Vascular Biogenics Ltd.
Q1 2017 Earnings Call Transcript

Published: 15 May 2017

[Operator:]

Good day everyone. And welcome to the VBL Therapeutics’ First Quarter 2017 Earnings Call. Today’s conference is being recorded. And at this time, I would like to turn the conference over to Michael Wood, at LifeSci Advisors. Please go ahead, sir.

[Michael Wood:]

Thank you, operator and good morning. And thank you all for participating in today’s first quarter 2017 financial results and corporate update conference call for VBL. Leading today the call will be Dror Harats, CEO of VBL, and Amos Ron, VBL’s Chief Financial Officer. A press release with the Company’s first quarter financial results became available at 7

[Dror Harats:]

Thank you, Michael and good morning to everyone joining us on our call. We appreciate opportunity to review our first quarter 2017 financials and provide you with an update of our progress and accomplishments year-to-date. As you may know, our lead drug candidate is VB-111, which is an innovative anti-cancer unique biologic agent that we are developing to treat a wide range of solid tumors. VB-111 has a dual mechanism of action, which combined targeting the tumor vasculature together with the ability to induce anti-tumor immune response. We have demonstrated evidence of the survival benefit with VB-111 in three cancer trials recurrent glioblastoma, ovarian cancer and thyroid cancer. Our ongoing Phase III GLOBE study in recurrent glioblastoma comparing VB-111 in combination with Avastin to Avastin alone is being conducted in center across the U.S., Canada and Israel. We completed enrollment in this trial in late 2016, five months ahead of schedule. The GLOBE study is proceeding under special protocol assessment granted by the FDA with full endorsement by the Canadian Brain Tumor Consortium. If successful, GLOBE should be the only trial needed for registration of VB-111 in recurrent GBM. We just announced in April that the data safety monitoring committee overseeing the trial had met for the second time and reviewed as safety data collected through part update in March this year. The DSMC anonymously recommended that the study continued as planned. The GLOBE study interim analysis, that is planned to be conducted after 105 days or after 50% of the patients had more than 12 months potential follow up, whichever occurs later is expected in the third quarter of 2017. The top-line data from the full data set is still expected in early 2018. As planned, the next registration trial for VB-111 will be in ovarian cancer for the platinum resistant patients in which we are advancing VB-111 most current therapies fail to prolong patient survival. We are moving forward with this on the strengths of the positive data generated in the Phase II trial that we completed last year. We intend to launch a pivotal study of VB-111 in platinum resistant patient in the second half of 2017. We continue to explore other indications and therapies application for VB-111 and just last week, we presented new preclinical data with checkpoint inhibitor combination study at the Annual American Society of Gene and Cell Therapy, meeting in Washington D.C. Immunotherapy, with checkpoint inhibitors as you know, has demonstrated the secrecy across several cancers. However, in many indications, only a low percentage of patients seem to expand for this class of treatment even when given as a monotherapy. Our study looked that VB-111 in combination with a PDL-1 blocker in animal models of lung cancer and melanoma, and we show that the combination resulted in an amplified anti-tumor effect compared with either agent administrated by it-self. If this data can be reproduced in humans we may be able to achieve a much better anti-tumor activity without increasing the dose of VB-111. Accordingly, we plan to launch an exploratory clinical study of VB-111 in combination with the Checkpoint Inhibitor in lung cancer by year-end 2017. I would like to spend a couple of minutes talking about our oncology pipeline and specifically about a novel and very interesting oncology target we have been working on called MOSPD2. MOSPD2 as a surface protein that is only expressed in monosite, its functions was not previously well known but through a series of studies, we have been able to determine that MOSPD2 is involved in cell migration. MOSPD2 appears to be expressed abundantly in many types of solid tumor and seem to correlate with tumor invasiveness and metastases. We presented data on MOSPD2 at the AACR conference in Washington in April. In the study, we presented it was shown from clinical biopsies that MOSPD2 is prevalent in invasive human breast cancer tissue and that levels of the proteins appear to correlate to breast cancer invasiveness. At the AACR, we presented data from a breast cancer model in which we shut-off MOSPD2 expression by Crisper technology and showed over 90% reduction in the development of lung metastasis. Targeting of MOSPD2 may have several therapeutic implications, including the inhibition of tumor cell metastasis and targeting of MOSPD2 positive tumor cells. We have already developed monoclonal antibodies against MOSPD2 and we are also in the process of creating a therapy against this novel target. If you would like to learn more about MOSPD2 and the work we have been conducting here in more depth, I encourage you to watch the webcast from the KOL event that we hosted on March 23rd which is archived on our Web site. Before I turn the call over to Amos, let me talk about what you can expect from VBL for the balance of 2017. We will be at the ASCO meeting this year and on June 5th, we plan to show new data from the Phase II trial, which we conducted with VB-111 in recurrent GBM. We will show that VB-111 in destroyable tumor regression and attenuation of tumor growth in recurrent GBM using individual Phase II patient data. The outset should become available any day now. The interim analysis from the GLOBE study, as I said before, is expected later in the third quarter of 2017; in preparation for commercialization of VB-111 we intend to have our new production facility operating in the fourth quarter of 2017; we will also be commencing enrollment in our Phase III trial in ovarian cancer in the second half of the year; and lastly, we hope to begin exploratory study of VB-111 in combination with a Checkpoint Inhibitor in lung cancer before year-end. In summary, the beginning of 2017 has been very productive for VBL. We have a committed team of people at the Company and an exceptional technology platform. I’m very excited by the opportunities in front of us as we move VB-111 and our other program forward and appreciate the full confidence of our shareholders. Amos, please?

