Vascular Biogenics Ltd.
Q4 2019 Earnings Call Transcript

Published: 19 Mar 2020

[Operator:]

Greetings and welcome to the VBL Therapeutics Fourth Quarter and Full Year 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. You may now begin.

[Michael Wood:]

Thank you, operator. Good morning and thank you all for participating in today’s year-end 2019 results and corporate update call for VBL Therapeutics. Leading the call this morning will be Professor Dror Harats, CEO of the company; and Amos Ron, the company’s CFO. A press release with the financial results became available at 10

[Dror Harats:]

Thank you, Michael, and good morning, everyone. Today, we will discuss our operating highlights and lay out our plans for 2020. Joining me on today's call is Amos Ron, our Chief Financial Officer who will discuss our year-end 2019 financial results. VBL made significant progress throughout 2019 and we hope to continue this momentum in the year ahead. This year, we will have three parallel clinical trials for our lead candidate VB-111 and we expect to generate a lot of new data from both the VB-111 and our MOSPD2 programs which are advancing well. So we look to 2020 as a potential turnaround year for the company.Let me begin with an update on our Phase 3 OVAL potential-registration study that is investigating VB-111 in recurrent platinum resistant ovarian cancer. We announced in December the completion of patient enrollment for the first interim analysis cohort and the readout for this analysis is expected before the end of the first quarter. This analysis will focus on CA-125 response rate, which will be analyzed according to GCIG strict criteria in 60 evaluable patients. The data will help us to know whether the positive outcome seen with VB-111 in the Phase 2 study in ovarian cancer is being replicated in OVAL which is a Phase 3 double blind randomized controlled pivotal trial.As a reminder, we saw 58% rate -- response rate in CA-125 in Phase 2. That is what we are looking to replicate here. We look forward to providing an update very soon once the DSMB has the results of the analysis. In February 2020, we announced the launch of a Phase 2 clinical trial of VB-111 in combination with nivolumab and anti-PD-1 immune checkpoint inhibitor in treatment of metastatic colorectal cancer. This study is being sponsored by the U.S. National Cancer Institute, under the Cooperative Research and Development Agreement or CRADA. The IND application has been approved by the FDA. The study, which is an open label study, will investigate if priming with VB-111 can drive immune cells into the tumor and turn the colorectal tumors from being immunologically cold to hot.In addition to safety and tolerability, this study will evaluate efficacy endpoint including test overall response, as well as immunological and histological readouts from tumor biopsies. We expect to have preliminary results by the end of 2020 or the beginning of 2021.The second new study planned for VB-111 in 2020 is an investigator-sponsored study of VB-111 in recurrent GBM patients. This randomized control study is sponsored by Dana-Farber Cancer Institute in collaboration with a group of top neuro-oncology U.S. medical center, including Massachusetts General Hospital, UCLA, UCSF, University of Utah, Memorial Sloan Kettering and University of Texas. The study will investigate neo-adjuvant and adjuvant treatment with VB-111 in recurrent GBM patients undergoing a second surgery. This study being conducted following new analysis that were concluded in 2019, which attributed the contradictory outcomes between the Phase 2 and Phase 3 trials in GBM to the lack of VB-111 monotherapy priming in the GLOBE study. An IND application for this study has gone into effect with FDA, and we expect this study will launch in the second quarter of 2020. Details on this study were unveiled at the Society for Neuro-Oncology Annual Meeting in November by Dr. Timothy Cloughesy, Director and Professor at the UCLA Neuro-Oncology Program.If successful, our safety study will generate results that can potentially be part of filing with the regulatory authorities.Data from the Phase 2 and Phase 3 studies of VB-111 were published in the December 2019 issue of the peer-reviewed journal of Neuro-Oncology. I would encourage you to read these manuscripts which are available online. You may also be interested in an article published earlier this month in Times Oncology by doctors Wen and Cloughesy discussing the lessons learned from this trial and the path forward for VB-111 in recurrent GBM. It is available online as well.Turning now to our MOSPD2 programs. We have two separate programs, one investigating bispecific monoclonal antibodies for cancer and the second developing classical antibody for immune-inflammatory indications. The bispecific antibodies are being designed to kill tumor cells based on MOSPD2 as a target whose expression is induced specifically in multiple tumors. We previously presented preclinical proof-of-concept for the approach using a BiTE antibody and are currently advancing our lead bispecific candidate toward an IND filing.New data from the program were accepted for the prestigious -- a late breaking news session at the 2020 American Association of Cancer Research or AACR Annual Meeting, which was originally scheduled for April this year, but due to the COVID-19 situation will probably take place only later this year. In the inflammatory program, we continue to advance the development of our lead MOSPD2 antibody for immune-inflammatory indications, with potential for MS, RA and NASH. We have signed a service agreement with Thermo Fisher Scientific, one of the leading vendors in the antibody field, for production of our lead candidate [VB-601] for toxicology and clinical development. Pre-IND submission for [VB-601] is expected in second quarter of 2020.We were accepted to present new data on MOSPD2 as a target for NASH and Crohn’s disease both at the European Association for Study of the Liver or EASL, Annual International Liver Congress, as well as at the Digestive Disease Week or DDW Conference. Actually our abstract for the DDW was rated in the top 10% of all studies in this category and was selected as Poster of Distinction. We look forward to presenting our data with these conferences will take place later on this year.In summary, we are proud of the progress being made across our clinical and R&D pipeline as we continue to execute on all our programs. We expect to have meaningful catalyst throughout 2020 beginning with interim results in ovarian cancer in the next couple of weeks and announcement of our MOSPD2 programs in inflammation and oncology. We are well financed with approximately $37 million in the bank at year-end, which should take us into the third quarter of 2021.I want to say a quick word about COVID-19 relative to our business. As of today, our operation has not been affected by the outbreak and our ongoing OVAL trial continues to enroll late-stage ovarian cancer patient in good pace, obviously with the necessary precautions required in this situation. Since we have our own in-house GMP manufacturing facility for VB-111, VBL has the ability to continue the production of this drug with relative small effect by the COVID-19 situation.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. We reported revenues for the year ended December 31, 2019 related to VBL collaboration of $0.6 million. Research and development expenses, net after government grants for the year ended December 31, 2019, were approximately $15.5 million, compared to approximately $15.9 million in the same period in 2018. General, administrative and marketing expenses for the year ended December 31, 2019 were $4.9 million, compared to $5.6 million for the same period in 2018.We reported net loss for the year ended December 31, 2019 of $19.5 million or $0.54 per share, compared to a net loss of $20.4 million or $0.62 per share in the year ended December 31, 2018. At December 31, 2019, VBL had cash, cash equivalents, short-term bank deposits and restricted bank deposits of $37 million and we expect that our cash, cash equivalents and short-term bank deposits will be sufficient to develop VB-111 and our other product candidates and fund operating expenses and capital expenditure requirements into the third quarter of 2021. For further details on our financials, please refer to Form 20-F filed with SEC this morning.We will now open the call for questions.

