Vascular Biogenics Ltd.
Q4 2017 Earnings Call Transcript

Published: 15 Mar 2018

[Michael Wood:]

Thank you all for participating in today’s Fourth Quarter and Full Year 2017 results and Corporate Update Conference Call for VBL. Leading the call today will be the CEO, Prof. Dror Harats; and Amos Ron, the company’s Chief financial Officer. A press release with the Company's year-end 2017 financial results became available at 7

[Dror Harats:]

Thank you, Michael, and good morning to everyone joining us on our call. Currently, VBL has more than $50 million in cash, which will enable us to continue to the development of VB-111 and our promising pipeline through 2020. Before we get into the financial details, I would like to take the opportunity to discuss the business aspects of VBL and how we see our path forward starting with VB-111. In our clinical program with VB-111 so far, we have seen multiple signals of efficacy including objective responses in late stage patients with high percentage of long-term survivors. Objective decrease in the CA-125 biomarkers in ovarian cancer and histological evidence for VB-111 related antitumor activity in both animals and in humans. We have patients that are on treatment with VB-111 and who appeared to be deriving benefit from this experimental drug. We are seeing objective responses for many months including in patients with recurrent GBM that have been on treatment for more than 16 months and up to 15 months now and are still in complete or partial remission. Having said that, we intend to analyze the GLOBE results thoroughly and try to understand more about the patient that did response well in the trial, but more importantly to investigate that why our promising Phase II data in recurring GBM were not repeated in GLOBE trial. We will provide you update as we receive more data. Our next important program is our Phase III trial of VB-111 in ovarian cancer. We intend to continue the ongoing OVAL trial, our Phase III potential registration trial in platinum-resistant ovarian cancer, in collaboration with the GOG Foundation. However to mitigate the risk, we intend to add an interim analysis for evidence of efficacy signal sooner than in our original plan, such readout may be available during the first half of 2019. We continue to believe in the potential of VB-111 for multiple solid tumors and in the near future shall provide more color on our continued development paths and clinical programs with VB-111. We have commitment to the patients including those who are on therapy and enjoyed benefits to continue the development of this unique drug candidate. We have a strong pipeline at VBL, including our exciting MOSPD2 program for oncology and inflammatory indications. MOSPD2 is a novel membrane protein found on tumor cells when they start invading tissue or creating metastatic lesion. We believe that targeting of MOSPD2 may have several therapeutic implications including in addition of tumor cell metastasis and targeting of MOSPD2 positive tumor cells and there are also potential application in chronic inflammatory conditions. We will present more information about this program for oncology as the late breaking news at the upcoming AACR conference in April and we will provide more details shortly. Last but not least, 2017 was a very meaningful year for VBL and we achieved many goals on the operational, financial and business front. Some of this might also include the opening of our new gene therapy manufacturing plant and headquarters and strengthening of our board with two seasoned board members, singing an exclusive license agreement for the development, commercialization and supply of VB-111 in Japan, raising of $18.75 million in gross proceeds in the public offering of common stocks and the initiation of the Phase III potential registration trial, the OVAL trial, studying VB-111 in platinum-resistant ovarian cancer. I will now turn the call over to our CFO, Amos Ron, who will provide an overview of our financials for the full year of 2017.

[Amos Ron:]

Thank you, Dror. Earlier this morning, we issued a press release detailing our financial results for the year ended December 31, 2017. We will review the financial highlights and also speak to our cash position and our financial guidance. At September 30, 2017, we had cash, cash equivalents and short-term bank deposits of $54.7 million and working capital of $50.5 million. As Dror said, we expect that our cash and cash equivalents, short-term bank deposits will enable us to fund our operating expenses and clinical development through 2020. In 2017, we have recognized revenues of $13.8 million, generated from the licensing and development agreement with NanoCarrier. Research and development expenses for the year ended December 31, 2017 were approximately $17.8 million, compared to approximately $12.4 million in the year ended December 31, 2016. The increase in research and development expenses, net, in 2017 was mainly due to increased expenses related to the management of our Phase III pivotal trial in recurring GBM in addition to cost incurred for the Phase III in ovarian trial. Ovarian trial has commenced in the fourth quarter of 20177. There was also an increase of R&D related costs due to an increase of share based compensation. Research and development expenses increase was offsets in part by an increase in the IAA grants received for the GBM program. General and administrative expenses for the year ended December 31, 2017 were approximately $5.8 million, compared to approximately $3.8 million in the year ended December 31, 2016. The increase in 2017 was mainly due to increased share based compensation expense to management and independent directors. The company reported a comprehensive loss for the year ended December 31, 2017 of $10.2 million, or $0.37 per share, compared to a net loss of $16 million, or $0.64 per share in the year ended December 31, 2016. Now, I would like to open the call for questions. Operator?