[Amos Ron:]

Thank you, Dror. Earlier this morning, we issued a press release detailing our financial results for the quarter ended March 31, 2017. We will review the financial highlights and also speak to our cash position and our financial guidance. Research and development expenses for the year ended March 31, 2017 were approximately $4.1 million compared to approximately $4 million in the same period of 2016. General and administrative expenses for the quarter ended March 31, 2017 were approximately $1.1 million compared to approximately $0.9 million in the same period of 2016. The Company reported a net loss for the quarter ended March 31, 2017 of $5 million or $0.19 per share compared to a net loss of $4.7 million or $0.21 per share in the quarter ended March 31, 2016. At March 31, 2017, we had cash, cash equivalents and short-term bank deposits totaling $39.6 million and working capital of $37.2 million. We expect that our cash, cash equivalents and short-term bank deposits will enable us to fund our operating expenses and capital expenditure requirement into 2019 and are expected to be sufficient to enable us to complete our ongoing Phase III clinical trial of VB-111 in recurrent GBM to support our planned cancer registration trial in ovarian cancer and an exploratory clinical study of VB-111 in combination with the checkpoint inhibitor in lung cancer, as well as to support the investment in the new Modiin facility. For additional details or information on our financials, please refer to our Form 6-K filed this morning with SEC. Now I would like the open up the call for questions.

[Operator:]

[Operator instructions] And we’ll take our first question from Charles Duncan from Piper Jaffray. Please go ahead.

[Charles Duncan:]

Good morning, guys; first of all, congrats and progress in the quarter, and thanks for taking our questions. Dror, I wanted to ask you couple of questions about the GLOBE program in GBM. The first is regarding this recent data safety monitoring committee review. Could you confirm whether or not that was just safety review or was there an efficacy component to that, and what specifically were they look at?

[Dror Harats:]

Basically, we are looking safety and that’s their charter. But as we all know, they look at survival as part of or the death event as part of safety of course. And because our primary endpoint is death, or the event are actually survival, then of course there is no way that you can separate it completely. But the major thing is that they are looking at safety, but of course, we do understand that they look at survival as well.

[Charles Duncan:]

And then going on to the -- the trending of the first real efficacy interim, I think you mentioned 105 deaths or 50% of patients having six month follow up, whichever is later. Your perspectives on timing, is that primarily driven by good clarity on the 50% having six months follow up, or are you tracking at least on a blinded basis the number of deaths. And I know it's not a blinded trial, so what gives you confidence about the timing of that interim?

[Dror Harats:]

So first everybody should understand that we are completed blinded on the data. And we have no way to know much on the data and that clearly is only the data monitoring committee that can take look at the data. And we insist on being completed blinded and we never try or allow anybody to tell us anything different that can hint anything. We know when we recruited patients and of course we know when we are going to get to the 12 months follow up of half of the patients. And that's not going to happen before Q3 2017. And therefore, we know that the interim will be at that time. Because we were recruiting ahead of time, we could expect to have more deaths earlier. It's not happening so far and we are looking at we have care that's -- is according to what we hope and expected. It does not mean anything and I want everybody to be very careful about it. But we know now that the interim won't happen before Q3 2017. Now the cut of date will be at the certain date in Q3, and of course it takes couple of weeks or up to four weeks to analyze the data. So we know that we won't be able to talk about interim analysis before the second part of Q3 2017. And we wanted to actually let the market know that that's a situation as we know it, right now, because the study is progressing and we have more information.

