BioLineRx Ltd. (BLRX) Q2 2020 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the BioLineRx Second Quarter 2020 Results 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' 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 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. During the second quarter, we continued to advance our clinical programs towards important and meaningful data readouts that are anticipated over the next few months. And while some timelines have changed very modestly as a result of COVID-19 and other factors, we look forward to a catalyst-rich second half of the year from motixafortide, formerly known as BL-8040, our lead clinical candidates. Recall that motixafortide is currently being evaluated in multiple late-stage trials across a range of cancer indications. At this point, I will provide an update on our motixafortide development programs as well as our second clinical candidate, the anti-cancer vaccine, AGI-134. Beginning with late-stage pancreatic cancer, or PDAC, recall that we are currently evaluating motixafortide in combination with KEYTRUDA and chemotherapy in a Phase IIa clinical trial known as the COMBAT/KEYNOTE-202 trial under a clinical trial collaboration with Merck. As you probably know, PDAC is among the most difficult cancers to treat and patients with this diagnosis have historically had very poor prognosis. More than 50% of PDAC patients are first diagnosed with advanced stage IV disease, due mainly to the fact that this cancer is symptomatic while it is metastasizing. In addition, immunotherapy has had a very limited effect in PDAC, both alone and in combination. So this is clearly a cancer indication with a substantial unmet medical need. During the fourth quarter of 2019, we announced encouraging preliminary data from this triple combination arm, briefly recapping the results of 22 evaluable patients at that time. The combination demonstrated a 32% overall response rate, a 13.6% confirmed overall response rate and a 77% disease control rate. Disease control defined as patients with partial responses or stable disease. Out of the 7 partial responders at that time, 5 were still on treatment with a maximum treatment time of over 330 days and 4 responders showed a reduction in tumor burden of greater than 50%. In addition, the median duration of clinical benefit for the 17 patients exhibiting disease control was 7 to 8 months. This data was later published in Nature Medicine. In February, we completed enrollment of a total of 43 patients in this study and had previously guided to providing survival data in the middle of this year. However, as this is an event-driven study, the requisite number of events has not yet been reached. The data is still maturing, and we now expect to report full results, including overall survival, progression-free survival and final overall response rate later in the second half of this year. We are pleased that as of today, there are still patients on study, and we hope this is an encouraging sign. We look forward to announcing this important data as soon as we were able to do so. Turning now to stem cell mobilization. We continue to advance our GENESIS Phase III study, and this continues to represent our most efficient path to registration. This study is a double-blind, placebo-controlled trial comparing motixafortide in combination with G-CSF to G-CSF alone for the mobilization of stem cells used for autologous transplantation in multiple myeloma patients. The primary endpoint is the proportion of subjects mobilizing over 6 million CD34 positive cells per kilogram in up to 2 apharesis sessions. Recall that in the leading portion of this study, our analysis of the first 11 patients down to 9 out of 11, 82% of the patients received the primary endpoint with 1 administration of BL-8040 in an up to 2 apharesis sessions. While 8 out of 11, or 73%, reached the threshold after only 1 after apharesis session. These are very compelling results and hold great promise for the 50% to 70% of multiple myeloma patients who are poor mobilizers. Based on those leading results in the first 11 patients, the DMC recommended that we move directly into the randomized portion of the study without the need for completing the full 30 patients in the lead-in periods. We had originally been guiding for results by the end of this year. However, as the trial has progressed, the continuing and deepening effect of the COVID-19 pandemic has had an effect on recruitment. On the other hand, we have seen a significantly lower dropout rate than we had anticipated when calculating the original sample size. As a result of these factors, we have made the decision to conduct an interim analysis on approximately 65% of the original trial sample size later in the second half of this year, for which the recruitment is nearly complete. Should the interim analysis demonstrate that the primary endpoint has been reached, we expect to announce the immediate termination of further enrollment. In order to maintain study blinding, top line results, including 100 days of patient follow-up subsequent to transplantation, will be announced in the first half of next year. If the interim analysis demonstrates that the primary endpoint has not yet been reached, study recruitment will continue to completion of target enrollment of 177 patients. Should this be the case as mentioned, we anticipate that the ongoing COVID-19 pandemic will have some impact on patient recruitment. And taking this into consideration, we would expect to report top line data under this scenario in the second half of next year. Moving on to the Phase IIb BLAST study of motixafortide in consolidation AML. This study is a randomized one-to-one, double-blind, placebo-controlled study with 2 arms, BL-8040 plus cytarabine and placebo plus cytarabine. The primary endpoint is relapse-free survival. Our collaboration partners for this study, the German and Leukemia Alliance, will be conducting an interim analysis on 128 out of 194 planned study subjects, all of whom have completed the full 18 months of follow-up in the study. The interim analysis will also include a futility analysis. And accordingly, the study will stop in the event of overwhelming superiority or futilities. Otherwise, the DMC will make a recommendation regarding study continuation. Consistent with our prior guidance, we anticipate reporting results from the interim analysis in the back half of this year as well. If positive, these results, together with the meaningful proof-of-concept data announced in our previously conducted Phase IIa study in relapsed/refractory AML, would provide strong rationale for continued development in this indication, and we plan to meet with the regulators to discuss the optimal development path forward in the AML setting. If the study is not terminated due to futility or overwhelming superiority, as mentioned, the DMC will make a recommendation regarding that study continuation, in which case, the number of subjects will be increased by 8 patients to 202 patients. And in that scenario, the estimated completion date will be in 2023 at the earliest. Before turning to our second clinical candidate, AGI-134, I would like to briefly comment on COVID-19 and the opportunity that it presents us. As we previously disclosed last quarter, but it is worth reiterating, we are currently evaluating motixafortide as a 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 lungs. Our hypothesis is that motixafortide may succeed in modulating neutrophils and macrophages via CXCR4 inhibition, thus reducing their retention in the lungs, potentially resulting in improved morbidity and mortality. We are currently evaluating the optimal path -- the optimal pathway to obtain initial clinical data in the shortest time possible, and we will, of course, keep you apprised of our progress. Now turning to AGI-134. Our second clinical candidate, AGI-134, is a synthetic alpha-Gal glycolipid immunotherapy in development for solid tumors. AGI-134 harnesses the body's pre-existing highly abundant anti-alpha-Gal antibodies to induce a hyperacute systemic specific antitumor response to the patient's own tumor neoantigens. This response not only kills the tumor cells at the site of injection, but also brings about a durable follow-on anti metastatic immune response. We are evaluating AGI-134 in an open-label Phase I/IIA 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 range of biomarkers and to validate AGI-134's mechanism of action. We will also assess clinical and pharmacodynamic parameters. Recall that in September 2019, we announced positive safety data. And later that same month, we moved quickly to initiate Part 2, which is a dose expansion phase. In Part 2, we as -- we are assessing the efficacy of AGI-134 using clinical and pharmacodynamic parameters. The trial is being carried out in the U.K., U.S. and Israel, all of which have been hard hit by the COVID-19 pandemic. Approximately 4 months ago, the decision was made to temporarily suspend enrollment in this trial, which we continue to expect will lead to an approximate 9-month delay. We are now gradually resuming enrollment activities, and we expect to report data in the second half of 2021. This is unchanged from the revised timing that we introduced last quarter. This delay does not dampen our enthusiasm for the molecule, which in preclinical studies has demonstrated an ability to drive primary tumor progression while preventing the growth of untreated distal secondary tumors. It also triggers a vaccine effect that may prevent the development of future metastases. I would now like to turn the call over to Mali Zeevi, our CFO, who will give a brief overview of our key second 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 filing we made this morning, which contain our financials, operating and financial review and press release for additional information. Research and development expenses for the 6 months ended June 30, 2020, were $10.1 million, an increase of $0.4 million, or 3.8%, compared to $9.7 million for the comparable period in 2019. The increase resulted primarily from higher expenses associated with the motixafortide COMBAT and GENESIS clinical trials, offset by a decrease in expenses associated with the AGI-134 study. Turning to cash, the company held $27.3 million of cash, cash equivalents and short-term bank deposits as of June 30, 2020. During the second quarter, we completed 2 registered direct offerings that raised aggregate gross proceeds of $13.4 million. 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'll turn the call back over to Phil.

