Vascular Biogenics Ltd.
Q1 2016 Earnings Call Transcript

Published: 13 May 2016

[Operator:]

Good day and welcome to the VBL Therapeutics First Quarter 2016 Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Michael Wood of LifeSci Advisors. Please go ahead, sir.

[Michael Wood:]

Thank you, operator and thank you all for participating in today’s first quarter 2016 financial results and corporate update call. I’m Michael Wood at LifeSci Advisors and leading the call today will be Professor Dror Harats, CEO of VBL Therapeutics and Amos Ron, VBL’s Chief Financial Officer. A press release with the company’s first quarter financial results became available at 8

[Dror Harats:]

Thank you, Michael and good morning to everyone joining us on the call. We are pleased to report that the first quarter was a very productive period for VBL as we continued to advance our late programs including the GLOBE study, our ongoing Phase III trial of VB-111. We are committed to our goal of becoming a leader in the development and commercialization of innovative first-in-class therapies for oncology indication and during the quarter we continued to build on the very substantial progress we made in 2015. Our most advanced therapeutic candidate is VB-111, a first in class gene therapy based biologics that we are developing for solid tumor indications. With an advanced program for recurrent glioblastoma or recurrent GBM an aggressive form of brain cancer, it is currently being evaluated in a pivotal Phase III study for recurrent GBM under an SPA and with full endorsement of the Canadian Brain Tumor Consortium additionally. We have been granted fast track designation by the FDA and VB-111 has received orphan drug status in the U.S. and Europe. Patient recruitment in the GLOBE is proceeding well. We have been enrolling patients in the U.S. since last August and in February this year we announced the enrolment of our first Israeli patient in Haifa, Israel. During the last quarter, we opened multiple additional centers in the U.S. and Israel and trial is moving forward according to plan. We expect to recruit approximately 250 patients in total and will perform an interim analysis when 91 mortality events have occurred in the trial, which we expect to happen in the first half of next year. We are also studying VB-111 in the treatment of recurrent platinum-resistant ovarian cancer and we have seen positive results and the high response rate in this indication as well. As we have explained, after reporting Phase II data last June, we have been following patients gathering tumor responses and survival data. Pending an end of Phase II meeting with the FDA, we believe that the next step for this program including randomized controlled trial in patients with ovarian cancer. At the forthcoming ASCO meeting in June, I am pleased to say that we have had two abstract accepted. One of this will be an update from the ovarian cancer trial. The data are still under embargo so I can’t go into much depth at this point, but the data will include new information on progression-free survival, overall survival two more biopsies including Immunohistochemistry analysis and analysis of the CA-125 biomarker. The second paper will describe the results of meta-analysis which was performed by an independent academic center comparing bevacizumab or Avastin data in recurrent GBM to our VB-111 Phase II data. In addition to ASCO, our team will also be presenting data at the Biomed Conference in Israel and several banking conferences during the upcoming weeks and at the Bio Meeting in San Francisco in June. Across all our trials, VB-111 has already been in more than 170 patients, is well tolerated and exhibits promising results in three separate oncology indications. There are even some patients from our Phase I study that have been on the drug now for five years. The safety aspect is very important because we want physicians to be able to use our drug VB-111 in combination with other agents. We have been in communication with the FDA regarding a possible expanded access protocol for VB-111 in GBM patients including those currently ineligible to participate in our studies. It could provide an opportunity for those who did not qualify for the ongoing Phase III trial to gain access to VB-111. Such a program could provide additional safety and efficacy data. We are working with the agency to finalize the parameters of this VB-111 access program. The third indication for VB-111 is thyroid cancer. As you know we met the primary endpoint of six months progression free survival in our Phase II trial. We continue to follow patient and hope to report more data including overall survival before year-end. Regarding our Lecinoxoids program, last month we reported the publication of data from VB-201 and VB-703 for the treatment of non-alcoholic steatohepatitis and liver fibrosis in digestive disease and science journal. The data indicate that Lecinoxoids can restrict liver inflammation and ameliorate liver fibrosis in an animal model of this disease. If you are interested in the article it is available on the magazine’s website or through a link from the press release on our webpage. Finally, we had a KOL event for the financial community in New York last week and it was nice to see some of you in attendance. I have to say we were very encouraged by the high level of interest; our speaker was Dr. Timothy Cloughesy from the David Geffen School of Medicine at UCLA who discussed advance in glioblastoma treatment including VB-111. For those of you who were unable to participate, I encourage you to listen to the replay on our website. Now, I’d like to return the call over to Amos Ron our Chief Financial Officer who will give you more details about our financial results. Amos.

