BioLineRx Ltd. (BLRX) Q3 2017 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the BioLineRx Third Quarter 2017 Conference Call. All participants are at present in listen-only mode. Following the management's formal presentation, instructions will be given for the question-and-answer session. [Operator Instructions] I would now like to turn the call over to Ms. Vivian Cervantes of PCG Advisory to read the Safe Harbor statement. Vivian, please go ahead.

Thank you, Operator. Before turning the call over to management, I would like to make the following remarks concerning forward-looking statements. All statements in this conference call other than historical facts are indeed forward-looking statements. The words, anticipate, believe, estimate, expect, intend, guidance, confidence, target, project, and other similar expressions are used typically to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and may involve and are subject to risks and uncertainties and other factors that may affect BioLineRx's business, financial condition and other operating results. These include, but are not limited to, the risk factors and other qualifications contained in BioLineRx's annual report on Form 20-F, quarterly reports filed in a 6-K, and other reports filed by BioLineRx with the SEC to which your attention is directed. Actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements. BioLineRx expressly disclaims any intent or obligation to update these forward-looking statements. At this time, it is now my pleasure to turn the call over to Mr. Phil Serlin, Chief Executive Officer of BioLineRx.

Thank you, Vivian, and good morning everyone. Thank you for joining us today on our third quarter earnings conference call. Earlier this morning we issued our Q3 earnings results. You will find a copy of the press release in the Investor Relations section of our Web-site. It was also filed as a 6-K this morning. This morning we look forward to highlighting our Q3 and year-to-date activities that show continued progress made on our clinical programs. To that end, I also would like to take this opportunity to invite you to our Investor Breakfast in New York on December 5 where we will provide a detailed update on our initiatives, including near-term milestones, and feature Dr. John DiPersio, Chief, Division of Oncology at Washington University School of Medicine, a renowned expert on CXCR4. Dr. DiPersio will present the role of CXCR4 inhibition in the hemato-oncology field as well as future trends relating to CXCR4. Our agenda this morning is as follows. We will first provide a review of the key developments achieved during the quarter. We will then discuss our financial results, enumerate our major target milestones for 2017 and 2018, and then open up the call to your questions. Joining me on today's call are David Malek, BioLine's Chief Business Officer, and Mali Zeevi, Chief Financial Officer, as well as Abi Vainstein, Vice President, Clinical and Medical Affairs, and Ella Sorani, Vice President, Development. All of us will be available for Q&A at the end of the call. I will begin with a review of our BL-8040 activities in the hemato-oncology areas of stem cell mobilization in AML, as well as provide an update on our newest project, AGI-134. Following that, I will turn the call over to David Malek, our Chief Business Officer, to elaborate on the status of our clinical collaborations in immuno-oncology. First, stem cell mobilization; we continue to advance our Phase 3 study for autologous bone marrow transplantation in multiple myeloma patients and expect to initiate the trial by the end of 2017. In this regard we made the necessary regulatory submissions for this Phase 3 trial, which we also call the GENESIS trial, in August of this year. This randomized, controlled study is aimed at evaluating the safety, tolerability and efficacy of the combination treatment of BL-8040 and G-CSF, the current standard of care, as compared to the control arm of placebo and G-CSF. It is expected to enroll approximately 200 patients and will be conducted in two parts. The first part designed to validate the optimal dosing of BL-8040 is a lead-in, open-label, multi-center study that will include approximately 10 to 30 patients in order to assess the efficacy and safety of treatment with BL-8040 and G-CSF. This part will be followed by a randomized, placebo-controlled, multi-center study in approximately 180 patients. The primary endpoint will be the proportion of subjects mobilizing a meaningful amount or over 6 million CD34+ cells per kg with up to two apheresis sessions in preparation for autologous transplantation after a single administration of BL-8040 and G-CSF, as compared to placebo and G-CSF. We see GENESIS as a very significant step for BioLineRx as it marks a clear and relatively rapid pathway to bring our lead project to regulatory approval in the U.S. Of note, we recently announced the acceptance for oral presentation at the 59th American Society of Hematology ASH Conference in December 2017, a preclinical data supporting BL-8040 as a robust mobilizer of hematopoietic stem cells, known as HSCs, associated with long-term engraftment. The data shows that BL-8040 yields a higher number of a specific type of HSCs that are associated with long-term engraftment relative to G-CSF, the standard of care drug used in most stem cell mobilization procedures. We are very encouraged by the data, which we believe lends support to BL-8040's differentiation and potential as the leading mobilizing drug agent. Now AML. During the third quarter we announced the initiation of our Phase 1b/2 clinical study to investigate BL-8040 in combination with Genentech's atezolizumab as part of a multi-study collaboration with Genentech. This study which we call the BATTLE trial will focus on the maintenance treatment of patients with intermediate and high-risk AML who have achieved a complete response following induction and consolidation therapy and are not fit for transplantation. Up to 60 patients are planned to be enrolled in this multi-center, single arm, open-label study to evaluate the combination of BL-8040 and atezo for maintenance treatment in AML patients. This study's primary endpoint is to assess whether the combination of BL-8040 and atezo prolongs relapse-free survival. The overall survival of these patients will be assessed as well in a long-term follow-up phase. The trial is planned to take place at approximately 22 sites in the U.S., Europe and Israel. In addition, we continue to investigate BL-8040 as part of the consolidation AML treatment line together with cytarabine, the current standard of care for patients who have responded to standard induction treatment and are in complete remission. This Phase 2b trial is a double-blind, placebo-controlled, randomized, multi-center study in up to 194 patients who will be enrolled in the trial. We continue to evaluate the possibility of an interim analysis on this study in the second half of 2018. I would now like to provide an update on our second immuno-oncology drug program, AGI-134. We are pleased to note that AGI-134 remains on track to initiate a first-in-man Phase 1/2a clinical study after successfully finishing all necessary GLP toxicology studies. We are currently working on site selection, regulatory submission preparation and operation startup, after completing the study design in collaboration with recognized key opinion leaders in the oncology and immunology area. To us, what makes AGI-134 promising is that it induces a hyper-acute immune response by naturally occurring pre-existing antibodies to elicit a tumor-specific immune response. The resulting activation and clonal expansion of T-cells to the patient's own neo-antigens has the potential to treat the primary tumor, existing metastases and provide long-term protection against future metastases. To us, AGI-134 adds an extremely promising new therapeutic program to our immuno-oncology pipeline, with a unique mechanism of action resulting not only in direct cytotoxicity of the injected tumor but also cytotoxicity of distant existing metastases as well as the potential for long-term systemic antitumor immunity, and similar to our BL-8040 platform we believe there are significant opportunities for combination treatments with other immunotherapies, especially checkpoint inhibitors. I will now turn the call over to David.

