BioLineRx Ltd. (BLRX) Q2 2019 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the BioLineRx Second Quarter 2019 Conference Call. All participants are at present in a listen-only mode. Following 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 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 the 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 second quarter earnings conference call today. Earlier this morning, we issued our Q2 earnings press release, a copy of which is available in the Investor Relations section of our website. It was also filed in the 6-K. I will begin with the brief review of our programs and activities and enumerate our major target milestones over the next several 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 during the call for Q&A, are Abi Vainstein, Vice President, Clinical Development; and Ella Sorani, Vice President, Research and Development. During the second quarter, we continued to aggressively advance our lead therapeutic candidates BL-8040 and AGI-134, both of which we’re developing for the treatment of multiple cancer indications. Beginning with BL-8040, which we are evaluating in a number of Phase 2 and Phase 3 clinical trials in multiple oncology indications, including pancreatic cancer, acute myeloid leukemia and stem cell mobilization for multiple myeloma patients. We see BL-8040 as a broad platform molecule that can be combined with a wide array of different molecules to potentially treat a broad range of cancers at various stages of disease. Recall that BL-8040 has been granted FDA orphan drug designation in all three main therapeutic areas previously mentioned, pancreatic cancer, AML and stem cell mobilization. We view these designations as confirmation that the agency recognizes the significant unmet therapeutic needs in these indications. Beginning with pancreatic cancer where we expect a significant data readout later this year. Recall that during the fourth quarter of last year, we initiated a triple combination arm of the Phase 2a COMBAT/KEYNOTE-202 study under our ongoing collaboration with Merck. The trial is evaluating the safety, tolerability and efficacy of BL-8040 in combination with Merck's KEYTRUDA and chemotherapy. As we look to build upon the encouraging top line results from the dual combination arm that we reported last year. Those results provided strong rationale for continued development, particularly in the second line pancreatic cancer patients. We are pleased to report that this trial is running efficiently and in accordance with our development plan timelines. We remain on track to report top line response data from the triple combo arm later this year, and progression-free survival and overall survival data in mid-2020. We believe data from this study is positive, maybe transformational and will open up additional opportunities in other solid tumor cancers and generate potential partnering discussions. So, the upcoming top line data is a very important near-term milestone for our Company. I will also point out that our collaboration with Genentech, in which BL-8040 is being evaluated in combination with atezolizumab in two Phase 1b/2 studies, as part of Roche's Morpheus platform, one in pancreatic cancer and one in gastric cancer is still ongoing. Needless to say, we are delighted to be working with Roche, Genentech, and we see this as another validation of be BL-8040’s potential to boost the anticancer effect of existing immunotherapies. We know that these trials are being run by Genentech as part of their very large Morpheus platforms, and we do not have insight at this time into their plans for the announcement or republication of data. We will of course provide an update as we gain visibility. Moving on to AML. We believe BL-8040 is highly differentiated from other compounds and development since this platform can be used as a basis for combination with different therapies in AML as well as in different lines of treatment. We are excited by the potential broad clinical utility in the AML space, which as you know, is a cancer with significant unmet medical needs. For relapsed/refractory AML, data from our Phase 2a proof-of-concept study demonstrated that the combination of BL-8040 with cytarabine significantly improves overall survival compared with historical data with cytarabine monotherapy and was saved and well tolerated. Specifically, the overall response rate for the expansion part of the study was 39%, and median overall survival was 10.7 months, compared with historical data on overall survival of 6.1 months for cytarabine alone. We continue to monitor long-term survival data for the patients who participated in this study. And we plan to meet with regulators to discuss the optimal development path forward for this important indication. Also in AML, we are evaluating be BL-8040 in the large randomized controlled Phase 2b study in consolidation therapy for patients in first remission, known as the BLAST study. As this is an event-driven