[Amos Ron:]

Thank you, Dror. I will review the financial highlights and also speak to our cash position and our financial guidance. We ended the quarter with $33.2 million in cash and cash equivalents and short-term deposits compared to $37.1 million as of December 31, 2015. Research and development expenses were $4 million for the three months period ended March 31, 2016 compared to $2 million for the same period in 2015. The increase in R&D expenses of $1.7 million is mainly related to increased cost for the VB-111 subcontractors and consultants enrolled in the Phase III pivotal trial of VB-111 in recurrent GBM which we commenced in August 2015. The remaining $0.3 million are related to timing difference in the receipt of grant [review] [ph] from the Office of the Chief Scientist in Israel. The grant for the year of 2016 was approved by the Office of the Chief Scientist timepiece only in May 2016. The approved grant for 2016 is approximately $2 million of non-dilutive money about 60% increase over the previous year. G&A expenses were $0.9 million for the three months period and in March 31, 2016 compared to $0.8 million for the same period in 2016. Net loss for the quarter was $4.7 million compared to $3 million for the same period in 2016. We expect our cash will be sufficient to fund our operations into mid-2018 and enable completion of the ongoing Phase III clock trial, the Phase II clinical trial of VB-111 in thyroid cancer and the Phase I/II clinical trial in ovarian cancer. Now I would like to turn the call over to the operator for any question and answers.

[Operator:]

Thank you.[Operator instructions] And we’ll take our first question from Charles Duncan with Piper Jaffray.

[Charles Duncan:]

Hi guys. First of all congrats on the progress and thanks for taking my questions. Dror, you characterised that GLOBE trial as going well. Can you give us any quantitative or even semi quantitative information in terms of the number of sites you have initiated in even better the patient, number of patients and/or if not numbers how would you characterise the patients in terms of their disease burden going into the trial thus far on a blinded basis?

[Dror Harats:]

So I can tell you that we have more than 30 centers now open both in United States and in Israel, most of them in the United States. We just heard that we got a final clearance from the Canadian authorities yesterday actually, so we are as I said, planning to open some centers in Canada very soon. And we are recruiting now even a little bit better than that [care] [ph] that we plan to recruit and I think that a thing that we are seeing is that the recruitment and the randomization goes very well which means that the doctors participating in the trial have the right reason to recruit patients to the trial. It’s always when you start the trial you are afraid that in the beginning the recruitment would be very slow. It started very nicely and I think it’s actually point to the major need in the field of GBM for a drug that’s extended a large expectancy and that’s what we showed in the Phase II and we feel confident in the drug from the doctors that are running the trial.

[Charles Duncan:]

Regarding that confidence from investigators have you detected a change or enhanced perspective on their relative to or despite the Celldex failure in the recent past?

[Dror Harats:]

I can tell you that the recruitment rate in the Phase III GLOBE trial is much faster than it was in the Phase II and that’s not surprising because in the Phase II it was an unknown and now it’s a known or at least there are indications that the drug is working not just at GBM and I was saying that we were encouraged by the interest in our KOL event because one of the thing that worries me that the failure of Celldex will actually bring some disappointment about the whole field, but I don't think that's the case. I think that people now realize the much needed -- a need for a real drug in recurrent GBM and that's why we saw interest at the KOL event and we are seeing interest in running the trial. And though I know that there is some competition trials going on at the same centers, the recruitment rate is extremely well.

[Charles Duncan:]

Okay. That's helpful and then if I could hop over to ovarian cancer at ASCO, I know that the data is still aren't here, you can't really talk much about it, because abstracts are up next week, but would you in terms response rates or takeaways that you would like to see out of that data, what would be a good number, and do you anticipate being able to present any biomarker data?

[Dror Harats:]

So, as you mentioned, the abstracts going to go live on the 18th next week and even when the abstracts are live next week, it won't have all the information that we're going to present at ASCO, because of course you send the abstract back towards the end of 2015 and you analyze data couple of months earlier, but what we hope to see is that a response rate that we've seen that was 60% response rate will stay in a similar number, because when you talk about chemotherapy along the response rate of this type of patients is about 11%. Now when they add Avastin at the AURELIA trial it was about 30%, so having 60% response rate will be super. But more than this, we are going to show the type of patients that we are having in this trial and I urge you all to look very carefully at the characteristic of the patients, because in most trial doctors avoid taking patient what we called a primary platinum-refractory patients which are patient who never respond to platinum or that less than three months after responding to platinum already had a recurrent. I don't want to say the number, but you will see it when we'll have the data at ASCO. I don't think that we put it at the abstract, but you will see it at ASCO itself and it’s a very high number. And the other point is that we are going to show that we have a very high number of patients that's already failed Avastin. So, to have 60% response rate in this type of population is actually a great indication that there is real response that we are seeing here.

