involved with VBIV since 2006, though confirmed at least since before 2015.

Insider, bought big in October 2019 after 2015 initial investment. Size of 2019 purchase eclipsed previous buys and quadrupled share stake. Did not buy the most recent April offering. Odd as Arch is Chairman of Board.

State Street

18.6M (up 4M in Q4 based on XBI)

7.7% (likely near 10% end of Q4 based on XBI)

Not only is State Street commonly linked to M&A, they run XBI, a popular ETF that markets itself as focused on aggressive growth stocks that are usually M&A related or related to massive stock appreciation from catalysts

Started position in Q2 2019, coinciding with M&A activity signals, continued to add over Q4 2019 and significant add of 15.6M to XBI (5x previous position at 3x previous cost basis) in Q3 2020. Since Q3 2020 has continued to aggressively add to XBI over Q4 2020




Blackrock is another classic tute often invested in M&A targets

Similar to State street, adds by Blackrock coincide with M&A activity signals (big position added in Q2 2019, then again in Q4 2019 to hit 5% ownership, since then has maintained 5% ownership

Viking Capital



Also another tute associated with bio M&A ex, Velos Bio

Initiated entire position in Q3 2020




Frost’s company, while he’s distanced from VBIV now, he used to be an insider

No purchases since 2017 (marks beginning of distancing from Frost influence)




Overlapping for M&A

Typically added on each offering doubling their stake each time




An institute that typically tries to invest in biotechs that they sell to MRK (like ARQL for example), used to be an insider

Initially added in 2017 financing round, and then Tomer Kariv added a big stake before december 2018 blackout began, they all departed BoD after blackout ended in June 2019 and presumably MRK M&A attempt failed

Insider Ownership & Activity

  1. Aside from Arch and Perceptive, the magnitude of insider share ownership is not necessarily super exciting, however the timing of share purchases is what is significantly more interesting

    1. https://docoh.com/company/764195/VBIV/insider-ownership-history

  2. If we define insiders as BoD members + Executive Management who all have insider knowledge, we can note two blackout periods where insiders for six months or more did not purchase shares

    1. One that began December 2018 to June 2019

    2. One that began October 2019 and has to date not ended…

    3. The reason this is interesting is this often coincides with M&A activity as insiders aware of ongoing BD/M&A negotiations cannot trade while having this knowledge as it violates insider trading until the inside information is no longer Material Non-Public Information

      1. Notable exceptions are grants that are given to you and 10b5-1 trades

    4. A similar related rule is around Rule 16-B which limits insiders of a company who buy and sell shares within a six month period from retaining profits, as they are at risk of having acted on insider information. Typically this warrants a six month period between buying and selling see https://www.investopedia.com/terms/s/shortswingprofitrule.asp

      1. Notable exceptions are related to 10b5-1 trades as well as grants that are accelerated for vest due to M&A

  3. Keeping in mind the blackout periods, what is notable about timing is that insiders added significant shares between the first and second blackout period

    1. https://docoh.com/company/764195/VBIV/insider-ownership-history 

  4. Double grants in 2020: Another important and interesting move related to insider activity, is that in July 2020, for the first time ever breaking the pattern, insiders gave themselves a second set of annual option grants.

    1. Historically, management gives grants in january, this was the first time management gave themselves a second series of grants citing the following 8-K excuse of being underpaid (an odd move I’ve not seen before)

    2. https://docoh.com/filing/764195/0001493152-20-012545/VBIV-8K

    3. My interpretation is that this is one of several options:

      1. Self enrichment scheme (unlikely)-> out of character for how they’ve operated with grants, and odd as price on grants was both high as well as not vesting til 2021 July vs typical immediate monthly vest schedule. Additionally the annual proxy meeting just happened April 2020 where they could have pushed for more direct compensation in a more permanent manner and did not bother doing so

        1. https://docoh.com/filing/764195/0001493152-20-007261/VBIV-DEF14A 

      2. Compensation for not being able to buy shares and being diluted (unlikely)-> Grant size far exceeds historical insider purchase activity so seems outsized compensation for avoiding insider buys, plus Gillis/Arch didnt get this benefit

      3. An advance on 2021 option grants (most likely in my opinion) -> given the blackout period and ongoing M&A, if management wants to reward management, they can give a second grant which will vest immediately in the case of a merger. The implication I read from this is something material will happen in January that warrants early compensation with grants.

    4. I find the below section interesting when looking at it as similar to an M&A deal conducted back in July 2019 between Pfizer and Array Biopharma, where a similar Compensation Committee Benchmark was conducted to negotiate comp. packages to ensure smooth transition by management during the merger


Cash: The company currently has 120M$ cash as of the end of 2019, with an additional 44M$ cash from Canadian grants for COVID ph1/2 trials.

Expenses: Currently we see expenses in the 10-12M quarterly burn rate. I would anticipate once SciBVac is being commercialized, this increases as Syneos Health costs for commercial team increase. 

