Vascular Biogenics Ltd.
Q3 2019 Earnings Call Transcript

Published: 14 Nov 2019

[Operator:]

Greetings and welcome to the VBL Therapeutics Third Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. [Operator instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Michael Wood of LifeSci Advisors. Thank you, Mr. Wood. You may now begin.

[Michael Wood:]

Thank you, Operator. Good morning and thank you all for participating in today’s third quarter 2019 results and corporate update call for VBL Therapeutics. Leading the call today 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 this morning and can be found on the Investors page of the company’s website at vblrx.com.Before we begin, I’d like to remind everyone that various remarks about future expectations, plans and prospects, constitute forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. VBL cautions that these forward-looking statements are the subject of risks and uncertainties that could cause actual results to differ materially from those indicated. Any forward-looking statements made on today’s conference call, speaks only as of today’s date, Thursday November 14, 2019, and the company does not intend to update any of these forward-looking statements to reflect events or circumstances that occur after today’s date.As a reminder, the conference call is being recorded and will be available for audio rebroadcast on the company’s website. As the operator mentioned, all participants are currently in a listen-only mode, and there will be a brief Q&A session following the company’s prepared remarks.So with that, I’d like now to turn the call over to Professor Harats, CEO of VBL. Dror, please go ahead.

[Dror Harats:]

