SciVac Therapeutics has agreed to acquire VBI Vaccines in a $92 million stock deal that will create a vaccine-focused developer with a licensed hepatitis B (HBV) vaccine and a pipeline of preventive and therapeutic candidates, the companies said today.

SciVac’s HBV vaccine, Sci-B-Vac™, is a “third-generation” vaccine intended to offer rapid onset of protection, high levels of anti-HBV antibodies and the ability to be administered at lower doses than competing HBV vaccines. In contrast to other vaccines that contain only one surface antigen (the “S” antigen), Sci-B-Vac contains the “S” antigen plus the “preS1” and “preS2” surface antigens.

As a result, according to SciVac, the vaccine offers more opportunities for the immune system to respond with antibodies that can recognize one of these components of the native hepatitis B particle. Sci-B-Vac is approved in 15 countries, and according to SciVac has shown a favorable safety and efficacy profile in 20 trials totaling more than 5,000 enrollees worldwide.

In the U.S., SciVac expects to launch Sci-B-Vac commercially in 2018 by demonstrating efficacy in the end-stage renal disease (ESRD) subpopulation, based on a clinical program slated to begin in 2Q 2016. The company notes that the CDC recommends hepatitis B vaccination for the 1 million patients with ESRD, for which 30-50% of these patients do not respond to current vaccines.

“We are excited to join with SciVac in the planned growth of market penetration for Sci-B-Vac while simultaneously advancing our pipeline of vaccine candidates,” VBI President and CEO Jeff Baxter said in a statement.

VBI, he said, will bring to the combined company its eVLP and LPV platforms, a pipeline of vaccine candidates, immunology and biologics formulation expertise, and an experienced board and management team.

VBI's eVLP Platform is designed to enable the development of enveloped (“e”) virus-like particle (VLP) vaccines that closely mimic the structure of enveloped viruses. VBI has initiated work for GMP manufacturing of its lead eVLP asset, a preventive cytomegalovirus (CMV) vaccine candidate, for use in preclinical and Phase I trials. The eVLP Platform has also yielded a novel therapeutic vaccine candidate for glioblastoma (GBM) and a preventive vaccine for respiratory syncytial virus (RSV).

VBI's Lipid Particle Vaccine (LPV) Platform is a proprietary formulation and process designed to enable the development of vaccines and biologics that can withstand storage or shipment at constantly fluctuating temperatures.

“We're thrilled to combine with SciVac's assets and talent to create what we believe will become a leading vaccine developer with global aspirations,” Baxter added.

Baxter and VBI Chairman Steven Gillis, Ph.D., will hold the same positions with the combined company, as will VBI CSO David Anderson, Ph.D. Curtis Lockshin, Ph.D., SciVac's CEO, will become the combined company’s CTO.

“The acquisition of VBI provides SciVac with access to an impressive portfolio of vaccine candidates that may address large unmet needs in both infectious diseases and oncology,” said Dr. Lockshin. “We expect that our vaccine development and manufacturing capabilities, intellectual property and existing contractual relationships will allow us to further the potential of this union.”

Dr. Lockshin added with guidance from VBI leadership, the combined company plans to drive future sales of Sci-B-Vac by conducting new clinical trials, with the goal of securing additional regulatory approvals in key markets and indications.

To carry out the acquisition, a newly formed, wholly owned subsidiary of SciVac will merge with and into VBI, with VBI surviving the merger as a wholly-owned subsidiary of SciVac—which will change its name to VBI Vaccines.

Once the merger takes effect, each share of VBI common stock will be converted into the right to receive 20.808356 common shares of SciVac, with VBI stockholders set to receive an aggregate of approximately 541,573,712 common shares of SciVac, representing about 42% of the issued and outstanding shares and voting power of the combined company. SciVax stock closed Friday at 17 cents per share on the OTC Markets, giving the deal a value of approximately $92.1 million.

Holders of VBI's securities will receive shares, options and warrants of SciVac representing approximately 46% of the fully diluted outstanding shares of the combined company. OPKO Health will be the largest individual shareholder of the combined company, with approximately 14% of issued and outstanding shares.

The boards of both companies have approved agreements related to the acquisition. The deal is subject to customary closing conditions, including the approval of SciVac and VBI shareholders.

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