BioLineRx Ltd. Q2 FY2020 Earnings Call

Thank you all for joining us. Welcome to the BioLineRx Second Quarter 2020 Results Conference Call. I will now hand it over to Timothy McCarthy of LifeSci Advisors to present the safe harbor statement. Tim, please take it away.

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. I appreciate you joining us for our second quarter earnings conference call today. Earlier, we released our Q2 results press release, which you can find in the Investor Relations section of our website. I will start with some brief prepared comments, followed by a discussion of our financial results from our Chief Financial Officer, Mali Zeevi. After that, we will open the call to your questions. Joining us for the Q&A are Abi Vainstein, our Vice President of Clinical Development, and Ella Sorani, our Vice President of Research and Development. During the second quarter, we continued to make progress with our clinical programs towards significant data readouts expected in the coming months. While some timelines have shifted slightly due to COVID-19 and other factors, we are looking forward to a rich pipeline of developments in the latter half of the year for motixafortide, previously known as BL-8040, our leading clinical candidate. Motixafortide is currently under evaluation in multiple late-stage trials across various cancer indications. I will now update you on our motixafortide development programs, along with our second clinical candidate, the anti-cancer vaccine AGI-134. Starting with late-stage pancreatic cancer, we are currently assessing motixafortide in combination with KEYTRUDA and chemotherapy in a Phase IIa trial known as the COMBAT/KEYNOTE-202 trial, as part of a clinical collaboration with Merck. Pancreatic cancer is one of the most challenging cancers to treat, with a historically poor prognosis, as more than half of patients are diagnosed with advanced stage IV disease. Immunotherapy has shown limited success in treating this cancer, highlighting a significant unmet medical need. In the fourth quarter of 2019, we shared preliminary data from this triple combination, which included 22 evaluable patients at that time. The combination yielded a 32% overall response rate, a 13.6% confirmed overall response rate, and a 77% disease control rate, defined as patients with partial responses or stable disease. Notably, among the 7 partial responders at that time, 5 remained on treatment for over 330 days, and 4 showed a tumor burden reduction of greater than 50%. The median duration of clinical benefit for the 17 patients with disease control was between 7 to 8 months, and this data was subsequently published in Nature Medicine. In February, we completed enrollment of 43 patients in this study and previously projected survival data for mid-year. However, as this study is event-driven, we have not yet reached the necessary number of events. The data is still being collected, and we now anticipate providing full results, including overall survival, progression-free survival, and final overall response rate later in the second half of this year. We are encouraged that patients are still participating in the study and hope this is a positive sign. Focusing on stem cell mobilization, we are advancing our GENESIS Phase III study, which represents our most effective path to registration. This is a double-blind, placebo-controlled trial comparing motixafortide with G-CSF versus G-CSF alone for mobilizing stem cells for autologous transplantation in multiple myeloma patients. The main goal is to see how many subjects mobilize over 6 million CD34 positive cells per kilogram across up to 2 apharesis sessions. In the initial part of the study, of the first 11 patients analyzed, 9 out of 11 met the primary endpoint with one administration of motixafortide across up to 2 apharesis sessions, and 8 out of 11 reached the threshold after just one session. These are strong results, particularly for the 50% to 70% of multiple myeloma patients who struggle with mobilization. Due to these promising early results, the Data Monitoring Committee recommended we advance directly into the randomized portion of the study without completing the full 30 patients in the initial phase. While we originally expected results by the end of this year, the ongoing COVID-19 pandemic has impacted recruitment. However, the dropout rate has been lower than anticipated. Therefore, we plan to perform an interim analysis on about 65% of the original sample size in the latter half of this year, with recruitment nearly complete. If this interim analysis shows that the primary endpoint has been achieved, we will promptly announce an end to further enrollment. To maintain study blinding, we expect to report top-line results, including 100 days of patient follow-up post-transplant, in the first half of next year. If the primary endpoint has not yet been met in the interim analysis, we will continue recruiting to meet our target of 177 patients, although we anticipate some impact on recruitment due to the pandemic. In that case, we estimate top-line data will be available in the second half of next year. Next, the Phase IIb BLAST study of motixafortide in consolidation AML is underway. This study is a randomized, double-blind, placebo-controlled trial with two arms—motixafortide plus cytarabine and placebo plus cytarabine. The primary endpoint is relapse-free survival. Our collaborators, the German and Leukemia Alliance, will conduct an interim analysis on 128 out of the 194 planned subjects, all of whom have completed full follow-up for 18 months. This interim analysis will also include a futility assessment, with the study stopping if overwhelming superiority or futility is observed. Otherwise, the Data Monitoring Committee will provide recommendations on study continuation. We expect to share interim results later this year. If the results are favorable, combined with the promising data from our previous Phase IIa study in relapsed/refractory AML, we will discuss our development pathway with regulators. If the study is not terminated for futility or superiority, the number of subjects will be increased to 202, and initial completion may happen in 2023. Before I move on to AGI-134, I want to touch on COVID-19 and the opportunity it presents. As previously mentioned last quarter, we are evaluating motixafortide as a potential treatment for COVID-19-related inflammatory lung disorders, such as acute respiratory distress syndrome. Significant data is emerging about the roles of neutrophils and macrophages in COVID-19 lung symptoms, including severe complications like ARDS, and the involvement of CXCR4 as a key mediator in inflamed lung tissues. We hypothesize that motixafortide could help modulate these cells, potentially improving outcomes by reducing their retention in the lungs. We are actively pursuing the fastest pathway to obtain initial clinical data and will keep you updated on our progress. Now, regarding AGI-134, our second clinical candidate is a synthetic alpha-Gal glycolipid immunotherapy being developed for solid tumors. AGI-134 leverages the body’s pre-existing anti-alpha-Gal antibodies to trigger a specific anti-tumor response to the patient’s tumor neoantigens. This response not only aims to kill tumor cells at the injection site but also elicits a lasting anti-metastatic immune response. We are conducting an open-label Phase I/IIA study in patients with unresectable solid tumors to evaluate the safety and tolerability of AGI-134 at the recommended dose across multiple solid tumor types, while also assessing clinical outcomes and validating the drug's mechanism of action. In September 2019, we announced positive safety data and promptly moved to initiate Part 2, a dose expansion phase. Part 2 focuses on assessing the efficacy implications of AGI-134. This trial is being conducted in the U.K., U.S., and Israel, all of which have been significantly affected by the COVID-19 pandemic. About four months ago, we decided to temporarily pause enrollment in this trial, which we anticipate will lead to a delay of approximately nine months. We are gradually resuming enrollment and maintain our expectation to report data in the second half of 2021, which aligns with the revised timeline shared last quarter. This delay does not lessen our enthusiasm for the molecule, which has shown potential in preclinical studies to drive primary tumor progression while inhibiting untreated distant tumors, as well as inducing a vaccine effect that could prevent future metastases. Now, I will hand the call over to Mali Zeevi, our CFO, to discuss our key financial statement items for the second quarter. Mali, please proceed.