[Charles Duncan:]

And then final question is this upcoming ASCO presentation, we'll look forward to see you there. But I'm wondering if there is any additional color you can provide on the information that will be provided at ASCO and how that might be interpreted at least with regard to not only the previous work, but also potential secondary analysis you may consider doing with the GLOBE trial?

[Dror Harats:]

I think that the major things that is going to be a take a message from the data that we are planning to share with the ASCO is that when you have a study, a Phase II study as we showed that show survival benefit; one of the big questions is always do you have any other information that actually support this data, because that's actually mitigate the risk of Phase III. If things go along, and not just survival, now progression free survival is very bad endpoint for a driver like VB-111; so the major thing that we could actually look at in a very careful way is what is actually causing this increase in survival and when we are looking at individual data, patient data; you can actually measure the growth of the tumor or the pace of growth of tumor or regression that you can see in the tumor; the stabilization and how long that it happened and is it statistically significant from the different group; the one that were treated thought progression and the one that weren’t. And of course that’s the data that we are going to present at ASCO, because of the embezzle to ASCO I cannot say much more and the abstract is going to be out I believe in couple of days. If I’m not mistaken, it's on the 17th. But even when you read the abstract, you will and then you’ll come to see the poster at ASCO and the figures themselves, it will actually, will give the right information when it will be very clear that the individual patient data looking at the tumor growth is actually strengthening quite dramatically, the data that we showed with survival. And the major thing is that we all know that GBM is a horrible disease and usually the tumor is actually doubling itself in terms of weeks or couple of months. And you will see that that’s now happening in many patients that were treated through progression. So I think that will be a major thing that will come from this ASCO data.

[Operator:]

[Operator Instructions] And we’ll take our next question from Swayampakula Ramakanth from HC Wainwright. Please go ahead.

[Swayampakula Ramakanth:]

On the combination that you’re looking at between combination of VB-111 and anti-PD-L1, so is it only lung cancer that you’re going to try in your initial studies. And what factors made you make that decision? And beyond the initial lung cancer, are there indications that you would want to explore with this combination?

[Dror Harats:]

In preclinical work that we did, we were looking at actually three different indications. We showed data in melanoma, in lung, in brain. And of course later on we would like to test it in more than just one indication. But being a small biotech company, I think that we cannot afford to do right now many small trials, and we plan to do the first trial in lung cancer after the data in the first quarter of ’18. We have a lot of plans to go ahead and develop VB-111 as a standalone and in combination in many different indications. One of the indications, just for an example, not that I’m saying that we’re planning it right now, is should we in ovarian because ovarian is such a deadly disease and Checkpoint Inhibitors didn’t really actually cross above or take and be given alone, they didn’t even got more than 15% of patient responding. So that might be a good indication; another one can be melanoma of course. We can think about it in combination in other tumors as well. And of course, we have also ideas where we would like to try VB-111 alone.

[Swayampakula Ramakanth:]

Regarding thyroid cancer, obviously the data looks strong, and I’m guessing what we’re going to see as the poster first t ASCO probably, is going to make it look even better. But as the same time, my understand is, correct me if I’m wrong. My understanding is thyroid cancer is something that you are not really clean and taking it to next level and we’d like to invite collaborator on that. What’s the progress being made there? Can you give us a little bit of color on that?

[Dror Harats:]

So thyroid cancer, or the type of patients that we were talking about, actually failed almost every treatment is about 2,000 patients in United States. And it’s going to be a long and difficult trial be done if you want to do a Phase III, because you have to recruit few patients at every center and that’s going to be a long trial. On the other hand, we know that in this very rare indications even relatively medium size Phase II that will be an investigator initiated trial that we can actually afford to elect happen after the data of the Phase III of the GLOBE trial, then the drug we’ll able to actually get this indication as well. So the idea is that part of the plan of development of VB-111 after the end of the GLOBE trial will be to do some studies by the Company. So some studies maybe in collaboration with partner, but certain studies will be done as an investigator initiated trials where we will supervise the protocol and let the doctors that are interested in this area, actually doing a trial that we show efficacy. And of course if the drug is on the market and there is a major need for patients like that, you can actually cross the bar to put the drug on the market of this indication without a need to do a full Phase III trial. So that’s advise that we got people that already had a chance like Dr. Humphrey’s that developed optical and other drugs as BMS. And I think that we will take this avenue in very rare indications where we can actually do it together with experts in the field we will do it this way, and thyroid might be one of them.

