BioLineRx Ltd.
Q2 2018 Earnings Call Transcript

Published: 13 Aug 2018

[Operator:]

Ladies and gentlemen, thank you for standing by. Welcome to the BioLineRx Second Quarter 2018 Conference Call. All participants are present in a listen-only mode. Following the management's formal presentation, instructions will be given for the question-and-answer session. [Operator Instructions]. I would now like to turn over the call to Ms. Vivian Cervantes of PCG Advisory to read the Safe Harbor statement. Vivian, please go ahead.

[Vivian Cervantes:]

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 a 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.

[Phil Serlin:]

Thank you, Vivian. And good morning everyone. Thank you for joining us on our second quarter earnings conference call today. Earlier this morning, we issued our Q2 earnings results. A copy of the press release is available in the Investor Relations section of our website. It was also filed as a 6-K. Our agenda this morning is as follows

[Mali Zeevi:]

Thank you, Phil. In our financial discussion we will only go over 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 six months ended June 30, 2018 were $9.6 million, an increase of $1.9 million or 24.9% compared to $7.7 million for the six months ended June 30, 2017. The increase resulted primarily from higher expenses associated with new BL-8040 clinical studies commenced during 2017, as well as higher expenses associated with AGI-134, including final preparations for initiation of the Phase 1/2a study, and expenses associated with BL-1230. Turning to cash, the company held over $41 million in cash, cash equivalents and short-term bank deposits as of June 30, 2018. Our financial footing remains solid and provides us with resources necessary to fully execute on our operational plan towards the first half of 2020. With that, we have now concluded the formal part of our presentation. Operator, we are now opening up the call to questions.

[Operator:]

[Operator Instructions]. The first question is from Konstantinos Aprilakis of JMP Securities. Please go ahead.

[Konstantinos Aprilakis:]

Guys, thanks very much for taking my questions and congrats on all the recent progress. Regarding the expansion of your IO collaboration, with Merck to include triple combo, consisting of 8040, KEYTRUDA and chemo in pancreatic cancer. So, you’ve already reviewed the factors that led to the decision to add a triple combo on. I was wondering if you might discuss any work you intend to do or that you think is necessary to determine the appropriate dosing and schedule of each component of the combo? And then I’ve a quick follow-up question.

[Phil Serlin:]

Thanks, Konsta. Go ahead Abi, would you like to answer that?

[Abi Vainstein:]

Yes. Thanks, Konsta. Basically, we have already decided on the combination that we want to do and the design of this study. We’re having a talk with a lot of key opinion leaders and we are deep in the area of the pancreatic cancer and involving different studies. And we actually believe that the treatment and the schedule of treatment that we decided is one that we are -- would help the patient the most. And the first to go without saying that we are doing this in a very close collaboration with the Merck people and the design of the study and the decision about the treatment that we will give with BL-8040 in combo is -- was decided upon communication and consolidation with Merck.

[Konstantinos Aprilakis:]

Okay. Perfect. And then regarding AGI-134, so you mentioned possible expansion into the US and additional countries in Europe after recently initiated trial. Can you discuss the gating factors involved here, what you need to see before expansion into these regions? And then I know it’s early, but do you expect to see monotherapy activity with 134?

[Phil Serlin:]

Yes. So, I mean I’ll let Abi expand a little bit more about the monotherapy aspect. But I think was more just a way of us not hedging as far as exactly the timing of it. We do definitely intend to open sites both in the US and in other countries in Europe. I -- so it sounded like it was a potential, I think that’s very, very, very likely that we will open up sites both in the US and the rest of the countries in Europe. You want to answer about monotherapy?

[Abi Vainstein:]

Yes. It’s just a matter of timing. We opened first in Israel because it was faster than the other countries. But we are moving forward and it’s not related to any milestones in terms of safety and efficacy and nothing else. We are working in parallel and if you need to open 10 sites, you need to open one-by-one and it’s the same in this case. We were beginning with Israel and then we moved forward to Europe and today US.

[Phil Serlin:]

You want to answer about the monotherapy, what kind of activity you are expecting?

[Abi Vainstein:]

Basically, I want to remind all of you that this is the first study that we have with AGI and the most important thing that we want to see is the safety of the molecule but we are planning to do a very large biomarker assessment of this molecule and we expect to see -- and to reaffirm the mechanism of action of our drug. Of course that we always expect to see efficacy but it’s just the beginning. We are moving -- we are doing the development as needed and basically we want to see that the drug is safe, that the mechanism that we proposed is the one that we see in patients and hopefully we will see some activity.

[Phil Serlin:]

Yes, I mean I think -- I do want to point out Konsta that we've done a number of preclinical studies and we saw very nice activity on a monotherpay basis as well as activity in combination with a checkpoint inhibitor. And so, we want to maximize the potential to see activity on a monotherapy basis and that's why we are doing both the monotherapy arm and the combination arms because we would like to give from a clinical perspective a chance for the molecule to show activity on a monotherpay basis.

[Operator:]

The next is question is from Joe Pantginis of HC Wainwright.