[Operator:]

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions]. Our first question comes from the line of Kevin DeGeeter with Oppenheimer. Please proceed with your question.

[Kevin DeGeeter:]

First off Dror, with regard to the ovarian cancer interim analysis, can you remind us is there an option to evaluate potential resizing of that study as part of the assessment?

[Dror Harats:]

Thank you, Kevin. I don't think that there will be a resizing of the trial due to the interim analysis because interim analysis is looking at the response rates of CA-125. And as you all remember, the primary endpoint is overall survival and we are not looking at overall survival at this point. I can tell you that if -- what we hope and expect to see is that we are repeating a very high response rate that we saw in the Phase 2 and we know that this response rate would correlate with survival. So later on in other interim analysis, your question might become a much more important and it might be that there will be a change later on, but not at this point.

[Kevin DeGeeter:]

And with regard to potential timeline for completion of enrollment for the ovarian cancer study, against the kind of current trends of enrollment and COVID-19 is definitely in the background of this question, how do you think about providing guidance for timeline for complete enrollment? Do you think your prior guidance is still appropriate in light of the number of unknowns that are currently in the market?

[Dror Harats:]

So we looked at what happened in the last couple of weeks or even the last three weeks and surprisingly enough, and maybe that because there is not much choice for these late stage patients, the recruitment rate is going in a very good pace right now.We are in line or even a bit ahead of line of what we wanted. Of course, nobody know and we should be all very careful with COVID-19 right now. But in the United States and in Israel, the recruitment is going very well. In any way we are not open yet in Europe. So we don't have a major effect on the recruitment there right now. And as I was saying, we see the opposite, but I don't want to say anything, because we don't know what will happen in the next couple of weeks. But right now, it looks those patients are getting the therapy, getting recruited. And even today, we had another randomization. So I believe that -- and as you all know, I have a -- I'm also having a big IRB Committee here in Israel, and we look at the different trials. I believe that the effect will be on every trial somewhat but much less in oncology trials where we’re needed to treat the patients.

