After trimming its headcount last year in an effort to cut down on operational expenses, VBI Vaccines found another way to improve its financial position with an up to $33 million Brii Biosciences deal that transfers the IP rights to its main vaccine candidate as well as manufacturing digs.
Hepatitis B (HBV) partner Brii will take over the duo’s HBV vaccine candidate VBI-2601, scratching the up to $437 million that Brii was to pay VBI in milestone payments and additional royalties after scoring the vaccine’s exclusive worldwide license in July.
The companies will “work together” to transfer the manufacturing tech for the vaccine to a site determined by Brii, the two said in a press release.
Through the deal, Brii also got its hands on VBI’s manufacturing capacities at its Rehovot, Israel facility, plus an exclusive development and commercialization license for VBI’s glioblastoma candidate in the Asia Pacific region, minus Japan.
VBI, for its part, got $2.5 million after signing the deal and is slated for an additional payment up to $30.5 million after the achievement of “certain activities” targeted for June 30.
“We believe that this transaction improves the financial stability of VBI and balances the potential value creation within our development and commercial portfolio with a streamlined and focused resource deployment,” VBI’s CEO Jeff Baxter said. “We remain steadfast in our belief that our pipeline can have a meaningful impact on patients, providers, and public health, and we believe this deal better positions us to deliver on this mission.”
VBI expects the transactions to shrink its debt overhang by “about 70%” as well as reduce the “long-term burn” of the company, Baxter added. Specifically, the company’s total debt principal under its facility with K2 HealthVentures should be cut down to $17 million, according to the release.
The deal comes after the Massachusetts-based drugmaker zeroed in on its HBV programs in April, which includes VBI-2601 and its 2021 approved vaccine PreHevbrio. To get there, the company had to prune its workforce by 30-35% to lower operating expenses by the same amount in decisions that were “not taken lightly,” Braxter said at the time.
Despite the stated focus, VBI’s pipeline still lists prophylactic vaccine programs for cytomegalovirus, COVID-19, zika and other coronaviruses.
As for what is now fully Brii’s HBV vaccine, known on that company’s side as BRII-179, a recent proof-of-concept study is consistent with a previous proof-of-mechanism study showing that the vaccine “induces functional immune responses,” Brii’s chief medical officer David Margolis, M.D., said in a release.
VBI pulled total revenues of $1.1 million in 2022 and brought in the same figure in sales during its most recently reported quarter of 2023’s third quarter. However, that period saw total revenues of $6.6 million thanks to its expanded license agreement with Brii.