BioLineRx Ltd. (BLRX) Q3 2019 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the BioLineRx Third Quarter 2019 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 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 third quarter earnings conference call today. Earlier this morning, we issued our Q3 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 recap our 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, our Vice President, Clinical Development; and Ella Sorani, our Vice President, Research and Development. During the third quarter, we continue to progress our lead therapeutic candidates BL-8040 and AGI-134 both of which were 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. Given the breadth of our development program we see BL-8040 as a platform molecule that can be combined with a wider array of different agents to potentially treat a range of cancers at various stages of disease. Our target indications are all difficult to treat cancers in urgent need of better therapeutic options, and this is reflected in the fact that BL-8040 has been granted FDA orphan drug designation in all three, pancreatic cancer, AML and stem cell mobilization. We're going to focus this morning on an update of our pancreatic cancer program where we expect a significant data readout by the end of this year. Recall that during the fourth quarter of last year, we initiated the 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 with BL-8040 and KEYTRUDA without chemotherapy that we previously reported. Those results provided strong rationale for continued development, particularly in second line pancreatic cancer patients. We are pleased to report that this trial continues to adhere to our development plan timelines. As mentioned, we remain on track to report response data from the triple combo arm by the end of 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 and other solid tumor cancers and perhaps as importantly, generate potential partnering discussions. So this upcoming data is a very important near term milestone for our company. The prognosis for pancreatic cancer patients remains very poor as it carries among the lowest one in five year survival rates among all cancers. While considering the upcoming triple combination data to be presented in our COMBAT/KEYNOTE-202 pancreatic cancer study, I think it is very important to highlight a few presentations that we recently delivered, where I've been invited to deliver at it highly regarded medical conferences, and which strongly support our hypothesis about the potential for BL-8040 in this area. Two posters were presented at the Society for Immunotherapy of Cancer Annual Meeting, otherwise known as SITC last week. The first poster which present -- which was presented this past Friday, details highly supportive data from a preclinical study investigating the triplet combination effects of BL-8040, anti PD-1 and chemotherapy on pancreatic cancer. These data further elucidate the mechanism of action of BL-8040 in combination with these agents, demonstrating that the combination impacts the tumor micro-environment, reducing the number of Immunosuppressive cells, such as T regulatory cells and myeloid derived suppressor cells, while increasing the number of activated effector CD8+ T cells. We believe the ability of BL-8040 to modulate the tumor micro-environment allows for better activation of immune effector cells, when combined with chemotherapy and immunotherapy. We are very hopeful that this anti-tumor activity will be confirmed in humans, as we eagerly await results from the triple combination arm of our COMBAT/KEYNOTE-202 phase 2 study. The second poster which was presented this past Saturday details dual combination results from an investigator sponsored study of BL-8040 in combination with KEYTRUDA in metastatic pancreatic cancer. These encouraging results mirror the results of the dual combination arm of the COMBAT/KEYNOTE-202 study that we announced last year at ESMO. Notably the dual combination showed signals of clinical activity and extended survival in pancreatic cancer patients, despite the fact that these particular patients has been heavily pretreated, which is obviously a very challenging patient population. These results give us hope that the addition of chemotherapy to this combination will have a synergistic anti-cancer effect and potentially usher in a new paradigm for the treatment of pancreatic cancer. This study was sponsored by MD Anderson and investigators from there delivered this presentation. Lastly, and most exciting, we have been invited to make a proffered paper oral presentation at on December 13 at the upcoming European Society of Medical Oncology, Immuno Oncology Congress, or ESMO IO, which is being held in Geneva, Switzerland. Our presentation there will highlight new clinical data from our triple Combination phase 2a, COMBAT/KEYNOTE-202 Study in Pancreatic Cancer. We are gratified to have been invited to deliver an oral presentation at this very prestigious meeting. And this will be an extremely important presentation for our company. We will of course provide more details once the data embargo is lifted. Let us now briefly turn to our collaboration with Genentech, in which BL-8040 is being evaluated in a dual combination with atezolizumab in two Phase 1b/2 studies, one in pancreatic cancer and one in gastric cancer. Needless to say, we are delighted to be working with Roche Genentech and we see this as another validation of BL-8040 potential to boost the anti-cancer