2023-07-17 07:51:26 ET
Summary
- Icosavax, a US biotech company, is developing vaccines for respiratory viruses using a proprietary virus-like particle technology; its lead product, RSV+hMPV vaccine, could become a multi-billion dollar franchise.
- The company's IVX-A12 vaccine candidate for respiratory syncytial virus (RSV) and human metapneumovirus (hMPV) has shown promising phase 1 results and received FDA's Fast Track designation.
- Despite risks associated with clinical trials, regulatory approvals, competition, and market acceptance, we initiate Icosavax stock with a speculative buy rating.
Company background
Icosavax ( ICVX ) is a US SMID-cap biotech company that focuses on developing vaccines for respiratory viruses, including COVID-19, RSV, and human metapneumovirus. The company utilizes a proprietary virus-like particle ((VLP)) technology (mimics the structure of viruses), and several unique vaccine candidates are in the preclinical and clinical stages of development. The novel technology platform allows the vaccine to elicit broader and more durable neutralizing antibodies with a potentially cleaner tolerability profile (VLPs are not infectious and don't replicate) than other platform technologies. We believe the company's lead product, RSV+hMPV vaccine, could become a multi-billion dollar franchise.
Furthermore, we believe Icosavax's VLP technology is highly flexible and scalable (produced through standard biomanufacturing techniques), and we expect the company use the existing VLP platform to launch next-generation vaccines for a variety of different viruses out there by switching the surface antigens. The speed of development of new vaccine products would be a big competitive advantage, as we have seen during the pandemic for COVID-19 vaccine products.
Pipeline overview (Company source) Pipeline overview (Company source)
Icosavax is currently developing variety of unique assets in the clinic, for example, vaccine candidates for respiratory syncytial virus (RSV) and human metapneumovirus (hMPV). IVX-A12 is a bivalent vaccine candidate targeting respiratory syncytial virus (RSV) and human metapneumovirus (hMPV). The product has received FDA's Fast Track designation and we believe this designation will help the company accelerate the development of IVX-A12 and market launch in the near future.
Icosavax technology (Company source)
The new phase 1 data for IVX-A12, a first-in-class RSV/hMPV bivalent vaccine was impressive
The phase 1 data for IVX-A12, a first-in-class RSV/hMPV bivalent vaccine, indicates promising results, adding credibility to the company's Virus-Like Particle ((VLP)) platform. We believe that IVX-A12 showcased robust immune responses at 1 month against both RSV and hMPV in older adults, making it a good investment candidate.
BTVI's key takeaways include:
- There was no immune interference, a crucial requirement for combo vaccines.
- Consistently high absolute Geometric Mean Titers (GMT), even more than a monovalent vaccine.
- The potential for protective GMT/Geometric Mean Ratios ((GMR)), especially in subjects with a low baseline.
- In terms of safety, a generally mild reaction profile and tolerability with no apparent dose dependence. IVX-A12 was well-tolerated across all dosage groups, with no vaccine-related serious adverse events (SAEs). Treatment-related adverse events (AEs) were few, mostly mild, and included injection site tenderness, headache, and myalgia.
- Moreover, IVX-A12 produced neutralizing antibodies (nAbs) titers at about 16,100 IU/mL for RSV-A and 8,300 IU/mL for RSV-B versus baseline.
- Remarkably, the product elicited higher post-vaccination RSV A and B nAbs than the previous monovalent RSV study.
- A sub-analysis on subjects with the 1st tertile baseline nAb titers revealed that these subjects had up to 11-fold and 7-fold higher Geometric Mean Fold Rises (GMFR) in RSV/A and B, respectively.
However, considering the small sample size and early stage of development, we believe that the company would need to replicate these results in larger phase 2 trials and eventually demonstrate clinical efficacy. We believe the measures to control baseline immunity could be a key focal point moving forward. In order to reduce baseline variability in later studies, the company plans to a) adjust the trial start time, b) distribute trial sites more evenly, and c) increase the size of the recruited patient population.
IVX-121 for RSV prevention showed some compelling data
On June 12, Icosavax reported an update on the six-month immunogenicity of its Phase I/Ib trial for IVX-121, an investigational vaccine targeting Respiratory Syncytial Virus (RSV). The management indicated that they anticipate reporting a 12-month immunogenicity update from an extension of the Phase Ib study around YE 2023.
The latest trial data showed the durability of the nAb response against RSV, which persists at least 6 months after patients received a single dose of IVX-121. We believe the sustained efficacy potential of the vaccine is highly compelling.
IVX-121 data (IVX-121 data) IVX-121 data (IVX-121 data) IVX-121 data (IVX-121 data)
We highlight a few key takeaways as follows:
- Reported findings indicate a consistent and robust immune response for IVX-121 across various unadjuvanted dosage groups for up to six months, both in younger and older adult cohorts.
- Particularly in the older group, Geometric Mean Titers (GMTs) for RSV-A neutralizing antibodies (nAbs) were documented to sustain at up to 6,184 IU/mL on day 180, down from 7,561 IU/mL on day 28. Relative to day 28, day 180 GMTs for RSV-A were preserved within a 64-98% range. While RSV-B GMTs showed higher variability, they remained above the baseline through day 180.
- In terms of safety, IVX-121 maintained a favorable profile, with no significant concerns arising in the six-month follow-up period, and no instances of vaccine-related serious adverse events.
Robust Financials
The company has robust $198m cash on hand with ~$17.4M cash-burn on R&D and $9.2M on SG&A expenses in 1Q23, which means that the company's cash runway will last until 2024. Net-net, considering the available data and the potential of capturing a meaningful market share in the US$10B+ vaccine market, we believe the current valuation represents a compelling entry point for long-term investors.
Risk to our thesis
- Clinical Trial Risks: Like all biotech companies, Icosavax faces risks associated with clinical trials. The positive Phase 1 results will need to be replicated in larger Phase 2 trials and ultimately demonstrate clinical efficacy.
- Regulatory Risks: FDA approvals are never a guarantee. Any delay or rejection could significantly impact the company's prospects.
- Competitive Landscape: The vaccine development sector is highly competitive. Success depends not just on the product's effectiveness, but also on its ability to stand out amongst competitors.
- Market Acceptance: There is always the risk that, even if the vaccines pass clinical trials and gain regulatory approval, they might not gain traction in the market due to factors such as pricing, efficacy concerns, or the emergence of new competitors.
Conclusion
We initiate Icosavax with a speculative buy given its unique virus-like particle ((VLP)) technology for vaccine development. The company's flexible, scalable tech, the promising Phase 1 results of their lead product, IVX-A12, and the strong financial position with a cash runway until 2024 make it a compelling investment.
For further details see:
Icosavax: Moderna 2.0, The Microscopic Giant In The Vaccine Arena