BioLineRx Ltd. (BLRX) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. Welcome to the BioLineRx Fourth Quarter and Full Year 2019 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'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, BioLineRx.

Thank you, Tim, and good morning, everyone, and thank you for joining us on our fourth quarter earnings conference call today. Earlier this morning, we issued our Q4 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. I will begin with a brief review of our programs and activities, recap our upcoming 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 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 fourth quarter, we achieved a significant development milestone with the announcement of preliminary Phase II data from the triple combination arm of our ongoing COMBAT/KEYNOTE-202 clinical trial that we are running in collaboration with Merck. Recall that this trial is evaluating BL-8040, which we are now calling motixafortide, in combination with Merck's KEYTRUDA and chemotherapy as a second-line treatment for pancreatic ductal adenocarcinoma or PDAC. PDAC is a particularly challenging form of cancer due to its aggressive biology and late-stage at the time of detection. Approximately 50% of patients are initially diagnosed at stage IV. These factors contribute to a very poor prognosis for these patients. Moreover, PDAC is also a cold tumor that is not receptive to currently available immuno-oncology agents. So more effective treatment options are desperately needed for this patient population. Motixafortide targets the chemokine receptor, CXCR4, a well-established cancer target, which is believed to play a key role in tumor growth, invasion, angiogenesis, metastasis and therapeutic resistance. CXCR4 is overexpressed in more than 70% of cancers and has shown to be correlated with poor prognosis. Previously, the results of the dual combination arm of the COMBAT/KEYNOTE-202 study that we announced last year show that motixafortide affects multiple modes of action in cold tumors, such as pancreatic cancer, including immune cell trafficking, tumor infiltration by immune effector T cells, and reduction in immunosuppressive cells within the tumor niche. By doing so, motixafortide when combined with the checkpoint inhibitors, such as KEYTRUDA, shows greater clinical activity than checkpoint inhibitor therapy alone. In the triple combination arm of the study, which is ongoing, we are testing the hypothesis that the addition of chemotherapy to this already promising combination will prove synergistic and yields further improvements in both efficacy and durability. In December, we presented preliminary data at the European Society of Medical Oncology Immuno-Oncology Congress, otherwise known as ESMO I-O in Geneva. As of the December 5 data cutoff date, 30 patients were evaluable for safety and 22 were evaluable for efficacy. All patients enrolled were originally diagnosed with stage IV metastatic PDAC, and had progressed following first-line treatment with gemcitabine-based chemotherapy. Recapping the highlights. Best response for the 22 patients evaluable for efficacy showed 7 partial response in 10 stable disease patients, resulting in an overall response rate of 32% versus 17% for standard of care and a disease control rate of 77% versus 52% for standard of care. Notably, the combination showed continuity of effect. 5 patients with stable disease became partial responders as treatment continued. Out of the 7 partial responders, 5 were still on treatment with a maximum treatment time of over 330 days, and 4 responders showed a reduction in tumor burden of over 50%. Median duration of clinical benefit until progression for the 17 patients with disease control was 7.8 months versus 3 to 4 months under standard of care chemotherapy. The combination was generally well tolerated with a safety profile that one would expect from chemotherapy-based treatment regimens. In terms of next steps, in January, we announced that we had completed enrollment of 40 patients in the triple combination arm. The trial is progressing as planned, and we expect to report progression-free survival and overall survival data mid-year. This is consistent with our prior guidance as the program continues to adhere to our anticipated development time lines. We were also extremely pleased to receive a notice of allowance from the U.S. patent office in January, entitling us to long-term highly enforceable and broad patent protection from motixafortide in combination with any PD-1 inhibitor, and more importantly, for all cancer indications, including, of course, any solid tumor. This important patent allowance through 2036 supports our immuno-oncology efforts from motixafortide in a very significant way. Turning now to our other pipeline indications. We are also evaluating motixafortide in acute myeloid leukemia as well as stem cell mobilization from multiple myeloma patients. We'd continue to view motixafortide as a platform molecule, and see an opportunity to combine it with a number of therapies targeting different cancers and at different stages of disease progression. Reflecting this versatility, the FDA has granted motixafortide Orphan Drug Designation in all 3 indications, which we believe validates the potential of this molecule, and reiterates the need for improved treatments in these difficult-to-treat cancers. We also recently announced that we received Orphan Drug Designation in pancreatic cancer by the European Medicines Agency. Beginning with AML, our large, randomized, controlled Phase IIb study of motixafortide and consolidation therapy for patients in first remission, known as the BLAST study is continuing. Last quarter, we indicated that since this is an event-driven study based on the number of relapse events in each arm, the time line for conducting an interim analysis was and remains fluid. At this point, we expect to conduct this analysis in the second half of this year. We will certainly keep you updated as we continue to progress towards this important data milestone. It's worth noting that our decision to investigate motixafortide in a consolidation AML setting, stems from meaningful proof-of-concept data announced in our previously conducted Phase IIa study in relapsed/refractory AML. These data demonstrated that the combination of motixafortide with cytarabine, significantly improved the overall survival compared with historical data for cytarabine monotherapy and was safe and well tolerated. 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 III trial, which is 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 randomized portion of this trial, which was planned to enroll 177 patients across more than 25 trial sites is ongoing. As our most advanced indication, stem cell mobilization remains our most efficient pathway to registration, and we believe it has the potential to be a game changer in autologous bone marrow transplantation for multiple myeloma and other indications, such as non-Hodgkin's lymphoma. The results that we observed from 11 patients in the lead-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 stem cell transplantation. 9 of 11 patients reached the primary endpoint threshold, over 6 million CD34 cells per kilogram with only 1 dose of motixafortide, and then up to 2 apheresis sessions. And 7 of 11 patients reached the threshold in a single apheresis session only. These initial results give us confidence as the randomized portion progresses, and we are looking forward to top line results later this year. Turning now to our second clinical asset, our novel cancer immunotherapy, AGI-134, which we are evaluating in a multicenter 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 of 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 the study, we moved quickly to initiate Part 2, which is the dose expansion phase. In Part 2, we are assessing the efficacy and proof of mechanism of AGI-134 using clinical and pharmacodynamic parameters. As a reminder, numerous preclinical 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. The trial is currently being carried out in the U.K., Israel and the U.S. We look forward to these initial efficacy results by the end of this year, which is unchanged from our prior guidance. I will now turn the call over to Mali Zeevi, our CFO, who will give a brief overview of our key fourth quarter financial statement items. Mali, please go ahead.

