Interview with Eurocine Vaccines AB's CEO Dr. Hans Arwidsson
Part of Eurocine Vaccine AB June 2021 rights issue
Swedish vaccine researcher and developer Eurocine Vaccine AB opened their new rights issue for existing and new investors. IPOhub team reached out their CEO and Board Director Dr. Hans Arwidsson and we asked few questions about the company, its strategy and ongoing rights issue.
What's Eurocine Vaccines AB about and who are the people behind it?
Specialized in vaccine development, and with decades long experience, the highly qualified team and board of Eurocine Vaccines has a proven record to manage all aspects of vaccine development including preclinical and clinical development, scalability into production, as well as business development and financing. With this background, Eurocine Vaccines has specialized on bridging the gap between innovation and market within the vaccine industry.
Out of the sea of diseases out there, why chlamydia vaccine?
There are always a number of factors influencing the decision to go ahead with a project and frankly, serendipity should not be neglected. We began to talk to the innovators of the chlamydia vaccine candidate a few years ago. When we evaluated new vaccine candidates, the chlamydia one looked more and more attractive and after having conducted a thorough market analysis on the opportunity, we were thrilled. We performed a couple of preclinical studies on the candidate together with the innovators and the results supported further development. A constructive and stimulating negotiation to reach a license agreement with the innovators deepened the relationship and the understanding of the innovation, as well as of the potential. Again, there are a multitude of reasons behind the selection, but to pick the most important – the market potential.
What makes the Eurocine Vaccines approach as a development company unique compared to other players?
We have a unique combination of factors in the same agile organization - a total focus on vaccine development, an operative team and a board with impressive experience in the area, a well-established network of contract developers and a good understanding of what the big vaccine companies want to see. This, together with well established relationships with key people in the industry comes together in a total package that is beaten by no one to our knowledge.
What about competition? Any direct competitors in your specific niche if we talk about chlamydia vaccine candidates?
Today, only one player has conducted any clinical trials on vaccines against chlamydia and that is the competitor we work to surpass. The well thought-out innovation that our candidate is based on, in combination with our goal-oriented plan for the chlamydia vaccine, I see good opportunities for this to happen. According to the latest information we have received through market intelligence, the competitor's dosing schedule is considered unfavorable, which we will of course consider in the design of our upcoming clinical study.
A few additional competitors are in the early development phase, i.e. earlier than us or in a similar phase. Our focused development with an experienced team and a competent network gives me confidence that we will be able to offer a competitive vaccine candidate.
Eurocine Vaccines AB had IPO back in 2006 and major but necessary changes in 2018. When are you expecting to break even?
Development of new pharmaceuticals always involves uncertainties and risks, which was the reason behind the restart of the company in the fall of 2018 as a result of unsatisfactory clinical results in a previous project. The restart was also reflected in the dramatic re-valuation of the company in connection with that. Thus, a “break-even” would be relevant to calculate from 2018 and onwards. Having said that, the total deal value of a license with a vaccine company on chlamydia could potentially be considerably bigger, assuming that it is a global deal based on good human data on safety and efficacy.
What is the market you are targeting worth and how will you reach it?
The total market for a well-documented, safe and effective chlamydia vaccine can be compared to the market for HPV vaccines (commonly called vaccines against cervical cancer), according to Globe Life Sciences Ltd. These vaccines, with Gardasil in particular but also Cervarix as the two leading products, sold for 4.2 billion US dollars in 2020 and are estimated to have combined sales of 6.9 billion US dollars by 2026. Eurocine Vaccines' chlamydia vaccine candidate targets exactly the same market segment, i.e. young teenagers before sexual debut, and could represent a corresponding market potential. Of course, this presupposes that the product is marketed by a global, experienced and knowledgeable licensee who invests heavily in exploiting the full potential in the segment. Even so, the growth up to such potential would need several years from launch. The part of this revenue falling into Eurocine Vaccines´ income statement depends on the deal structure between Eurocine Vaccines and the licensee. Further, the time point in the development project, at which a deal is signed would influence the split of the license revenue between Eurocine Vaccines and the innovators. We would predict a license deal to be possible after one, or maybe two, clinical studies, i.e. 2023 or later.
