BioLineRx Ltd. (BLRX) Q1 2020 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the BioLineRx's First Quarter 2020 Results 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 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's 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 results press release, a copy of which is available in the Investor Relations section of our website. It was also filed as a 6-K. I will begin with some brief prepared remarks 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, our Vice President, Clinical Development; and Ella Sorani, our Vice President, Research and Development. Before turning to the results, I would like to make a comment about the humanitarian and economic crisis brought on by COVID-19. We, like many companies have quickly adapted to a remote working environment that puts our employees in the best position to remain safe while continuing to work toward our collective goals as a company. The pandemic has caused unprecedented disruptions in day-to-day activities and has resulted in delays to drug development timelines around the world given the difficulty of advancing ongoing trials and recruiting patients for new trials. Recall that our lead clinical candidate, motixafortide formerly BL-8040 is currently being evaluated in several studies across multiple cancer indications including advanced metastatic pancreatic cancer, stem cell mobilization in AML. We also have a second clinical candidate the anti-cancer vaccine AGI-134 that is being evaluated in solid tumors. We believe that having multiple clinical trials at various stages of completion will help us navigate through this crisis even while some of our programs may experience COVID-related delays. As currently contemplated, notwithstanding the pandemic, we believe we remain on track for three meaningful data readouts by the end of this year. That will be quite an accomplishment and a testament to the dedication of not only our team, but also the principal investigators that believe strongly in the potential of motixafortide and are eager to see these trials through the completion. Our broad development pipeline together with recent decisive actions that we have taken internally to reduce cash burn best positions us to navigate through these challenging times and I believe we will emerge even stronger than before. And while COVID-19 has clearly created challenges for us and the industry, it also may present an opportunity for BioLineRx to potentially play a role in the fight against this dangerous pathogen. We are in the initial stages of evaluating motixafortide as the potential therapy for COVID-19-induced inflammatory lung disorders including acute respiratory distress syndrome or ARDS. In this regard, substantial data is emerging regarding the involvement of neutrophils and macrophages in the development of COVID-19 lung symptoms including severe complications such as ARDS, as well as the key involvement of CXCR4 as the primary mediator of those cells in the inflamed alveolar tissue of the lung. Our hypothesis is that motixafortide may succeed in modulating neutrophils and macrophages by a CXCR-4 inhibition thus reducing the retention in the lungs, potentially resulting in improved morbidity and mortality. We are currently evaluating the optimal pathway to obtain initial clinical data in the shortest time possible. Now recapping our programs. Recall that during the fourth quarter, we announced preliminary Phase 2a data from the triple combination arm of our ongoing COMBAT/KEYNOTE-202 clinical trial that we are running in collaboration with Merck. This trial is evaluating motixafortide in combination with Merck’s KEYTRUDA and chemotherapy as a second-line treatment for pancreatic ductal adenocarcinoma or PDAC. Of 22 evaluable patients at the time, the combination demonstrated a 32% overall response rate, a 13.6% confirmed overall response rate and a 77% disease control rate. Disease control being defined as patients with partial responses or stable disease. By comparison, the ORR, confirmed ORR and DCR for the current chemotherapy standard-of-care in a similar patient population are 17%, 7.7% and 52% respectively. Added the seven partial responders at that time in our trial, five were still on treatment with a maximum treatment time of over 330 days and four responders showed a tumor reduction and tumor burden of over 50%. In addition, the median duration of clinical benefit for the 17 patients exhibiting disease control was 7.8 months versus approximately three to four months for the current standard-of-care. These are clearly very exciting results, particularly since PDAC is among the most difficult cancers to treat and also due to its late-stage at the time of diagnosis. In January, we completed enrollment of the 43 patients in this study. As mentioned earlier, since the emergence of the pandemic, we have remained in close contact with the principal investigators of all our studies and we are pleased to report that as of today, we remain on track to report progression-free survival data and overall survival data from the triple combination