effect of existing immunotherapy. We know that these trials are being run by Genentech as part of their very large MORPHEUS platforms. As we're not the sponsor of these studies, we have had limited information about Genentech’s data publication plan to the BL-8040 related arms within the MORPHEUS platform. Recently, however, we have been informed that the studies are being completed and that Genentech expects to report on the results during the first half of 2020. Moving on to AML, we are deep in the midst of evaluating BL-8040 in a large randomized controlled phase 2b study in consolidation therapy for patients in first remission, known as the BLAST study. And we have previously reported that we intend to conduct a robust interim analysis on this study. As this is an event driven study based on a number of relapse events in each arm, the timeline for reporting interim data is somewhat fluid. And whereas we previously guided to interim results by the end of this year, it now looks like based upon the number of relapse events to this point, that it is more likely that we’ll have these results in the first half of next year. Again, this is not come as a surprise, and we fully realized that this was a possibility given the design of the study. We will certainly keep you updated as we can continue to progress toward this important data milestone. It's worth noting that our decision to investigate BL-8040 in a consolidation AML settings stems from meaningful proof-of-concept data announced in our previously conducted phase 2a study in relapsed refractory AML. These data 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. 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 in the relapsed refractory setting. Finally, turning to stem cell mobilization, which is our most advanced indication and our most direct path to registration. 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. As mentioned, 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 of this study, 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 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 study of AGI-134 in unresectable solid tumors. The study has two parts. Part one, which is a dose escalation phase, and part two, which is a dose expansion phase. The trial is currently being carried out in the U.K. and Israel and we plan to open trial sites in the U.S. in the first half of next year. This on-going phase 1/2a study is a multi-center open-label study to evaluate the safety and tolerability of AGI-134 at the recommended dose in multiple solid tumor types to evaluate a wide-array of biomarkers and to validate AGI-134’s mechanism of action. Furthermore efficacy will be accessed by clinical and pharmacodynamics parameters. In September, we announced that we had successfully completed the dose escalation part of this study and AGI-134 was found to be safe and well tolerated with no serious drug related adverse events or dose limiting toxicities reported. The maximal tolerated dose was not reached and the recommended dose for part two of this study was determined. Following the results of part one of this study, we moved quickly to initiate part two, which is a dose expansion phase. In part two, we will access the efficacy of AGI-134 using clinical and pharmocodynamic parameters. As a reminder, numerous pre-clinical studies of AGI-134 to date have demonstrated that treatment with this novel compound leads to regression of established primary tumors, prevents growth of untreated distal secondary tumors and triggers a vaccine effect that may prevent the development of future metastases. We look forward to these initial efficacy results by the end of 2020. This timeline is 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 go over only a few significant items on this call, research and development expenses and cash. Therefore, let me invite you to your views of the hour [ph] we issued this morning, which contains more detailed information. Research and Development expenses for the nine months ended September 30, 2019 were $15.3 million, an increase of $0.7 million, or 5%, compared to $14.6 million for the nine months ended September 30, 2018. The 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. Turning to cash. The Company held $30.1 million of cash, cash equivalents and short-term bank deposits as of September 30, 2019. We reiterate our previous cash guidance that our current resources are sufficient to fund our operations through our more 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 two milestones between now and the end of the year. First, response results from the Phase 2a triple combination COMBAT/KEYNOTE-202 pancreatic cancer trial of BL-8040 KEYTURDA and chemotherapy under the collaboration with Merck. And secondly, an oral presentation with additional data from the phase 2a triple combination COMBAT/KEYNOTE-202 pancreatic cancer trial at the European Society of Medical Oncology, Immuno Oncology Congress in December. And in 2020, we expect as follows; progression free survival and overall survival data from the COMBAT/KEYNOTE phase 2a triple combination study in mid-2020. Interim results from the phase 2b/a AML consolidation study during the first half of 2020. Topline results from the phase 3 GENESIS registrational study in stem cell mobilization in the second half of 2020. And finally, initial results from part 2 of the phase 1/2a trial of AGI-134 by yearend 2020. 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 Joe Pantginis of HC Wainwright. Please go ahead.

