Vascular Biogenics Ltd.
Q3 2020 Earnings Call Transcript

Published: 16 Nov 2020

[Operator:]

Greetings. Welcome to VBL Therapeutics Third Quarter 2020 Earnings Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. I would now like to turn over the conference to your host, Michael Wood, LifeSci Advisors. Thank you. You may begin.

[Michael Wood:]

Thank you, Operator. Good morning and thank you, all, for participating in today's Third Quarter 2020 Results and Corporate Update for VBL Therapeutics. Leading the call this morning will be Professor Dror Harats, CEO of VBL and Amos Ron, the company's CFO. A press release with the company's financial results became available earlier this morning and can be found on the Investor's page or the company's website at vblrx.com.

[Dror Harats:]

Thank you, Michael, and good morning, everyone. Joining me on today's call is Amos Ron, our Chief Financial Officer who will discuss the third quarter of 2020 financial results. I am pleased to say that it has been another productive quarter for VBL with important developments and milestones for our lead program, VB-111, VBL's unique gene therapy for solid tumors. We are particularly encouraged by the ongoing progress with our Phase 3 OVAL pivotal trial in ovarian cancer, which is successful, has the potential to establish a new standard of care in a challenging disease setting where patients currently have limited options. OVAL is an international placebo-controlled double-blind Phase 3 potential registration study in recurrent platinum-resistant ovarian cancer. Patients are being randomized to receive either VB-111 or placebo on top of weekly Paclitaxel, which is a standard of care chemotherapy for this condition. The study has been designed to enroll up to 400 adult patients and the primary endpoint is overall survival. Despite the COVID-19 pandemic, recruitment in the OVAL study is proceeding well and the pace of recruitment has now proceeded our initial projection. There are now almost 200 patients enrolled, which is half of the projected study population. Earlier this year, we announced the outcome of pre-specified interim analysis that was conducted by the independent Data Safety Monitoring Committee or DCMC on the first 60 patients enrolled, which demonstrated that their response rate in the VB-111 treatment arm was 58% or higher. This response rate is impressively higher than expected for standard of care treatments for which response rate is typically between 10% and 20%.

[Amos Ron:]

Thank you, Dror. Revenues for the third quarter 2020 were $193,000 compared to $79,000 for the comparative period in 2019, an increase of 144%. Research and Development expenses net were approximately $4.8 million for the third quarter, compared to approximately $3.8 million in comparable period of 2019. General administrative expenses for the third quarter were $1.1 million, compared to $1.2 million for the third quarter 2019. Comprehensive loss for the third quarter was $5.8 million or $0.13 per share compared with $4.9 million or $0.14 per share for the third quarter of 2019. As of September 30, 2020, we have cash, cash equivalents, short term bank deposits and restricted bank deposits of $37.3 million and working capital of $30.7 million. We expect that our cash and cash equivalents and bank deposits will be sufficient to fund operating expenses and capital expenditure requirements into the third quarter of 2020. For further details on our financials, please refer to the form 6-K filed with SEC. With that, I return things back to the operator for the Q&A portion of this afternoon's call.

[Operator:]

Thank you. Our first question is from Kevin DeGeeter with Oppenheimer. Please proceed.

[Kevin DeGeeter:]

Okay, great. Thank you for taking my questions today and congratulations on all the progress with regard to enrollment for OVAL. I guess really, maybe two questions from us today. Dror, I believe you, in your prepared comments, cited a pooled response rate of about 50% in OVAL from the first 200 patients. Can you provide a point estimate our exact figure for that response rate and the number of patients that's based on?

[Dror Harats:]

Yes, of course. Thank you, Kevin. When we talk about available patient, as you all know, we talk about patients that have a CA-125, of at least a twice the normal level, which is about 70. It's exactly what we did in the interim analysis and that's about 80% to 85% of the patients recruited for the trial. And of course, we are talking of patient that we have at least two months follow up so that we can actually know if this is a real response or not a real response. So they're actually not far from the 200 I was a talking about, but one can estimate. I don't want to give you exact number, but it's above 150 patients already and I can tell you that a number right now is around 55% response rate for this total population, which is even a bit higher of what we've seen in the first 60 patients. So it's a very steady, very high response rate that we do see in this trial and now that we are basically halfway recruiting for this trial, so we can actually conclude at this trial, we are going to have a higher response rate.