Thank you, Phil, and good morning everyone. As Phil mentioned earlier, I will discuss our immuno-oncology collaborations with Genentech and Merck, which are based on our BL-8040 platform technology. We are pleased to note that we have several programs underway and according to plan, as we work with leading immuno-oncology partners in combination trials for our lead program BL-8040. It is well understood that immuno-oncology is one of the most promising approaches for the treatment of cancer, with immunotherapies receiving widespread attention in addition to combination therapies that increase the efficacy of cancer immunotherapy. BL-8040, a best-in-class CXCR4 antagonist, is a powerful mobilizer of immune cells, increases infiltrations of immune cells to tumors, and modifies the microenvironment in a pro-inflammatory manner. Based on this principle, we have secured collaboration agreements with three leading immuno-oncology partners, Genentech, Merck, and MD Anderson Cancer Center. When combined with PD-1 antagonist such as Merck's KEYTRUDA or PDL1 antagonist such as Genentech's atezolizumab, BL-8040 has the potential to increase the mobilization of immune cells to the tumor area and enable activated T cells to better reach tumor cells, increasing their impact on the tumor. We are therefore very excited by the level of interest of these leading partners in exploring this combination. To date, we have two ongoing Phase 2 programs with Merck's KEYTRUDA in pancreatic cancer. The first collaboration is between BioLineRx and Merck, and the second is led by MD Anderson Cancer Center. Partial results from the monotherapy treatment with BL-8040 in our combination Phase 2 pancreatic study named the COMBAT study has been accepted for presentation at the ASCO GI Conference and will be released in January 2018. The COMBAT study includes centers in the U.S., Israel and South Korea, and is an open-label, multi-center, single arm trial, designed to evaluate the safety and tolerability of the combination of BL-8040 and KEYTRUDA as well as multiple pharmacodynamic parameters in approximately 30 subjects with metastatic pancreatic adenocarcinoma. We also have a robust clinical collaboration with Genentech, which falls under the MORPHEUS Novel Cancer Immunotherapy Development Platform, earmarked to specifically assess efficacy and safety of drugs in combination treatments. We are very pleased that BL-8040 is being evaluated in multiple cancer types and by the fact that BL-8040 was selected to take part in this significant clinical undertaking by Genentech, which provides validation of our growing body of clinical evidence in support of BL-8040 as a best-in-class CXCR4 inhibitor. During the last few months, we have announced the on-schedule initiation of three Phase 1b/2 combination trials with Genentech's atezolizumab in pancreatic cancer, maintenance AML, and gastric cancer. We remain on track to announce the initiation of our fourth study in non-small cell lung cancer during the next few months. The partial results of the Phase 1b/2 solid tumor trials in collaboration with Genentech are expected in the second half of 2018. We look forward to providing updates on this initiative. Let me now turn the call back to Phil.