[Operator:]

Thank you. [Operator Instructions] Our first question is from Charles Duncan with Piper Jaffrey. You may begin.

[Charles Duncan:]

Hi, guys. Thanks for taking my questions. I had a couple of them to Dror. One is that you alluded to some – in the GLOBE study for GBM, you alluded in some patients who had responded and more perhaps long-term survivors are responders, and you’re doing additional work. And I guess I am kind of wondering when we might anticipate some additional clarity on that data?

[Dror Harats:]

Thank you, Charles, for asking the question. We are analyzing the top-line data as we have got them and we are still waiting for more data to come. We just recently got it in a format that we can do more analysis and look for more information. And I think that my answer today is not going to be much different from the one that I gave last week because it’s really hard to say an exact date, but we will try to come back to the market as soon as we have more information. What I can say now is as you all recall the GLOBE was comparing VB-111 on top of Avastin to Avastin alone and therefore we have to be very careful when we interpret the data, but I can tell you that there are some patients that are still on the combination of VB-111 and Avastin that are still in complete remission or partial remission, but it’s still early to discuss and because we are gathering their information. What we wanted to make sure is that we will enable these patients to stay on the drug because they are responding so well.

[Charles Duncan:]

Okay. And so can I anticipate perhaps more clarity during the next quarter?

[Dror Harats:]

I think so. I think that a validate state.

[Charles Duncan:]

Okay. And then when you consider the – I guess characteristics, tumor size, performance status, age anything in this cohort, in the GOG trial. And you compare it to the previous study. I guess what are you seeing? Are you seeing any differences really in the patient population that was a sample that was enrolled in GOG relative to the past work?

[Dror Harats:]

I think that when we will come with more clear and detail data. It will be very obvious with this patient population were quite sick. In some trails there was a selection including criteria for small tumors which we didn’t do. And therefore we have seen patients with very big tumors, with medium tumors and small tumors as well. But the percentage was leaning more to the big tumors. But I don’t want to get too much into it because we are still analyzing it, but definitely we are looking to see if the patient had, had a reasonable size tumor responded better to the patient that had huge tumors. And we will come with this information. What I can say that the major difference between the study that we are actually trying to figure out what was the difference between the Phase II and the Phase III. And that was quite clear at long whole time that in the Phase II we had the ability to give first VB-11 and to prime the patients may be with VB-11 and only then we added Avastin. In the Phase III when we the SPA it was actually agreed with the agency that instead we will give it top of Avastin and that’s a major difference in the design between the two trials. And we are looking to see if that was one of the reasons why we have such difference between the two studies. I can tell you that in the Phase II we had some patient with significant disease with big tumors and when we look at the Phase II data even if we look at the full over 60 patients that were in the Phase I and Phase II. We do see a significant number of patients that actually lived for very low period of time. And it didn’t repeat itself in the Phase III. And we have to investigate and find out what was the major difference because the Phase II in general there were more than 60 patients that were getting VB-11. And response rate and longevity of survival was quite significant and impressive. And that would let us to do of course the GLOBE trial. And that’s what led FDA to do it together with us under an SPA. And the difference between the Phase II and the Phase III is a big difference.

[Charles Duncan:]

Okay. That’s helpful. Appreciate the added color to. And I appreciate the discussion around tumor size because that has been an issue in other studies. I wanted to just hop over quickly to ovarian cancer. In your press release you talked about an interim analysis in the OVAL trial that could occur sooner than the original plan. And I’m just kind of wondering what will be the basis or the trigger of the interim analysis and what is your thinking behind that kind of plan?

[Dror Harats:]

I want to be very careful, Charles, before I’m getting into details because we are right now in the process of discussing it with steering committee of the trial. And of course we will discuss this indication with the agency. But it’s going to involve some surrogate and biomarkers that will enable us to see that we are actually repeating both, we have seen in the Phase II in the ovarian trial. And that we are on the right path in terms of efficacy to have the full study for the ovarian trial. So it’s not going to be a major difference because we plan to have an interim analysis for futility in the OVAL trial that was part of the protocol, but we are modifying it in a way that we will get it earlier and it will be more significant in terms of the efficacy signal. When we will have the exact detail after agreeing with agency because we basically agreed in general with steering committee of the trail that pushing us of course to go forward and do this trial because they also don’t see how a failure in the current GBM in such a tough indication especially when it was given together with Avastin which we are not going to do in the ovarian trial. But we want to be very careful and to mitigate the risk here. And that’s why we had this discussion, but we still need to discuss it with the agency before we come to the project.