Revenue: Revenue is non-existent, a few paltry million due to not selling SciBVac in any major territories yet. In general this company won’t see revenue before 2022 and even then meaningful revenue is at least 2023 timeline in my opinion given low commercialization potential for SciBVac. 

Debt: Currently they have taken out 20M in debt from K2HealthVentures with the option to take an extra 30M in three additional tranches upon meeting specific milestones ranging from transactional to clinical progress for GBM and Chronic HBV.

At the moment the company does not appear to be in need of cash and I view risk of an offering as low, especially at the current price levels. It’s notable that the company had the option to dilute an additional 77M worth of cash at a great price of 4.5 but decided against doing so in Q3, only diluting 45M at 11M shares. This is especially notable because they have not hesitated historically to conduct huge dilutions.

Expected Upcoming Catalysts

2021 H1

  1. COVID

    1. Monovalent 2902 trial data in Q1 (given single dose vaccine, I anticipate we see data within 21-28 days of full enrollment for ph1 and ph2 not long after). It’s possible we see ph1/ph2 data by end of March, though it depends how well they execute on trials.

    2. Canadian supply agreement likely in Q1 upon data for 37M-76M doses depending if they demonstrate data only of 2902 (cov-19) or also of 2901 (pan corona). Given their connections to the Canadian COVID task force and NRC, it’s likely we see at least a Canadian supply agreement if nothing else. 

    3. Further government agreements possible, I view it as likely that VBIV can usurp the role that GSK and Sanofi were attempting to fill for EU + various countries, given their tech is a better version of Sanofi’s recombinant vaccine platform and they are a single dose solution that is cold chain independent with greater efficacy. Given Sanofi/GSK represented 10% of the global supply for 2021 vaccines, that is a large opportunity. Similar setbacks for CSL offer high opportunity for VBIV if they can demonstrate their vaccine is legitimate (anticipated by Q1). 

    4. Possible NIAID/NIH grant/funding for pan-corona vaccine, anticipated in Q1 after Jan 11th application submission deadline 

  2. GBM

    1. The company hit the 24 month endpoint for their initial part A dose range finding trial and will likely release survival statistics in Q1. If any of the 5 patients who were alive at the 12 month measurement mark with median 14 months survival remain alive at the 24 month mark, this will be a major outlier from literature expectations given median OS is usually 7-8 months with SoC.

    2. Additional tumor data in Q1 from the GSK/GM-CSF arms of their trial demonstrating any additional partial responses or continued stable disease status.

    3. Potential license deal for GBM, given they have stated plans to move to a pivotal registrational trial that does a combo of their therapeutic with anti-PD1 against just anti-PD1 therapy. This would imply needing more than just a collaboration agreement in my opinion for a BP to be willing to take this step with them in a pivotal trial in 2021.

  3. Chronic HBV

    1. The company will have collected high dose therapeutic cohort data’s six month endpoint data as of December 2020 based on March 2020 enrollment completion and 3 months for therapy followed by 6 months of primary endpoint data collection. I expect this will demonstrate further antibody/T-cell responses in Chronic HBV patients given Brii has already green lit moving forward with a combo therapy trial in Q1 2021. I expect data early Q1

    2. Brii is initiating a ph2 combo therapy treatment in Q1 2021 that will combine VIR’s RNAi therapy with VBIV’s vaccine therapeutic to test if a functional cure results from these two treatments.

Company Assets

Asset/IP Summary

LPV Platform

The LPV platform is a transportation and storage technology VBIV has developed that allows them to store vaccines for long periods of time at standard room temperatures. As I understand it, they are using Typically, vaccines require a cold chain (ie to be stored in a freezer where it can keep the temperature low enough to avoid risking loss of potency), primarily due to risks from moisture affecting the potency and/or risking safety.

This has resulted in making it difficult to vaccinate in developing countries where such infrastructure is not available, on top of increasing costs for storage/transportation by 20% in general.

LPV uses a formulaic process and technology that can save costs by 20%, allow greater penetration into developing countries with vaccines, and appears to have been proven to work with many existing vaccines already.

It effectively uses a variety of synthetic lipids that reduce stress on the vaccine components and prevent moisture from penetrating it, allowing the vaccine to survive at room temperature for up to a year.

Sanofi (2015) and GSK (2016) both also agreed to collaborate/evaluate this technology though it doesn’t appear either has utilized it in any of their vaccine candidates yet. It also appears the Sanofi partnership soured because it is not directly listed on their website anymore when presenting LPV related details.

eVLP Platform

To understand the value of the eVLP platform and what it represents, you need to get a basic primer in vaccines to distinguish the tradeoffs of different vaccine technologies.

Reminder, I am not someone who is in a medicinal field professionally, so my interpretation may be incorrect or overly simplified. I welcome any perspectives/corrections that may help improve this DD.

