BioLineRx Ltd. (BLRX) Q1 2019 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the BioLineRx First Quarter 2019 Conference Call. [Operator Instructions] I would now like to turn the call over to Timothy McCarthy of LifeSci Advisors to read the Safe Harbor statement. Tim, 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, Tim and good morning everyone, and thank you for joining us on our first quarter earnings conference call today. Earlier this morning we issued our Q1 earnings press release, a copy of which is available in the investor relations section of our website. It was also filed as a 6-K. Since we recently provided a clinical update with our fourth quarter results just a few weeks ago, we're going to keep our comments brief this morning. I will begin with a brief overview of our programs and activities, enumerate our major target milestones over the next few quarters, and then Mali Zeevi, our Chief Financial Officer will provide a short discussion of our financial results. We will then open up the call to your questions. Also joining the call for Q&A are Abi Vainstein, Vice President Clinical Development; and Ella Sorani, Vice President of Research and Development. During the first quarter, we continue to advance our lean therapeutic candidates BL-8040 and AGI-134 which we are developing for the treatment of multiple cancer indications. Beginning with BL-8040 which as you know we are evaluating an eight Phase 2 or Phase 3 clinical trials in multiple oncology indications including steps of mobilization for multiple myeloma patients, acute myeloid leukemia and pancreatic cancer. One of these trials is being conducted under our ongoing collaboration with Merck and three are being conducted under our collaboration with Genentech. Our partnerships with these two leading oncology companies validate our platform and give us conviction in BL-8040 ability to play a synergistic role when combined with other therapeutic agents. And in addition to these we certainly see opportunities to enter into additional partnerships down the road and to that end we are in active discussions with other parties regarding additional collaboration opportunities and we look forward to providing further updates at the appropriate time. What sets BL-8040 apart is its ability to potentially treat a broad range of cancers and at various stages of disease. As we've indicated previously, [indiscernible] repeating in multiple clinical studies to date in a number of the indications BL-8040 has demonstrated robust mobilization of target cells a direct apoptotic effect, as well the ability to induce infiltration of T cells into the core and periphery of solid tumors. All of this while maintaining a very favorable safety profile. BL-8040 has received FDA orphan drug designation in multiple indications including pancreatic cancer, AML and stem cell mobilization. We view these designations as significant value creating additions to the BL-8040 program. And now we’ll review our development programs beginning with stem cell mobilization our most advanced indication. We continue to advance our double-blind placebo-controlled Phase 3 GENESIS trial which is comparing BL-8040 in combination with GCSF to GCSF alone for the mobilization of hematopoietic stem cells used for autologous transportation in multiple myeloma patients. Recall that as a result of the very positive results that we observed in the leading portion of that trial, on a DMC's recommendation we moved quickly into the randomized placebo control part of the study which is designed to include 177 patients in more than 25 centers. The randomized portion of the trial is ongoing and we continue to expect topline results in the second half of 2020. Stem cell mobilization remains our most efficient path to registration and if we can replicate the results from the leading portion to the larger randomized portion of the trial, we believe this would be a true game changer in autologous bone marrow transplantation for multiple myeloma and other indications such as non-Hodgkin's lymphoma. Turning now to pancreatic cancer. During the fourth quarter, we initiated a triple combination arm of the Phase 2a COMBAT/KEYNOTE-202 study under our ongoing collaboration with Merck. The trial will evaluate the safety tolerability and efficacy of BL-8040 in combination with Merck's KEYTRUDA and chemotherapy. As we look to build upon the very encouraging topline results of the dual combination arm that we presented at the 2018 ESMO conference in October. Those results which we reviewed in some detail during our fourth quarter call give us the confidence to move forward in the triple combination arm and specifically in second line pancreatic cancer patients. We believe the addition of chemotherapy to this promising combination will have a synergistic anti-cancer effect and we are very eager to see the topline data which we expect in the second half of this year consistent with our prior guidance. Now moving onto AML we believe BL-8040 can provide broad therapeutic coverage in the AML space with potential activity at different stages of disease and in different patient populations. This is a key point of differentiation versus other AML compounds that are being developed currently. For relapse/refractory AML we previously discussed the compelling overall survival data from our Phase 2a proof-of-concept study that we presented at the ER conference in June. These data demonstrated that the combination of BL-8040 with high-dose cytarabine, HiDAC, significantly improved overall survival compared with historical data for HiDAC monotherapy and was safe and well-tolerated. We continue to monitor long-term survival data for patients in this study. Given this encouraging data we intend to further pursue this indication and we plan to meet with the regulatory authorities during the second half of this year to discuss the optimal clinical development pathway going forward. Also in consolidation AML we are evaluating BL-8040 in a large randomized controlled Phase 2b study in consolidation therapy for patients in first remission known as the BLAST study. We are very much looking forward to interim results in this study which are planned for the second half of this year with full topline data expected in 2021. As it pertains to our ongoing collaboration with Genentech in which BL-8040 is being evaluated in combination with the anti-PD-L1 centric as part of Roche's Morpheus platform, three Phase 1b/2 studies were ongoing in maintenance AML, pancreatic cancer and gastric cancer. Needless to say we're delighted to be working with Roche, Genentech. This is an important collaboration for our company and a strong validation of BL-8040s potential to boost the anticancer effect of existing immunotherapies. At this time, we do not have any data to report. All we can say is that the trials are progressing as planned and we are optimistic that we will be able to provide a more substantial update later this year. Turning now to our second clinical candidate, our novel cancer immunotherapy AGI-134,AGI-134 is novel mechanisms of action is designed to label cancer cells with alpha-Gal, which then become the target of pre-existing anti-gal antibodies. This MoA triggers an immediate hyper acute local anti-tumor response, as well as the follow on systemic anti-tumor response, targeting both the primary injected tumor and distal secondary tumors. Preclinical studies have demonstrated the treatment with AGI-134 leads the complete progression of primary tumors, prevents growth of untreated distal secondary tumors and triggers the vaccine effect that may prevent the development of future metastases. Furthermore, in other preclinical studies, the combination of AGI-134 with an anti-PD-1 immune checkpoint inhibitors demonstrated a synergistic effect in protection from secondary tumor growth. We are currently running a Phase 1/2a study of AGI-134in unresectable solid tumors as both the monotherapy and in combination with checkpoint inhibitors. Part 1 is the dose escalation phase. Part 2 is a dose expansion phase comprised of three cohorts. The first will access AGI-134 as a monotherapy in multiple solid tumor types. The next two cohorts will combine AGI-134 within an immune checkpoint inhibitor in metastatic colorectal cancer and head and neck cancer. This study is progressing as planned. Last week we announced that the FDA approved our IND application which will enable us to expand the ongoing study currently being carried out in the U.K. and Israel to the U.S.by the first half of 2020.We look forward to the initial safety results from Part 1 of the study later this year and initial efficacy results from Part 2 of the study by the end of 2020. These timelines are consistent with our prior guidance. 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, please go ahead.