[Joe Pantginis:]

Two questions please. The first one is logistical I hope. Just wanted to get some additional color with regard to the pushing out of timelines for the AML consolidation study and curious if you’ve had any interview also with the recent changes to the AML treatment landscape?

[Phil Serlin:]

So it has nothing to do with the changes to the AML treatment landscape and I'll let Abi expand a little bit on the second part. But it's really -- it's -- we have not seen -- I mean first of all this is a study being done in collaboration with the German Leukemia Alliance Group and so every decision is being made jointly with them. Recently when we've done some analysis we’ve simply not seen enough events that enable us to feel that these analysis will be powered enough to give us the type of information that we would like to see ourselves and also report to the public. So therefore that's really the only reason why where it's being pushed off for another six months or so. Do you have anything to add?

[Abi Vainstein:]

No, I think, no.

[Phil Serlin:]

Okay.

[Joe Pantginis:]

Okay. So my second question, since 8040 seems to continue obviously to push in the right direction, when you look at just the stem cell aspects of the drug, I was wondering if you can just add a little more color -- I know you mentioned these couple of things briefly but maybe add a little more color with regard to the stem cell mobilization aspect and what the real potential of patient benefits could be as well as the pharmaco-economic benefits, should it be approved?

[Abi Vainstein:]

Yes, basically what we want to show with this study that only one dose of BL-8040 is able to mobilize a big amount of cells which is more than the minimal required of 2 million. We are talking here about 6 million cells in up to two apheresis. Mainly the difference will be first of all that the patients will receive only one dose, they need to come for injections in the evening only one time. Therefore, if we are able to show that we can do this in one apheresis session, it will be much more robust. But also if you see that we can collect 6 million in two apheresis sessions to bring the patient less time to the hospital to dose them less, I think it will be of great value compared to our competitors right now. And this is our aim in this study to show that we can make the life easier for the patient as well.

[Phil Serlin:]

Yes. As you mentioned Joe, I mean we are -- of course we are looking at the pharmaco-economic aspects as well. But I think that they go -- and we think they go hand-to-hand. If we can reduce the amount of administrations and also the apheresis sessions, it will be beneficial both to the patients and also from economic perspective.

[Joe Pantginis:]

Thank you very much.

[Operator:]

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

[Mark Breidenbach:]

Hi. Thanks for taking the questions. Just a couple on the lead-in cohort from GENESIS. First of all, can you tell me if all 11 patients were successfully transplanted, even the two that didn’t hit their target dose, target harness after two apheresis sessions, if were enough stem cells collected to actually undergo the transplant? And the second question is, are there any plans to discuss the transplant outcomes for this lead-in cohort, sometime in the next coming months? Thank you.

[Phil Serlin:]

Go ahead.

[Abi Vainstein:]

Thanks for the question. Basically all the patients reached a minimum needed of 2 million cells and -- which is very encouraging for us, it’s -- 100% of the patients reaching the minimum needed is -- from our point of view is very encouraging. In regards of the engraftment, of course that we are following up these patients but the main purposes of lead-in period is to allow us to move forward and to have some color before we move to the randomization part of the study, more in terms of the safety and immediate efficacy in terms of mobilization. We are not planning to publish any data on engraftment in these patients because this is not -- was not the objective of this lead-in period. We are -- we will wait, all of us, till the end of the study and to see what happens also on the mobilization part and the engraftment part of the study.

[Mark Breidenbach:]

Okay. Thanks for clarifying. That’s it for me.

[Operator:]

The next question is from Caroline Palomeque from Maxim Group. Please go ahead.

[Caroline Palomeque:]

So just quickly on the finance side. So, with the pipeline advancing and the cost of the trial, can you give any guidance on future burn and what you think your runway will be?

[Phil Serlin:]

Yes. So we’ve actually giving guidance about that in the past and it’s also in our current 6-K, and quarterly operating review. We have about two years of cash left; our cash balance is a little bit above $41 million. We’re burning more or less around $20 million a year. So, we are -- we intend to stay in that framework and so we expect our cash to last until through the second quarter of 2020.

[Operator:]

[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 two hours after the conference. In the US, please call 1877-456-0009. In Israel, please call 03-925-5937. Internationally, please call 972-3-925-5937. Mr. Serlin, would you like to make your concluding statement?

[Phil Serlin:]

Yes, thank you. I would like to thank all of you for joining us on today's call. In summary, we continue to execute on our programs and are pleased to report on our progress. Specifically, we are encouraged by our data readouts which provide us with a growing clinical data base in support of BL-8040’s mechanism of actions in our three main therapeutic areas. Facilitating continued investments is therapeutic potential. And having recently imitated our Phase 1/2a immuno-oncology study for AGI-134 in several solid tumor indications, we look forward to providing updates as we develop our second main drug program. We appreciate your continued support and thank you for joining us this morning.

[Operator:]

Thank you. This concludes the BioLineRx second quarter 2018 conference call. Thank you for your participation. You may go ahead and disconnect.