Thank you, Mali. In closing, as is our custom, I would like to take a few moments to summarize our 3 key data milestones for this year. One, full results, including overall survival, progression-free survival and full overall response rate data from the COMBAT/KEYNOTE-202 Phase IIa triple combination study in the second half of this year. Two, interim analysis of our Phase III GENESIS registrational study in stem cell mobilization in the second half this year. If the primary endpoint is reached, we would immediately announce cessation of recruitment at that time and would expect to have full top line data in the first half of 2021. Otherwise, if the primary endpoint is not met in the interim analysis, we would complete full recruitment of the study and would anticipate full top line data in the second half of next year. And three, interim analysis from the BLAST Phase IIb AML consolidation study during the second half of 2020, unchanged from prior guidance. Notwithstanding the modest changes to certain time lines as set forth above, we are on track to achieve multiple important and potentially value-creating data catalysts in the second half this year. We are pleased with our continued progress, particularly in light of the disruptions caused by the pandemic, and I look forward to providing future updates. With that, we have now concluded the formal part of our presentation. Operator, we will now open up the call to questions.

[Operator Instructions]. The first question is from Joe Pantginis of H.C. Wainwright.

Two questions, if you don't mind. First, regarding COMBAT. Just wanted to see, hopefully, it does have to do with the patients being on the study longer that the timelines have been pushed out a little bit, so we will just keep our fingers crossed on that. But I just wanted to ask directly on the -- any impacts from COVID directly on COMBAT with regard to losing any patient.