Vaccines at a high level are based on the idea of exposing your body to different levels of a germ/pathogen that helps the body develop immune resistance similar to what is acquired after one actually survives the disease. Vaccines have evolved over the ages, going from providing people dead viruses (inactivated) to providing them in a weakened form (attenuated) to providing small specific parts of the virus to trigger targeted responses (subunit, polysaccharide, conjugate, recombinant, toxoid). Over the years this has improved potency while lowering risk levels from exposing yourself to pathogens unnecessarily. 

However, there is still massive benefit with using VLP (Virus Like Particle) vaccines as you can construct something that very closely resembles a virus without having any genetic material that can replicate and pose a risk to someone like with attenuated vaccines (increasing potency far beyond the same anti-gens in a recombinant vaccine). Additionally, being able to express multiple different aspects of a vaccine (anti-gens, sugars etc) means you can still elicit a strong targeted response that has even shown strong benefits against cancer (as for unknown reasons virus like particles frequently accumulate in tumors).

In 2011, VBI V had acquired ePixis for their eVLP platform, a third generation VLP technology. Its advanced capabilities included a lipid bilayer (ie being “enveloped” like a real virus) which also allowed more custom expression of anti-gens internally vs on the surface.

The increased resemblance to a virus benefitted immune response while also providing flexibility for customizing bivalent/trivalent vaccines in all sorts of combinations (visible below)

So far to date, we’ve also seen that all of the eVLP vaccines developed by VBI V are also compatible with the LPV platform for transportation and storage without a cold chain.

Given VLP vaccines are useful against cancer, it makes sense that VBI V has sought to demonstrate their eVLP platform works by focusing on CytoMegaloVirus (CMV) which is an interesting target for two reasons:

  1. CMV has to date seen most of its success in recombinant vaccines

  2. CMV is common in tumors for glioblastoma (brain cancer) and breast cancer

To date, they have demonstrated success in ph1 trials for CMV and GBM using their eVLP vaccines, see CMV pipeline for more details

It appears they also developed a vaccine for Zika using eVLP in 2016 during the outbreak media wave (likely pumping due to Frost’s influence).

Pipeline Overview


Hep B

Honestly, I meant to write up for both these sections, but I’m a bit tired of writing almost 30 pages, so I’ll just reference @nickpd/R8Plus’ (stocktwits) analysis of SciBVac and point you to my rebuttal of bear thesis points for scibvac here


TODO writeup market analysis

TODO writeup revenue analysis




CMV Prophylactic

Tired, doing quick bullets here to get salient info across, TODO clean up

CMV is a great target for eVLP because it already has some results demonstrated with recombinant vaccines which means eVLP can construct similar anti-gen targets and try to get a higher targeted response with less anti-gen.
This was demonstrated here as they managed to show much higher potency and immune response (effectively they achieved similar responses as other competitor vaccines with 5-10% of the concentration). They can go ahead with 10x higher concentration in ph2 (expected to further enhance potency), and had posted a study design for ph2 CMV trials that the FDA had approved I believe. It appears they no longer are waiting on toxicology results (based on removal of this language from annual report) and are merely waiting for when they can fund this and proceed with next steps.

TODO do revenue analysis


VBIV’s GBM program is a proof of concept that is attempting to demonstrate the following ideas, as presented at World Vaccine Congress:

  1. Evidence that the eVLP platform can be used to develop flexible, potent, vaccines for immunology/oncology purposes

  2. That eVLP can create immunotherapeutic vaccines that target cancer tumors through specific common viral anti-gens

    1. By targeting viral anti-gens vs general anti-gens, the immune system can isolate the tumor cell vs healthy cells and improve the immune response

    2. The key here is being able to identify the right viral anti-gens to prioritize in developing a vaccine

In this case they got lucky by not having to locate a target themselves, and falling back to literature where it’s established already that GBM tumors contain CMV proteins for unknown reasons.

Hence, they could extend their existing CMV work by targeting an additional anti-gen that would result in a bi-valent eVLP vaccine with even more potency on CMV VLP.

VBIV showed great data so far for their ph1b/2a targeting recurrent GBM (brain cancer) which has no current SOC (though the closest proxies have 30% 12 month Overall Survival rate, and median overall survival is  ~8 months).

Though early, the vaccine worked effectively and safely, demonstrating 50% vaccine responder rate (3/6) in the highest dose arm and (6/15) responder rate in all three dose range finding arms. Outcome wise, we saw an almost doubling of median overall survival from 7.75 months for non-responders to 14 months in responders. OS rate was 83% vs 33%, and despite there being 50% more non-responders, we still saw more vaccine responders survive aggregate (5/6 vs 3/9)

So given a target with multiple anti-gens, eVLP was able to create a powerful vaccine against the tumor that has benefitted real patients in clinical settings. They still are evaluating how adjuvants and/or GM-CSF enhances immune response, perhaps increasing proportion of vaccine responders. One of the adjuvants they are evaluating ironically is GSK’s ASO1b adjuvant. This is ironic because Gillis was the original creator of the MPL adjuvant (one of two key elements of ASO1b) and had sold it to GSK through Corixa sale in 2003 (how life moves in circles interestingly). If the responder rate goes up to 60-70% and shows even better survival rate, this will be a blockbuster.