[Swayampakula Ramakanth:]

And knowing how you and your management operate and I’d like to think they had, the amount of money you’re trying to spend into this manufacturing facility and trying to put something up, both in terms of time and energy. What are the grand plans for this facility beyond VB-111? It is a lot of effort, I understand, how much it takes to put a thing together. Can you give us a little bit more color on what the grand strategies on developing a facility up?

[Dror Harats:]

You know that every drive introductions has special process and need special equipment, especially when you talk about biologics. Right now, the plan is to have the clean rooms and the facility ready for VB-111 and with the positive results of the GLOBE study, we estimate that we will be working there full speed just to make VB-111. Having said that, that give us the expertise on producing a novel biologic drug, and later on we will develop the second generation therapy, 511 that we were discussing. And then of course this facility will enable us to something like that. And of course, if we will be -- have to do or make along the road other biologics like antibodies for the MOSPD-2, these facilities will have the ability to make these drugs. But right now we are completely geared and focused on VB-111.

[Swayampakula Ramakanth:]

Since you’ve talked about MOSPD-2, you gave us a nice teaser the other day in New York. What progress has been made towards that project? And can you just give us a little bit more of that what you have on the press release?

[Dror Harats:]

Well, we’re working on MOSPD-2 quite heavily; we are actually testing the antibodies right now; we’re testing the CAR-T and the cells that we produce. So we are actually testing all of this and getting some more antibodies. I think that it's too preliminary for me to say anything that in this type of things, I would like to get the data solidified more before we announce it. But we are progressing very well.

[Operator:]

And we'll take our next question from Charles Duncan from Piper Jaffray. Please go ahead.

[Charles Duncan:]

I wanted to ask you about the ovarian cancer trial, you'd mentioned I believe in the press release that you may able to enter Phase III here soon. And I'm kind of wondering what are your remaining steps that are necessary before you can articulate the protocol and the start of that trial, seems like it's been in the works for a while?

[Dror Harats:]

So we are quite advanced in this trial; although, the plan when we say the second half, was it's going to be toward the end of the second half. That was the plan from the beginning and that's the days that we all should remember. We already have the protocol ready. We went back and forth with FDA and our biocertification. We actually have been offered by the FDA that if we would like we can ask for an SPA, the decision is not to do that, but actually to agree with FDA on many details and that's what we were doing. We already picked CRO, but I don't want to elaborate more on that at this point. But in due time we will tell you who we are going through the study with. We are already picking centers both in Israel and in United States, and I want to explain important things on where we are doing our trials right now, and what is our exit plan when we are discussing Europe? There’re quite a differences between the U.S. rules and the European rules regarding therapy and regarding the way the facility that you are producing the drug for Phase III should be. If it should be already fully commercialized and inspected then you can do a Phase III trial with the biologic like VB-111 in Europe. So right now we are not including European countries in our trial. It doesn’t mean that we are not talking to the European authorities, because if a drug is prolonging survival in indication when there is a major need, the European authorities will actually take a very serious look even if the study hasn’t been done in Europe. So the idea is to do the study of the ovarian mainly again in the U.S. and in Israel. We already looking at different sites, we’re preparing the compounds, the production. I think that we’re already done with that, and all the details to make this study successful study.

[Charles Duncan:]

And so just to clarify, it sounds like towards the end of the second half of the 2017, you’ll be able to articulate the nuances of the protocol and the recent discussions with the agency?

[Dror Harats:]

No, actually I mislead you. We already had a discussion with agency in December of 2016, and we already got the green light on the protocol and the green light of doing a Phase III where the endpoint is survival; so all of this has been done. What we will have in second half of ’17 is actually start recruiting patients.

[Charles Duncan:]

Okay. In second half, okay…

[Dror Harats:]

During this year, more toward the end of the year, we will be recruiting patients.

[Operator:]

[Operator Instructions] There are no further questions. At this time, Dror Harats, I would like to turn the conference back to you for any additional or closing remarks.

[Dror Harats:]

So thank you all for participating in the call, and we hope to see a lot of you at the ASCO meeting when we are going to present new data. Thank you very much.

[Operator:]

This concludes today’s presentation. Thank you for your participation. You may now disconnect.