BioLineRx Ltd. Q2 FY2022 Earnings Call

Ladies and gentlemen, thank you for standing by. Welcome to the BioLineRx Second Quarter 2022 Results Conference Call. All participants are presently in a listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session. I would now like to turn over the call to Tim McCarthy of LifeSci Advisors. 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 of BioLineRx.

Thank you, Tim, and good morning, everyone, and thank you for joining us on our second quarter results conference call today. Earlier this morning, we issued a 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 an overview of our second quarter. Then Mali Zeevi, our Chief Financial Officer, will provide a discussion of our financial results. We will then open up the call and are looking forward to your questions. Also joining the call for Q&A are Abi Vainstein, our Chief Medical Officer; Ella Sorani, our Chief Development Officer; and Holly May, our Chief Commercial Officer. During the second quarter and subsequent period, we made significant progress across both our stem cell mobilization and pancreatic cancer programs for our lead compound, Motixafortide. At the same time, we are approaching a key data readout for our second program, the anti-cancer vaccine, AGI-134, which I will discuss shortly. Turning to our most advanced opportunity, stem cell mobilization. In stem cell mobilization, we are nearing completion of our new drug application and anticipate submitting the package to the FDA within the next four to six weeks. Recall that we held a successful pre-NDA meeting with the agency this past December and gained alignment on key aspects of the filing, most notably that a single Phase 3 study, Genesis, would be sufficient to support a submission. As a brief reminder, our Genesis Phase 3 trial of Motixafortide in stem cell mobilization met all primary and secondary endpoints with a very high degree of statistical significance, a P-value of less than 0.0001. Approximately 90% of patients underwent transplantation after mobilizing the target number of stem cells following only one administration of Motixafortide on top of G-CSF and in only one apheresis session versus approximately 11% in the G-CSF arm. In addition, patients in the Motixafortide plus G-CSF arm collected an average of 11 million cells per kilogram in only one apheresis session, versus approximately 2 million in the G-CSF arm. We believe the clear clinical advantage to patients of a significantly reduced number of apheresis sessions is quite compelling while the high level of certainty regarding the number of apheresis sessions will enable more efficient utilization of apheresis units at transplantation institutions where there is often a shortage of available machines. In contrast, the use of G-CSF alone, one of the main current treatments for mobilization, generally requires multiple apheresis days to reach the target number of cells for collection. In a substantial number of instances, patients remain unable to produce the target number of cells for autologous transplantation. Not only does this add significantly to the cost of treatment, but it becomes logistically challenging for hospital apheresis units that are already quite burdened. Similarly, even with the addition of plerixafor to G-CSF, which is the other main treatment in this indication, multiple administrations in apheresis sessions are generally required to achieve the target number of stem cells. Given that we have shown that Motixafortide on top of G-CSF can achieve the target mobilization with a single administration of Motixafortide and in a single apheresis session, the advantages of this combination over the existing treatment protocols are abundantly clear. In this regard, recall that we commissioned two pharmacoeconomic studies in the U.S. over the last year. One comparing Motixafortide against G-CSF, and the second comparing Motixafortide against plerixafor. Both studies were performed by the Global Health Economics and Outcomes Research Team of IQVIA and were rigorously designed and executed. Both studies identified significant cost savings from using Motixafortide driven by its ability to optimize the mobilization and collection of stem cells and therefore reduce the number of apheresis sessions, in turn driving benefits to the patients, the centers, and the payers. Against G-CSF alone, Motixafortide plus G-CSF was associated with a statistically significant decrease in health resource utilization during the autologous stem cell transplantation process, with lifetime estimates showing a net cost savings of approximately $19,000, not including the cost of Motixafortide against G-CSF alone. Against plerixafor in combination with G-CSF, IQVIA did a