BioLineRx Ltd. (BLRX) Q4 2017 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the BioLineRx Fourth Quarter and Full Year 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 certain 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 on our fourth quarter and year-end 2017 earnings conference call. We issued our year-end earnings results earlier this morning and you will find a copy of the press release in the Investor Relations section of our Web site. Our results were also filed as a 6-K this morning along with our annual report on Form 20-F. Our agenda today is as follows. We will begin with a review of our programs and activities following by a discussion of our financial results. We will also enumerate our major target milestones for 2018 and open up the call to your questions. Joining me on today's call are Mali Zeevi, Chief Financial Officer; as well as Abi Vainstein, Vice President, Clinical and Medical Affairs; and Ella Sorani, Vice President, Development who will be available for Q&A at the end of the call. To begin, 2017 was a significant year for the company as we made important advancements in our principal clinical development programs. In this respect, we made key strides in three areas. First, our development of BL-8040 in stem cell mobilization where we recently initiated our first Phase 3 registrational study; second, the study progress on our immuno-oncology programs with both Merck and Genentech. This includes our recently announced partial monotherapy results in pancreatic cancer in combination with Keytruda as well as the initiation of several Phase 1b/2 studies with Tecentriq. And third, execution of our growth strategy which included the acquisition of our second novel oncology drug AGI-134. To support these advancements, we strengthened our balance sheet during 2017 with financing transactions led by BVF Partners. I would also like to point out the very encouraging ongoing long-term survival results which we announced in December relating to our previously completed Phase 2 study in relapsed/refractory AML. As 2018 unfolds, we look forward to reporting on further advancements in our clinical development programs overall and most specifically on clinical data readouts from several Phase 2 studies and the leading results from our Phase 3 autologous stem cell trial. Let me now briefly review BL-8040 activities in our three main areas; stem cell mobilization, AML and immunotherapy. In the fourth quarter, we were very pleased to initiate as planned our first Phase 3 registrational study for BL-8040 which evaluates the program for autologous bone-marrow transplantation in multiple myeloma patients. The GENESIS trial is aimed at evaluating the safety, tolerability and efficacy of the combination treatment of BL-8040 and G-CSF, the current standard of care versus the control arm of placebo and G-CSF. To us, GENESIS marks a clear and relatively rapid pathway to bring our lead project to regulatory approval in the U.S. This study evaluates the potential for placebo [ph] with BL-8040 in a single administration and up to two-day collection regimen for rapid mobilization of stem cells, which could represent a significant improvement over the current treatment program using G-CSF that requires up to four apheresis sessions. We look forward to providing results from the initial dose confirmation leading cohort of the GENESIS study by mid-2018 with enrollment of the full randomized control part of the study expected to conclude in 2019. Now turning to AML. As mentioned, in the fourth quarter we reported positive long-term survival data from the dose expansion part of our Phase 2a study in relapsed/refractory AML. The data shows that the combination of BL-8040 with high-dose Ara-C in its difficult to treat patient population significantly improved overall survival compared with historical data from high-dose Ara-C monotherapy. Specifically, median overall survival was 11.1 month compared to historical data for patients treated only with high-dose Ara-C showing overall survival of approximately 6.1 month. In addition, the subset of patients exhibiting a response showed prolonged overall survival with estimated one year and two year survival rates of 60%. We are currently in the process of collecting survival data from all patients in the study including additional patients receiving the optimal dose selected for expansion, and we intend to present these results at a scientific conference later this year. As mentioned, we are extremely pleased with these long-term results and we will continue to monitor the overall long-term survival of patients in this study. In parallel to the progress being made in the execution of our other two important studies in AML, our randomized control Phase 2b study in consolidation AML and our Phase 2a study in maintenance AML that is part of our multi-study collaboration with Genentech. Now moving on to immuno-oncology collaborations. In the third pillar of our BL-8040 strategy treatment of cell tumors in combination with checkpoint inhibitors, we saw tremendous progress during 2017. During the last quarter, we provided the first clinical data readout on BL-8040 from our COMBAT study in pancreatic cancer under the collaboration with Merck. Our partial monotherapy results in this combination trial were announced at ASCO GI. The data clearly demonstrated BL-8040’s mechanism of action in a difficult to treat population showing T-cell infiltration into the tumor after five days of monotherapy. Specifically, the results show that BL-8040 induces robust infiltration of anti-tumor T-cells into liver metastasis in almost half of the pancreatic cancer patients who underwent the biopsy which is seen as key in the objective of improving the responsiveness of patients with pancreatic cancer to immunotherapy. BL-8040 also induced an increase in the number of total immune cells in the peripheral blood while the frequency of peripheral blood regulatory T-cells, Tregs, known to impede the anti-tumor immune response, was significantly decreased. We believe these results clearly lend support to the rationale for combining BL-8040 with checkpoint inhibitors. We look forward to providing top line results in the COMBAT trial in the second half of 2018. Turning to our clinical collaboration with Genentech which primarily falls under Genentech’s MORPHEUS Novel Cancer Immunotherapy Development Program as scheduled to Phase 1b/2 clinical studies in pancreatic and gastric cancer were initiated in 2017. This is an addition to the maintenance AML trial that I discussed earlier and we intend to announce the initiation of a fourth study in non-small cell lung cancer during 2018. We look forward to partial results from one or more of these studies by the end of 2018. Finally, I would like to provide an update on our second immuno-oncology program AGI-134. At the recent ASCO-SITC conference, we presented AGI-134 preclinical data that showed remarkable tumor regression. In two melanoma models, data demonstrated complete tumor regression in 50% and 67% of mice treated intratumorally with AGI-134. Treatment with AGI-134 also showed a beneficial effect on survival compared to the control group. In addition, the results showed that the injection of AGI-134 into the tumors induces activation of the complement system, an important component of the innate immune system as it is predicted to elicit [ph] subsequent more robust and systemic response against tumor cells and create a pro-inflammatory tumor microenvironment. We look forward to data from additional preclinical studies planned for AGI-134 and we expect to initiate a first in human Phase 1/2a clinical study by mid-2018. And similar to our BL-8040 platform, we believe there are significant opportunities for combination treatments using AGI-134 with other immunotherapies, especially checkpoint inhibitors. I will now move on to our milestones for 2018. We expect important milestones over the next 12 months as we continue to execute on our clinical programs. As mentioned earlier, we are looking at several data readouts. We expect results from the leading phase of our Phase 3 pivotal study in stem cell mobilization for our autologous transplantation in midyear. We expect top line results from our Phase 2a COMBAT study for BL-8040 in combination with Keytruda in pancreatic cancer in the second half of this year. We look forward to partial results from one or more of our Phase 1b/2 studies in solid tumors under our Genentech collaboration by the end of this year. We continue to evaluate the possibility of an interim analysis on our Phase 2b study in consolidation AML in the second half of this year. We plan to initiate a first in human Phase 1/2a clinical study with AGI-134, our new innovative immuno-oncology asset obtained as part of the Agalimmune acquisition by midyear. Lastly, we continue to develop the projects we’ve in-licensed under our strategic collaboration with Novartis and we intend to screen and review additional innovative projects under the collaboration. We hope to add one to two value add novel compounds to our pipeline during 2018. 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. Mali, go ahead.