[Charles Duncan:]

Okay. And would you anticipate that information flow in the next quarter or so?

[Dror Harats:]

Yes I guess that we will have this information in the next quarter.

[Charles Duncan:]

Okay, thanks for taking my questions Dror.

[Dror Harats:]

Thank you very much.

[Operator:]

Thank you. [Operator Instructions] Our next question comes from Swayampakula Ramakanth with H.C. Wainwright. Your may begin.

[Swayampakula Ramakanth:]

Thank you. Good morning Dror. Just a quick question on the OVAL study, I know you don’t want to talk too much about it, especially about the interim endpoint. I was just wondering how are you thinking about this interim endpoint, is this – will this include some efficacy along with futility analysis or is it just efficacy? And the second point is obviously I’m sure you’re thinking about this but just trying to figure out since this study had already started if you put in an interim endpoint what sort of a statistical analogy could you incur? Any commentary on that?

[Dror Harats:]

Okay so of course as you were saying I will try to say what I can. So we are going to look for efficacy and futility. And the efficacy will be very meaningful because it will tell us [indiscernible] we have a good chance for a success, but also that we are repeating what we have seen in the Phase II. So that will give us more stable evidence to go forward. Besides that I want to mention that the protocol for the ovarian trial is exactly the same regiments that we did in the Phase II and OVAL trail in Phase III. In the GBM we were actually had to change the regimen as I did explain before when we had the discussion with the agency here, with ovarian trial we are actually repeating exactly what we were doing in the Phase 2, which always give more confident. But nevertheless, we would like to have this interim analysis of efficacy and futility. In terms of statistics, there was already a discussion on the statistics when we were planning to have an interim analysis. And we're not sure how much it will change it. I can tell you that we anyway plan to change the protocol of the ovarian trial, because we're planning to make it as a double-blind trial. So we didn’t preclude that many patients so far, because we knew that we're going to change a protocol anyway to make it a double-blind trial, which I believe with VB-111 it's going to be an important for success of the trial, because when the patients and doctor are not blinded. And they've been randomize to the control arm, there is always a risk that some of them will drop from the trial or withdraw consent right away. And we had a small number, but some number in the GBM in the GLOBE trial, and we didn't want to repeat it. So anyway we had a plan even before getting the data of the GLOBE trial to –go to – to open a little bit different protocol for the OVAL trial. So the changes that we are making right now will take into consideration this whole thing and the alpha that we will have to pay. And we will design the trial in a way that it can be and hopefully will be a successful trial including the right number of patients and the statistics.

[Swayampakula Ramakanth:]

Thank you. Thanks for that additional color. Regarding MOSPD2 and expectations of some data at the AACR conference, where is the program at this point in the sense is it at a place where its ready to get to the clinic or how much more work you need to do on this before we can even think about starting in Phase I study.

[Dror Harats:]

The program is right now it's the following stage. We do have already proprietary antibodies that we made those for are inflammatory and for the oncology program. We might want to optimize some of them, some of them are really wouldn't needed to be optimize. We are at the stage of proving the efficacy of this all program including the work done on the knockout that we made and on the antibodies. And we will have to make the decision to elect the right antibodies to go for toxicology. And then to come forward or get it ready for the clinic, so we're at the stage of fine tuning the efficacy, fine tuning the selection of the right antibody and then we'll go forward to where the clinical program.

[Swayampakula Ramakanth:]

Very good. And then the last question from me is on VBL-201. Could you give us an update or this is a program where you had done some work. There's some potential for it in NASH. But I'm not sure where exactly it is at this point.

[Dror Harats:]

I think that I would be more happy to discuss it in the near future. We are planning to have a major Board discussion and strategic discussion for the company in the very near future. And when we will come with more clear going forward with this program I will let market them.

[Swayampakula Ramakanth:]

Thank you. Thank you very much, Dror and good luck.

[Dror Harats:]

Thank you very much.

[Operator:]

Thank you. I’m showing no further questions at this time. I’d like to turn the call back over to Dror Harats for closing remarks.

[Dror Harats:]

So thank you all for joining us for this call this morning and have a wonderful day.

[Operator:]

Ladies and gentlemen, this concludes today’s conference. Thanks for your participation. Have a wonderful day.