Now imagine if they expand this proof of concept to other cancer tumors that have different viral anti-gens. It’s believed that breast cancer and other forms of brain cancer also have CMV tumors. Additionally, if they had an identification mechanism to discover new anti-gens prevalent only in tumor cells, they could pursue all cancers.

TODO do revenue analysis

TODO add competitor analysis and examples of previous vaccines (and what separates VBIV’s approach)



While this seems like a valid use of the eVLP platform to pursue an outbreak situation in 2016, it’s clear from how many paid articles are out there pumping VBIV and Frost that this was just a pump and dump scheme from Frost’s typical playbook.

Hence I’m not digging deep in here, feel free to read more here



Bear Thesis

Below I’ve tried to list out my main bear thesis angles as well as my perspective with facts/evidence that indicates whether the bear thesis is justified/material to the bull thesis. I list these in a structure that relates to different aspects of the company laying out the bear angle first and then my take 

SciBVac will not be a major commercial success

Is this a legitimate issue?: Yes, I believe so for a few reasons

  1. They are ignoring pediatric market based on their PR and fireside chat which comprises a large portion of Engerix-B sales as far as I can tell and are planning on selling below Engerix-B cost (based on fireside chat with baxter in December 2020 for SciBVac)

  2. The Engerix-B sales are 300M between EU and US, and there’s 40M sales from Heplisav-B via DVAX. I estimate another 200M unmet need market in vulnerable adult patients given DVAX estimates 2 years ago 

  3. Irregardless whether it’s a 2 dose or a 3 dose vaccine, Heplisav-B has already demonstrated not having a BP partner to help commercialize your vaccine will result in miniscule sales (30-40M annual) and market penetration, with Engerix-B remaining unthreatened.

  4. Syneos Health has experience selling GSK products and I suspect has handled Engerix-B in the past, and they have a very strong commercial advisory board, but far as I can tell, the priority for Hep B Vaccination rate in the US is the biggest reason the adult market has so much unmet need. It’s unclear if this contract commercialization organization + advisors can overcome the inherent issues in this market even with a quality product, but I would definitely expect it to take at least 1-2 years to ramp up sales. The low sales in existing countries that have approved SciBVac is in my opinion evidence of this as well as the low penetration by DVAX despite a better product than Engerix-B for adult vulnerable patients. Additionally, they may end up needing to do a rev-share model with Syneos (which is still favorable to a blanket fee for service model which can bankrupt them if they pursued this alone with just Syneos Health)

  5. They owe a 12% royalty according to their 10-Q between Ferring and SciGen, which will significantly affect their margins in my opinion. This runs for ten years starting from the first revenue year in each approved country. 

Is this a material issue?: Luckily, I believe the above is material because I don’t invest in this company because of SciBVac and think it’s a red herring. The real value is in their Chronic Hep B therapy and eVLP based assets such as GBM, covid, and CMV. As long as they resolve licensing one of their other assets with upfront cash and royalties or manage to broker a deal for an M&A exit, I am comfortable with this dismal SciBVac commercialization prospect.

Frost Involvement

Here are details around Frost and his past that explain why in general he should be considered a red flag when investing in VBIV. The TLDR; is that Frost is one of the biggest red flags you can find in a penny biotech given his illustrious past where he leverages his retail investor following to manipulate biotechs by pumping and dumping them, working with groups such as Barry Honig and others.

Is this a legitimate issue?: Yes, absolutely. There are court cases including his settlement with SEC which cite VBIV and link his network of paid promoters with VBIV based on a large number of promotional content for the merger with SciVac as well as their work on Zika. Additionally, OPKO, his company, held BoD seats in the company.

Is this a material issue?: In my opinion, this is THE biggest red flag you can find in VBIV, and if you do not believe the bull points in the document mitigate this red flag you should not be invested in VBIV. 

However, I believe this USED to be a material issue that is less relevant TODAY and I view it as no longer material.

  1. Frost’s stake in the company has been immensely diluted down from 45% at time of scivac merger in 2015/2016, to 15% in 2017, to today now be <3% far below an insider level

  2. Frost has not bought any additional shares in VBIV in the past 5 years

  3. His influence at the company is removed, first through Arch and Perceptive slowly increasing ownership of the company to ~32% as of today over the past few dilutions, and second through his BoD seats for OPKO being removed and replaced with Gillis’ team from Shire, a significantly more reputable M&A bio team

  4. Perceptive and Arch remain invested here with large ownership stakes implying they are not concerned that the company itself is a scam even if it has a dark past with Frost involved. They even had opportunities to exit with 300% profit on their cost basis over the summer at the 6+ highs and decided not to take any profits.