Hi, everyone. Thanks for taking the question. So I wanted to focus on sort of the broader potential commercial profile for BL-8040. And I know, I might be asking you to take some broad strokes here and you know, forward looking statements, but starting with the GENESIS trial, so obviously you said this is your potential first path or accelerated path through registration. Is this something you would potentially look to commercialize yourself? But of course, this is I guess a little more complex because you can't necessarily separate out indications for a drug, as you look for the oncology profile to expand as well and the potential partnering events around BL-8040 as well. So I guess how do we look at the commercial profile in the future?

Thanks, Joe. Yes, so, we are looking to partner out BL-8040 the entire asset for all indications. We think, we after bringing the data later this year, in pancreatic cancer, the data in AML in the first half of next year, and/or the data in stem cell mobilization in the second half of next year. We think that it would – BL-8040 would be a likely candidate for -- for licensing, for out-licensing for partnering. And so that's our strategy. If you recall, last year, we acquired an additional 20% of the economics of BL-8040. And one of the reasons was one of the outcomes of that acquisition was that it is a lot more commercially feasible to out-license the stem cell mobilization program at this point. The AML and pancreatic cancer solid tumor markets were much larger, and therefore, even without that additional 20% it was, had economic sense but, but subsequent to the acquisition is the addition -- additional 20% last year. The stem cell mobilization indication is also something that we believe we should be able to partner.

Great. And so I mean, I guess you're in a good position to have, I guess important potential first looks obviously from your current collaboration between Merck and Genentech as I guess potential players in there, if not others, but definitely looking forward to the December data and thanks for the color.

Thanks a lot.

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

Hey guys, congrats on the progress. And thanks for taking the questions. And congrats on the oral presentation at ESMO IO. Phil, I was wondering, or maybe this is better directed toward Abi. I was wondering on a on a very qualitative level, are you expecting any big difference between the types of pediatric patients that are being enrolled in the triple combination versus the types that were enrolled in the doublet combos? Either in the earlier keynote cohort or in the MD Anderson trial, we just thought to see this weekend?

Hey go ahead, Abi.

Okay. Yes, is a good question. Definitely, the patient population is different. It's more a homogeneous in order to try to have data who is more powerful and the strength of the data is, it's more valuable when you have a very, very well defined population as we have in this part of the study. As you may remind the first part of the study we have all patients in any line of treatment we have patients from second line through fifth line of treatments. And for this part of the study – and as well MD Anderson study as well. And in this part in the second cohort of the combat trial, we are only focusing in patients who are in second line who progressed in Gen-based treatment and they were diagnosis from the beginning as a metastatic disease. This is very important to remark because that might be a lot of difference based on the background of the patient. We believe that the results for a study which is multinational in so many sites with difference investigators and within a well-defined population, and with strength the results of our study.

Okay, that's very helpful. And also, would you expect in your presentation maybe at ESMO IO? Do you think, you'll be able to include spider plots so we can really get a sense for how the treatment may be offering or changing the growth trajectory of tumors in patients? Thank you.

Yes, definitely as one of the graphical representation of the data that we have. As you know, we don't have a lot of exposure to see a lot of long term assessment and this will be as Phil said before, in 2020 we will see more data on progression for survival and overall survival, but yes, we are planning to make some biographical presentations and data that will help the patient.

Okay, perfect. Thank you for taking the questions.

Thanks a lot of Mark.

[Operator Instructions] Please stand by while we poll for some more questions. 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 03-925-5904. Internationally, please call 972-3925-5904. Mr. Serlin, would you like to make a concluding statement?

Yes, I would. Thank you. 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 good day.

Thank you. This concludes the BioLineRx third quarter 2019 conference call. Thank you for your participation. You might go ahead and disconnect.