Thank you, Phil. In our financial discussion we will only go over few significant items on this call, research and development expenses and cash. Therefore 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. Research and development expenses for the quarter ended March 31, 2019 was $4.4 million as compared to $5.1 million for the comparable period in 2018, a decrease of $0.7 million or 13.4%.The decrease resulted primarily from a decrease in share based compensation. Turning to cash, the company held $40.6 for million in cash, cash equivalents and short-term bond deposit as of March 31, 2019 as compared to $30.2 million as of December 31, 2018. In February 2019 we completed the public offering with gross proceeds of $15.4 million, which provide us with a cash towards the first half of 2021, a runway of more than two years sufficient to fund our operations to our most significant clinical milestone. And with that, I will turn the call back over to Phil.

Thank you, Mali. In closing, I would like to take a few moments to summarize our most significant upcoming data milestones through the end of 2019. These are unchanged from our last quarterly report but they are worth repeating as 2019 is potentially a catalyst rich year. First, top line results from the Phase 2 triple combo pancreatic cancer trial of BL-8040, KEYTRUDA and chemotherapy under the collaboration with Merck in the second half of this year. Also potential interim results from the Phase 2 AML, Phase 2b AML consolidation study in the second half of this year. Also initial safety results from part 1 of the Phase 1/2 a trial of AGI-134 in the second half of this year and then top line results from one or more of the solid tumor trials under collaboration with Genentech in the second half of this year or early 2020. 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 Mark Breidenbach of Oppenheimer. Please go ahead.

