BioLineRx Ltd. (BLRX) Q1 2018 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the BioLineRx, First Quarter 2018 Conference Call. All participants are at present in a 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 over the call 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 today on our first quarter earnings conference call. Earlier this morning we issued our Q1 earnings results. You will find a copy of the press release in the Investor Relations section of our website. It was also filed as a 6-K this morning. Today we will begin with a review of our programs and activities, followed by a discussion of our financial results. We will also enumerate our major target milestones through the end of this year and then 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 Hillit Shachar, Vice President, Business Development who will be available for Q&A at the end of the call. We entered 2018 with encouraging data, in line with our efforts to build a growing body of evidence and supported the therapeutic potential of our programs. This included our first clinical results for BL-8040 monotherapy from the combat study for advanced metastasis pancreatic cancer patients under our collaboration with Merck, as well as very encouraging overall survival data in relapsed/refractory AML patients treated with a combination of BL-8040 and high-dose Ara-C. We also saw promising preclinical data on [inaudible] models with intratumoral administration of AGI-134 our second asset. Let me now being with a review of BL-8040 activities in our three main areas; stem cell mobilization, AML and immunotherapy. As planned, we initiated the GENESIS study, our first Phase III registrational study for BL-8040 last quarter. This study evaluates BL-8040 as a stem cell mobilization agent for autologous bone-marrow transplantation in multiple myeloma patients. The study aims to evaluate 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 in G-CSF. Specifically we are looking into the therapeutic potential of treatment with BL-8040 in a single administration and up to two day collection regimen, which we believe could represent a significant improvement over the current treatment program using G-CSF with or without Mozobil, which requires multiple administrations and up to four apheresis sessions, especially for patients with severely compromised bone-marrow who are considered poor mobilizers. To us GENESIS marks a clear and relatively rapid pathway to bring our lead project to regulatory approval in the U.S. We continue to look forward to providing results of the initial dose confirmation, leading cohort of the GENESIS study in the next few months. Enrolment of the full randomized controlled part of the study is expected to conclude in the second half of next year. In the allogeneic setting last week we announced positive results from a proof of concept Phase II clinical trial assessing BL-8040 as a single agent for allogeneic stem cell mobilization. The full top line results of the study will be presented at the upcoming EHA conference to take place next month in Stockholm, Sweden. Mobilization of stem cells for the purpose of donor allogeneic transplantation after hydros chemotherapy is currently performed using a four to five day treatment cycle with G-CSF and a one to two day apheresis procedure. Single agent treatment with BL-8040 showed similar efficacy in only one administration. In addition, BL-8040 showed non-inferiority in recipient engraftment, with all transplanted recipients successfully engrafting with BL-8040-mobilized grafts. We were very pleased with the results of this proof-of-concept Phase 2 clinical trial, showing that a single administration of BL-8040 followed by apheresis results in rapid and effective stem cell mobilization and leads to prompt hematopoietic recovery after allogeneic transplantation. These robust results in an allogeneic setting continue to strongly support BL-8040's mechanism of action and demonstrate the ability of BL-8040 as a fast and effective mobilizing agent, thereby giving us further confidence in our ongoing Phase 3 study in stem cell mobilization for autologous transplants. We intend to further evaluate the allogeneic transplant landscape in order to decide on the best development pathway forward for this complementary indication. Turning to AML, last week we reported continued 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 this difficult to treat patient population significantly improved overall survival compared with historical data from high-dose Ara-C monotherapy. Specifically, median overall survival was 9.1 month compared to historical data for patients treated only with high-dose Ara-C, showing overall survival of approximately 6.1 months. In addition, the subset of patients exhibiting a response showed prolonged overall survival of 16.7. We will be providing further updates on this data at next month’s EHA conference and we expect the data to improve as we continue to monitor patients from this study. We are extremely encouraged with the overall survival data continuing to flow from this proof-of-concept study. The study included a very difficult-to-treat patient population, in which 81% were either refractory to one or two inductions, or experienced progression-free survival of less than one month to 12 month after first-line therapy. These data continue to give us confidence in the AML space, where we have two important studies ongoing – a large randomized controlled Phase 2b study in consolidation AML, and a Phase 1b/2 study in the maintenance AML under our collaboration with Genentech As previously disclosed, we are currently working towards performing an Interim Analysis on the Phase 2b study in consolidation AML towards the end of the year, subject among other things to reaching an appropriate number of events in the study to provide the analysis for the appropriate level of statistical power. Finally, we now turn to our immuno-oncology program. In the first quarter we provided the first clinical data readout on BL-8040 from our COMBAT study in pancreatic cancer under our collaboration with Merck, with our partial monotherapy results in this combination trial 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 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 total number of immune cells in the peripheral blood, while the frequency of peripheral blood regulatory T-cells or 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. Enrolment of the study has been completed and we expect to meet our timeline for conclusion of the study and top-line results in the second half of 2018. Turning to our clinical collaboration with Genentech, we continue to execute on the three studies currently running; the previously mentioned AML maintenance study that we are running, and two additional studies, which fall under Genentech’s MORPHEUS Novel Cancer Immunotherapy program, one in pancreatic cancer and one is gastric cancer. A fourth study in lung cancer in planned for initiation by the end of the year. We look forward to providing you an update on one or more of these studies towards the end of 2018. Let me now provide you with 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 and we are encouraged by these results, whereas previous studies had demonstrated that intratumorally administration of AGI-134 induces a systemic anti-tumor response that protects mice from the development of distant tumors. The new study presented at ASCO-SITC now show direct regression of established primary tumors after injection with AGI-134. 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 a 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 are on track to initiate a first in human Phase 1/2a clinical study in the next few months. Similar to our BL-8040 platform, we believe there are significant opportunities for combination treatments using AGI-134 with other immunotherapies, especially checkpoint inhibitors. Now I’ll turn to milestones for 2018. We expect important milestones over the next three quarters, including several data readouts. First, we expect results from the leading phase of our Phase 3 GENESIS study in stem cell mobilization for our autologous transplantation in the next few months. Next, top line results of our Phase 2 study for BL-8040 in stem cell mobilization for allogeneic transplantation will be presented at EHA June. Additional information on our overall long-term survival results from our Phase 2a trial in relapsed/refractory AML will also be presented at EHA in June. We plan to initiate a first in human Phase 1/2a clinical study with AGI-134 in the next few months. 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, and we continue to evaluate the possibility of an interim analysis on our Phase 2b study in consolidation AML by the end of 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 item. 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 for the three months ended March 31, 2018 was $5.1 million, an increase of $1.5 million or 41% compared to $3.6 million for the three months ended March 31, 2017. The increase resulted primarily from higher expenses associated with new BL-8040 clinical studies commenced during 2017 and spending on our new AGI-134 near-clinical project. Turning to cash, the company held $44.2 million in cash, cash equivalents and short-term bank deposits as of March 31, 2018. Our financial footing remains solid and provides us with the resources necessary to fully execute on our operational plans into the first half of 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. [Operator Instructions]. The first question is from Joe Pantginis of HC Wainwright. Please go ahead.