[Kevin DeGeeter:]

Great, thanks for that. And then I think our second question, just with regard to the DSMB update in the first quarter, maybe two parts to the question. First was that shading towards earlier in the quarter closer to the January timeframe or perhaps later closer to March? And then could you just remind us as to what the either expected learning or the depth of communication you anticipate being able to provide to investors following that update?

[Dror Harats:]

So, of course, at DSMC meeting is actually as planned, it's every six months and it's going to be in the middle of the first quarter actually - quite an exactly in the middle; so you can estimate exactly when it's going to be. I don't want to say the specific date - I mean, because of DSMC never like to actually have it publicly disclosed the date to their meeting. I was telling you before that what we are looking at of course is both safety but not just safety, they're looking at efficiency as well because this is a survival trial; and all of us know that if a drug shows survival benefit, it's quite difficult to keep on a trial. Also, there are no rules to stop this trial early for efficacy. The DSMC insists to see all the data. So what they are going to see is a very thorough data on safety, which they are getting every time, including all the SAEs, AEs, everything and of course they should come back to us hopefully and say as we always got it, that they say it's quite a safe drug. But also, they are going to see the full data on the primary endpoint which is overall survival and secondary endpoint which is PFS. On the second secondary which is a response rate and with CA-125, basically they're going to see data on all the patients recruited to that time, which is we expect to be, of course, over 200 patients. And they're going to see the data in a very similar way that they're going to see the data at the end of the trial. What they are going to disclose? Not that much actually, because we have to be blinded and we keep very careful to be blinded. This is a pivotal trial. So far, it's really a promising trial because of the very high response rate and nobody wants to hurt this trial in any way with agency. And therefore, most probably what we will be able to say that they looked at the data, and they gave us a green light to go on. It's unlikely at that point that they will have enough data, even if the drug is working in a very well way to stop the trial early.

[Kevin DeGeeter:]

That's extremely helpful. Listen, congratulations on all the progress. Thanks for taking my questions.

[Operator:]

Our next question is from RK with H.C. Wainwright. Please proceed.

[Swayampakula Ramakanth:]

Thank you. Good afternoon, Dror and Amos. Since you already answered my questions all well, regarding the colorectal cancer study, could you give us some additional color regarding the design and also when we could potentially get that first look at the data in the sense if there is an interim analysis?

[Dror Harats:]

So thank you, RK. As you know, this trial is done together with National Cancer Institute and we are actually recruiting patient with colon cancer - metastatic colon cancer, which are beyond the standards of care therapy. So most of them failed chemotherapy, a lot of them already failed checkpoint inhibitors. Although you know, the checkpoint inhibitors don't work usually in colon cancer and what they are getting through, it's actually a single-arm open trial, where we are recruiting these patients. They're getting their first biopsy usually from a metastatic lesion in the liver to show that indeed the tumor is what we call tumor, that there is no immune system involved in the tumor and we expect that to be in basically everybody they recruit on this trial. And then they will get on that same day, the first dose of a VB-111, 10 to the 13 viral particles. Two weeks later, before getting the first dose of nivolumab, half of them will have a second the biopsy just to show what VB-111 alone is doing to the immune system and we know from biopsies we did in ovarian cancer, that we should expect to see the new system there. It's a bit early, but it's okay because we are going to have a third biopsy. In the second week, they're going to get a nivolumab and they're going to get nivolumab every two weeks while every six weeks, they will get a combination of both VB-111 and nivolumab. So this way, we are priming to bring the immune system into the tumor and then of course, we hope that the checkpoint inhibitor will activate it. The second half of patients that didn't get a biopsy after just VB-111, will get the biopsy just before the second dose of VB-111 to see what the immune system reaction is to the combination of VB-111 plus nivolumab. So we are going to actually look at these biopsies quite soon. We estimated by mid-2021 or sometime in the second quarter, we will have the first results that will tell us if indeed we are turning colon cancer to become a hot tumor.

[Swayampakula Ramakanth:]

Thank you. At the time you do the biopsy, will you also be doing any biomarkers? Will you be looking at any biomarkers in addition to the tissue?