cross-study comparison, and these results even surpassed the economic benefits seen in the pharmacoeconomic study versus G-CSF alone, with lifetime estimates showing a net cost savings of approximately $30,000, not including the cost of Motixafortide for Motixafortide plus G-CSF versus plerixafor plus G-CSF. I’d also like to take a moment to mention the extensive analyses that we have done to understand the addressable market for Motixafortide in stem cell mobilization, including a market assessment that we commissioned through a well-respected third-party vendor, ZS Associates. The conclusion is that in 2021, the value of the U.S. stem cell mobilization market was estimated at approximately $360 million and is continuing to grow. Globally, we believe the addressable market exceeds $500 million. With the advancement of new induction treatment regimens for multiple myeloma patients, which generally include multiple therapeutic compounds within the combination, the subsequent risk of mobilization failure continues to increase. To date, higher intensity, three or four drug regimens have become the standard of care induction treatment for all autologous stem cell transplant eligible patients. Recent data have demonstrated that the use of such higher intensity induction treatments can lead to impairment of stem cell mobilization. Additionally, age is a predictor of stem cell mobilization response, and elderly patients with a decreased ability to mobilize the target number of stem cells are being treated more frequently than in the past. Based on the above need for better mobilization agents, growth in this market over the last few years has been driven by the increased upfront use of the plerixafor plus G-CSF combination therapy to drive stem cell mobilization, especially in multiple myeloma patients. The plerixafor unit and dollar volume performance in the U.S. over the past few years indicates increased use of the product in stem cell transplants. And as mentioned, this dynamic has been exacerbated in recent years by the introduction of more effective and aggressive induction therapies, which on the one hand, had higher initial response and remission rates, but on the other hand, have negatively impacted stem cell yields, even with plerixafor, which on average requires more than two administrations and two apheresis sessions in order to reach the target mobilization. This trend highlights the ever-increasing need for a better and more potent mobilizer, and we believe that is Motixafortide. Considering the totality of the data that we have compiled on Motixafortide and stem cell mobilization, both clinical and pharmacoeconomic, we are confident that a very strong case can be made for Motixafortide as part of this new treatment paradigm in stem cell mobilization for all multiple myeloma patients undergoing autologous stem cell transplantation. In addition, longer term, we believe that our product has the potential to expand beyond multiple myeloma to other indications. Now, I’d like to speak briefly about our prelaunch activities. In parallel to the NDA submission activities, we continue to evaluate all of our options with regard to the commercialization of Motixafortide in the U.S. In this regard, we are advancing a broad range of pre-launch activities that would be required under any commercialization scenario, whether we commercialize with a partner or independently. As part of our commercial preparedness, in June, we announced the appointment of Commercial Strategy and Operations veteran Holly May as our new Chief Commercial Officer. In this newly created position, which is based in the U.S., Holly is responsible for the commercial planning, positioning, and launch oversight for Motixafortide in the stem cell mobilization indication across the U.S. market, assuming U.S. approval. We believe Holly is the perfect fit for this role. Her career trajectory has included 13 commercial launches, and she brings specific expertise in the hematopoietic stem cell mobilization area from her recent work in gene therapy. In addition, we have carried out a number of prelaunch activities with long lead times, such as engaging key vendors with expertise in the pricing and market access areas, initiating medical affairs activities, for example, institution profiling, medical materials outreach to key stakeholders; drafting brand logo and artwork, and finally, engaging commercial packaging organization, serialization, and third-party logistics partners. We have indicated before that the stem cell mobilization market is highly concentrated; approximately 80 centers perform approximately 80% of stem cell procedures. Therefore, the commercialization expenses and footprint required would be limited relative to a more