Hi guys, good morning, thanks for taking the question. Phil, I was wondering I guess if you could help us manage investor expectations with regard to the type or level of data that we will be receiving for the next few catalysts. So first, with regard to the lead-in data from GENESIS, what kind of data are you looking to present and then importantly for the COMBAT study, the top-line results in the second half, obviously I’m assuming maybe some early response rate data. Are you also looking to present – hit the logical data as well similar to your interim data where you showed the important T cells [Inaudible].

Thanks Joe, thanks for listening on the call. Yes, so let’s start with the lead-in periods. So for the lead-in period, of course this was the dose confirmation potion of the study that we’ve been doing. It’s in between up to 10, from 10 to up 30 patients, so we will definitely have safety data and we will also have mobilization data as well, and that like I said, we should be putting out that data sometime in the next couple of months. As far as the COMBAT study, you are correct, we will have for sure all the pharmacodynamic dynamic data, but not only on a monotherapy basis, but also on the combination of BL-8040 plus pembro and in addition we will also have as you mentioned response data as well. Obviously survival data, I believe we’ll have some, but you know perhaps there will be some patients who are still ongoing. So we will be trying to give as much data as possible as well on survival.

No that’s great, Thank you. And if I could just follow-up, I know this is early until you put out the press release with regard to you know the finalized designs and what have you. But with regard to AGI-134, I know you are looking at solid tumors obviously, but what kind of design are you looking at other than a standard relapse refractory sort of all comers, not three plus three design type of things, but what kind of general design are you looking at for this study?

Yes, so I mean we have this in our Corporate Presentation. The study starts with a dose escalation phase and then it moves into three separate arms, AGI-134 of monotherapy arm with all comers and then it has a combination with immune-check point inhibitors in two arms, one in metastatic colorectal cancer and one in head and neck tumors.

Got it, thanks a lot Phil.

No problem. Thank you.

The next question is from Jason McCarthy of Maxim. Please go ahead.

Hi Phil, thanks for taking my questions. So BL-8040 just demonstrated continued positive data as the stem cells mobilized during allogeneic transplant. So given that the pivotal trials and autologous TMT receptions pending a positive outcome and approval, could BL-8040 be used in both the allo and the auto settings?

Yeah, I mean we are moving forward in the Phase 3 in autologous as you mentioned and I think that we feel right now that autologous is a larger indication. It’s a higher unmet medical need. Many of the patents are – have you know very, very difficult and severely compromised bone marrow and therefore they do not mobilize very well. The same situation doesn’t necessarily exist with the allogeneic transplant setting. There is less of an unmet medical need. It’s also from what we’ve seen, it’s a smaller market. So our objective is to move forward in the autologous setting and receive approval as soon as possible in that setting and then make a determination of how best to develop BL-8040 in the allogeneic setting.

Alright, thank you, and then just another quick one. Can you give us an update on the commercialization efforts for BL-5010 for skin? When could royalty start flowing to pile on for that?