This is Matt on for Mark. Thanks for taking our questions and congrats on the progress. So Phil, maybe a quick question on 8040s label, assuming a positive Genesis outcome in myeloma. Have you started thinking of ways you might be able to expand 8040s label into additional autologous transplant indications obviously non-Hodgkin's lymphoma is probably the largest but also there’s being a lot of work done in gene therapies, immobilization for gene therapy could be another interesting indication?

Thanks, Matt. I appreciate your question. I'll turn it over to Abi.

Thank you for the question. Indeed we are just working right now to have first step in barrier autologous in stem cell transplantation for multiple myeloma and the reason for that to try and to get as fast as we can to approval. Afterwards we will have the door open to move forward and expand our program to different indication as to you pointed out. A non-Hodgkin lymphoma, Hodgkin lymphoma, aplastic anemia or gene therapy everything can be done but our first milestone and the most important milestone for us is to bring BL-8040 to the market. Then we will be able to expand the program to anything that we want.

And then maybe a quick question on the BLAST trial and I realize their release is being strictly controlled by the German group, but can you kind of set our expectations for what we might see in that in terms of the type and extent of the data that can be presented and then I also just wanted to clarify if the futility analysis will also be conducted at that time? Thanks.

I will take this one as well. You are right. The data, the study is to manage and is conducted by the German group. We are working with them very closely and working together we can say. I cannot share exactly which data we will be able to put out you know to the public and the interim analysis and whether it will be an interim analysis of futility analysis. We’re working and trying to decide which will be the best way to understand what the data is saying as been an interim analysis. And this is the reason for what we are waiting for the best time to do that. We don’t want to do these analysis before time and not having the bad debt data that we can. We are trying to manage everything that we want. We want to have the data but we want to have the best data that we can and it will be based of course in the event which are the relapse and them out of relapse and the time to relapse for the patients who are doing the study. Again, we are all the time working very closely with the German group in order to decide together which data we will analyze? What would be the best timing to do that and then we will decide together what we will be able to put out publicly and what we cannot do that.

I’ll add Matt, I think obviously we have an interest in putting out as much data as possible. I will say that both to the public but I’ll also mention that the another use of this is under CDA to speak with partners etcetera. So we are working on sort of in both pathways as far as both the type of data that will be able to release under CDA to potential partners as well as to the market as a whole.

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

This is [indiscernible] calling in for Jason McCarthy. So my first question, I would like to if you could provide us pressure on the mechanistic basis for combining BL-8040 versus chemotherapy and checkpoint and how may they synergies?

Okay, thanks very much. If I understand, just want to make sure I understand correctly. You're asking mechanistically on how we view the triple combination in pancreatic cancer and perhaps other solid tumors, correct?

Exactly, yes.

Go ahead, Abi.

This is a great question because if you may recall in the past that didn’t want to combine immunotherapy with chemotherapy because they saw that they cannot work together but things move forward and just became more and more common to combine PD-1 and chemotherapy. And where is the place of the BL-8040? Here its interesting because what we are testing in our best trial in pancreatic cancer is the combination of CXCR4 maybe the BL-8040with immunotherapy for patients in which immunotherapy didn’t show an effect. And we show that the addition of BL-8040 provide the immune checkpoint in this case PD-1 inhibitor KEYTRUDA to work in this patient provide delayed of the progression of the disease in seven as per the number of patient that we have and having also a response in patients who are in general not responsive to immunotherapy. And if we - and pancreatic cancer is very difficult to treat disease. Immunotherapy and CXCR4 show activity that we need to see more and activity that chemotherapy can bring to this combination is to - by the activity of the chemotherapy itself it can bring the tumor risk, review the tumor, expose the new antigens that can increase the immune response that PD-1 will assist to improve. And look forward the BL-8040 will assist in given the PD-1 to get into the tumor tissue as well as the T-cells, the adopted T-cells and decreasing the [indiscernible] the cells or the cells who are again to treat the activity of the PD-1. It’s a little bit - I think it’s a little bit completed to maybe to understand but there are three things here BL-8040 is bringing the T-cells into the tumor and given the possibility the PD-1 to work in tumor who is actually don’t respond and responses to PD-1 activity to immunotherapy. The chemotherapy will expose this new antigen and increase immune response and we expect that it will exceed also in the reduction of the tumor. We expect to see in the combo trial for this reason more response, more stable disease at the end of the day better survival at the end of the day.

