Executive Summary

Q1 2023 showed early commercial traction: PreHevbrio net product sales rose 90% quarter-over-quarter from Q4 2022 to Q1 2023, supporting a 285% YoY revenue increase to $0.49M; however, losses widened on higher SG&A and FX headwinds .
Management implemented cost reductions targeting a 30–35% OpEx reduction in 2H 2023 vs 2H 2022, aiming to extend runway as EU/UK commercialization ramps via Valneva and U.S. retail access expands (six chains including Costco, RiteAid, Walmart) .
Pipeline catalysts in 2H 2023: additional Phase 2 HBV immunotherapy (VBI-2601/BRII-179) data; GBM program and multivalent coronavirus vaccine interim data mid-year, offering potential narrative support despite near-term cash burn .
Estimates context: S&P Global consensus for Q1 2023 was unavailable in our data access, so we cannot assess beats/misses versus Street expectations; management did not provide revenue or margin guidance (only OpEx reduction plans) .

What Went Well and What Went Wrong

What Went Well
- PreHevbrio commercial momentum: “Net product sales increased 90% from Q4 2022,” with Q1 net product sales of $0.5M as access broadened (retail pharmacies and federal channels) .
- Access expansion: Available at six U.S. retail pharmacy chains and broad coverage for the product-specific CPT code across Medicare, commercial, and Medicaid plans .
- HBV therapeutic progress: Initial Phase 2 combination study data suggest VBI-2601 + HBV siRNA could be a meaningful part of a functional cure regimen; more data expected in 2H 2023 .
What Went Wrong
- Elevated OpEx: SG&A rose to $13.3M (vs $10.9M YoY) on commercial execution costs, insurance, professional, and labor costs; OpEx actions only started in April (after Q1) .
- Gross-to-net dynamics: Q1 gross sales of ~$0.8M reduced by ~$0.3M in discounts/chargebacks/rebates to ~$0.5M net, underscoring pricing/access frictions typical early in launches .
- FX headwind: FX loss of $6.8M inflated GAAP net loss to $27.8M; non-GAAP excluding FX was $20.9M, reflecting intercompany loan translation impacts (USD/CAD vs NIS) .

Financial Results

Income statement – YoY comparison (Q1 2022 → Q1 2023)

Metric ($USD Millions except per-share)	Q1 2022	Q1 2023
Revenues, net	$0.126	$0.485
Cost of revenue	$2.754	$3.559
R&D expense	$2.362	$3.151
SG&A expense	$10.930	$13.284
Total operating expenses	$16.046	$19.994
Loss from operations (EBIT)	$(15.920)	$(19.509)
Net loss	$(21.254)	$(27.751)
Diluted EPS	$(2.47)	$(3.22)
Net loss excl. FX (non-GAAP)	$(16.860)	$(20.938)
Diluted EPS excl. FX (non-GAAP)	$(1.96)	$(2.43)
Weighted avg. shares (M)	8.609	8.609

Quarterly trend snapshot

Metric	Q3 2022	Q4 2022	Q1 2023
Revenues, net ($M)	$0.317	N/A	$0.485
Loss from operations (EBIT, $M)	$(21.558)	N/A	$(19.509)
Net loss ($M)	$(25.209)	N/A	$(27.751)
Diluted EPS ($)	$(0.10)	N/A	$(3.22)
Cash & equivalents at period end ($M)	$83.6	$62.6	$40.4

Notes:

Management stated PreHevbrio net product sales increased 90% sequentially vs Q4 2022; absolute Q4 2022 quarterly revenue was not disclosed in the press release .
Q1 2023 gross-to-net: ~$0.8M gross sales less ~$0.3M discounts = ~$0.5M net .

Commercial/product KPIs

KPI	Q1 2023 Status
U.S. retail pharmacy access	Now in 6 chains incl. Costco, RiteAid, Walmart
Federal channels	VA, Federal Bureau of Prisons, certain military facilities
Customer orders	+170% vs Q4 2022 (count of orders)
Reimbursement	Strong CPT code coverage across Medicare, commercial, Medicaid
U.K./EU	Initial U.K. stocking order shipped end of Q1; EU availability expected beginning Q2 2023 (via Valneva)
Canada	Expected availability by year-end 2023

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Operating expenses (normal business)	2H 2023 vs 2H 2022	Not provided previously	30–35% lower OpEx expected; workforce/OpEx reduction announced Apr 4, to largely complete by end of June 2023	Introduced
PreHevbri EU availability	2023	“Beginning first half 2023” expected (Valneva deal)	Expected available in certain European countries beginning Q2 2023	Maintained/Timed
PreHevbrio Canada	2023	“Expect to make available in 2023”	Availability expected by year-end 2023	Maintained/Timed
VBI-2601 (HBV) add-on study (PEG-IFN + NrtI)	2023	Interim topline data expected Q3 2023	Interim topline clinical data expected 2H 2023	Timing window updated
VBI-1901 recurrent GBM next phase	2023	Expected Q2 2023 initiation	Expected mid-year 2023 initiation	Slightly later
VBI-2901 Phase 1 interim	Mid-2023	Mid-year 2023	Mid-year 2023	Maintained

No revenue, margin, OI&E, tax rate, or dividend guidance was provided .

