Natali_Mis/iStock via Getty Images
Certain medicines are so widely necessary that it is impossible to charge too much for them. Antibiotics and vaccines fall under this class. I never buy vaccine stocks, barring the rare exception, because I believe ROI may be poor for such companies. With that caveat, let us dig into HilleVax (NASDAQ:HLVX), which Takeda spun out to develop its proprietary norovirus vaccine.
HilleVax uses virus-like particles to develop its vaccine. These VLPs look and feel like a virus, having the same viral structural proteins that self-assemble into a shell or capsid. However, they don’t have DNA or RNA required to replicate. Thus, they are not infectious and are widely used for vaccine development, for example with the hepatitis B virus (HBV) VLP.
Lead candidate HIL-214 is a VLP targeting norovirus infection in adults and children. Norovirus causes moderate-to-severe acute gastroenteritis (AGE’). If approved, this could be the first commercial vaccine for the indication. The molecule has completed 9 Phase I & II studies in over 4,500 subjects, and has demonstrated proof of concept in a phase 2b trial in adults. It is currently running a phase 2b trial in over 3000 infants, among a variety of other trials.
HilleVax was spun out of Takeda’s phase 2 norovirus product with investor Frazier Healthcare Partners in 2021, and the IPO garnered $135mn in initial funding from RA Capital, Deerfield, and others.
Norovirus is an endemic viral infection occurring in the intestine, causing acute gastroenteritis in adults and children worldwide. The disease burden is high, with over 700mn affected and 200,000 deaths globally.
Takeda did a large phase 2b trial of the asset in 2018, but they did it in homotypic norovirus, and there just weren’t enough homotypic patients in the trial for it to be successful. Thus, p-value was not attained for the primary endpoint. However, if you considered heterotrophic norovirus- i.e., any norovirus strain – then the trial attained statistical significance in this heterotrophic patient population with a high statistical significance. This led Takeda to continue the trials.
Two strains of norovirus, GI.1 and GII.4, are the principal targets of HIL-214. GI.1 targeting produces a broad immune response, while GII.4 is the most common strain responsible for nearly two-thirds of norovirus illness. Trials have been conducted in thousands of patients.
In these large numbers of patients, HIL-214 demonstrated a good safety profile. There were mostly mild to moderate local adverse events in adults, with systemic AEs similar to placebo. AEs in infants were also largely mild to moderate with short duration (<3-4 days). Indeed, the company says that the safety profile is comparable to commercial vaccines.
Immunogenicity, too, was robust, with high expression of HBGA-blocking antibodies, even 5 years post vaccination. The Takeda trial showed high viral efficacy even in the population that failed to meet the primary endpoint. In the heterotrophic population, too, viral efficacy was high.
Although the company has conducted trials in both adults and infants, they plan to focus initial development on infants alone, because of the endemic nature of the infection, and the higher prevalence of the GII.4 strain. A 3000-patient phase 2b study called NEST-IN1 is ongoing. Enrollment of all 3000 patients is completed, and topline data is expected in mid-2024. Interim data from Cohort 1 has shown immune responses consistent with prior infant studies of HIL-214.
Financials
HLVX has a market cap of $478mn and a cash balance of $244mn. Research and development expenses for the second quarter 2023 were $23.0 million, while general and administrative expenses for the second quarter 2023 were $7.2 million. At that rate, they have a cash runway of some 8 quarters.
The company is almost entirely held by smart money. Key holders are Frazier, Takeda, and Deerfield. There’s been a single insider transaction, a purchase, in the last two years.
While I began by saying that vaccine is not always a lucrative market, that is not true for major players and in certain situations – the key example here being Moderna during the coronavirus. That was a special situation, however, norovirus too is widely infectious in the USA. 1 in 15 Americans will get it in their lifetime. Norovirus causes 19-21 million cases of vomiting and diarrhea in the US, 109,000 (approx.) hospitalizations, and 900 deaths, mostly among adults age 65 years and older. Since there are no approved vaccines, it is difficult to estimate a direct market size. However, the company says that vaccines for other viruses with similar profiles have markets running into multiple billions of dollars.
Risks
Despite running a large number of trials, there are no “registrational” or “pivotal” trials yet. No major trial has met a primary endpoint successfully, despite indications of viral efficacy. There is no timeline provided by the company about a regulatory submission. Lastly, my concern with the vaccine business still remains. The vaccine market is dominated by big pharma, and here, despite Takeda’s backing, it may be tough for a new player to get a foothold.
Bottom line
This is a Takeda and Frazier spinout, so there’s that pedigree. That is interesting, but I am going to wait for phase 3 data before I take a serious interest.