Thank you, Phil. In our financial discussion, we will 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 December 31, 2019, were $23.4 million, an increase of $3.6 million or 18.3% compared to $19.8 million for the year ended December 31, 2018. The increase resulted primarily from higher expenses associated with the motixafortide GENESIS and COMBAT clinical trials, offset by a decrease in expenses related to BL-1230, a project which was terminated in 2018, as well as a decrease in payroll and share-based compensation. Turning to cash. The company held $27.5 million of cash, cash equivalents and short-term bank deposits as of December 31, 2019. 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 how our team has executed on our plan this year. We have advanced motixafortide ahead in all 3 indications. We are on track for an important survival readout that we believe will confirm earlier evidence that we have a compelling product that may address an unmet need in PDAC, a very difficult tumor type. At the same time, we have secured Orphan Drug Designation from the FDA and EMA, and were granted patent protection in all tumor types until 2036, providing us with plenty of room to maximize the value of motixafortide in current and future indications. Looking ahead at our upcoming data milestones this year. Progression-free survival and overall survival data from the COMBAT/KEYNOTE-202 Phase IIa triple combination study in PDAC in mid this year; interim results from the Phase IIb AML consolidation study in the second half of this year; top line results from the Phase III GENESIS registrational study in stem cell mobilization also in the second half of this year; and finally, initial results from Part 2 of the Phase I/IIa trial of AGI-134 by year-end this year. We believe we have set the stage for a catalyst-rich year, 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.

[Operator Instructions] The first question is from Mark Breidenbach of Oppenheimer.

Congrats on recent progress. I guess, I wanted to just start with asking if any of your planned 2020 clinical readouts are contingent on the timing of specific medical meetings. Would you release the data via press release, if we see any major delays or reschedulings of medical meetings? For instance, we just saw that with ACR. Would you kind of stick to the schedule you have now or stick to the revised schedule for -- to accommodate for reschedulings?