Earnings Call Themes & Trends

Note: No Q1 2023 earnings call transcript was available in our document set; themes below derive from press releases (Q3’22, FY’22, Q1’23).

Topic	Previous Mentions (Q3’22 and FY’22)	Current Period (Q1’23)	Trend
U.S. commercial execution for PreHevbrio	Early launch activities, field team deployment, access/reimbursement groundwork; customer acquisition more than doubled since early Q4’22	90% q/q increase in net product sales; +170% customer orders; broad CPT coverage; six retail chains live	Improving momentum
EU/UK commercialization (Valneva)	Partnership announced; availability expected early 2023	Initial U.K. stocking order shipped; EU availability expected beginning Q2 2023	Transitioning to launch
Cost discipline	No explicit numeric reduction target; cash declined through 2022	30–35% OpEx reduction targeted in 2H’23 vs 2H’22; workforce reduction initiated in April	Sharpened focus on OpEx
HBV immunotherapy VBI-2601	Initial Feb 2023 data suggested stronger immune responses with siRNA combo; more data expected in 2023	Reiterated potential part of functional cure regimen; interim topline in 2H’23	On track
GBM (VBI-1901)	Preparing next phase; FDA ODD and Fast Track; initiation expected Q2/mid-year 2023, plus INSIGhT arm with balstilimab	Recurrent GBM next phase expected mid-year; INSIGhT arm expected Q3 2023	Near-term starts
Coronaviruses (VBI-2901)	Phase 1 initiated Sep 2022; interim mid-year 2023	Interim Phase 1 data mid-year 2023 reiterated	Maintained

Management Commentary

“We continue to focus on three core priorities: (1) making a difference in the fight against hepatitis B including prevention and treatment, (2) advancing key development programs… and (3) managing our operational expenses and capital to fuel sustainable growth…” .
“I am especially excited to note the increase in use of PreHevbrio in the U.S.… we hope and expect to see this momentum continue throughout 2023 and beyond.” .
“Encouraging clinical data… from our partnership with Brii Biosciences underscores the belief that a functional cure… is within reach, and that our immunotherapeutic candidate, VBI-2601, has the potential to be a meaningful part of that combination regimen.” .

Q&A Highlights

No Q1 2023 earnings call transcript was available in our document set; accordingly, we cannot provide Q&A highlights or call-based guidance clarifications for the quarter.

Estimates Context

S&P Global consensus for VBIV Q1 2023 (revenue, EPS, EBITDA) was unavailable in our access, preventing a beat/miss assessment versus Street expectations. Management did not issue numeric revenue/margin guidance in Q1 2023; focus was on OpEx reduction and commercial/pipeline milestones .

Key Takeaways for Investors

Early U.S. commercial traction is visible: PreHevbrio net product sales +90% q/q and +170% increase in order count, with six retail chains live and solid payer coverage—key for continued revenue build in 2023 .
Cost reset underway: 30–35% 2H’23 OpEx reduction target should moderate burn, though Q1 cash fell to $40.4M; execution on savings and working capital will be closely watched .
EU/UK commercialization inflection: Initial U.K. stocking and planned EU availability in Q2 2023 (via Valneva) provide a second growth vector beyond the U.S. .
Clinical catalysts in 2H 2023: Additional VBI-2601 HBV combo data and VBI-1901/INSIGhT starts plus VBI-2901 interim data offer multiple shots on goal to support sentiment .
FX volatility materially impacts GAAP results; non-GAAP (ex-FX) helps isolate operating performance (Q1 non-GAAP net loss $20.9M vs GAAP $27.8M) .
Near-term narrative driver: execution on U.S. retail/IDN expansion and EU launch ramp, plus visible OpEx reductions—these are likely the primary stock catalysts until clinical data readouts arrive .

Additional Data Detail

Gross-to-net dynamics: Q1 gross sales ~$0.8M less ~$0.3M in discounts/chargebacks/rebates → ~$0.5M net product sales .
Cash trajectory: $83.6M (Q3’22) → $62.6M (Dec 31, 2022) → $40.4M (Mar 31, 2023) .
YoY operating drivers: Higher SG&A from field team deployment and distribution build-out; R&D up with VBI-2901 Phase 1 enrollment completion in Q1 2023 .

Limitations and Data Sources

Q1 2023 earnings press release (8-K Item 2.02 with Exhibit 99.1) .
Prior quarters’ press releases: Q3 2022 and FY 2022 (includes YE 2022 balances) .
S&P Global consensus data for VBIV Q1 2023 was unavailable via our access; thus, no estimate comparison could be provided.

VBI Vaccines Inc/BC (VBIV)·Q1 2023 Earnings Summary