traditional oncology launch in a broader indication. In addition, Holly's pre-existing relationships with the majority of these centers will serve us well. So regardless of the manner in which we commercialize Motixafortide in the U.S., our efforts now will ensure that we are prepared for a robust launch next year that maximizes the value of the asset and ensures that Motixafortide is well-positioned to capture a significant share of the estimated $360 million annual market opportunity in the U.S. In addition, as mentioned, our longer-term plans involve expanding Motixafortide beyond multiple myeloma into additional indications. Turning now to our Motixafortide pancreatic cancer or PDAC program. In June, we took a significant step forward with this program by entering into a development collaboration agreement with GenFleet Therapeutics. Under the terms of this agreement, GenFleet will execute a rigorously designed, randomized Phase IIb clinical study in approximately 200 first-line metastatic PDAC patients in China. Importantly, we maintain full rights to Motixafortide across all indications and geographies, while GenFleet would be entitled to a small single-digit sales royalty should Motixafortide ultimately be approved. This collaboration is based on the positive results that we reported from our Phase IIa combat KEYNOTE 202 triple combination study of Motixafortide in combination with Merck's anti-PD-1 KEYTRUDA and chemotherapy as a second-line therapy. As a reminder, data from the Phase IIa study demonstrated a substantial improvement across all study endpoints as compared to historical data, including median overall survival, median progression-free survival, confirmed overall response rate, overall response rate, and disease control rate. Based on their development capabilities in China, including experience in conducting combination trials in the immuno-oncology space, we believe that we have found the ideal partner to advance Motixafortide in pancreatic cancer, and we look forward to the initiation of this trial in 2023. Regarding our second clinical candidate, the intratumoral anti-cancer vaccine, AGI-134. Recall that we are evaluating safety, tolerability, and proof of mechanism in multiple solid tumor types in the Phase I/IIa study. This study is designed to evaluate a wide array of biomarkers and assess both clinical and pharmacodynamic parameters. We hypothesized that AGI-134 coaches tumor cells with alpha-gal to make them look like foreign tissue in order to evoke an immune response to both destroy existing tumors and provide a vaccine-like effect. We hope to successfully demonstrate this mechanism of action when we read out top-line results from Part 2 of the study. We are on track to do so later this year. If positive, we plan to initiate a Phase II study in 2023. 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. As is our practice 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 three months ended June 30, 2022, were $5.4 million, an increase of $0.3 million or 5% compared to $5.1 million for the three months ended June 30, 2021. The increase resulted primarily from an increase in expenses associated with the AGI-134 study offset by lower expenses associated with the completed Motixafortide GENESIS trial, as well as lower expenses related to NDA supporting activities related to Motixafortide. Research and development expenses for the six months ended June 30, 2022, were $9.8 million, an increase of $0.4 million or 4.4%, compared to $9.4 million for the six months ended June 30, 2021. The reason for the increase is similar to the aforementioned increase in the three-month period. Turning to cash, the company held $43.2 million of cash, cash equivalents, and short-term bank deposits as of June 30, 2022. We believe we are well-financed to achieve multiple potentially value-creating milestones into the first half of 2024. 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 key upcoming milestones. First, submission of an NDA to the FDA for Motixafortide as a novel mobilization agent for multiple myeloma patients undergoing autologous stem cell transplantation expected in the next 4 to 6 weeks. Secondly, announcement of initial results for Part 2 of the Phase I/IIa trial of AGI-134 in solid tumors in the second half of 2022. And now for some slightly longer-term milestones, potential FDA approval of Motixafortide in 2023, potential U.S. launch of Motixafortide and stem cell mobilization in 2023, initiation of a Phase IIb randomized study in PDAC under our collaboration with GenFleet in 2023, and initiation of the Phase II study for AGI-134 in 2023. And with that, we have now concluded the formal part of our presentation. Operator, we will now open up the call to questions.