Thank you, Michael and good morning everyone. Today, we will discuss our third quarter 2019 financial results and operating highlights. Joining me on today’s call is Amos Ron, our Chief Financial Officer. As you know, VBL has three innovative platform pathologies in the field of oncology and inflammation. I will start with an update on our lead candidates, VB-111, a gene-based biologic with a novel dual mechanism that we are developing for solid tumor indications. VB-111 has shown an overall survival benefit across three tumor types in our clinical trials to date.Our lead program is the OVAL Phase 3 trial of VB-111 in platinum resistant ovarian cancer patients. This is a potential registration study, in which the primary endpoint is overall survival, and secondary endpoints include progression free survival, CA-125 response, and objective response rate. The study is progressing according to plan, and we expect an important interim analysis in the first quarter of 2020. The interim analysis will focus on CA-125 response rate. We are watching this biomarker carefully, not only because in many cases it reflects the behavior of the tumor earlier than seen with tumor volume changes, but also because of the correlation it demonstrated with overall survival in our prior Phase 2 study.As a reminder, in the Phase 2 study, 58% of the patients treated with VB-111, had a CA-125 response according to the strict GCIG criteria. And in those patients, the median overall survival was 808 days, versus 351 days for those patients without CA-125 response. The upcoming interim data, will help to inform us if the positive outcome in our Phase 2 study, is being replicated in ongoing OVAL Phase 3 double blind controlled trial. Therefore, we see the analysis as potential derisking event for the trial.To expedite the development of VB-111, we are currently getting ready to expand the OVAL trial to additional geographies, particularly in Europe. This should accelerate the pace of the trial, and will enable us to start working with key regulatory authorities on the path forward for VB-111. We believe that VB-111 has the potential to become a highly differentiated therapy for platinum resistant ovarian patients, versus recently approved therapies, such as PARP inhibitors and anti-VEGF drugs. These therapies were approved based on progression free survival, but so far, did not demonstrate overall survival benefit. While the end point of the OVAL trial is overall survival. We look forward to updating you on VB-111 program in ovarian cancer, as events progress over the next few months.Moving to our program in recurrent GBM, we were very pleased to announce last week, that the FDA has approved an IND application for an investigator sponsored Phase 2 trial of VB-111 in recurrent GBM. The IND was submitted by Dana-Farber Center Cancer Institute on behalf of a group of top neuro-oncology US medical centers. The study is randomized, controlled, blinded clinical trial of VB-111 in recurrent GBM patients undergoing a second surgery. VB-111 will be administrated either before and after the surgery, that is at both neoadjuvant and adjuvant therapy, or just after the surgery as an adjuvant therapy, and will be compared to a third cohort that will get standard of care as control.The study builds upon our previous positive Phase 2 trial of VB-111 in recurrent GBM, and incorporates lessons learned from the GLOBE study. As this is randomized, controlled, blinded study, that will evaluate overall survival and progression free survival. If results meet our expectations, we believe that together with our prior positive data, this trial has a potential to provide for conditional approval of VB-111 for recurrent GBM, given the unmet need in this deadly disease. Further details on the study, will be presented at the annual meeting of the Society of Neuro-Oncology next week in Phoenix, Arizona.I would also like to mention the upcoming study of VB-111 in colon cancer. As you know, VB-111 has potential for various solid tumor indications, by targeting the tumor vasculature and turning immunologically cold tumors, hot. In this regard, we’d like to explore the effect of VB-111 in colon cancer, another important type of cold tumor. An NCI sponsored trial of VB-111 in colon cancer, will evaluate for the first time, a combination of VB-111, and the checkpoint inhibitor in colon cancer, in which checkpoint inhibitors are so far in effecting for the vast majority of patients. The open label study is expected to start soon, and we anticipate a potential read out by the end of 2020.Our clinical program of VB-111 will therefore comprise three pilot studies of VB-111 in 2020. First, our OVAL Phase 3 potential registration study in ovarian cancer, for which interim analysis is expected in the first quarter of 2020. Second, the investigator sponsored study in recurrent GBM, with readout expected in 2021, and the potential for conditional approval. And third, the NCI sponsored open label study in colon cancer, from which data are expected by year end 2020.Let's now talk about MOSPD2, our novel therapeutic target for inflammation and oncology indications. As we have discussed, MOSPD2 is a protein that VBL has identified as a key regulator of chemotaxis in cancer cells and monocytes. We are developing two independent platform of proprietary monoclonal antibodies, one based on bi-specific monoclonal antibody for oncology indications, and the second using classical antibodies for inflammatory conditions. In the MOSPD2 oncology program, we are currently testing multiple proprietary bi-specific antibodies in preclinical work, and expect to have more information on safety and efficacy in Q1 2020, which will help inform us as we move to toxicology study towards an IND for this program.In our MOSPD2 program for inflammation, we have already identified the lead candidate antibodies, and we continue to push this program forward, as evidenced by the recent service agreement that we signed with Thermo Fisher, one of the leading CMOs in the antibody field for GMP grade production of VB-601 in a scale sufficient for toxicology and early human clinical trials. We are glad that the new biology that we have identified with MOSPD2, is gaining scientific interest and recognition. Later today, we will be giving an oral presentation at the Israeli Society of Neuro-Immunology Annual Congress. Our work was chosen as one of the three best papers in the conference, and was given an award by peer review committee of experts in neuro-immunology. We look forward to keeping you updated on our MOSPD2 program for inflammation and oncology as they develop.In summary, we are proud of the progress being made across our research and development pipeline, as we continue to execute on all our programs. We expect to have meaningful catalysts over the next 12 months, beginning with the launch of the investigator and NCI sponsored studies of VB-111, the interim readout in ovarian cancer in Q1 2020, and the planned IND filing for MOSPD2 in inflammation and oncology. We are well financed, with approximately $41 million in the bank, which should take us into the second half of 2021.I will now turn the call over to Amos Ron, our CFO, to review the financial results for the quarter. Amos?

[Amos Ron:]

Thank you, Dror. In the third quarter of 2019, we reported revenues related to VBL’s collaborations of $4.1 million. Research and development expenses, net after government grant, were approximately $3.8 million for the third quarter, compared to approximately $4.1 million in the same period in 2018. General and administrative expenses for the third quarter, were $1.2 million, compared to approximately $1.4 million in the same period in 2018.VBL reported a net loss for the third quarter of $4.9 million or $0.14 per share, compared to a net loss of $5.4 million or $0.15 per share in the quarter ended September 30, 2018. At September 30, 2019, the company had cash, cash equivalents, short-term bank deposits, and restricted bank deposits totaling $41.1 million, and working capital of $34.5 million. We expect that our cash, cash equivalents and short-term bank deposits, will enable us to fund operating expenses and capital expenditure requirements for approximately two years. For further details on VBL’s financials, please refer to Form 6-K filed with the SEC.We will now open the call to questions.

