Executive Summary

Q2 2023 was a transition quarter with tightened cost structure, a redefined U.S. field force, and added liquidity from a July public offering and expanded Brii partnership; reported net revenue rose to $0.72M, +108% YoY, driven by U.S. PreHevbrio and initial EU sales via Valneva .
Non-GAAP net loss (ex-FX and impairment) improved to $18.7M from $23.8M YoY; GAAP net loss was $44.6M, reflecting a $20.0M impairment and $5.9M FX loss .
Commercial momentum: average order size among switching accounts increased 46% QoQ; PreHevbrio global net product sales grew 48% QoQ to $0.7M; CDC adult vaccine contract award up to $25.4M supports public health channel push .
Estimates context: S&P Global consensus was unavailable; a third-party source indicates Q2 EPS was -$2.17 vs a -$2.16 estimate (minor miss), revenue consensus not available .
Near-term catalysts: APAC licensing with Brii (July) including $15M upfront and potential milestones and double-digit royalties, continued EU launches in H2 2023, and expected Canada availability in H1 2024 .

What Went Well and What Went Wrong

What Went Well

PreHevbrio global net product sales increased 48% QoQ to $0.7M; momentum supported by targeted U.S. commercial redeployment completed in June .
“Q2 was a period of transition…we believe we are well-positioned going into the second half of 2023 to execute on our corporate strategy and drive growth and value” – Jeff Baxter, CEO .
Strategic deals: expanded APAC licensing with Brii ($15M upfront, $3M equity, up to $422M milestones, double-digit royalties); CDC adult vaccine contract award up to $25.4M .

What Went Wrong

GAAP net loss remained elevated at $44.6M due to a $20.0M impairment and $5.9M FX loss, despite lower SG&A; FX volatility linked to intercompany loans and currency translation .
Cost of revenues increased with scaling production, keeping gross profit constrained relative to net sales growth .
Cash declined to $20.8M at quarter-end (pre-July financing/partnership proceeds), underscoring liquidity needs amid pipeline execution .

Financial Results

Metric	Q2 2022	Q1 2023	Q2 2023
Revenues, net ($USD Millions)	$0.346	$0.485	$0.720
Cost of Revenues ($USD Millions)	$2.522	$3.559	$3.483
R&D Expense ($USD Millions)	$5.643	$3.151	$3.292
SG&A Expense ($USD Millions)	$15.084	$13.284	$10.917
Impairment Charges ($USD Millions)	$0.000	$0.000	$20.000
Total Operating Expenses ($USD Millions)	$23.249	$19.994	$36.579
Loss from Operations ($USD Millions)	$(22.903)	$(19.509)	$(36.972)
Foreign Exchange Gain (Loss) ($USD Millions)	$(21.895)	$(6.813)	$(5.948)
Net Loss ($USD Millions)	$(45.699)	$(27.751)	$(44.628)
Basic & Diluted EPS ($USD)	$(5.31)	$(3.22)	$(5.05)
Non-GAAP Net Loss ex-FX & Impairment ($USD Millions)	$(23.804)	$(20.938)	$(18.680)
Non-GAAP EPS ex-FX & Impairment ($USD)	$(2.77)	$(2.43)	$(2.17)

Segment/KPI detail:

KPI	Q4 2022	Q1 2023	Q2 2023
PreHevbrio Global Net Product Sales ($USD Millions)	N/A	$0.5	$0.7
QoQ Change in Global Net Product Sales	N/A	+90% vs Q4 2022	+48% vs Q1 2023
Avg Order Size Change (accounts switching to PreHevbrio)	N/A	N/A	+46% QoQ
Customer Orders Change (QoQ)	Baseline	+170% vs Q4 2022	N/A
CDC Adult Vaccine Contract Award	N/A	N/A	Up to $25.4M

Margins (Gross Profit Margin %, EBITDA Margin %, EBIT Margin %) were not disclosed in the press releases, and S&P Global fundamentals were unavailable for VBIV mapping during retrieval.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Operating Expenses (normal business)	H2 2023 vs H2 2022	Not previously quantified	Reduce by 30-35% vs H2 2022	Lowered
Workforce Reduction	Q2 2023 completion	Initiated April 2023	30-35% reduction largely complete by end of June 2023	Implemented
EU Launches (PreHevbrio/PreHevbri)	H2 2023	Continued expansion anticipated	Additional European market launches expected	Maintained/updated timing
Canada Availability (PreHevbrio)	H1 2024	2023 expected earlier	Availability expected H1 2024	Timing updated
CDC Adult Vaccine Contract	2023	N/A	Award up to $25.4M	New award

Earnings Call Themes & Trends

No Q2 2023 earnings call transcript was found; VBIV did not provide an earnings call transcript in our document catalog or investor site for Q2 2023. Special call transcript exists for Feb 28, 2023 but is not Q2 earnings-related ; Q2 2023 press release used for themes.