[Kevin DeGeeter:]

That's terrific. One more from me, maybe then I'll get back in the queue. With regard to acceptance of the late breaking abstract for AACR, first, congratulations for that, it's terrific to see validation of the science. AACR, at least in the context of clinical data, has suggested to sponsors that they may not penalize for future presentation at their conference, if the sponsor moves ahead with publishing the data prior to the rescheduled date. Any thoughts as to whether for your data there may be options to communicate some of the findings prior to whenever that meeting is being rescheduled to?

[Dror Harats:]

We’re definitely considering it and we'll come back to the market with it. I don't think that we would like to delay this very important information that we are holding. And you can guess that if we were accepted to the late breaking news, it is important information. But we will have to see what is right timing for that.

[Operator:]

Thank you. Our next question comes from the line of Sam Slutsky with LifeSci Capital. Please proceed with your question.

[Sam Slutsky:]

Just, Dror, real quick. Could you just remind us of the contribution from a financial standpoint to NCI and investigator-sponsored GBM studies as well as the anticipated size of each? Thanks.

[Dror Harats:]

Okay. So definitely, it's a major contribution, because for the NCI study, we are paying a very small amount of money for administrative. And the only thing that we do is we support them with our drug and all the rest is actually taken care by the U.S. government and NCI. And with investigator-sponsored trials in GBM, we are giving them an education grant that is to support mainly the monitoring of the trials so that the data will be in line of data that you can actually submit to the agency.And in the agreement that we have with these centers is that the data belong to VBL and that we will be allowed and actually doing it together with them, submitted to the agency. There is such a major need in recurrent GBM. And if indeed we get positive results in these randomized trials, that will be a very important issue for the patients.

[Sam Slutsky:]

And then in terms of enrollment size of each, how are you thinking about that?

[Dror Harats:]

Enrollment for the NCI study is actually planned to be an open single-arm trial, just to see, if indeed in colon cancer we are making the tumor hot. And of course if that would be the case then the idea is to extend it to other indications in GI oncology. And so that's the plan and we're planning to actually recruit about 27 to 30 patients for colon cancer. But as I was saying, we will be flexible here, because it might be that very early we will see that the combination is actually working. And that's why I was saying that we are going to see data already toward the end of this year.We are doing biopsies on all the patients and very soon we will know after seven or eight patients, if indeed, we are making this tumor hot. And if we do so, then of course, we want to extend it.In terms of the GBM trial, it's actually planned as a blinded randomized control trial. So I believe that the data will come in 2021, maybe the second half of 2021 when the full study is actually already recruited. I can tell you that doctors will see the MRIs. Because from the operation on, it's not a blinded trial because we have one group which is getting standard-of-care and the other two arms getting VB-111. And if they will see meaningful things and they will come back to us, we will know about it. But the plan is that we will have the results by the end of the trial.

[Operator:]

Thank you. Our next question comes from the line of Ram Swayampakula with H.C. Wainwright. Please proceed with your question.

[Ram Swayampakula:]

Good afternoon, Dror, and Amos. A couple of quick questions. The first one on the interim analysis expected before the end of this quarter. So, outside of the CA-125 data that we would be -- we expect to see, what other data would be presented from these 60 patients, so that we get a better feel for what to look out for in the total trial later?

[Dror Harats:]

Okay. So, thank you RK for the question. In the interim analysis, we will be able to disclose the data on the blended population, the response rate that we do see with CA-125 on the total population, maybe talk about what percentage of response we do see in the one that develop a fever, which we know that they are basically all VB-111. But the most important thing is that interim was designed in a way that it will be -- enable us to tell the market if we are at least as good as what we've seen in the Phase 2. So the go no-go is not if we are not where -- so if we are the same as chemotherapy, it’s if we are much better than the chemotherapy. And that's how it's all designed.We won't be able to disclose the exact number in each group. This is a blinded trial, although this is not the primary endpoint. I can tell you that in this interim, the -- this study is going to have more information about RECIST response, but we are not going to disclose this. But as I was mentioning before, this all go together in a very aligned way. The patients who have had a response to CA-125 usually have a response to -- by RECIST and vice versa. And at least in our Phase 2 we saw a very good correlation between response to CA-125 and survival later on.In the next interim analysis, which will take place when we have 100 patients recruited and randomized to the trial and follow-up for at least 100 days, we are already going to look at PFS and survival. This was planned according to assumptions of number of mortalities that we expect at this point.

[Ram Swayampakula:]

Thank you very much for those detail. Regarding the ISD study in GBM, you said that could be used as -- it could go as part of FDA filing. So can you elaborate on that, do you still -- or should we still expect you to take that data and the GLOBE to the FDA? Or is that something else in addition to these studies that you will need to do before you take to the FDA for a potential approval?