[Dror Harats:]

Of course, there are going to be a thorough investigation of the tumor including genetic, genomic, proteomic, everything.

[Swayampakula Ramakanth:]

Perfect. And then on MOSPD2, what additional work needs to be done before you get to file the IND or inflammatory indications in the second half of next year.

[Dror Harats:]

So actually, for the IND, we need to complete a toxicology testing. We are a doing it right now. We already got preliminary results, which I'm not going to disclose, but everything goes forward quite well. And of course, we are making the batch for the clinical trial. So we expect to submit the IND sometime in the second half of 2021 and hopefully towards the end of the year, we will be able to start to study.

[Swayampakula Ramakanth:]

Perfect, thank you. Thank you for taking my questions.

[Operator:]

Our next question is from Soumit Roy with Jones Trading. Please proceed.

[Soumit Roy:]

Hello, everyone, and congratulations on all the progress. A quick question on the OVAL trial. Are you seeing given the very promising data from the second interim and the first interim? Are you seeing any uptick in the rate of enrollment or expansion in the number of sites that's enrolling? If you can give us how many sites currently enrolling for the trial? And the second is are you collecting data on the ongoing COVID-19? If any of your patients are being tested and will that be presented separately? How is that being presented to DSMB? Thank you.

[Dror Harats:]

Sure. To answer your first question, we have now 73 centers and most of them in the United States, some of them in Israel and lately, we opened some centers in Europe and we are planning to open centers in Japan quite soon. So actually, it's going very well not just in recruiting and not just in recruiting in centers that are already recruiting, but also in opening new centers. And actually the vibes that we're getting from in United States also centers our part of GOG organization. So we hear from the Steering Committee, which is mainly members of GOG that things go very well and doctors are quite pleased with what they do see. Of course, patients are tested for COVID-19. There were only, if I recall right, two or three patients that actually got infected with COVID-19. And I think that all of them stayed on the trial. But I'm not 100% sure about this information, because we try not to get too much information from this blinded trial unless we have some issues. So, I don't think that we will need to do a different analysis for patients that were infected with COVID-19. It's only very minimal number of patients right now.

[Soumit Roy:]

That's perfect. Thank you so much. Congratulations, again.

[Dror Harats:]

Thank you very much.

[Operator:]

Our next question is from Jonathan Aschoff with ROTH Capital Partners. Please proceed.

[Jonathan Aschoff:]

Thank you very much. Drew, for the colorectal trial with nivolumab. What result will you guys deem as successful enough to proceed with further trials? What's the bogey that you're looking for?

[Dror Harats:]

So of course, everybody wants to see some signal of a response in terms of a resist; I won't say in term of PFS always, when you talk about a small number of patients. But I think that a major endpoint that we are looking for, is actually giving a simple systemic IV infusion and change tumor from a cold tumor to a hot tumor. I'm sure that you're all familiar with numerous studies done now with very complicated procedures - injecting into the lesion, taking cells and educate them ex vivo and put them back into the tumors. All of this is really quite complicated with a lot of complication. I think that even if we just show that we can turn colon cancer to a hot tumor and bringing a lot of immune cell there that will be good enough to actually make a decision to do a relatively small randomized control trial on the combination in this indication. Even did we see more than this and some signals, then maybe the right thing will be to do a bigger trial right away.

[Jonathan Aschoff:]

Okay, and I can't see where I've written down the size of this trial. How many patients ?

[Dror Harats:]

Okay. The size of this trial is planned to be up to about 40 patients. It doesn't mean that we are going to go all the way to 40 patients. The idea is that after about 8 to 10 patients, they're going to look at NCI on the biopsies and actually get the first results if the tumor is becoming a hot tumor. So that's the first result that we are expecting in the mid-2021. So right now, the protocol took about 27 patients, but we can increase it if needed. And actually, we can actually also increase it to other indications in GI. If indeed we do see in colon cancer that we turn cold tumor hot, the plan at the NCI is to extend it to other indication in GI. So the whole idea of this tumor - of this study, you can call it a teasing study - to see if indeed we are repeating what we have seen in ovarian cancer because in ovarian cancer, it's quite clear in every biopsy that we're taking, including biopsies from Phase 3 where we are blinded. But we look at the biopsies just to see that they're done right, a lot of inflammatory cells, and we know that that's not coming from patient with chemotherapy. So we do, VB-111 does change cold tumors hot.