Yes. Joe, it's good to speak to you, and I hope you're doing well. Yes. So there has been no impact of COVID-19 on the COMBAT study. As we mentioned, it's fully recruited. It was -- we completed recruitment in February already. And the patients are still coming in -- based on their scheduled appointments. Since pancreatic cancer is such a difficult indication, the patients are less likely to avoid coming to the hospital when or where to get their treatment. So like I said, it hasn't had much of an impact at all.

No, that's great. And then just my second question has to do with GENESIS. So definitely an intriguing announcement today with regard to the interim analysis. So I guess my question would revolve around your regulatory discussions around this interim and what the potential statistical hit would be for introducing this interim.

Yes. So let me just first, I mean, just I want to reiterate. We have -- this interim analysis is something, I mean, we saw already, earlier in the year already, that the dropout rate was lower than -- significantly lower than expected. And due to the fact that we've seen some difficulty with the recruitment, it brought us to the conclusion that it makes sense that we don't think that there's a big risk in performing an interim analysis. As far as I know, we don't believe that there would be much of a statistical hit

Only a minimal penalty.

Only a minimal penalty. And this -- we've already filed the protocol for the interim analysis. It's been approved by the regulatory authorities. The statistical analysis plan as well. So -- and we've -- as I've mentioned also, we're almost done with the recruitment. So there's very little to stop the interim analysis from recurring on time.

The next question is from Mark Breidenbach of Oppenheimer.

Phil, I guess I'm left wondering if a smaller trial size would still satisfy the safety database requirement for product registration in GENESIS. And also, it would be helpful if you can remind us what the original powering assumptions were for GENESIS and how a potentially reduced trial size could impact that powering.

Yes. So as far as -- I'll take the safety aspect, and then I'll turn it over to Abi for the second part of the question. As you know, this trial has been going on for a while. In the meantime, we have increased the study, the COMBAT study. We did a second norm in a COMBAT study. And so we feel -- also there's been more patients as well in the AML study. So we feel that this will have little-to-no impact as far as the amount of patients necessary for the -- from a safety perspective with the FDA. As far as -- can you repeat the second part -- did you hear the second part of the question?

No, I did not.

Can you repeat the second part of the question, please, Mark.

Sure. Just if you can give us -- remind us what the original powering assumptions were for GENESIS and how potentially reducing the trial size would impact powering?

Mark, I will take this question. Actually, we cannot disclose the power for the study. However, as you know, we power COMBAT Phase III trial for registration and with the requirement of the FDA. Basically, the interim analysis that -- the protocol amendment with the interim analysis, was submitted to the FDA and approved by the FDA. And therefore, we don't see any issue in this regard -- with the number of patients that we suggest for the interim analysis. Actually, again, the idea of this interim analysis is mainly based on the fact that we didn't have the percentage of the dropout rate that we calculate in the beginning. Therefore, we don't believe that there will be any effect on the power of the study or in the number of -- the successful of the study.

Yes. I mean I'd like to also maybe emphasize. From our perspective, this is 1 of our most important milestones. And this is our first registration trial, and I want to assure you that we would not be doing anything to jeopardize the study in any way. And so we feel very comfortable going forward with the interim analysis because of the significant decrease in the dropout rate.

Okay. And maybe 1 final 1 for me on COMBAT/KEYNOTE-202. Should we be expecting the PFS and OS data to be presented at a major medical meeting in the fall? Or are these results simply going to be delivered by a press release?

We haven't made a decision yet. We're obviously looking at conferences. It's hard to to plan the study while it's still ongoing as far as when we're going to be able to do a data cut for a particular conference. I think that we felt -- last December, it was sort of -- it made sense. It was -- we had just had enough data for half of the patients. I think we feel very strongly that we need to complete the study as soon as possible, get the results, make sure that we've done everything to clean the data properly, et cetera, et cetera. And so I haven't -- we haven't made a decision yet as far as when, in which conference, but obviously, we would like to present at a conference.

[Operator Instructions]. We have a follow-up question from Joe Pantginis of H.C. Wainwright.

I just wanted to get back on regarding the statistical analysis plan for GENESIS that you submitted to the FDA. I guess I would ask it this way, what do you consider it, was it a standard discussion to be able to implement these changes? Or did you have to invoke on any of FDA's recent commentary that they would be, say, how would I put it, a little forgiving with regard to COVID impact on study?

No. We don't -- we actually didn't have any problems in regard with the COVID because we don't have any patients that have major issues. In regard to the COVID, we have tried to stop the recruitment because of this issue. But there are some some considerations, but there are not -- not affect the primary endpoint and the principal secondary end point on the study. We submit the interim analysis to the FDA, they approve the interim analysis. We submit the statistical analysis plan, then they work with that to -- to also allow this interim analysis to be done.

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 2 hours after the conference. In the U.S., please call 1-888-782-4291. In Israel, please call 03-925-5921. Internationally, please call 972-3-925-5921. 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 our next comprehensive update in November. Be safe and have a great day.

Thank you. This concludes BioLineRx Second Quarter 2020 Conference Call. Thank you for your participation. You may go ahead and disconnect.