CMV PH2 Trial Delay

It’s an odd move from an execution point of view to go as far as to design a phase 2 study that would test doses 3-10x higher than ph1 with Health Canada, and which was forecast to initiate end of 2019 pending toxicology results, and then to suddenly pull it from your plans. Most recently, they have cited that it is due to lack of resources (I presume funding)

Is this a legitimate issue?: They have delayed enrollment into an asset that clearly had high potential, which raises questions of their execution competency at a first glance.

However, if I look at the reasons and under the hood it reveals two potential reasons for this, a third if you believe the M&A angle.

  1. They can’t afford to run a ph2 trial given their liquidity/financials: Running a ph2 trial that is run against a placebo can be costly and take at least a year or longer to reach a data readout. Given their cash resources and the heavy dilution necessary to continue operation I think this sort of makes sense, but merits the question why not license the asset

  2. They are dealing with patent issues with UPMC who has a license to CMV via their eVLP: In their 10-Q it states that they are “negotiating an extension” to their existing eVLP patent family license that would cover CMV (which UPMC is a co-owner of). Separately, their own patents around CMV have not been granted in key regions and are in a state of ongoing appeal in the US (though Australia has granted their patent). This could also explain why they’ve not monetized/licensed their CMV asset.

  3. It’s unnecessary to invest further funds into CMV if they are planning on selling the company soon anyways: They already demonstrated meaningful success by induction of epithelial cell nAB along with higher nAB titers than previous recombinant vaccines for the same target antigens of Gb protein, at a dose <10% the dose size typically used for VLP vaccine and far below the dose size of competitors that attempted the same thing. Given previous vaccines with worse results demonstrated 50% protection in RCT ph2, and the bar for approval is likely near 70%, they’ve demonstrated the asset likely has approval potential and primarily needs funds from a BP (making the M&A case clear). This would also explain why they have not licensed the asset off.

Is this a material issue?: I think any of the three reasons above give decent reasoning why they’ve suddenly paused on the ph2 trial. I don’t think there would be issues with toxicology testing or VBIV asset being worthless, but between poor financials to sustain numerous ongoing trials, a priority on GBM over CMV, potential patent issues, and potential M&A exit, I’m willing to forgive/overlook this execution issue. Though it is a bad example of giving time to competitors like Moderna to move ahead and progress quickly in trials in my opinion.

My M&A Thesis

My investment thesis is based on a few beliefs that together imply that VBIV will be acquired by a BP in the near term, likely GSK.

I will establish that:

  1. VBIV is worth acquiring.

  2. VBIV is interested in being acquired/pursuing negotiations

  3. Multiple BP are likely interested in either licensing or acquiring VBIV/assets

  4. M&A is likely near term

Hypothesis 1: VBIV is a good acquisition for its platform, IP/pipelines, and talent

  1. Their platform/assets are diverse and very valuable to vaccines BP (Merck, Sanofi, GSK, etc)

    1. VBIV is a company with an excellent team filled with the best in the entire industry at vaccines R&D

      1. I’ve already covered the sheer breadth of R&D experience involved between Gillis, Baxter, and De Wilde who are rockstars in the immunology world

      2. Their experience and their advisory board’s experience means they have the best minds working on solutions to complex immunology problems, in many cases people who invented the literal vaccines they are trying to enhance

    2. They are in an appealing position where they primarily need help scaling (mainly paying for trials and scaling to sell products), something a BP will happily handle to get many new pipelines, approvals, and revenue streams

      1. GBM is a proof of concept that can evolve to all cancer tumors (at the least breast cancer and a few others that have CMV related tumors)

      2. If Chronic Hep B Cure works, they still have rights to it in non-China regions

      3. eVLP can construct a vaccine easily/flexibly for protein antigens

      4. CMV can help them benefit newborns

      5. SciBVac can capture adult diabetic unmet need market (nearly matching existing GSK revenue)

    3. Their assets (eVLP and LPV) allow whoever buys them to easily expand to developing markets and flexibly solve immunology problems with a third generation VLP vaccine

    4. Replacing Engerix offers an appealing payoff especially if the 550M of US HBV revenue can be unlocked through pursuing adult diabetics with SciBVac

Hypothesis 2: VBIV is interested in being acquired and is currently pursuing M&A negotiations

VBIV has begun focusing on prepping for a sale in the last 2-3 years and is likely pursuing negotiations actively. 

  1. As mentioned in previous sections, they appear to have started to hire more management team execs whether in BoD or in the company to increase their M&A capacity and experience

    1. McNulty being hired Aug 2018 despite an existing Chief of Business implies they needed a more seasoned biotech M&A expert to take over BD

    2. They took on McKee to the BoD in Jan 2019 (another lifelong M&A veteran)

    3. They then added Cordeiro to the BoD in April 2019 (another lifelong M&A veteran)

    4. This seems like an aggressive decision for a company that at the time had few assets that were ready for licensing (only CMV had completed ph1). Now they have many ready to be licensed, yet they haven’t licensed any of them out. Instead they’ve just paused the programs like CMV due to lack of resources, or agreed to a collaboration agreement like GBM.