arm of this study in mid-year. This is consistent with our prior guidance and is poised to be a very significant milestone for our company given the promising data to-date and a urgent need for new effective options to treat PDAC. As of CXCR-4 inhibitor, we believe motixafortide has potential to be combined with a number of therapeutic agents to attack different cancers and at different stages reflecting this receptivity, we are also evaluating motixafortide in acute myeloid leukemia, as well as stem cell mobilization for multiple myeloma patients. The FDA has granted motixafortide orphan drug designation in all three indications and this past January, we received orphan drug designation in pancreatic cancer from the European Medicine Agency. Now speaking about AML. Regarding AML, our large randomized controlled Phase 2b study of motixafortide in consolidation therapy for patients in first remission, known as the BLAST study is continuing. We currently expect to conduct an interim analysis on this study during the second half of this year. We will certainly keep you updated as we continue to progress towards this important data milestone. If positive, these results together with the meaningful proof-of-concept data announced on our previously conducted Phase 2a study and relapsed refractory AML would provide strong rationale for continued development in this indication and we plan to meet with regulators to discuss the optimal development path forward in the relapse refractory setting after the results. Now, turning to stem cell mobilization, which is our most advanced indication, the Phase 3 GENESIS trial continues to recruit as planned. This study is a double-blind placebo-controlled trial comparing motixafortide in combination with GCSF to GCSF alone for the mobilization of stem cells used for autologous transplantation in multiple myeloma patients. The randomized portion of the trial is ongoing and we remain on track to report results from this study by the end of this year. As our most advanced indication, stem cell mobilization remains our most efficient pathway to registration and we believe it has potential to be a game changer in autologous bone marrow transplantation for multiple myeloma and other indications such as non-Hodgkin’s lymphoma. Recall that the results that we observed from eleven patients in the lean in portion of this study showed an ability of the combination to reduce the number of administrations and apheresis sessions, as well as hospitalization costs related to the preparation of multiple myeloma patients for autologous hematopoietic stem cell transplantation. Nine of eleven patients reached the primary endpoint threshold of 6 million CD34 cells per kilogram with only one dose of BL-8040 and an up to two apheresis sessions and seven out of eleven patients reached the threshold in a single apheresis session only. Now turning to our second clinical asset, our novel cancer immunotherapy AGI-134, which we are evaluating in a multi-center open-label Phase 1/2a study in patients with unresectable solid tumors. The study is designed 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. We will also assess efficacy by clinical and pharmacodynamic parameters. Following the results of Part 1 of this study, we moved quickly to initiate Part 2, which is a dose expansion phase, In Part 2, we are assessing the efficacy of AGI-134 using clinical and pharmacodynamic parameters. The trial is being carried out in the UK and Israel, both of which saw a significant impact on the COVID-19 pandemic. The decision was made to temporarily suspend enrollment in this trial, which we project will lead to an approximate nine month delay. So whereas we’ve previously guided the top-line data from this trial in the back half of this year, we now expect to report data in the second half of 2021. This delay does not dampen our enthusiasm for the molecule, which in preclinical studies has demonstrated an ability to drive primary tumor regression while preventing the growth of untreated distal secondary tumors, it also triggers a vaccine effect that may prevent the development of future metastases. Before turning the call over to Mali, I want to wrap up with an update on intellectual property. In February, we announced that a notice of allowance has been issued by the U.S. Patent and Trademark Office, USPTO for patent application claiming the use of motixafortide combined with any PD1 inhibitor for the treatment of any type of cancer. This patent when issued, will be valid until July 2036 with a possibility of up to five years patent term extension. Additional corresponding patent applications are pending in Europe, Japan, China, Canada, Australia, India, Korea, Mexico, Brazil and Israel. This patent is an important addition to our intellectual property state and we will continue to file additional patent applications both in the U.S. and globally to further protect our proprietary technology. I would now like to turn the call over to Mali Zeevi, our CFO, who will give a brief overview of our key first quarter financial statement items. Mali, please go ahead.