Topic	Previous Mentions (Q4 2022 & Q1 2023)	Current Period (Q2 2023)	Trend
HBV Commercial Execution	U.S. access broadened; retail chains; initial U.K. stocking; +170% customer orders QoQ in Q1	U.S. targeting redefined via Syneos; new team deployed; avg order size +46% QoQ; EU launches continued	Improving execution
Partnerships/Licensing	Valneva distribution in EU; CEPI collaboration (coronavirus)	Expanded APAC licensing with Brii for PreHevbri; $15M upfront; potential milestones/royalties	Strengthening partnerships
Cost Structure/Headcount	April 4 plan to reduce workforce & OpEx by 30-35%	Workforce reduction largely complete; OpEx reductions reiterated for H2	Cost-down progressing
Regulatory/Contracts	EU/Canada approvals; U.K. stocking	CDC adult vaccine contract award up to $25.4M	Positive public health channel
Pipeline Execution (VBI-2601, VBI-1901, VBI-2901)	Phase 2 data anticipated 2H23 for VBI-2601; GBM Phase 2b initiation planned; VBI-2901 interim mid-year	Additional Phase 2 data for VBI-2601 expected H2; GBM Phase 2b dosing expected Q3; VBI-2901 Phase 1 interim data Q3	On-track milestones

Management Commentary

“Q2 was a period of transition…we believe we are well-positioned going into the second half of 2023 to execute on our corporate strategy and drive growth and value” – Jeff Baxter, President & CEO .
“We continue to focus on three core priorities: (1) making a difference in the fight against hepatitis B, (2) advancing key development programs, and (3) managing our operational expenses and capital to fuel sustainable growth” – Jeff Baxter (Q1 remarks) .
On HBV therapeutic strategy: initial Phase 2 data “underscore 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 Q2 2023 earnings call transcript was available; thus no Q&A highlights or clarifications can be provided from a call. Themes and specific quotes are drawn from press releases and SEC 8-K filings .

Estimates Context

S&P Global consensus estimates for Q2 2023 were unavailable due to missing mapping for VBIV in the retrieval system.
A third-party source indicates Q2 2023 EPS actual -$2.17 vs estimate -$2.16 (minor miss). Revenue consensus not available from that source .
Given the GAAP impairment charge ($20.0M) and FX loss ($5.9M), non-GAAP results better reflect core operations; non-GAAP net loss improved to $18.7M YoY, which may inform future estimate revisions focused on operating loss trajectory .

Key Takeaways for Investors

Commercial execution is improving: targeted U.S. redeployment and EU launches drove higher PreHevbrio utilization and average order size; expect continued uptake in H2 2023 and into Canada in H1 2024 .
Cash at quarter-end was $20.8M, but July financing ($20.5M gross) and Brii upfront ($15M incl. $3M equity) materially strengthened liquidity; watch cash runway versus pipeline timelines .
Non-GAAP losses narrowed YoY even as GAAP was impacted by non-recurring impairment and FX; track OpEx discipline (30-35% reduction targeted for H2 vs H2 2022) and FX exposure from intercompany loans .
CDC contract award up to $25.4M is a notable public health channel catalyst; monitor execution and purchase pacing across immunization programs .
Strategic alignment around HBV (PreHevbrio prevention, VBI-2601 therapeutic) plus APAC licensing leverages partner commercialization and potential milestones/royalties; focuses capital on highest-return opportunities .
Near-term pipeline readouts (VBI-1901 GBM Phase 2b initiation/dosing; VBI-2901 Phase 1 interim) could add optionality; investor focus remains on commercial HBV traction and operating efficiency .
With S&P consensus unavailable and limited external estimates, price-driving narrative hinges on visible revenue growth, OpEx execution, and partnership milestones rather than quarterly EPS optics .

Citations:

VBI Vaccines Inc/BC (VBIV)·Q2 2023 Earnings Summary