Thank you, Phil. Before I begin, let me invite you to review the filings we made this morning, 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 in 2017 were $19.5 million, an increase of $8.3 million, or 75%, compared to $11.2 million for 2016. The increase resulted primarily from higher expenses in 2017 associated with new BL-8040 clinical studies commenced during the third quarter of 2016 and during 2017, as well as spending on our new AGI-134 near-clinical project. Turning to cash. The company held $49.5 million in cash, cash equivalents and short-term bank deposits as of December 31, 2017. Our financial footing remains solid and provides us with the resources necessary to fully execute on our operational plans into 2020. With that, we have now concluded the formal part of our presentation. Operator, we are now opening up the call to questions.

Thank you. Ladies and gentlemen, at this time we will begin the question-and-answer session. [Operator Instructions]. The first question is from Jason McCarthy of Maxim. Please go ahead.

Hi. Good morning, Phil. Just a couple of questions. You showed really good data with T-cell infiltration on the pancreatic study there’s a small number of patients, but as we look forward to the top line data later this year and not just pancreatic, gastric and AML as well, for the combination study, what would you expect the response rate to be for a checkpoint monotherapy in these indications just to get a sense of what kind of data we might be looking for? And my second question is around the AML Phase 2b study. I know you haven’t publicly disclosed where enrollment is, but could you give us a sense of what would prompt you? What factors to do an interim analysis this year? Thank you.

Okay. Hi, Jason. Thanks for asking. So let me answer the second question first. This study will probably complete enrollment of the Phase 2b or the BLAST study in consolidation AML. It will probably complete enrollment sometime towards the end of 2019 or into 2020 and we’ve noted that the top line results will probably be in 2020. We feel that it’s important for us to get a look at the data before 2020. And so we’re looking for enough events that will give us enough confidence in the data that we would like to show towards the end of this year. So we don’t know exactly when that will be. We’re working right now with our statisticians and we’ll have more information later in the year. But I believe that we’re looking at something towards the end of this year for the top line results – I’m sorry, for the interim results. Abi, would you like to answer the first question.

Yes. About the study tumor trial, as you know, we have several solid tumors trial in collaboration with Merck and with Genentech and basically in the area of pancreatic cancer, the expected response to the majority of the population of pancreatic cancer is what we know and publishers that written no response at all. In the area of gastric cancer, the data published is more with the Keytruda [indiscernible] and also the response rate in this group is very low. It’s around 13% of the patient responding. Then we have here a place to improve both the pancreatic treatment with immunotherapy as well as the gastric cancer.

Great. Thank you for taking the questions.

Thanks, Jason.

[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 1-888-326-9310. In Israel, please call 03-925-5901. Internationally, call 972-3-925-5901. Mr. Serlin, would you like to make your concluding statement?

Yes. Thank you. I would like to thank all of you for joining us on today's call. We are excited about the potential of our therapeutic pipeline and encouraged by the data demonstrated to-date. We look forward to providing you with progress reports on our important milestones ahead. We appreciate your support and we thank you again for joining us this morning. Have a great day.

Thank you. This concludes the BioLineRx fourth quarter 2017 conference call. Thank you for your participation. You may go ahead and disconnect.