VBI Vaccines, Inc. – Ordinary Shares (NASDAQ:VBIV) just announced the details of its long awaited phase III program in hepatitis B. The program, if successful, will underpin registration applications for VBI’s lead hepatitis B asset in the US, Europe and Canada and – as such – its initiation is a major step towards the company dramatically increasing its target population.

Markets are yet to respond to the news, meaning there exists an opportunity right now to get into the stock ahead of VBI revaluing to reflect the operational advance.

With this in mind, here’s a look at the details of the trial, what’s important about how the trial is set up and what to look for going forward as indicative of successful execution and – in turn – a long term bull thesis on the company.

So, as mentioned, it’s a hepatitis B program and it revolves around an asset called Sci-B-Vac. For those new to this company, VBI has developed a platform through which it is able to create next generation vaccines that are designed to build on the immunogenicity and seroprotection offered to patients as part of the current standard of care vaccines. In this instance, the target is hepatitis B and the current standard of care vaccine in this space is Engerix-B.

Engerix-B is effective across a decent portion of the global population but it has its limitations. First, it commands a drawn out dosing regimen, which can lead to non-adherence and – by proxy – a failure of the drug to induce immunization. Second, it’s not particularly effective in certain subgroups of the population; namely, immunosuppressed patients. People with diabetes often fail to achieve seroprotection, even after completing a stringent dosing regimen of Engerix-B. The same is true with elderly patients and patients with chronic kidney disease.

Sci-B-Vac is designed to incorporate three different hepatitis B related antigens, which can help to increase the immunogenicity of the vaccine by increasing the variety of antibodies that are created in response to the vaccine being presented to the immune system. It also doesn’t require the adjuvant that’s generally attached to the standard of care treatment (in the case of Engerix-B, it’s aluminum).

VBI has conducted numerous early and mid stage trials that have demonstrated the safety and efficacy of Sci-B-Vac across a range of population types – regular, immunosuppressed, etc. The drug is also already approved in a number of countries globally and is one of two standard of care hepatitis B vaccines for newborns  (it shares this title with the above discussed Engerix-B) in Israel. This means that, in addition to the data collected formally by the company as part of clinical trials, there also exists a huge data set derived from everyday administrations – all of which prove that this is a safe and effective alternative to the standard of care therapy.

On its own, however, this data isn’t enough to justify approval in the above three noted major markets – the US, Europe and Canada. The regulatory authorities in these regions –  the FDA, the EMA and Health Canada respectively – require an investigator sponsored phase III trial to form the basis of an application for approval and it is this trial for which the company just served up the details.

Before getting into the trial specifics, it’s worth noting that, over the last six months, VBI has put together three pieces of the approval puzzle for this particular asset. Specifically, these pieces are confirmation from the FDA, the EMA and Health Canada that a single, global phase III program would be enough to underpin an application in each region. In other words, confirmation that the company won’t have to conduct three separate programs, one for each region. This confirmation from Europe and Canada came back in February. Markets had to wait a little longer for US confirmation but it eventually came in June.

This latest release, then, confirming trial design, is a fourth piece of the puzzle and the final one necessary before initiation.

So, let’s look at the trial.

As mentioned, it’s a single global program that’s set up to underpin registration applications in the US, Europe, and Canada and, according to the study design, it’s going to consist of two phase III studies. The first will be a safety and immunogenicity study called PROTECT and the second will be what’s called a lot-to-lot consistency study called CONSTANT. All told, both studies will enroll approximately 4,800 subjects and will be conducted at approximately 40 sites across the U.S., Europe, and Canada.

It’s worth noting here that a count of 4,800 patients is relatively low for a pivotal trial in a common indication like hepatitis B. The reason that the company is able to keep this number so low is that, as described above, there already exists a large set of data supportive of safety and efficacy. According to the company’s latest release, this set includes data from more than 2,000 patients.

Anyway, let’s look at the two phase III trials.

The PROTECT study will be a double-blind, two-arm, randomized, controlled study, enrolling approximately 1,600 adult subjects all of which are age 18 years and older. Subsequent opt enrollment, the patients will be randomized in a 1:1 ratio to receive either a three-dose course of Sci-B-Vac (at a 10μg dose) or a three-dose course of the control vaccine, which is the above discussed Engerix-B (at a 20μg dose).

There are two primary endpoints associated with the study.

The first is the demonstration of non-inferiority of the seroprotection rate induced by the active drug versus the control drug, four weeks after the third vaccination. This one relates specifically to patients aged 18 and older.

The second is the same, but superiority (as opposed to non-inferiority) in patients aged 45 and older. This one is an attempt to prove that the drug can be more effective in the immunocompromised population, as discussed above.

The CONSTANT study is a double-blind, four-arm, randomized, controlled study that will enroll approximately 3,200 adult subjects, age 18-45 years. In this one, the patients will be randomized in a 1:1:1:1 ratio to receive one of four three-dose courses – Lot A of Sci-B-Vac 10μg, Lot B of Sci-B-Vac 10μg, Lot C of Sci-B-Vac 10μg, or the control vaccine Engerix-B 20μg.

For those not familiar with these lot-type studies, the point is to show that the effect that the drug has on the patients is the same across a variety of different lots (just think of these as batches) of the drug in question. In this instance, VBI is trying to show to the regulatory agencies that Sci-B-Vac is consistently manufactured and – by proxy – has a consistent impact (in terms of seroprotection induced) across a range of different batches. The consistency in this instance is measured using what’s called geometric mean concentration (GMC) of antibodies.

The best way to think of this second study is as it being a study geared towards demonstrating a consistency of quality of the product, as opposed to specifically addressing efficacy. Of course, safety and efficacy will be measured (in fact, they comprise the secondary endpoint of this particular part of the program), as these metrics will also be used to measure quality across batches.

So, what are we looking for from the trials as indicative of success?

From the first study, we want to see two things.

First, that the drug is as effective in inducing seroprotection in adults aged 18 plus as is Engerix-B. That’s sort of the core primary endpoint. The second primary endpoint, however, the one looking at patients aged 45 plus in this author’s opinion, is more interesting. Not necessarily more important, as the primary needs to be hit, but more interesting.

Why?

Because there’s a very large market available to VBI if it can show that its asset is superior to Engerix-B in immunosuppressed patients. This second primary endpoint is geared towards proving just that.

From the second phase III, we just want to see safety and consistency between lots. It would be nice to see superiority in efficacy as compared to the individual lots and Engerix-B but it’s not essential.

As far as timelines are concerned, VBI hasn’t served up any specific dates for enrollment initiation but the company expects to kick off both studies during the second half of this year. With a 15-month time to completion, this means we should see topline hit press during the first half of 2018.

Disclosure: The author has no shares in any of the stocks mentioned in this article.