Which are your the markets you are targeting? All at once or any specific?
Our target is to develop our vaccine candidates to become attractive for global deals with one partner for each vaccine. Having said that, the market value of most pharmaceutical products is dominated by the US, Europe and Japan, with emerging markets growing but still representing just a fraction of the market value just mentioned. It should also be mentioned that a vaccine candidate like chlamydia can have a considerable need in developing countries, where chlamydia infection in the eyes is actually the world´s biggest cause of preventable blindness.
Currently what are Eurocine Vaccines' biggest challenges?
Some of the challenges we may face are connected to development activities. During the time leading up to the start of the first clinical study with the chlamydia vaccine, we have a well worked-out plan, but of course unforeseen problems can arise, which can lead to increased time and / or increased costs. This may, for example, be due to unforeseen difficulties in developing a reliable method of producing the active protein in the vaccine or ambiguities in the toxicological study, which we need to carry out in order to obtain approval to carry out the study.
Together with the well-balanced margins in our planning, our assessment is that the experience and the network of contacts we have, means that we can quickly identify risks in the specific projects and mitigate the risks within the existing plans. Regarding the evaluation of new vaccine candidates, we would simply refrain from a project if the risks were considered too big.
Biggest achievements so far
During the last year, we have established the chlamydia vaccine project as our primary focus thanks to the exclusive license agreement that we entered with the innovators in August 2020, together with the selection of Biovian Oy as our contract developer for the project. We are now investing in the project, to take it into the clinical phase as quickly and as effectively as possible.
In parallel, we have established a number of interesting contacts with other vaccine innovators, which we will continue working on to reach additional agreements covering promising vaccine candidates.
Both these achievements support our approach to “bridging the gap between innovation and market” as the right strategy for Eurocine Vaccines.
Looking ahead, where will Eurocine Vaccines AB be in three to five years? In case the current vaccine trial will be successful, how will this shape the company's trajectory from the business perspective?
In five years, I would like to see Eurocine Vaccines having a project portfolio including between three and five vaccine projects in different phases. For one or two, we have entered into licensing deals with major players in the vaccine industry. The organization has grown to be able to manage such a vaccine portfolio and comprises a total of at least ten employees, compared to four today. This means that I see great opportunities for synergies with a larger vaccine portfolio - that is one important part behind the goal of expanding the development portfolio – to allow for such synergies.
Alternatively, Eurocine Vaccines may have reached such an attractiveness for a vaccine company that an acquisition has been completed.
You are currently running an rights issue to raise more capital, and a clear plan mentioned in your recent press release , how are the funds being allocated?
Our most important activities are conducted with the aim of documenting our vaccine candidate against chlamydia, to begin the first clinical study in the fourth quarter of 2022. The proceeds from the unit issue, together with the proceeds from the option exercise in March 2022, will finance these activities, until an application to conduct the study has been submitted and approved.
In addition, the funding will give us the opportunity to intensify the work of searching for, identifying and evaluating new vaccine candidates to add to our portfolio. It is an ongoing work with the goal of building a portfolio of vaccine candidates in different development phases, where I want to see a portfolio with at least three vaccine projects in different phases in a few years time - a way to increase the potential of our business while spreading the risks over several project.
Lastly, anything you would like to tell investors that are having a look at Eurocine Vaccines? Why now?
We are still at the beginning of our work to build a portfolio of promising vaccine candidates. I believe that the business we are running can be viewed with much greater interest when we have clearly shown that the portfolio strategy works in vaccine development, and more specifically for the idea of "bridging the gap between innovation and market”. I fully understand that this concept needs time and successful results to be fully confirmed from an investor perspective. We will get there.