Thank you, Phil. In our financial discussion, we will only go over 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 and financial review and press release for additional information. Research and development expenses for the year ended March 31, 2020 were $5.4 million, an increase of $1 million or 23.5%, compared to $4.4 million for the comparable period in 2019. The increase resulted primarily from higher expenses associated with the COMBAT clinical trial, as well as an increase in share-based compensation. Turning to cash, the company held $21.2 million of cash, cash equivalents and short-term bank deposits as of March 31, 2020. We reiterate our previous cash guidance that our current resources are 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 this year. Progression-free survival and overall survival data from the COMBAT/KEYNOTE -202 Phase IIa triple combination study in mid this year; interim results from the Phase 2b AML consolidation study during the second half of this year; results from the Phase 3 GENESIS registrational in study stem cell mobilization also in the second half of this year; and finally, initial results from Part 2 of the Phase 1/2a trial of AGI-134, in the second half of 2021. We believe we have set the stage for a catalyst rich year, in spite of the pandemic and we look forward to providing future updates on our continued progress. 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 H.C. Wainwright. Please go ahead.

Hi everyone. Thanks for taking the question and hope you are all well. Phil, it’s great to see your leading milestones are remaining on track. So I just have a couple of logistical questions. First, with regard to the pancreatic study and I guess, even for all the studies, are you seeing any even modest dropouts due to COVID?

No, we haven’t seen any dropouts at all. First of all, it’s good to speak to you, Joe, first of all, and I also hope that you are well. But thankfully, we haven’t seen any issues in the BL-8040 studies. As mentioned, we have seen some issues in AGI-134. We thought it was the right thing to do to freeze the recruitment on that study and wait until things settle down, especially since that study is being managed mostly or the recruitment is mostly in the UK, which as you know is still suffering more than most places. But, like I said, the 8040 studies are – we are really not seeing any significant issue with the studies stemming from the COVID-19.

Got it. And then my second question actually has to do with 134 and again logistical here, would you disclose sort of the level of accrual that you had thus far and did you have any internal discussions to decide whether you would want to put out maybe some additional immunological data or PK data for – or not PK data, just basically immunological or translational data from the study that you have since it is open-label or you want to obviously maybe wait to have the most robust dataset possible?

Okay. Thanks for this one, Joe. Actually, we’ve been so conservative to publish data for very few patients who want to have more robust data to be able to present in the very thoughtful manner the data that we have, then and this stage we are not aiming to do that. And we are waiting for this COVID to go away and we would be able to begin again the recruitment in the UK and Israel as well as in the U.S.

Completely understandable and a sound clinical approach. Thanks a lot guys and be well.

Okay. You too. Thanks, Joe.

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

Hey guys. Congrats on the progress, especially given the difficult circumstances and thanks for taking my questions. So, just following up on one of the previous ones, it sounds like there is not really a chance COVID-19 would cause the GENESIS trial to fall short of its enrollment target, if I am understanding correctly? And I am just wondering if you can comment if there any specific actions being taken to address COVID-related protocol deviations or missing follow-up data from GENESIS patients?

Thanks for the questions. Actually, also for the stem cell mobilization, we didn’t see any changes. At the beginning we have freed some sites recruitment but we are still on track with the recruitment as planned. Therefore, we don’t see that if COVID affect us in general. About the deviation, it’s a good question there. They put guidelines in regard to the deviation. They allowed more deviation but actually we didn’t see such a difference between before and after the COVID. Actually, the patients that need to be transplant, they come to the site and they are doing mobilization and further transplant. We are not receiving or having more deviation compared to before. But it is good to know that the FDA is more flexible due to the Coronavirus issue.

Okay. Got it. And assuming positive data from GENESIS, can you just go over any plans for a pre-NDA meeting later this year after the data are out? And I am also curious if you have an adequate stockpile of motixafortide to potentially support a 2021 launch?

Well, first of all, as you know, we haven’t made secret of the fact that we are looking for a collaboration partner for motixafortide for BL-8040. And so, our plans have not changed in that regard that to go – to find a partner and I would conceive - it’s conceivable that any partner would want to participate in any type of pre-NDA meeting with the FDA. Having said that, we are getting the data together and doing whatever is necessary including validation, batches, et cetera, et cetera of BL-8040 in order to move forward and be prepared for a pre-NDA meeting, an NDA submission, et cetera, et cetera. But like I said, I think, it would make sense that since we are in parallel speaking with potential collaboration partners it would make sense to do that together with them.

Okay. Understood. And one last quick one from me. Can we assume the COMBAT/KEYNOTE-202 results will be presented at a major medical meeting? And is there a guidance for mid-year data kind of inclusive of late – through the third quarter ASMO timeframe? Just curious on that. Thanks.

Yes. So, we are very excited about the opportunity to present at one of the conferences mid-year. And so, I can’t give you any more information in mid-year. But you should look for it in the early summer I guess, would make sense.

Okay. That’s helpful. Thank you so much.

[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 1-888-782-4291. In Israel, please call 03-925-5928. Internationally, please call 972-3925-5928. Mr. Serlin, would you like to make your 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. Be safe and have a great day.

Thank you. This concludes the BioLineRx first quarter 2020 conference call. Thank you for your participation. You may go ahead and disconnect.