[Operator:]

Thank you. [Operator Instructions]. Your first question comes from Geulah Livshits from Chardan. Please go ahead.

[Geulah Livshits:]

Hello, and thanks for taking my questions. So regarding the OVAL trial on ovarian cancer, can you give a bit more color maybe on what's driving the timeline for that (indiscernible), given that I think it was initially guided for the fourth quarter of ’19, and has now moved to the first quarter of ’20. Then I have a follow up on (indiscernible).

[Dror Harats:]

Okay. Thank you, Geulah. The interim analysis that we are planning to have is of course not just futility analysis. It’s also looking for efficacy, and we're looking to see if we are actually repeating what we've seen in the Phase 2, where the response rate was quite high for C-125, which is the first efficacy marker that one can look in ovarian cancer. And we're keeping it in a very strict way according to the international criteria. And therefore what you have to have is that a patient will have at least twice the level, or the normal level, which means that C-125, when we recruit them, has to be higher than 70. And then it - the response has to be monitored for at least two months.So we are looking to have at least 60 available patients. So far, we know that a percentage of patients that don't meet the international criteria to start with, which means that they don't have high enough level or that you cannot record it for enough time, is actually close to about 20%. So we will need to recruit 20% more patients than 60 for this drive, for this interim analysis. And we will have to follow them for at least two months and to analyze, it will take another month or so. And that's why, instead of rushing and recruiting wrong patients that didn't really meet the criteria, or didn't meet the inclusion criteria, we were very careful first to recruit the right patients to the trial.And second, to include in this analysis, only patients that fulfill the full requirements for this analysis. And we don't think that this delay in one quarter for the interim analysis is - actually have any meaning in terms of full trial. And we prefer to come to the market with solid results and not trying to cut any corner to meet any timeline. So that's why we are announcing that it's going to be the first quarter. And actually, if you look at our website, we are already saying it in the last months or six weeks now. Otherwise, the study is going very well, and actually we are quite encouraged with what we do see on the combined blinded data.

[Geulah Livshits:]

Great. That makes sense. And then a follow up on the (indiscernible) study, I think as I understand (indiscernible) so far. Will the control group also receive a second surgery, or are they not receiving surgery in the medical (indiscernible) et cetera?

[Dror Harats:]

It's an excellent question, Geulah. Everybody will go to surgery of course. Otherwise, the control arm will be completely different. So we're going to show the exact protocol in the conference next week. But I can already say that the way it's done, it's in a very careful way. All three groups will be blinded, controlled and randomized before surgery to either get placebo, or get VB-111. And then they all go to surgery. And the people going to analyze the tissue, are going to be completely blinded to who was who and to which group that they were belong.So the first thing that when we will look at the immune response and the changes in the genomic of the tumor, it will be completely blinded to a group that's got VB-111, and groups that got placebo, and nobody will know which one was. After surgery, they will be divided again, and the group that got placebo, will be divided into two groups. One that will then start getting VB-111. So we will have an answer if neo-adjuvant make any change, or any change in their response, compared to an adjuvant therapy with VB-111. And the third group at that point will go in (stand-off) care. So no group has benefit or different benefit from the surgery. All of them going to surgery.

[Geulah Livshits:]

Great. Thanks.

[Operator:]

Thank you. Your next question comes from Arthur He with H.C. Wainwright. Please go ahead. Arthur, your line is live. You might have yourself on mute.

[Arthur Yu He:]

Hey guys. This is Arthur for RK. Thank you for taking my question. So I just want to follow up on the OVAL Phase 3 trial. Could you just remind us, beside the C-125 biomarker data, what else we should looking for, for the interim analysis?