I will now relay to the milestones for 2017 and 2018. We continue to execute diligently on our clinical development plans, both internally and through our significant collaborations. In doing so, important milestones in the next 12 to 18 months are as follows. We expect to initiate our Phase 3 registration study in stem cell mobilization for autologous transplantation by the end of 2017. Next, we expect partial results from our immuno-oncology Phase 2a study for BL-8040 in pancreatic cancer to be presented in January 2018 during ASCO GI with top line results in the second half of 2018. We expect to initiate the last of our fourth Phase 1b/2 studies for BL-8040 in combination with Genentech's atezolizumab in early 2018, with partial results for some of the studies in the second half of 2018. We plan to initiate a first-in-man Phase 1/2a clinical study with AGI-134, our new innovative immuno-oncology asset obtained as part of the Agalimmune acquisition in the first half of 2018. We expect top line results from our stem cell mobilization in Phase 2a study for allogeneic transplantation by mid next year. We continue to evaluate the possibility of an interim analysis in our Phase 2b study in consolidation AML in the second half of 2018. Lastly, we continue to develop the projects we have in-licensed under our collaboration with Novartis and we intend to screen and review additional innovative projects both under our Novartis strategic collaboration as well as outside of the collaboration. We anticipate adding several value-add novel compounds to our pipeline over the next 12 to 18 months. I would now like to turn the call over to Mali Zeevi, our CFO, who will give a brief overview of our key financial statement items. Go ahead, Mali.

Thank you, Phil. Before I begin, let me invite you to review our quarterly filings, which contain our financials, operating and financial review and press release, for additional information. I will only go over two significant items on this call, research and development expenses and cash. Research and development expenses for the nine months ended September 30, 2017 were $13.3 million, an increase of $5.1 million, or 62%, compared to $8.2 million for the nine months ended September 30, 2016. The increase resulted primarily from spending on our new AGI-134, new clinical projects, and from higher expenses in 2017 associated with new BL-8040 studies commenced during the third quarter of 2016 and during 2017. Turning to cash, the Company held $55 million in cash, cash equivalents and short-term bank deposits as of September 30, 2017. Our financial footing remains solid and provides us with the resources necessary to fully executing our operational plans over the next two years. With that, we have now concluded the formal part of our presentation. Operator, we are now opening up the call to questions.

[Operator Instructions] The first question is from Joe Pantginis of HC Wainwright. Please go ahead.

Wanted to ask about AGI-134, looking forward here, obviously you mentioned sort of the obvious potential for combination with checkpoint inhibitors, so I was just curious, are there any other potential combinations that might be appealing to you based on the compound mechanism of action?

So, generally speaking, AGI has the potential to be combined with all or many immunotherapies, but in the first instance we are aiming to test it in combination with checkpoint inhibitors.

Got it, understood. And then with regard to the upcoming stem cell mobilization study, I apologize if I missed this comment, with regard to the design, did you have the potential, if I recall or not, the potential to give a second dose of 8040?

Basically we will have two parts for the study. The first part is a lead-in period in which we will test the dose of [1.25] [ph] for the indication of [indiscernible] stem cell mobilization, and after we assess a number of patients for this living period, we will decide how to move forward at randomization. But basically yes…

Yes, but with regard to the dosage?

With regard to the dosage, basically it is the dose that we expect to move forward and we believe that we will continue the development in the randomization. Basically I'm talking about one dose of BL-8040 on top of G-CSF, only one dose.

Understood. Thank you very much, guys.

The next question is from Mike King of JMP Securities. Please go ahead.

Congrats on the execution. I also wanted to ask a question on 134. I'm not sure you are in a position to answer, but if you could perhaps talk about are there any specific biomarkers that you could point us to when you have some top line data? I don't know if you are willing to say if that's going to be late next year or early the following year, but how should we think about gauging the activity of 134 sort of something like PFS on its outcome?