    5. It’s worth noting that the combined value of all the deals done with either the company’s team or with companies they founded exceed 100B

      1. 20B Sanofi bought Genzyme

      2. 62B Takeda bought Shire

      3. 16B Amgen bought Immunex

      4. 300M GSK bought Corixa

      5. 2.4B Servier acquired Shire Oncology assets

      6. That doesn’t even include all the deals made by the R&D teams to acquire other companies vs being acquired

    6. It makes more sense for this much M&A talent to be focused on them actually negotiating a buyout

  2. Company entered into K2HealthVentures loan right after perceptive loan terminated naturally, implying desire to get sell side advisor support (noteworthy as agreement alludes to license deal in 2021 Q1)

  1. They’ve diluted down Frost’s stake significantly, reducing his influence and ownership stake sufficiently enough he likely does not cause acquirers to hesitate in my opinion.

    1. It’s of particular note that Gillis, Arch, and Baxter didn’t really do big purchases in December 2018 after the first dilution that brought OPKO below 10% ownership

    2. Perceptive bought many shares but didn’t see a major change in their ownership percent, staying constant near 20% (ie what it was before) which seems odd almost as if they are just trying to maintain control and avoid others taking control rather than increase ownership…

    3. However after the next September 2019 dilution, we see everybody buying huge sums. Gillis, Arch, Baxter in big, with giant purchases (relative to their stakes)

  2. It seems clear to me that Tomer Kariv’s buys here the day before the first blackout began are the same thing Pontifax did with ARQL. You can find in the ARQL merger notes that Ran Nussbaum bought a huge stake in the company 6/27/19 the same day “representatives of ARQL spoke with representatives of [MRK] following a telephone introduction by a director of ARQL”. Given Pontifax left the company the day after this blackout ended, it seems likely to me that was the first attempt to sell the company (likely to MRK) and it failed for TBD reasons.

  1. As mentioned here, Gillis bought a massive amount of shares for the first time in September 2019 (10M shares). He has previously bought shares, but never such a massive amount. Previously he bought 300k shares 2 years ago and then his initial position in 2015. He had the option to buy shares in June, however he chose to wait (potentially because he knew an offering was inevitable). Given he’s Chairman of the board, this feels like a very intentional move made by him (likely being aware that a BO will be pursued in H1 2020 and a deal will be made). 

    1. This is exacerbated by the large volume of insider buying by all the officers as well as by the in tandem purchases of a large number of shares by Arch (a similar 10M shares) and Perceptive (another 20M shares to maintain their 25% market share) implying everybody is rushing to cash in on buying shares for a payoff soon

    2. This almost implies no more dilutions were anticipated to be coming or necessary (or equally likely, they could come but insiders couldn’t count on being allowed to purchase). 

  2. Given the relative age of the management team members involved, it’s unlikely in my opinion that they plan to wait for another 5-10 years to see their assets pay off via a partnership or going it alone. Additionally, for institutions like Perceptive, liquidation of their entire stake in the company is difficult without an M&A exit. Lastly, if you pay attention to the philosophy of Bob Nelsen and Steven Gillis at Arch, their view is biotech exists to innovate and be acquired by non-innovative pharma companies who are cash rich. Pharma cannot innovate and hence must acquire its innovation elsewhere.

Hypothesis 3: There are multiple BP candidates that would have interest in acquiring VBIV assets, my lead pick is Pfizer

Company / Assets

Infectious Disease (Pan-Corona, Hep B, Zika, CMV)

Immuno-oncology (GBM, breast, prostate cancers)

Chronic Hep B Therapy


It has not only acquired eVLP assets previously for CMV, but is on the lookout for novel infectious disease assets. Their previous license deal with BioNTech does not appear to have made any progress into clinic in the 2+ years they’ve done the license

Pfizer has tried to tackle GBM since 2008 and has failed, but is still actively attempting PD-1/combo therapy trials for GBM and medulloblastoma. Additionally, prostate cancer and breast cancer are two of the areas they are most focused, constantly looking to make big deals for such assets. Lastly, they are very good partners with GSK who VBIV did the collaboration on adjuvant with.

Historically Pfizer has been interested in tackling Hepatitis C but had to exit early once it realized it was too late to make a difference. I think they’d like the value of CHB therapy, but don’t know if they view it as core to their business like the Oncology assets

In my opinion, Pfizer is most interested to own the oncology focused assets. They may or may not view the infectious disease assets as very valuable, however I believe they are the most likely candidate to license or buy for the onco assets.


I don’t think Gilead is interested in infectious disease

Gilead just acquired Immunomedics for breast cancer, in my opinion they likely don’t see a need to pursue another breast cancer focused asset here, though it could complement their existing assets potentially and give them a route into prostate cancer.

Antivirals and hepatitis are the bread and butter for Gilead, I would expect them to be the most interested in a Chronic HBV functional cure component like VBIV’s asset, though it’s worth noting its more a therapeutic vaccine which is a little bit outside of Gilead’s typical wheelhouse in my opinion. 