[Charles Duncan:]

Okay. That's helpful. And then last question is given those observations in the ovarian cancer study when would you anticipate the similar feedback from the agency, FDA regarding next steps in that Phase 3 timing and size?

[Dror Harats:]

We already had the whole file ready to submit to the FDA about a month ago, but then when we analyze the new data that we are gathering for the ASCO and we saw how much it more solid and actually show that the drug is working in a very good way, we elected to delay it a little bit and we are planning to send this to the FDA in the next couple of weeks. And then you can count about two months to the end of Phase 2 meeting, so that tells you when we will know from the FDA if they see the same way eye by eye with us.

[Charles Duncan:]

Okay. Thanks, Dror for the added color. I'll hop back in the queue.

[Operator:]

And the next question is from Joe Pantginis with Roth Capital Partners.

[Joe Pantginis:]

Hi, guys, good morning. Thanks for taking the question. Dror, I was wondering if you can expand a little bit on your goals at least, I mean, obviously you don't have final guidance or sign-on, but your goals regarding the expanded access program. And then also can you give some color as to why patients you said that might be ineligible for the Phase 3, what's making them ineligible? So, thanks a lot.

[Dror Harats:]

Okay. So, I think that when you have a drug that both the company and the agency feels that the drug is actually working in a field that there is a major need then access program is the right thing to be done because there will be a delay between the time that we will finish recruiting patient to the study will be close to recruiting and the time that a drug can go on the market even with a very successful trial. And I think that ethically you have to think about how can you treat patients. So, one of the thing will be patient of course that didn't go in time on the trial and they would be able to go on the trial and we would let them get the drug on an access program and other thing will be patients that are a bit sicker which means that Karnofsky will be lower than we cut for a trial. It can be patients that had more than two recurrences because that's the limit that we put here, because there is always a debate if the patient have more than two recurrences maybe a prognosis is different than therefore they are usually excluded from this type of trial. We're still debating it to take patients that failed Avastin because these patients usually have a very short life expectancy and you will know that it takes time from VB-111 to actually do the work. So we're still debating on that with FDA. But in general we're going to take sicker patients. We're going to take patients that failed more than twice and people that didn't – their disease progress when we already closed recruiting.

[Joe Pantginis:]

Thank you very much.

[Operator:]

And we'll go next to Sean Lee with H.C. Wainwright.

[Sean Lee:]

Good morning, guys. Just wondering if you could elaborate a little more on what we can expect next year from the GOBLE trial. Would the DSMB looking only at safety or you're going to see the efficacy as well?

[Dror Harats:]

Thank you for asking the question. The interim analysis is plan for futility because FDA under an SPA allow us to do only a single trial at the size of Phase 2 not really a real use of Phase 3 and they would like to see both safety and efficacy on the whole trial which mean that they would like to help the patient go all the way through for a safety in both arms. Having saying that by the transit we will do the interim analysis that expected that we will be fully recruited to the trial, so the DSMB is going to look at the whole data, but we are not allowed to make a decision to stop the trial early unless we are giving up the SPA. So the idea is that they will look to see that there is no futility which we all think that there won't be any indication like that. And then of course if the data already shows the physical significant difference between the two arms, they will have to go to the FDA, to the agency, show them the data and the agency should make the decision. In my mind, by the time they will do of this, we will be about two months from ending the trial or two to three months from ending the trials so it’s not going to change much.

[Sean Lee:]

I see. Thank you for clearing that out. Also my second question is on the NASH and Liver Fibrosis program. What are your plans for the clinic for those?