I also want to point out that our trial the double combination of KEYTRUDA and BL-8040, we saw for the first time in the clinical setting the proof of the mechanism of action, meaning that that Abi mentioned, meaning the mobilization of the T-cells, the infiltration of the T-cells, the change in the immunosuppressive environment, these were all very well documented and seen in this trial and it gives us a lot of confidence as much as we can have in pancreatic cancer that the triple combination will see an improved response in overall survival.

Well, my second question with the IFG for AGI-134 now proved in the U.S., could you give us a little bit more color on the past forward you are approaching more tumor types in the Phase 1/2a trial. After that would you look at multiple features and various cancer types?

Our trials right now the AGI-134 is the first unmet trial. The aim of the study is mainly to show that the injection of the AGI is safe and well tolerated and of course, we will upset a biomarker and trying to see some clinical activity but the aim of the study at least just the beginning is to see that we can inject AGI and its safe. The second part of the study we are expanding a little bit indication and the program and we will have monotherapy by which in a basket study also the aim is to try to see a clinical activity, biomarker activity and we have also decided to focus into these disease and combine this with [indiscernible] to try to see whether the addition of AGI sliced out we believe have a effect of immunotherapy has been never seen. We will improve the response in to the first patient population head and neck colorectal cancer and top of PD1 inhibitor but currently I have a very low activity or known activity for example in colorectal cancer who are inhibitors.

The next question is from Joe Pantginis of HC Wainwright. Please go ahead.

First on the COMBAT study, can you give us a level of the kind of data will be able to see it because it will be the first look where you only have response rate data or will you have some ability to have some biopsy and immune data at the same time as well?

Yes, so I mean I think that we've given guidance on this already we are focusing the topline results will focus on response rates and that should be in the second half towards the end of this year. And we hope to have overall survival results sometime in mid-next year more or less again the later is I think it's probably - it means that it's working it's better for us, but we assume and it will be somewhere in the middle or early second half Q3 of next year.

I want to add what Phil said that together with the data on response and this is validation we will have some of the data of survival for the patients who were treated for the beginning we will able to have snapshot of progression free survival and overall survival together with a response rate but the main topline result in all the patients will be response. In regards, to the biopsies we will not assess more biopsies since we already prove the mechanism of action and we don’t want - actually there are patients here and having two biopsies in these patients is very difficult for them. And since we already proved that BL-8040 together with PD1 have effect have pharmacodynamic effect in these patients, we decided we will not continue to do biopsies in these patients.

And then just a follow-up on some of the logistics around the IND for AGI-134. So should we view as essentially a time zero to activating sites in the U.S. essentially now having to start the process of identifying sites and IRB approvals et cetera enable to hit first half 2020 as you said to get sites active?

The time zero is already passed, we're already beginning to work with the sites we have - we identified sites, we have key opinion leaders who are working with us since the beginning of the development. And we have sites engaged in this trial and of course we are - its takes time until we open them as we are beginning to work with them already and again to work 2020 we’ll able to begin recruit patients in the U.S.

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 1-888-782-4291. In Israel, please call 03-925-5925. Internationally, please call 972-3925-5925. Mr. Serlin would you like to make your concluding statement.

Yes. Thank you. That concludes our call this morning. I'd like to thank you again for your continued interest in BioLineRx. And we look forward to providing future updates on good things to come. Have a great day.

Thank you. This concludes the BioLineRx first quarter 2019 results conference call. Thank you for your participation. You may go ahead and disconnect.