Basically we will assess different biomarkers. The majority of them will be general because this is the first study that we are doing with AGI like PCR expansion and immunophenotyping and T cells activity activation, and of course we will have [indiscernible] indication that I cannot disclose at this stage, we will have different biomarkers for each one of them.

Okay. And Phil, are you willing to go on record now to say when you think you might have that data or reluctant to do so at this point?

At this point, Mike, I'm sorry we are reluctant to do so. We have given guidance as far as starting the study, which will be in H1 of 2018, but we don't have any more guidance as far as anything else goes.

Can you say what patient population you might study first?

Basically we are thinking about more general population. Again, we are not able now to disclose specifically about the population, and probably further and more specific population.

Right. I mean, Mike, we have mentioned that it's an intra-tumoral injection. So you have to assume that it's going to be tumors that are easily accessible, so to speak.

I understand that. I'm just trying to figure are you thinking about going in treatment-experienced patients or in patients who are either early in treatment or treatment-naïve?

It's our first trial and basically we are trying to do this, the trial need to be feasible as well and we can say that we will go for a population which is more advanced and who have lesion that we can inject, and we will assess the activity of AGI alone and probably in combination as well.

Okay, great. And then just turning to 8040 for a minute, can you talk about what data you might be able to show at ASCO in January, just as far as the metrics, not necessarily the actual data, but just kind of what kind of things should the investors be looking for?

I know. I will be happy to share this with you but we have an embargo and we cannot share this data at this time point.

No, I'm not asking for the data. I'm just asking will you show PFS, will you show response rate?

No, no. I understand. Sorry. We have an agreement with Merck and we are not able to show any data on the combination until the end of the study and the top line results. Basically what we are presenting is only data on the monotherapy.

Okay, but will that include response rate to PFS or you're not willing to tell us?

No, no, we cannot show [indiscernible] because the response rate is based on the combination therapy. It is more related to biomarker.

Yes, no clinical data on biomarkers.

No clinical.

I see. Okay, that's helpful. Thanks.

The next question is from Mark Breidenbach of Oppenheimer. Please go ahead.

Congrats on the quarter's progress. So, I was just wondering if you can comment on the degree of read-through we can expect from the Merck COMBAT study in pancreatic to the other pancreatic trials that are being run with Genentech and with MD Anderson, how similar are the patient populations in all three of these trials?

The difference basically I think is some of the drugs that we are using, in the Genentech trial this is using PDL1 and the trial with Merck we are using PD-1. You know that these drugs have different mechanisms of action. Basically they work in the same pathway but at different parts of the pathway and we want to maximize the effect - the additive effect of BL-8040 in immunotherapy. From the collaboration with MD Anderson, it is more focused in biomarker and trying to seeing more in deep what this combination is doing in terms of again for the mechanism of action of course but we want to see also the response at the clinical level, but we are looking more on the translational part of the combination.

Okay, that's helpful. And one question on stem cell mobilization. Obviously at ASH we are expecting presentation showing that BL-8040 [indiscernible] different types of stem cells into circulation relative to G-CSF. I'm just wondering if there is anything, if there is any comparison that will be included between BL-8040 and Plerixafor specifically and if you would expect a difference in the mobilized stem cell populations between Plerixafor and BL-8040?

There is no comparison. We are trying to make some differentiations with what is the currently standard of care and of course we will further investigate trying to make the differentiation, but at this time point we cannot say more than that. It's preclinical and we will try to see whether we can find this difference at the clinical stages as well.

Okay. Thanks for taking the questions.

[Operator Instructions] There are no further questions at this time. Before I ask Mr. Phil Serlin to go ahead with his closing statement, I would like to remind participants that a replay of this call is scheduled to begin two hours after the conference. In the U.S., please call 1-866-500-4953. In Israel, please call 03-925-5946. Internationally, please call 972-3-925-5946. Mr. Serlin, would you like to make your concluding statement?

Yes, I would. Thank you. I would like to thank all of you for joining us on today's call and for your support. We continue to advance our therapeutic pipeline in the most efficient manner possible. Our team is driven and well-focused on delivering to our plans. I would like to remind everyone again regarding our upcoming Investor Breakfast which is scheduled to take place in New York City on December 5 and we look forward to providing you with timely updates on our progress. Thank you again and have a good day.

Thank you. This concludes the BioLineRx Third Quarter 2017 Conference Call. Thank you for your participation. You may go ahead and disconnect.