While I perhaps view them as a contender for licensing the Chronic HBV therapy, I don’t think they have serious capacity for large deals after the sheer number of deals they’ve done in the past year


Mrk does have a history of failed attempts at zika/cmv and has demonstrated no progress on covid so far, while also being historically VLP vaccine friendly, but at the same time they earlier this year bought Themis for COVID

They’ve already made an alternative bet on a poliorhinovirus solution for gbm treatment which is their bet to benefit Keytruda for breast cancer as well it appears.

While mrk does have a hep B vaccine recombivax, i’m not aware of any Chronic HBV programs or interest they may have

Between them appearing to make alternative bets for these indications and previous attempts at selling to MRK via pontifax, I think theyre likely not a serious contender.


GSK is in desperate need of a novel vaccine platform given they only have good adjuvants, not any home grown vaccine tech. They also have failed at CMV and their flu/covid vaccines could use help

GSK is already collaborating with VBIV on GBM therapy with their adjuvant. However they don’t own any PD-1 and I think given their recent deals with SURF and Tesaro I’m unsure they would be serious about the CMV+ tumor assets

GSK does have a Hep B Chronic therapy program that I could imagine being used in combo with VBIV’s.

While there are very strong ties between VBIV management and GSK and they have a collab agreement, I can’t help but feel the recent rumors of GSK making large deal offers to other companies in recent weeks like Eidos and Surf imply they aren’t a serious contender here.


They previously acquired Protein Sciences Company which gave them a major flu vaccine as well as a recombinant protein vaccine platform

They may be interested, especially since they historically failed at CMV approaches, but they also have bought THOR recently implying a focus on a different approach to immunotherapy cancer treatment

Seems irrelevant to their focuses

I don’t think Sanofi would buy VBIV assets due to them having made acquisitions of large immunotherapy and vaccine tech platforms already in the past. Plus the number of poached Sanofi execs at VBIV imply they aren’t dealing with Sanofi


They are probably the top candidate that would be interested in VBIV for infectious disease, given they have Seqirus focused on investments into cell based flu vaccines, with a desire to grow flu vaccine market share (which would likely require something like eVLP mammalian cell line to ensure universal flu vaccines could be developed for max efficacy and safety).

Historically the company has avoided oncology efforts, out-licensing any onco assets it acquires as part of M&A, claiming that it is not their area of expertise. Hence I don’t take them to be serious here.

I think this is peripheral to their interests though it perhaps could fit in CSL-Behring folio.

In general, they are most likely to want VBIV’s eVLP platform for infectious disease purposes, though historically they don’t make very large deals. 


I don’t think Takeda has the liquidity to seriously consider any acquisitions after the Shire deal tapped them out

Hypothesis 4: A major M&A deal is near

  1. We still have an ongoing insider trading blackout running at over 15 months since October 2019. 

    1. This is huge because neither did any insiders (including Perceptive who likely does not have insider info) take profits on 5 year highs at prices with over 1000% profit margins on their cost basis. Very odd, given Perceptive has typically aimed for 300-400% profit historically and could’ve de-risked the entire investment merely selling the 9M they added in April 2020 to remove their cost basis at summer highs. 

    2. Neither have we seen Arch buy into recent offerings at rather cheap prices considering their assets and long running history of being involved here (and neither did any other insiders buy). 

    3. On top of all of this, there’s been 30% dilution since the September 2019 offering was bought by insiders, a big hit to the insiders stake (especially Arch/Gillis) implying the payoff for holding must be worth it if they are holding because there is no M&A happening (or if there is M&A happening its relevant enough they cannot trade/they expect a higher payoff by holding).

  2. Assets for SciBVac and eVLP have both demonstrated success at this point, no more evidence is needed in either to prove that they work and can be valued appropriately.

    1. Additionally, GBM will have 2 year survival numbers in December 2020, a clear outlier proof (that together with the newer more advanced trials can forecast value of asset)

    2. Chronic HBV therapy will have full data as of December 2020 for high dose, another evidence that likely also allows crossover trial data as control arm shifted to one of the treatment arms, which would be able to prove causality/impact of the therapy on immune response + impact to HBV infection, allowing clear valuation.

  3. IP coverage has been granted for almost every asset VBIV owns in their pipeline (with COVID resolved due to canadian/nrc agreements granting license rights to joint IP) ensuring BP feels good about asset protection. CMV remains their one gap on IP.