Thank you. The first question is from John Pantginis from Wainwright. Please go ahead.

Joe, are you there?

Can you hear me?

Yes, now we can. Go ahead.

Great. Thank you. Thank you. So a few logistical questions. So first, glad to see that the NDA filing is on track. Just curious what is left to dot and T's to cross that are still outstanding?

They want to know what is left to do. Just go ahead.

Hi, John, it's Abi speaking. There are several steps when you are doing a submission. You need to write and you need to publish, and we are on track. We are completing our work here in BioLine of writing, and we are moving forward with all the publishing and all the technical issues. And for this reason, we can already say that we are on track. We are sure about that.

Okay. And then with regard to sort of pre-launch activities, I'll ask a few questions on that, but first, I wanted to ask about the manufacturing preparedness should you be approved.

Yes. So, I mean we've already completed our validation batches. Our API is manufactured in the U.S. at a well-known site. Our drug products are manufactured in Europe at a well-known site. We've already started working with secondary packaging, etc. as we mentioned on the call. So, we feel that we are very much on track for a timely launch if approved.

Got it. And then, so with regard to commercial prep, I appreciate all the details you shared in your prepared comments and definitely a great hire in Holly. So, I guess, you talked about, obviously, you're looking at all options in the U.S. So let's just focus on the potential if you were to bring it forward yourself, at least in the beginning. So what can you be doing right now, but not necessarily pulling the trigger on regard to, say, pre-hire types of details for a sales force and what kind of size would you potentially be looking at because hemoncs are generally pretty specific.

Yes, so, I mean, I'll turn it over to Holly in a minute. I just want to say, as I mentioned, we have not made any decision at this point. All options are on the table at the moment. We are speaking with potential co-commercialization partners, as well as looking at the potential for going out on our own. We are doing quite a number of, as I said, of pre-launch activities, all of which are applicable under any of the scenarios as far as commercialization. So I just want to say that briefly, and I'd be happy to turn it over to Holly to add any more color.

Sure. Thanks. This is Holly. Our big goal, regardless of the consultation structure, partner or self-commercialization, is to have a launch as close to the PDUFA date as possible. There are many activities that, regardless of who is going to market, absolutely need to be initiated ahead of time. We are already well on our way with things such as supply chain, market access, customers, and the overall go-to-market strategy. I think Phil mentioned some of these, but a little bit more color there is secondary packaging. We're well on our serialization process. We've got 3PL partners identifying state licensing, which is another long lead time item that we've considered. We've been looking into through talking with customers and market research demand drivers to assess the marketplace to establish relationships through medical affairs, outside of commercial but medical affairs, with both accounts and transplanters. Like I said, we're also looking at the most important market access type of decisions such as pricing variables, etc. So regardless of the commercialization strategy that we move forward with, all of those things are items that need to be in the pre-launch period, and we have initiated things in all of those regards.

Okay. Got it. Thanks for that, Holly. And then I guess one last question. I mean, maybe not looking to disclose today, so – and it's option dependent as well. When do you think you might be or BioLine might be in the position to describe clinical plans beyond multiple myeloma that you alluded to?

Abi, would you like to take that?

I will take this question. Indeed, we are not communicating right now. Our plan doesn't mean that we didn't have a lot of plans. Currently, our focus is on the NDA submission. However, we have several ideas on how to continue the development of BL-8040 either in the area of hematological disease as well as in solid tumors. As you may remember, we have a deal with GenFleet in order to develop BL-8040 to continue the development of BL-8040 in pancreatic cancer. In this, we are continuing to work. We have an investigator-initiated study also in pancreatic cancer in the U.S. at Columbia University, and we have some other ideas on how to develop and expand the development of BL-8040 in the area of hematology. But I think we will need to wait a little bit more before we can discuss this other idea.

I appreciate it. Thanks for all the added color, guys.

Alright. Thanks so much. Have a great day, Joe.

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

Hey. Thanks for taking the questions. Just a couple from me. I wanted to seek some additional clarity on the cash runway guidance. Is the guidance you are offering today inclusive of all pre-launch expenses that you think are going to be necessary to support commercialization? Or is it right now just really focusing or inclusive of the long lead time items? So that's the first question. And the second question, I was just wondering if there have been any news or updates from the academic sponsored trial in frontline PDAC. Are we possibly going to be seeing any data from that trial later this year? Thanks for taking my questions.

Okay. Abi, you want to take the second one first?

Yes, I will. First of all – it’s an investigator-initiated study, and we have less influence on what happens there, but we hope to have some results to share in the upcoming months and see how we will move forward in this regard in terms of pancreatic cancer. At the moment, I cannot commit to any specific day, but it should be in the upcoming months.

And as far as the cash runway, we mentioned that we have $43 million in cash, which, again, as we mentioned, is enough to take us through our major upcoming milestones, which include most of the pre-launch activities. As a pre-commercial stage company, we believe that we'll have multiple options available to us if and when the time comes.

Alright. Thanks for clarifying and thanks for taking our questions.

Thank you. Have a great day.

The next question is from John Vandermosten of Zacks. Please go ahead.

Hello everyone and good morning, and good afternoon. I'd like to understand the GenFleet arrangement. So they are doing a trial, a triple combination trial in China. Will it only remain there? Is the deal only in the Chinese geography, and what if it's successful and how might that expand out to other regions?

