BioLineRx Ltd. (BLRX) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. Welcome to the BioLineRx First 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' 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 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 pipelines 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 advance metastatic pancreatic cancer, stem cell mobilization and 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 3 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 to completion. Our broad development pipeline, together with recent decisive actions that we have taken internally to reduce cash burn, best position 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 in 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 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 lung. 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 way to obtain initial clinical data in the shortest time possible. Now recapping our programs. Recall that during the fourth quarter, we announced preliminary Phase IIa 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 with 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. Out of the 7 partial responders at that time in our trial, 5 were still on treatment with a maximum treatment time of over 330 days. And 4 respondents showed a tumor reduction in 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 3 to 4 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 midyear. 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 the urgent need for new effective options to treat PDAC. As a CXCR4 inhibitor, we believe motixafortide has potential to be combined with a number of therapeutic agents to attack different cancers and at different stages. Reflecting its versatility, 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 3 indications. And this past January, we received Orphan Drug Designation in pancreatic cancer from the European Medicines Agency. Now speaking about AML. Regarding AML, our large randomized controlled Phase IIb 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 a meaningful proof of concept data announced on 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 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 III GENESIS trial continues to recruit as planned. 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 randomized portion of the trial is ongoing, and we remain on track to report results for the 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 11 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. 9 of 11 patients reached the primary end point threshold of 6 million CD34 cells per kilogram, with only 1 dose of BL-8040 and an up to 2 apheresis sessions. And 7 out of 11 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 multicenter open-label Phase I/IIa study in patients with unresectable solid tumors. The study is designed to evaluate the safety and tolerability in 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 the study, we moved quickly to initiate Part 2, which is the 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 U.K. and Israel, both of which saw a significant impact from the COVID-19 pandemic. The decision was made to temporarily suspend enrollment in this trial, which we project will lead to an approximate 9-month delay. So whereas we previously guided to 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 PD-1 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 5 years patent term extension. Additional corresponding patent applications are pending in Europe, Japan, China, Canada, Australia, India, Korea, Mexico, Brazil, 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 that 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 financial, operating and financial review and press release for additional information. Research and development expenses for the quarter 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'll 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 IIb AML consolidation study during the second half of this year. 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 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.

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

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 dropout due to COVID?

No, we haven't seen any dropout at all. First of all, have a -- it's good to speak to you, Joe, first of all, and I also hope that you're 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 settled down, especially since that study is being managed mostly -- or the recruitment is mostly in the U.K., which as you know is still suffering more than most places. But like I said, the 8040 studies are -- we're 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've had thus far? And did you have any internal discussions to decide whether you'd want to put out maybe some additional immunological data or PK data -- 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 data set possible?

Abi?

Okay. I'll take this one, Joe. Actually, we don't feel comfortable to publish data for very few patients. We want to have more robust data to be able to present in a very thoughtful manner the data that we have. Then at this stage, we are not aiming to do that. And we are waiting for this COVID to go away, and we will be able to begin again our recruitment in the U.K. and Israel as well as in the U.S.

The next question is from Mark Breidenbach of Oppenheimer.

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

Thanks for the question. Actually, also for the stem cell mobilization, we didn't see any change at the beginning. We have freezed some sites for recruitment but we are still on track with the recruitment as planned. Therefore, we don't see that COVID affects us in general. And about the deviation, it's a good question. The FDA put guidelines in regards 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 that we -- compared to before. But it's 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'm 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 a secret of the fact that we're 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 get -- and be prepared for a pre-NDA meeting and NDA submission, et cetera, et cetera. But like I said, I think it would make sense that since we're in parallel speaking with potential collaboration partners, it would make sense to do that together with them.

Okay, understood. And one last quick one for me. Can we assume the COMBAT/KEYNOTE-202 results will be presented at a major medical meeting? And is there a guidance for midyear data kind of inclusive of late third quarter ESMO time frame? Just curious on that.

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

[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 (888) 782-4291. In Israel, please call 03-925-5928. Internationally, please call 972-3-925-5928. Mr. Serlin, would you like to make your concluding statement?

Yes, I would. Thank you very much. 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.