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 contains 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 timelines 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.

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

I have two questions, if that’s alright. First, about COMBAT. I hope the longer timelines are due to patients staying in the study longer, so let’s keep our fingers crossed. I also wanted to ask if there have been any direct impacts from COVID on COMBAT, specifically regarding patient loss.

Yes, Joe, it's great to talk to you, and I hope you're doing well. There has been no impact from COVID-19 on the COMBAT study. As we mentioned, it is fully recruited; we completed recruitment in February. The patients are still attending their scheduled appointments. Due to the severity of pancreatic cancer, patients are less inclined to avoid coming to the hospital for treatment. So, as I mentioned, there hasn't been much 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, I want to reiterate that our interim analysis shows the dropout rate is significantly lower than expected. Given the recruitment challenges we've encountered, we believe it's reasonable to conduct the interim analysis, and we do not foresee a significant statistical impact.

Only a minimal penalty.

Only a minimal penalty. We have already filed the protocol for the interim analysis, and it has received approval from the regulatory authorities. The statistical analysis plan is also approved. As I mentioned, we are nearly finished with recruitment, so there is very little that could prevent the interim analysis from taking place on schedule.

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. I'll address the safety aspect first, then turn it over to Abi for the second part. This trial has been ongoing for some time, and we have expanded the COMBAT study, including a second cohort. Additionally, the number of patients in the AML study has increased. Therefore, we believe this will have minimal to no impact on the number of patients required from a safety standpoint with the FDA. Could you please repeat the second part of the question?

No, I did not.

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

Sure. Could you remind us what the original powering assumptions were for GENESIS and how potentially reducing the trial size would impact powering?

Mark, I will address this question. Unfortunately, we cannot disclose the specifics regarding the power of the study. However, as you know, we powered the COMBAT Phase III trial for registration in accordance with FDA requirements. The protocol amendment that included the interim analysis was submitted to the FDA and received their approval. Therefore, we do not anticipate any issues with the number of patients proposed for the interim analysis. The concept behind this interim analysis is primarily based on our initial calculations regarding the dropout rate, which has differed from our expectations. Consequently, we do not foresee any impact on the power of the study or its potential for success.

Yes. I mean I'd like to also maybe emphasize. From our perspective, this is one 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 one final one 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 regarding conferences. It's challenging to plan the study while it's ongoing, especially concerning the timing of a data cut for any specific conference. Last December, we believed it made sense to present since we had sufficient data for half of the patients. We are committed to completing the study as soon as possible, obtaining the results, and ensuring that the data is properly cleaned. So, we have not yet decided when or at which conference to present, but we certainly aim to do so.

We have a follow-up question from Joe Pantginis of H.C. Wainwright. We felt that last December made sense for a particular conference since we had just enough data for half of the patients. We are determined to complete the study as soon as possible, obtain the results, and ensure that we have properly cleaned the data. However, we haven't yet decided when or at which conference we will present, but we would like to present at a conference.

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, a little forgiving with regard to COVID impact on study?

No, we didn't have any issues related to COVID since we don't have any patients facing major problems. We did pause recruitment due to this situation, but it won't impact the primary or secondary endpoints of the study. We submitted the interim analysis to the FDA, and they approved it. We also submitted the statistical analysis plan, and they collaborated with us to allow the interim analysis to proceed.

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.