  4. Insider grants being given in July as second annual grant, speculatively implies there may not be ability to rely on January grants for some reason (whether price appreciates drastically or company is sold)

  5. S-8 filing end of July (often S-8 filings can be indicative of M&A activity anticipated in the following several months to a year). While not all S-8 filings on their own indicate this, paired with other indicators its an additional confirmation, especially when the last S-8 was significantly smaller. This is because these are used as part of rule 14d-10(d) as far as I can tell to reward service by employees or BoD members etc, likely involving tapping the S-8 which is basically a discretionary pool of employee grant equity7

  6. The K2 agreement alludes to a potential license deal for Chronic Hep B between Jan and April timeframe in 2021. Around the same time as K2 agreement, they began adjusting their patents, including a broad spectrum flu patent on peptides that would be useful for a pan-influenza vaccine (similar to their stated intent of pan-corona vaccine). At the same time, they hire a commercial advisory board of pandemic + flu experts with little Hep B experience. Feels like gathering talent for an acquirer to get around non-competes given these people are primarily ex-Sanofi (notorious for pursuing non-compete enforcement) and ex-MRK (that too left MRK mere months before joining the commercial advisory board). This pattern continues with John Dillman and Aaron Rak joining VBIV from Sanofi/Seqirus respectively. At this point they’ve got execs poached from every major vaccine big pharma company (GSK, Sanofi, Merck, Takeda, CSL/Seqirus) except for Pfizer. Feels like an odd coincidence they are the only company they’ve not poached an exec from.

  7. With COVID trials imminent and possibility of Canadian supply agreements coming with them (given the company is equivalent to Canadian Moderna in terms of government relations), any bidders will have to risk valuation rocketing from COVID related value/hype being priced in once VBIV demonstrates success in pan corona/monovalent corona vaccines. 

  8. Additionally the company has been extremely silent on covid program/plans, what to expect, trial design, final chosen adjuvant and appears to almost have been delaying trials as much as possible into January 2021. If secrecy related to a partnership (like a mysterious third party alluded to in Canada agreement) then it cannot maintain secrecy once trials initiate soon. The Canada agreement’s change in control language was additionally emphasized when it was signed and 8-K was posted in September about new agreement signed

  9. Company has been completely silent on catalysts to expect in 2021, neither committing to things in corporate presentation nor in 10-Q filings only brief allusions in PR. In addition, they’ve been downplaying news and withholding data, almost suppressing the price as if to avoid disturbing ongoing negotiations. Concrete example is the company not filing an 8-K about their Chronic Hep B Therapy moving into a ph2 combo trial via Brii, only tweeting about it (when this is rather material news worthy of an 8-K). At the same time they’ll file an 8-K for something immaterial like EMA accepting their application and starting the clock for BLA filing review. This seems like an odd pattern that isn’t sustainable (assuming it is for ongoing negotiations). If reviewing historic corporate presentations this is an outlier, as in 2017 they used to give 12 months out forecasts, in 2018 it was 18 months out forecasts, in 2019 it was 18 months out/through end of 2020, in 2020 it was through end of 2020. As we approach December 2020, we’ve only reduced visibility of upcoming catalysts. 

  10. Large increases in tute positions over the past year, with extra high additions specific to Q3, largely by firms known to pursue M&A oriented investments. Very likely that these are adds anticipating M&A news coming in next few months. Noteworthy XBI/state street has continued to aggressively add over Q4 with an additional 4M shares.

  11. Significant short interest jump in the last two weeks of September, coinciding with timing of large institutional ownership increase, with no decrease materially in short interest over past 3 months only a slight increase (short interest comprises 17% of company shares outstanding). Such a large short interest is typical of companies before M&A (from large market makers fulfilling large institutional buy orders).

  12. Company made an odd move of incorporation as a B.V. (private business) in the Netherlands on October 21, exactly 6 months after the last insider purchase by Perceptive in April’s offering on April 24th. While this could be just to support EMA filing, I find it odd that this incorporation (a move that apparently can be done for you on demand) was timed to exactly six months from the last insider purchase by Perceptive, odd considering they’d had plans for EMA filings as early as 2020 Q1. Netherlands is well known as a tax haven with very beneficial policies for M&A purposes. Add in that the same month Aaron Rak joined from Seqirus and there was no PR, they granted 100k options to an existing employee the day after the Dutch incorporation (odd move to give 100k additional options to an employee that didn’t even merit a form-4) and its painting an odd picture given thats a significant number of options for an employee who is not even on the executive team to receive.

Valuation of VBIV 

VBIV assets are truly challenging to evaluate, both because they have demonstrated best in class combo/monotherapy potential but also because the sales profile is so compelling for majority of their assets that a fair valuation and probability of success discount still reveals a massive valuation potential in the 10-15B range if assets demonstrate further probability of success from further data.

Given this team has over 100B dollars worth of M&A deals closed between them, I feel there’s good odds they can negotiate a strong exit deal for themselves whether involving up front cash + CVR or partnership to buyout.

I plan to add detailed valuation estimates to this document in the near future later this week after cleaning up my working models and assumptions on commercialization potential/market share

Disclaimer (again)

I am not liable for any decisions you make based on the above and nothing above is meant to be construed as a push for you to invest in VBIV. Investing in penny stocks is a risky decision and one you should make after consulting your financial advisor. If you lose money from this, it’s on you.

Any and all feedback on the investment thesis, either challenging points or providing more data and perspective is welcomed (feel free to email me or hit my twitter or stocktwits) 

May your due diligence be fruitful in assisting you to make decisions.

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