[Dror Harats:]

So, we are an oncology company and we are going to focus on oncology and this is coming from a small molecules that we developed for inflammation actually we develop them for inflammation actually we developed them for atherosclerosis but it's very difficult to develop it for atherosclerosis for a small company. At that time we did these studies because we knew that from the mechanism of action it should work in a liver fibrosis, actually its work other fibrotic disease and we will come with some more pre-clinical data later on this year, but a nice thing about it for a liver fibrosis or fatty liver is that you all know that many more patients has fatty liver than the one that will eventually go into inflammation and fibrosis. The drug that we developed does not do anything to the fatty liver and we don't want to treat millions of people for a disease that to core only in a smaller number of patients. So the way the drug is working actually its blocking the inflammation itself and not enabling to go from the fatty liver to the inflammatory disease and then to fibrosis and it works directly on fibrosis. And we knew it from the mechanism of action which works on Toll-like receptor 4 and 2 which take place in anti-fibrosis on the inflammation from the monocyte migration story. Now the way I view it and of course we are not going to develop it ourselves, we are going to see if we can have a deal with one of the company that moving forward programs in a liver, fatty liver and the NASH and the whole idea is that you can follow patients nowadays with different type of scans and ultra sounds, the fiber scan and actually know this when they are from state zero to a grade zero to grade one or from grade one to grade two and then make the decision to intervene actually because we are not working on the fatty liver, we're working on the second stage of the disease when it move to inflammation, because 201 is a Phase-2-ready drug, we believe that the data that we show in the preclinical is as good as many of the compounds that went into a Phase 2 and there would be someone that will want to develop it, but they want to make it very clear that we are focused on oncology, we have lot on the plate and we are not going to do this trial by ourselves.

[Sean Lee:]

I see. It just seems like very interesting modules, but thanks for clearing that up. And that's all I have. Thank you for taking my questions.

[Operator:]

[Operator Instructions] And our next is from Ram Swayampakula with H.C. Wainwright.

[Ram Swayampakula:]

Thank you. Good morning, Dror. Thanks for taking my questions as well. We know that company is looking VB-111 in terms of developing the drug for recurrent GBM. What's the management thoughts regarding newly diagnosed GBM and what efforts are you making for that indication.

[Dror Harats:]

So, that's an excellent question and thank you for asking it. I believe that eventually at the end of the day the drug should be a given, its newly diagnosed GBM, I believe together with radiation this stage and the chemotherapy. But of course this is a much bigger trial and we cannot do or run the two trials together, so it all depends on financial situation of the company and how much money we can raise, but that's really coming in plan. And just the hint that show that this is what we should do. You know that we have at one patient with complete response right now for more than two years. And this patient had a disease, diagnosed, he had surgery, radio therapy and temodar and then the disease came back. This patient went through a second operation and the months later the tumor came back. And the tumor came back a months later tells you that this is an aggressive disease, but nevertheless the tumor was relatively small a months later. That's when we came with VB-111; the patient is on VB-111 alone, not even in combination with Avastin now for more than 24 months without evidence of disease. So, with one patient, but I don't think that before this one patient we didn't have these guess that what we should do is coming when there is a major de-bulking of the disease, because the way VB-111 working is actually not melting the tumor, its not enabling the tumor to keep growing. So if it's coming when there is no mass or very small mass we have a much better chance to show results, so definitely newly diagnosed GBM will be next stage. We were debating if he wants to put it in the access program, but I think that we should do a proper study.

[Ram Swayampakula:]

Okay. That's fantastic. And then, staying with oncology and staying with VB-111, so beyond GBM and ovarian cancer, are there other potential indications that you're thinking off in terms of developing those drugs?

[Dror Harats:]

So, you know that's – we showed the data in a thyroid and I think that in thyroid we can [Indiscernible] well differentiated thyroid cancer that failed everything and with medullary thyroid cancer where we had an objective response with reduction of calcitonin from 14,000 to 6,000 and this patient is still stable. So that's one indication, but that's a very small indication. From the Phase 1 we learned that it works in renal. We didn't elect to go to renal because it was quite crowded. We know that it's actually working quite well in a neuroendocrine. We still have patient on the drug with neuroendocrine patient that had a horrible disease and we have a hint that it's working in lung cancer, that's the hints that we got from the Phase 1. We never tested it in press or other bigger indications, but I think that we have a very good guidance; because from the Phase 1 we learn that we're anti [Indiscernible] drug show signs of response even if not a great response. VB-111 will be much better. So we know what indication we should follow.

[Ram Swayampakula:]

Okay, great. Thank you very much Dror.

[Operator:]

And it appears there are no further questions at this time. I'd like to turn the conference back to management for any additional or closing remarks.

[Dror Harats:]

So, thank you everybody and I would like to thank you all for attending this call. Have a good day.

[Operator:]

This concludes today's call. Thank you for your participation.