study based on the number of relapsed events in each arm, the timeline for reporting interim data is somewhat fluid. At this time, we continue to anticipate interim results later this year. We will provide a further update on our third quarter conference call in November. With regard to our Phase 1b study in maintenance AML, which we were running under our collaboration with Genentech, we have just reached a joint decision with Genentech to terminate the study. As the treatment paradigm in maintenance AML continues to shift towards existing therapies such as induction and consolidation therapies, as well as hypomethylating agents, in addition to the fact that more and more patients are going for bone marrow transplantation, the remaining relatively small pool of patients made enrollment in the study, particularly challenging, even after we executed several protocol amendments. This was a highly experimental and exploratory indication and does not affect in any way our development plans in the other AML indications. Finally, turning to stem cell mobilization, which is our most advanced indication. The GENESIS trial continues to recruit as planned. This study is a double blind, placebo controlled Phase 3 trial, which is comparing BL-8040 in combination with G-CSF to G-CSF alone, for the mobilization of stem cells used for autologous transplantation in multiple myeloma patients. Despite several new approvals in multiple myeloma, autologous stem cell transplantation is still the preferred standard of care treatment for patients with multiple myeloma, after remission. Following completion of part one of the study, the randomized portion of the trial, which includes 177 patients across more than 25 trial sites is ongoing, and we continue to expect top line results in the second half of 2020. Stem cell mobilization remains our most efficient pathway to registration. And if we can replicate the positive results from the leading portion in the randomized portion, 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. Now turning to our second clinical asset, our novel cancer immunotherapy AGI-134. AGI 134 is novel mechanism of action, triggers an immediate hyperacute, local anti-tumor response, as well as the follow-on systemic antitumor response, targeting both the primary injected tumor and distal secondary tumors. It also triggers a vaccine effect that may prevent the development of future metastases. We are currently running a Phase 1/2a a study of AGI-134 in unresectable solid tumors. The study has two parts. Part one is a dose escalation phase, and part two is a dose expansion phase. And it’s currently being carried out in the UK and Israel. And with our recently approved IND application, we plan to open trial sites in the U.S. in the first half of next year. We look forward to the initial safety results from part one of the study later this year, and initial efficacy results from part two of the study by the end of 2020. These timelines are consistent with our prior guidance. We anticipate initiating part two of this trial, later this year. 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 go over only a 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 financial review and press release for additional information. Research and development expenses for the six months ended June 30, 2019 were $9.7 million, an increase of $0.1 million, or 2%, compared to $9.6 million for the six months ended June 30, 2018. The small increase resulted primarily from higher expenses associated with the BL-8040, GENESIS and COMBAT clinical trials, offset by a decrease in expenses related to BL-1230, a project which was terminated last year, as well as a decrease in payroll and related expenses. Turning to cash. The Company held $35.2 million of cash, cash equivalents and short-term bank deposits as of June 30, 2019, as compared to $30.2 million as of December 31, 2018. In February 2019, we completed a public offering with the gross proceeds of $15.4 million, which provide us with the cash runway through the first half of 2021, sufficient to fund our operations through our most significant clinical milestones. 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 upcoming data milestones. Beginning with the second half of 2019, top line response results from the Phase 2 triple combo pancreatic cancer trial of BL-8040, KEYTURDA and chemotherapy under our collaboration with Merck; initial safety results from part one at the Phase 1/2a trial of AGI-134; potential interim results from the Phase 2b AML consolidation study; and initiation of part two of our Phase 1/2a trial of AGI-134. And in 2020, we expect progression-free survival and overall survival data from the COMBAT/KEYNOTE-202 study in midyear, and top line results from our Phase 3 GENESISI registrational study in stem cell mobilization, in the second half of the year. With that, we have now concluded the formal part of our presentation. Operator, we will now open up the call to questions.