[Dror Harats:]

Okay. So the interim analysis is done quite early in the trial. So nobody should expect to see survival or a PFS data at this point. They’re going to be followed quite sooner later on another interim analysis that's going to look for a overall survival, and that's going to be a futility analysis, which is going to be done on PFS and overall survival. And that's going to be done when we have 100 patients randomized and followed for at least 100 days. I expect this will come in the second half of 2020.But in the interim analysis, of course we are not going to mention the number of responders in each arm. This is a double blinded placebo controlled trial, and one has to be very careful in what you can or can’t say in the middle of the trial. But we will be able to say, if the DSMP show enough meaningful data that puts them in a position to tell us that we are actually repeating results that we have seen in the Phase 2. Besides that, we are always able to look at the blinded combined data, and we will be able to share with you and the market, what percentage of patients in the two groups, are responding.And I assume that one can make the calculation, if the study is repeating what we've seen in the Phase 2, and their response rate is quite high in the total population of the drive, that's really meaning that we have actually following what we've seen in the Phase 2. And of course, we will have some more information on other end points in terms of the blinded combined data. We will share it with them all.

[Arthur Yu He:]

That's great. Thank you. And just on the colon cancer trial, just curious, do you guys have any idea on the checkpoint inhibitor in mind, any specific color you can give us or?

[Dror Harats:]

Yes. So first maybe something I didn't say on the call and I should say, we are actually going to have tissue from all three trials. In the GBM, it's obvious because everybody go through second surgery. So we will know what VB-111 is doing to the brain tumor. In ovarian, we are actually taking biopsies from a lot of the patients, before VB-111 and after VB-111, after first dose and third dose. And in the colon cancer, we’re also going to have to have tissue before giving a VB-111 or checkpoint inhibitors, and we're going to have a tissue after VB-111 alone, and after the combination with the checkpoint inhibitor. The plan is to use (indiscernible) for this trial.

[Arthur Yu He:]

Okay. Thank you very much.

[Operator:]

Thank you. [Operator instructions]. Your next question comes from Soumit Roy with Jones Trading. Please go ahead.

[Soumit Roy:]

Hi everyone. Thanks for taking the question. Just wanted to go a little back in the ovarian trial, and from the Phase 1 trial. I remember initially you said, the three month scan, the patients were showing - in the tumor volume size, the patients were showing some immune related edema. So it was complicating the resist response rate by tumor volume. Have you - do we have an update on those, any resistant response rate by tumor volume of this patient at a later time point?

[Dror Harats:]

So in the Phase 2 trial that we actually show the data, we could show that even - though in some patient, it was increasing a little bit in the beginning, many times it didn't meet the criteria for progression. And then when you follow the patient, it actually the tumor shrinks, and in some cases, it went into buffer response or over or even near complete response. In the Phase 3 trial of course, we are following the patients right now. And as you know, this trial started as an open trial only for the first four patients, then we modified it to double blind trial. But in this, a small part of the open trial, two patients that were on VB-111, one had a partial response according to resist, and the other one had a near complete response with one lesion disappeared completely, and the other lesion is actually almost disappear completely.From questions we get from the centers, and of course I don't know if they are on a control arm or VB-111, because we are all blinded, the only time that we cannot be blinded is patients that develop fever, and that's of course quite known. But I don't have the information if the question was in a patient with fever or without fever. We learned that there are more responders in the trial, but that usually coming from questions that we get on where to do biopsy, how to do biopsy and stuff like that. We don't have real concrete information on that, but I believe that later on in 2020, when we will have more blinded combined information, we will be able to say more things, not just to C-125, but also on the total progression free survival that we get.And as you all know, the expected one of course is historical control and one has to be very careful, but the expected one is 3 to 3.6 months. If we'll keep on seeing what we are seeing right now, and we will know that (BFAS) is actually more than the historical control, we will let you know. but one, we’ll have to be very careful because it's blinded combined data, and it all depends on what we know in historical control, and we all should be very careful about it.Regarding the C-125, I think it's a stronger signal always, because it actually depends on real numbers. It's not impression. It's not something that the central lab can look at it different than the doctors. It's much more concrete, and that's why we elected to have it as our phased first interim analysis.