[Jonathan Aschoff:]

Thank you for that. And the 55% that you answered for response rate to the first question was simply taking the 50% blinded response, right, because you had to have a minimum of 10?

[Dror Harats:]

No. I want to make it clear. We're talking about over 50% in the total blinded population and then you asked me if I can be more specific, how much over 50% I was saying? At this moment it's 55% for the total population, but we all know that chemotherapy give a very relatively low response rate. And we already know from the interim that we had at least 58% response rate in the treatment arm and 69% in the one that we know that are on VB-111. So we expect it to be much more than 55% in the treatment arm.

[Jonathan Aschoff:]

Okay. That 55% is based on 150 patients you are saying roughly?

[Dror Harats:]

That's right.

[Jonathan Aschoff:]

Thank you very much, Dror.

[Dror Harats:]

Thank you.

[Operator:]

Our next question is from Jonathan Kreizman with Valore Research. Please proceed. Jonathan, your line is live.

[Jonathan Kreizman:]

Dror, Aamos, can you hear me?

[Dror Harats:]

Yes, of course we can hear you.

[Jonathan Kreizman:]

Okay, so we're beginning to see some encouraging testimonies on patient forums from women who shared some positive outcomes from their enrollment in the OVAL trial. So while I acknowledge these are sporadic testimonies, if you will, and the company is of course blinded to the results, if these results do eventually turn out to indicate the higher OS and PFS outcome either in the upcoming or next interim analysis, what kind of OS and PFS threshold do you think would be required for the DBMC to evaluate stopping the trial and recommend the company to initiate the filing process?

[Dror Harats:]

So this question should be asked at DSMC. I told you not pre-specified in any way but I guess that we'll tell you we'll look forward to see is a statistical significant difference between the two arms. Because they're getting a Kaplan-Meier curve, so they will know indeed if the two curves separated enough to show statistically significant which is for now for overall survival, it's 0.05%, and for the PFS as a secondary to gain 0.05% unless an 0.05% . And the hazard ratios that were actually calculated for something like that, it's about 0.65% , so it's like a good hazard ratio. So, I'm not sure if we - if it will be exactly on 0.05%; they will make this decision. But you know, they will never take a decision like that alone; usually there is a special meeting with the agency when something like that happen because this is a pivotal trial to put the drug on the market in a very difficult indication. But I can assure you that beside of the DSMC, we're we have a very strong Steering Committee chaired by Dr. Bradley Monk, which is a one of the leaders of GOG and they are monitoring the study in a very careful way. We are not reading by purpose all these testimonies from patients, we are not allowed to do it as a company. But the vibes that we get from the Steering Committee, which are actually taking care of a lot of the patients, as you can guess, because GOG as most of the centers, they're quite optimistic.

[Jonathan Kreizman:]

Okay, great. Then, second question on MOSPD2. So maybe you could share some thoughts on how you're planning to approach the clinical trials in 2021? And whether you expect at this point to initiate the trials standalone or partnered with a sponsor, or what is the financing, planning and budgeting ahead of the clinical phase?

[Dror Harats:]

So actually in our budgeting, we are calculating all the expenses including all the way to the end of Phase 1A, which is not going to be a big trial. And of course, you know that when you have such a novel technology and novel indication, one has to be very careful to go from a low dose to a higher dose and that's a plan in the Phase 1A and if indeed the results will be as expected and because it's such a novel type of therapy for immuno inflammatory diseases and because we already have a very strong data in the preclinical work, we assume that at a certain point, we won't develop it alone. But right now we're geared to develop it all the way till the end of the Phase 1A study.

[Jonathan Kreizman:]

Okay, that's helpful. Thanks.

[Operator:]

We have reached the end of our question-answer-session. I would like to turn the conference back over to management for closing remarks.

[Dror Harats:]

So thank you, all, for joining us today on this call and we all hope to be able to tell more good news in the future. Thank you very much.

[Operator:]

Thank you. This does conclude today's conference. You may disconnect your lines at this time and thank you for your participation.