Thank you. [Operator instructions] The first question is from Mark Breidenbach of Oppenheimer. Please go ahead.

Hey, guys. Thanks for taking the questions, and congrats on recent progress. Just going into the upcoming top line data from COMBAT/KEYNOTE-202. I'm curious what you would see or define as a successful outcome in this interim readout, given that it just focuses on response rate? And would you and Merck really be able to make any conclusive decision going forward on continued development in the absence of PFS and OS data that wouldn't come out until next year? Thanks.

Yes. So, thanks, Mark. I appreciate the questions. So, I think that we feel that the PFS data and OS data is very, very significant. But, I will remind you that this is an open label study from our point of view as well as from Merck's point of view. And so, therefore, we hope to, at the end of this year -- we hope to provide not only the response data on all of the patients, but we should have PFS data and OS data on a subset of the patients. And so, depending on the size of that data, we -- the number of patients with that data, we hopefully will be able to provide some data on that as well. And again, as I mentioned, Merck will be looking at all of the data as we go along. I think, another piece of data that would be important is also the duration of response. So, I think that that is sort of -- we feel that the response data is important. But, I think that all of the KOLs that we've spoken to and everyone in the industry that we’ve spoken to clearly feels that PFS data and the OS data is probably more important.

Do you anticipate we'll get a little bit of duration of response data in addition to a simple response rate with this top line release, later this year?

Yes, I hope so. Yes.

Yes, part of the patients will be on the study for a long time, so not for all of them, but for participation here, there will definitely be also duration of response data.

Okay. That would be helpful. And a final question sort of on this planned interim and analysis of the BLAST trial. First, first of all, you’ve seen the interim analysis, will this be definitive in terms of giving you enough information to proceed with development in this AML setting, consolidation setting or not? And if you do see a clear benefit in the ML consolidation setting, what would be your expectations in terms of registrational requirements? Thanks for taking questions.

Yes. Okay. So, we -- I think that we've mentioned previously, we see this interim analysis as something very important. We -- the reason why we are -- the timelines are so much fluid, as I mentioned, is because it's we want to make sure that when we do the analysis, do the database lock, we will have the highest potential power that we can have, taking into account the timelines that we're looking at. So, if it will require a delay from a few weeks to a few months, we think it may be worth doing so. Because again, this is going to be sort of our decision making point for the asset. We don't want to and cannot wait for the top line results that are out sometime at the end of 2021. We've said several times that we need to see the data as early as possible. But again, we want to make sure that that data is as robust as possible. As far as moving forward to a Phase 3, I'll turn it over to Abi at this point.

Yes. For the Phase 3, the data, first of all, I want to remind you about the study. We are conducting the BLAST study in patients who are in remission, patients who receive their first treatment for their AML, and we are using the combination of BL-8040 [indiscernible] the response that they get after induction. The further development based on the results of this study will help us to understand first of all, the utility of BL-8040 in the area of the consolidation, as well as give us confidence also in the area of relapse/refractory AML. We believe that BL-8040 for platform for the treatment of AML in different area, the proof-of-concept that we see in the relapse/refractory AML give us their basis to move forward for consolidation. And if we get the reassurance when we get the results and the consolidation, we’ll feel more comfortable, do more -- and we will have data to support also the further development for relapsed/refractory AML. I think that everything is connected. And we hope to be able to move forward in all the directions within the AML area.

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

I'm curious, can you remind me please with regard to COMBAT? You have a lot of data coming out, obviously you just discussed. Are you going to be providing at some point additional immune related data regarding immune infiltrates from biopsies et cetera?

Actually, we, in the first part of the COMBAT trial in which we did biopsies before and after the treatment with BL-8040 and with BELIEVE-8040 and the combination with KEYTRUDA, we show and we proved the mechanism of fraction that we proposed in the study at the beginning. We have already this data. We don't believe that we need to continue to the show this data. But what we are having is biopsies at screening to try to work more in a biomarker and something that may help us to decide which patients will be the one who respond better in the future. Not in a mechanistic way of the biopsies, more in the surrogated biomarker way for the biopsies. We will take tumor burden, PD-L1 expression and CXCR4 expression, and the other biomarkers. The idea is to use these biopsies only to predict or to try to help understand which patients we have more benefit from the combination that we are proposing.

Got it. No, that's very helpful. Thank you. And then, my second question it is, if you look beyond -- and this is certainly forward-looking. If you look beyond pancreatic indication, what type of tumor might be compelling to you to go after, based on 8040 mechanism and immune activation?

Joe, you may know that CXCR4 and other companies who have CXCR4 are trying this pathway of blocking for different cancers and in different combinations. I think that the pancreatic cancer is just the beginning. Pancreatic cancer is one of the most difficult to treat cancer, it's a very cold tumor which is difficult to treat with immunotherapy, but still we feel that combination of BL-8040 with KEYTRUDA show activity and may show more activity when we combine with chemotherapy. From here, we can move to any indication that in the past was not responded to immunotherapy, for example colorectal cancer, HCC and others. I don't think that -- the pancreatic cancer can be just the opening door, just the beginning for an extension program in all different indication combinations.

[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 1-888-295-2634; in Israel, please call, 03-925-5904; internationally, please call 972-3-925-5904. Mr. Serlin, would you like to make your concluding statement?

Yes, sure. Thank you. So, that concludes our call this morning. I'd like to thank you again for your interest in BioLineRx. And we look forward to providing future updates on our continued progress. Have a great day.

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