[Dror Harats:]

So for us, all depends on the results of this trial, which is a randomized control trial that has a standard-of-care arm and neo-adjuvant and adjuvants for VB-111. If indeed we do repeat what we have seen in our Phase 2 when we primed with VB-111 and that's exactly what we are doing here, then of course that would be a major thing in recurrent GBM, when there weren't so far a randomized controlled trial that came positive.So together with the data that we have in the Phase 2 and while everybody understands that what happened in the GLOBE trial was actually the result of Avastin added to the drug where Avastin is actually blocking the expression of VB-111 and taking out the target for the drug. So, I believe that together with all these data, we will be able to file to the agency. But of course, it's all depend on positive trial of these new trial that we are running.

[Ram Swayampakula:]

One last question. On MOSPD2 in cancer, I know you may not be able to talk too much about the preclinical data that you're excited, which is sort of accepted at the AACR. But based on the data that you have so far, could you share with us a little bit on the plans for the clinical development program and provide us some color, such as like what kind of indications could we be thinking about and potential timelines for the start of the clinical program?

[Dror Harats:]

So I'm thinking because I'm trying to think what I want to say and what I can’t say. So, I can tell you that we basically already selected the lead compound. Based on the data that we have so far and there are two very good candidates that we can go forward with. And of course, we are testing it now in different indication pre-clinically. And it's working in more than one indication. And then we will have to choose which indication we want to go forward.The results are quite compelling. And with that, of course, we will have to go and produce it in GMP and do toxicology and everything needed. We are having plan where we basically do right now some of this looking at safety of this compound. There is always an issue with bispecific antibody when you used a CD3 as one of the arms to repeat cause systemic side effects. We didn't see any of that so far, but we are testing much more deeply to be sure that there it’s not there. We are also considering doing some more [species] there. But I will definitely elaborate to provide much more information later on this year, hopefully very soon.

[Operator:]

Thank you. Your next question comes from the line of Soumit Roy with Jones Trading. Please proceed with your question.

[Soumit Roy:]

Just could you give us a little ballpark of when the -- for this interim data coming up this month, when is the data cut off, is it like earlier March or more in February? And could you remind us when you think the enrollment completion will be fully over with Phase 2 trial? And I have one question -- one more question.

[Dror Harats:]

So thank you, Soumit. For the interim analysis, if you're familiar with the GCIG criteria, what you have to do is actually follow the patient and see if there is at least 50% reduction in CA-125 to call it response. And then you have to have a confirmation which has to be at least 28 days apart from each testing. We were trying to add most of the 60 patient that we have for the interim analysis in a way that we will have a definite result either that they're responders or non-responders. So we finished recruiting the whole cohort in the first or second week of January, I believe. And then of course, we had to keep on some follow-ups. So the cutting date for the information is actually just from some time in the last week. And that's why, as you can imagine, there are only not that many days toward the end of the quarter but we will have the DSMB meeting and we will have the information, we will be able to come with this information before the end of this month.Regarding the results or the full results of this trial, we believe that we are going to have a full recruitment by -- or toward the end of 2021. And then of course, it all depends on the mortality that we will see in the trial. If it will be according to our calculations, it can be about 12 months from the last patient in but it all depends and we have a maximum of 18 months from the last patient in, even if we don't get to the full number of events.

[Soumit Roy:]

Got it. Thank you, that's really helpful. And on the CRC trial, I noticed you have an inclusion criteria of liver mets, is that very common operus? And is that where you see they’re probably going to see vectored more and you expect VB-111 to be expressed there more? Could you just give us any color on that?

[Dror Harats:]

Definitely. You know that most patients with colon cancer have liver mets. That's basically the usual thing. And usually they have quite a big liver met and that's one of the big problems. If it's too big, you cannot do what we call the Swiss cheese surgery that you take off these metastatic agents. And when we are talking about patient in the stages, there are not responses to chemotherapy anymore, almost all of them, if not all of them will have liver metastasis. And the reason to go for liver metastasis, first it's much more -- or it's much easier to do the biopsy. So -- and we depend on the biopsy here because every patient will have a biopsy to start with, so that we will prove that this is an immune cold tumor. And then each patient will have another biopsy after VB-111 priming and then after the combination with nivolumab. So the colon cancer and liver metastasis is very important. There is also a benefit here, because adenovirus actually go to the liver, about 90% of what we are injecting systemically will go to the liver. And the liver metastases are having a lot of new vasculature. So it's a very good target for us. And indeed, if we do see positive results that we are making it hot in the same way that we did for -- in ovarian, then one of the next indications might be hepatocellular carcinoma.

