Top25-SA-Banner

Vascular Biogenics Ltd (VBLT) Loses a Bull Following Disappointing GLOBE Flop

H.C. Wainwright's Swayampakula Ramakanth believes this failure now "casts doubt" on VBLT's therapeutic prospects for its VB-111 asset.


Vascular Biogenics Ltd (NASDAQ:VBLT) investors were met with the worst kind of news: a failure in the last stage of the pivotal clinical trial game. The Israeli biotech player’s Phase 3 GLOBE trial of its recurrent glioblastoma multiforme (rGBM) drug VB-111 did not succeed in meeting the primary endpoint of overall survival- and investors are running for the hills. Shares have been crashing almost 62% today in the aftermath.

As a result, H.C. Wainwright analyst Swayampakula Ramakanth is fleeing the bullish camp in the wake of the brain cancer treatment trial failure, disappointed that there are “no meaningful catalysts expected in the next 12 months.”

Therefore, as “GLOBE falters at the last hurdle,” the analyst downgrades from a Buy to a Neutral rating on VBLT stock while slashing the price target from $11 to $3, which implies a 15% upside from current levels. (To watch Ramakanth’s track record, click here)

“We expect the company to present the detailed analyses for these endpoints at a scientific conference later this year, and if VB-111 is able to show any benefit in these patient subpopulations, there may still be a path forward for the drug in this indication,” notes the analyst.” Yet, opting to be on the safe side here, the analyst is not including any revenues correlated with GBM in his modeling moving forward.

Ultimately, “Ovarian study to continue, but don’t expect results soon,” concludes the analyst, asserting: “According to management, despite the failure of GLOBE, the OVAL study is expected to continue as planned. While we agree that GBM and ovarian cancer are very different diseases and that VB-111 has achieved promising results in a Phase 2 study in ovarian cancer, we also note that the Phase 2 study only included 21 patients and that the setback in GBM casts doubt on VB-111’s therapeutic potential […] At this time, we believe the OVAL study design does not include an interim readout, and in our view, the topline results from OVAL are not expected until the 2H21 at the earliest, which may render the stock price range bound in the near term.”

Though Ramakanth once anticipated OVAL boasted a 65% probability of success, the analyst lowers it now to 45%.

TipRanks signals caution as the word on the Street when it comes to VBLT’s chances in the market. All 3 analysts polled in the last 3 months approach the company from the sidelines.