[Soumit Roy:]

Got it. And my last question is, if you're looking at any kind of biomarkers for predictive purposes other than maybe the fever, something like (indiscernible), expression. Any thoughts around there?

[Dror Harats:]

So definitely fever. And it appears with VB-111 is considered a side effect because you have to report when patient is getting drugged and getting chills and fevers. So I can tell you that the percentage of patients developing fever is actually similar to what we've seen in all our Phase 2 trials, is about 40% so far. I can tell you that in the blinded data, the one developing fever, doing quite well in their C-125 response. So there are a lot of signals that we have a good chance to repeat what we've seen in the Phase 2. So far, it's a small number of patients, but not that small anymore. And it’s actually behaving in a very similar way to what we've seen before.

[Soumit Roy:]

Thank you so much for taking the questions, and congratulation on all the progress.

[Dror Harats:]

Thank you very much.

[Operator:]

Thank you. Our next question comes from Sam Slutsky with LifeSci. Please go ahead.

[Sam Slutsky:]

Hey everyone, thanks for taking the questions. Regarding the MOSPD2 programs, I was wondering if you’d provide some color just on how you’re thinking about broadly taking these assets forward, as well as initial indications where you might look to first in the clinic.

[Dror Harats:]

So thank you, Sam, for asking the question. I will divide it into the inflammation and oncology. And you could understand from what I was saying that we are a bit more advanced in the inflammation. In the inflammation, we have at least good two candidates right now, and one of them is a progress forward. We do have data from in-vitro and in-vivo studies, and the data is quite compelling in different type of inflammatory diseases. We’re presenting some of it in the conferences and publishing. We're going to publish more, and we're going to present in many more conferences in the near future.So definitely, the drug - the antibody is working quite well, significantly well in the animal models of MS, or a neuro inflammation. And most probably that's going to be the first indications that we will go with to the clinic. It also works very well in Nash, but that's a much more bigger trial that one would go. So the first proving man will go in other indication. And I don't want to say things that are not in the public domain, but I think in our presentation, we already showed that it works quite well in array rheumatoid arthritis, and there is another indication that we tested.So, so far, because monocytes play a major role in chronic inflammatory diseases, and actually in almost all of them, the chronic phase depends on monocytes, every indication we tested actually, it worked quite well. The other very important thing that it should be quite easy to see if it’s working because we are always testing it on human cells, on monocytes. And we did test it of course on healthy volunteers, but we are progressing with testing it, not just on healthy volunteers. And so far, it seems the results are coming in a very nice way. So the plan is to go first to MS and then extend it. And of course this is going to be a big program. So I was saying before that we might want to develop it or co-develop it with a partner, and that’s think through of course.In regarding to the oncology, we have a family now of proprietary bi-specific antibodies that we developed that bind to most MOSPD2 on one hand and CD3 on the other hand. We already tested this family of molecules in-vitro, and we know that they actually have a death of the tumor cells that express MOSPD2 actually done by the T-cells. And we have evidence for that already, and we have some understanding of structure function of these different family of b-specific antibodies. So we are quite advanced in understanding what should be the best antibodies.What I was talking about is an in-vivo study that we are actually running right now, which will give us very good color on how safe it is in terms of other tissues, not tumor. And more than this, on how efficient it is. If this trial will come the way we hope, it will come. Then in the beginning of 2020, we will know that we have a candidate in our hand going for completely novel targeting oncology. And then we'll make a decision in which indication we're going to go. We have some thought about which solid tumor we want to go for, but this study that we're doing now, is a critical study in the pathway to make sure where we should go with these bi-specific antibodies.

[Sam Slutsky:]

Got it. It’s helpful. Thanks.

[Operator:]

Thank you. There are no further questions at this time. I would like to turn the floor back over to management for closing comments.

[Dror Harats:]

So thank you all for joining us for this call, and thank you for the questions. Have a nice day.

[Operator:]

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.