Okay sure, no problems. By the way, I did want to – just one thing on the allogeneic setting. I just also want to put a point out that we also view the data in allogeneic which we just put out as additional proof of concept, an additional support for the robust mechanism of action, the robust mobilization that we see overall for BL-8040 and like I think we’ve indicated in our press release, it really does significantly increase our confidence as far as the autologous Phase 3 data. As far as 5010, as we reported I think maybe two years ago or so, we out licensed the OTC indications for BL-5010 to Perego [ph] and therefore Europe and a number of other selected countries around the world. It is – we never expected to you know this is what is a legacy asset of ours. We never really expect to see a huge amount of revenues from this. They started to launch the product. To tell you the truth, I think it’s you know going slowly, but we do believe that it will pickup in the next 18 to 24 months and I think as we’ve indicated previously, we do expect in peak years to get somewhere on the magnitude of $1 million to $2 million of royalty revenues from this product. The patent life is quite long. Its till 2034 I believe, so it would be a nice little annuity for us going forward, but it’s certainly not going to be a blockbuster by any means. I’ll also point out that we only invested about $3 million in this product overall. We haven’t been investing in this product I think any cost whatsoever for the last three of four years. So from my perspective its sort of just a nice little tension annuity coming up for the company that will reduce our burn rate on a go forward basis.

Alright, thank you very much for taking my questions.

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

Hey guys, this is Nat [ph] on for Mark, thanks for taking my questions. Phil, I wanted to ask you about 8040s performance in allo transplants and the data you are going to present at EHA. But from the abstract 8040’s potency as a mobilizer is pretty clear, but I’m wondering, should we also be focused on outcomes of the recipient following transplant. So looking at things like engraftment or incidence in GVHD, is there any reason why mobilization with 8040 could lead to different outcomes compared to Q-CSF.

That’s a very good question. We did indicate previously, I think in the end of 2017 and I’ll also turn the call over to Abi in a moment, but we had an oral presentation at ASH I think at the end of 2017, where we did show in some pre-clinical studies that potentially the type of cells mobilized will enable a better engraftment, a healthier engraftment, potentially less GVHD if I’m not mistaken. So there might be room to assume that, and certainly we will be looking at that as well. We don’t have any data right now on GVHD, because obviously it takes longer. The chronic takes three months – I’m sorry the acute takes three months and the chronic is at the end of a 12 month period. So, we haven’t reached those end points yet, but we will obviously report that data, so it’s hard to say right now. I mean we have some hope that it might make a difference, but we just don’t know at this point. Abi, do you want to add anything to that.

No, I think you explained it very well. We actually know that we – the graphs might be different from the G-CSF, but we still cannot say what are exactly the difference and what will be the outcome in the recipients. I also felt that we will do a similar assessment has been done previously with the data of the stem cell mobilization in healthy volunteers. We will try to – we are doing the same also for the allogeneic and we will try to see whether the long term outcomes are better with our molecule compared to G-CSF.

Got it, that’s helpful. Thanks for taking the questions.

Thanks, I appreciate it.

The next question is from Konstantinos Aprilakis of JMP Securities. Please go ahead.

Hi guys, this is Mike King on for Konstantine. I was wondering if you could comment on the significance of the patents recently granted by the EPO covering the use of the BL-8040 with Cytarabine for treating AML and remind us of other patents you are pursuing for BL-8040 across its multiple potential indications. And does the recently granted patent cover BL-8040 or inhibition of CXCR4.

Yes, so – okay, did you have anything else, did I cut you off?

No. no.

Okay good. Alright, thanks and say hi to Konstant for us. So we see this patent as being quite significant. BL-8040, the composition of matter patent BL-8040 is into the mid-2020. So we have been working quite extensively on a number of other patent protection and regulatory exclusivities that will provide us with the maximum amount of exclusivity possible. This particular patent in AML which was granted in Europe is from our perspective very, very important, because consolidation AML and maintenance AML, both of those indications are something very much on the central pathway so to speak of our development program and we look at both of them, especially consolidation AML for example, that could be a serious blockbuster indication moving forward. This particular parent provides protection. It’s a used patent that provides protection for BL-8040 plus cytarabine, which is exactly the way we are developing what our dosing is right now for consolidation AML and as I indicated, in Europe it’s been granted through 2034. We have a similar patent outstanding right now, submissions outstanding in the U.S., Japan and many other countries that we normally submit patents to around the world. So we look at this as something very, very significant.

Thanks for taking the question guys.

Okay.

[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 1-877-456-0009. In Israel please call 03-925-5942. Internationally, please call 972-3-925-5942. 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. As you can see, we have a lot of very exciting clinical development going on. With a therapeutic pipeline that has shown very encouraging data to-date, we will do our utmost to continue to officially execute on our programs and we look forward to reporting meaningful clinical milestones over the next three quarters. We greatly appreciate your support and we thank you again for joining us this morning. Have a wonderful day. Thank you.

Thank you. This concludes the BioLineRx, first quarter 2018 conference call. Thank you for your participation. You may go ahead and disconnect.