Yes. So thanks, Mark. So -- yes, so we intend to put the data out midyear. We've always intended to put the data, the next data set in the middle of the year. And that's -- we're still guiding towards that. So whether or not there are any of the conferences are delayed significantly even for up to -- into next year, what have you, that shouldn't affect our schedule for releasing data.

Okay. That's helpful. And maybe specifically with regard to the GENESIS trial, since we're not too far away from this data. Is it reasonable to expect that the top line data would be delivered via press release, and then a more detailed analysis would be included at a medical meeting? And can you also remind us on the follow-up requirements that we should be thinking about for GENESIS before, and the NDA filing could go forward?

Abi, go ahead, please.

Mark, it's Abi here. Yes, actually, it really depends exactly what will be the time lines for this. But I think that we will be able to report, in the first release, the top line results. And further, we will extend and make more analysis and present more data in one of the conferences.

Okay. But in terms of follow-up?

In terms of follow-up, it depends. So we'll take more time, and I think in this regard, we will be able to present this in one of the conferences more than in a press release, because we have more time to do that, that is for the primary endpoint.

Okay. And maybe just a final one from me, also on the stem cell mobilization topic. Have you given any more thought to the idea of potential label expansions into auto -- autologous transplants outside of multiple myeloma in terms of thoughts around minimal requirements for enabling usage of this product in transplants? For instance, auto transplants in non-Hodgkin's lymphoma?

We actually have this talk all the time. We didn't change our thoughts in regard to opening the label, but our main endpoint is to complete the GENESIS, have the data and hopefully, we are successful. And from there, we will be able to expand the label to other indications when we will be already in the market.

The next question is from Joe Pantginis of H.C. Wainwright.

So my questions are really forward-looking here. So please bear with me. The first part is, though, I think it's a good time for maybe a little bit of a reminder with regard to the pancreatic study. Since this is a clinical collaboration with Merck, can you just remind us again that Merck does not say, for example, have any right to first look for the product for any potential partnership, and that you're completely open with regard to potential partnering opportunities?

Yes, that's correct. Our collaboration with Merck has no strings attached whatsoever from a business development perspective. No first look, I mean, obviously, they're seeing the data. As we go along, we have regular meetings with them. But other than that, they have no rights to -- on the -- any licensing rights or anything like that on the asset.

No, that's helpful. Thanks for the reminder. And then -- so my forward-looking statement or question really has to do with next steps, not only for panc, but also for the GENESIS study and potential path to market. So GENESIS is clear. I wanted to see if you had any broad strokes for what a potential registration path could be for panc, assuming the survival data come out positive. And for GENESIS, in the stem cell mobilization area, do you look to commercialize it yourself, et cetera?

Okay. So let me speak to the last question, and then maybe I'll turn it over to Abi as far as the clinical development plan going forward for registration in pancreatic cancer. So I think that we've said very clearly over the last year or so that we intend to look for a collaboration partner going forward for BL-8040. That's our plan. We hope to take the 3 pieces of data coming out, AML, stem cell mobilization, pancreatic cancer, and look to collaborate with a larger partner to -- for commercialization, et cetera. Abi, do you want to talk about the pancreatic cancer?

Yes. In regard of the development program, basically, we are currently moving forward in the indication that we are doing right now, which is actually the tough indication in pancreatic cancer, we are treating patients who are diagnosed in stage IV. And progress after the first-line of treatment. This will be our main pathway for approval. However, as for the GENESIS trial, our aim is to, after getting hopefully, an approval to moving forward and develop the combination of motixafortide, immuno-checkpoint and chemotherapy for other lines of treatments in pancreatic cancer and also for other indications. Pancreatic cancer is just a -- the indication that we choose in order to show the mechanism of action and the synergies in between the immunotherapy, CXCR4 and chemotherapy. But this combination treatment can be applicable for sure, for other indication in which immunotherapy didn't show to be much effectively.

[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 2 hours after the conference. In the U.S., please call 1 (877) 456-0009. In Israel, please call 03-925-5927. Internationally, please call 972-3-925-5927. 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. Have a great day and stay safe.

Thank you. This concludes the BioLineRx Fourth Quarter and Full Year 2019 Conference Call. Thank you for your participation. You may go ahead and disconnect.