[Operator:]

Thank you. Our next question comes from the line of Jonathan Kreizman with Valore Research. Please proceed with your question.

[Jonathan Kreizman:]

So we’re beginning to see some of the coronavirus dynamics impacting the CRO landscape and potentially slowing down recruitment and maybe even pushing off an initiation of certain trials. So how much of these dynamics are you seeing or expecting to see as the situation evolves in the coming weeks, coming months for the GBM study? And then what are the factors you expect could impact any initiation of the trial going forward?

[Dror Harats:]

Thank you, Jonathan. I will separate it into the different trials. In the GBM trial -- and maybe in the trial, let's say NCI, it might have some effects. Because as you were saying, some trials are not -- people are more reluctant to start a study unless there is a major need. And in GBM, there is a major need. So as far as of today, there is no effect on the company with this COVID-19 story and that's surprising already. In terms of the ovarian trial, we do see recruitment as planned so far. And even if we'll have a little delay, you all know that disease -- unfortunately, the cancer skip on and I believe that we will be able to catch up very quickly later on. But we're all in somewhat an unknown area.I can tell you what I know for sure from letter we got from the agency. It's a letter that every company, every sponsor got. And I can tell you the same thing we got from the Ministry of Health here in Israel. Actually they are much more flexible right now with a lot of the rules that they have in how to run the trial. So if there is a delay in monitoring, it's okay. If there is a delay in imaging, it's okay. The major thing is to try and get the patient to get the drug and look for safety and you can do monitoring, a rare tumor monitoring as we call it or distance monitoring.So I believe that everybody is working to make sure that the studies are going on. And I'm in touch with the big pharma, I won't mention names, but I'm in touch with them also, and we are all working together on how you can keep on running the trials for the benefit of patients. We don't want patients to die from their primary disease just because we have restriction now because of the virus.

[Jonathan Kreizman:]

Okay. I have another follow-up. So we've seen two competitive trials fail during this quarter in ovarian cancer, one testing with PARP combination and the other with a PD-1 agent. So as these studies further accumulate, what are your thoughts in terms of a possible combination study with VB-111 in ovarian with either one of these? And what is the medical community learning on the benefit of a potential combination therapy as the realized PARP data is progressing since being introduced last year as a first line therapy?

[Dror Harats:]

So I think it all depends on the biology of the tumor and the mechanism of action of the drugs that you are testing. Unfortunately, PD-1 inhibitors don't work in cold tumors, because they don't have the cells to work on. And in ovarian cancer, there is a repeated failure using checkpoint inhibitors, and it's in a way a little bit picky that you keep on or that some people keep on doing these trials and actually using patient time and patients’ -- and doctors’ time to repeat again and again these type of trials.Having said that, because we are bringing the immune cells into the tumor, so combining our drug with a checkpoint inhibitor might be a very good idea, actually I believe that one of the reasons why some patients after a long period of time that they're responding to our drug might actually stop responding is because you have immune cells there, but now they are shut off by the tumor. And then of course, adding checkpoint inhibitor will be a major thing.We are going to learn much more about it in the trial that we are running into colon cancer, because that's exactly what we are going to do there. And from at least animal models, we know that this combination works very well.In terms of combining it was with drugs like PARP inhibitors, I believe that that’s a -- it makes sense, but I will say even more that combining VB-111 because of the mechanism of action and because it's working completely different ways from others, might be a good idea in different kind of regimen. We will have to think very carefully with the positive results in our OVAL trial.What should be the next step? Should we add it to PARP inhibitor at the time that patient is basically in remission? I'm not sure at all because we need some tumor to work on, or should we add it right when you have the first time that tumor is recurring or maybe even as a first line. But all this is a -- all this will be considered and done later on. We all have to remember that things are OVAL trial most of the patients coming to this trial already failed a vaccine and already failed PARP inhibitors. And nevertheless, if we will come in the next couple of weeks, and say that we are repeating the Phase 2 where we have -- where we basically in the Phase 2 got almost 60% response rate. So if we are repeating it even in patients that already failed PARP inhibitors and failed a vaccine, that will be a major derisking for this trial and its progress.

[Operator:]

Thank you. There are no further questions at this time. I'd like to turn the call back over to management for any closing remarks.

[Dror Harats:]

So thank you all for joining us on this call and stay safe. Thank you very much. Have a good day.

[Operator:]

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. Have a wonderful day.