Yes. So, I can just say that this is a trial that they are performing, a Phase IIb randomized study in 200 patients in first-line metastatic pancreatic cancer. But they do not have any rights to no territory. They don't have any territorial rights in China, Greater China, anywhere. We are keeping all of the global rights and all of the global indications to the product. They are entitled to a low-single-digit royalty if Motixafortide is approved. Once we receive, hopefully, if the data is positive, we believe and since it’s a positive and a well-designed randomized controlled Phase IIb study, we believe that we will be able to take that data and speak to additional partners, larger global partners, to go forward with a clinical development plan to a Phase III study and again, if successful, then to registration.

And they would be eligible for that royalty on a global basis as long as it's used in that triple combination, but that's it?

No, they would be entitled to a royalty on Motixafortide sales in general, but again, a very small single-digit royalty and it's also capped. But we haven't given much guidance on it, we gave overall guidance at this point.

Okay. And the checkpoint inhibitor that they're using, is that their own internally developed checkpoint inhibitor?

Yes. We haven't disclosed that. I mean, they have access to a checkpoint inhibitor.

Okay. I know there have been a number of them developed in China that are similar in the way they act compared to the ones developed.

That's our feeling.

Yes. Okay. And questions on Motixafortide in autologous stem cell transplants. If approval comes, it will be in multiple myeloma patients, but obviously, the potential market is a little bit larger. Are there any efforts you can make to use it in a broader transplant setting, such as in perhaps allogeneic transplants or beyond multiple myeloma? And what would you need to do to get there? I mean, perhaps not another trial necessary or perhaps it is. What do you see the pathway there for expanding the use outside of the multiple myeloma area?

I will take this question. Again, you are right. There are other places – other indications for stem cell mobilization. However, the biggest and largest indication is in multiple myeloma; that is the one that we chose. This is one of the reasons for why we chose multiple myeloma because it's the largest and there continues to be an unmet demand that's increasing all the time because of the increase of the induction treatment and the age of the patient. Therefore, this is the larger market. If we want to have an expanded indication in terms of mobilization, we will need to have some kind of data from clinical trials, the type of clinical trial that we need to do. We need to check it again. But there are – as I said before, there are other opportunities that we are evaluating further, and we will need to decide which is the best for us to invest in order to expand the label.

Okay, great. And last one for me is for you, Mali on R&D expenditures. Will AGI-134 expenses continue to increase as the year progresses? Is that what we are thinking?

Yes. As we already published, we completed the recruitment of AGI-134, and we are working on the analysis of the blood samples. That's why you see the increase in the R&D expenses related to AGI-134.

Okay. And so they should remain at similar levels or maybe drop off a bit as we move into the second half.

Yes, this will drop off a little bit by the end of the year.

Okay. Great. Thank you guys. Appreciated.

Thanks, John. Have a great day.

There are no further questions at this time. Before I ask Mr. Phil Serlin to proceed with his closing statement, I would like to remind participants that a replay of this call will begin two hours after the conference. In the U.S., please call 1 (888) 295-2634. In Israel, please call 03 9255-904. Internationally, please call (972) 3 9255-904. Mr. Serlin, would you like to make your concluding statement?

Yes, I would. Thank you, operator. To summarize, we remain on track to submit our NDA for Motixafortide in stem cell mobilization in the next 4 to 6 weeks, while in parallel, we advance pre-launch activities. We are evaluating different options with respect to the commercialization of Motixafortide in the U.S., either independently or with a partner. In either case, our ultimate goal is to execute a robust launch of the approved drug that maximizes the value of the asset. We believe we can capture a significant share of the U.S. market estimated to be in excess of $360 million and growing rapidly. From both a clinical and pharmacoeconomic perspective, we believe Motixafortide on top of G-CSF can quickly become the standard of care in this important indication. At the same time, we are pleased to advance Motixafortide in pancreatic cancer through our GenFleet agreement, and we are rapidly approaching a key data readout for AGI-134. I am very pleased with the progress that we made during the second quarter and look forward to a very productive back half of the year. Thank you all very much for your continued interest in BioLineRx and we look forward to providing our next comprehensive update in November. Be safe and have a great day.

Thank you. This concludes the BioLineRx Second Quarter 2022 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.