Vascular Biogenics Ltd.
Q4 2016 Earnings Call Transcript

Published: 27 Mar 2017

[Operator:]

Good day and welcome to the VBL Therapeutics Fourth Quarter and Full Year 2016 Earnings call. Today’s conference is being recorded. At this time, I’d like to turn the conference over to Brian Ritchie of LifeSci Advisors. Please go ahead, sir.

[Brian Ritchie:]

Thank you Operator, and thank you all for participating in today’s full year 2016 financial results and corporate update conference call. Leading the call today will be Dror Harats, CEO of VBL Therapeutics, and Amos Ron, VBL’s Chief Financial Officer. A press release with the company’s full year 2016 financial results became available at 7

[Dror Harats:]

Thank you Brian, and good morning to everyone joining us on our call. We appreciate the opportunity to review our 2016 financials and provide you with a corporate update. I would like to start by briefly reviewing the highlights of 2016. We made excellent progress in 2016 with VB-111, also known as ofranergene obadenovec, across three Phase II studies for different oncology indications - recurrent glioblastoma or rGBM, platinum resistant ovarian cancer, and radioactive iodine resistant thyroid cancer. VBL’s Phase II study of VB-111 in rGBM met its primary endpoint, almost doubling median overall survival, and as we presented at ASCO 2016, treatment with VB-111 through progression was significantly better than historical meta analysis data for the standard of care, Avastin. We continued to advanced our GLOBE open study of VB-111 in rGBM where we are very pleased to announce that enrollment in the study at 2,056 patients had been completed five months ahead of schedule. In December 2016, the independent data safety monitoring committee which reviewed the data recommended that the study continue as planned. In platinum resistant ovarian cancer, we presented data at ASCO 2016 demonstrating a significant increase in overall survival with VB-111 given in combination with chemotherapy along with 60% durable CA-125 response rate, which is approximately twice the historical response with Avastin to chemotherapy in platinum resistant ovarian cancer. Our Phase II of VB-111 in advanced differentiated thyroid cancer was also successful. The primary endpoint of the trial, defined as six months progression-free survival of 25%, was met with a dose respond. There was also an overall survival benefit signal with a tell of more than 40% at 3.7 years for the therapeutic dose cohort, despite the fact that most patients in the VB-111 study had tumors that previously had progressed on several lines of therapy, including kinase inhibitors. Now as we look forward to busy and meaningful years in 2017 and ’18, the major catalysts continue to focus on the clinical development of VB-111. As you know, the GLOBE study, which is our most advanced clinical trial, has planned data readouts this year and in early 2018, readouts which will likely be key inflection points for our company. The GLOBE study is comparing VB-111 in combination with Avastin to Avastin alone and is being conducted in centers across the U.S., Canada and Israel. In addition to completing enrollment faster, we also recently received FDA approval for adjustment in protocol of the trial under the SPA relating to the timing of the interim and final analysis. We believe that these adjustments will provide better powering and increase the probability for a clearer efficacy signal. We continue to expect that the interim analysis will occur in mid 2017 and that the top line data from the full dataset will be available in early 2018. The next indication for a pivotal trial for VB-111 will be ovarian cancer. Ovarian cancer represents a very significant unmet need with approximately 22,000 American women having been diagnosed in 2016, according to the data from the NCI. For the platinum resistant patients in which we are advancing VB-111, most current therapies fail to prolong patient survival. In December 2016, we shared these data with the FDA in an end of Phase II meeting to discuss the clinical path forward in ovarian cancer. We have agreement with the agency on our clinical plan to proceed to a Phase III pivotal study in platinum resistant patients with overall survival as a primary endpoint. We plan to launch an ovarian cancer pivotal study in the second half of 2017. In February this year, we announced full data from our Phase II exploratory trial of VB-111 as monotherapy in thyroid cancer. This open label dose escalating study was designed to assess the safety and efficacy of single or multiple doses of VB-111 as monotherapy in patients with advanced recently progressed differentiated thyroid cancer that is unresponsive to radioactive iodine. The trial met its primary endpoint with a dose response and also provided evidence of disease stabilization and positive safety profile. The full data of the thyroid cancer trial showed an overall survival benefit for VB-111 with a tell of more than 40% at 3.7 years for the therapeutic dose cohort. We see this positive data as additional proof of concept for VB-111 in the third type of advanced solid tumor, and they are particularly important in that they demonstrate potential VB-111 efficacy as monotherapy. Our primary focus, however, continues to be advancement of VB-111 toward commercialization in the rGBM and ovarian cancer indications. We have the option to pursue thyroid cancer at the later stage, possibly with a strategic partner. We continue to strengthen our VB-111 IP portfolio with a recent VB-111 composition of matter patent allowance in China and granted patent in Australia, which add to our granted U.S. patent whose term is October 2033 before extension. As the clinical program of VB-111 advances, we plan ahead toward the potential commercialization of VB-111. To this end, we are establishing a new standalone facility in Modiin, Israel which will house our local biological drug manufacturing facility and will also include our new headquarters, discovery research and clinical development departments. Our plan is to relocate to the new site in the second half of this year. As we said, this new facility requires only limited capital resources in the initial stage and the near term investment is not expected to materially impact VBL’s cash position. Now I would like to turn the call over to Amos Ron, our Chief Financial Officer, who will give you more details about our financials. Are we online?

[Amos Ron:]

Sorry for the disconnection of the line. We were a bit gone. This is Amos Ron, CFO of VBL. Thank you, Dror. Earlier this morning, we issued a press release detailing our financial results for the year ended December 31, 2016. We will review the financial highlights and also speak to our cash position and our financial guidance. At December 31, 2016, VBL had cash, cash equivalents and short-term bank deposits of USD $45.3 million and working capital of $41.8 million. Research and development expenses for the year ended December 31, 2016 were $12.4 million compared to $11.2 million for the year ended December 31, 2015, an increase of $1.2 million. The increase was mainly due to increased expenses for the VB-111 subcontractors and consultants as the Phase III pivotal trial of VB-111 in rGBM gained momentum with the completion of patient recruitment and trial progression. General and administrative expenses for the year ended December 31, 2016 were $3.8 million compared to $3.7 million for the year ended December 31, 2015. The company reported a net loss for the year ended December 31, 2016 of $16.0 million or $0.64 per share compared to a net loss of $14.9 million or $0.73 per share in the year ended December 31, 2015. We expect that our cash, cash equivalents and short-term bank deposits will be sufficient to enable us to complete our ongoing Phase III clinical trial of VB-111 in rGBM and to fund our operating expenses and capital expenditure requirements into 2019, including supported our planned Phase III clinical trial for VB-111 in ovarian cancer and exploratory clinical study of VB-111 in combination with a checkpoint inhibitor in lung cancer, as well as supporting the investment in the new Modiin facility. For additional details or information on our financials, please refer to our Form 20-F filed with the SEC. Now I would like to return the call back to Dror.

[Dror Harats:]

Let me conclude by saying this is an exciting time for our company as we execute on the clinical programs around our lead candidate, VB-111. As we look forward in 2017, we have a number of important milestones. We are planning to report additional data related to the immune-oncology angle in our mechanism of VB-111 as well as to show additional patient-specific analysis. Based on our preclinical data, we think that the immune angle of VB-111 may be combined with other immune stimulating agents and therefore we intend to launch an exploratory study of VB-111 in checkpoint inhibitor in lung cancer this year. We have recently published a paper on a novel immune-oncology target we have been working on, MOSPD2, and expect to present additional data at the AACR meeting in April and at the KOL and R&D event that we have scheduled to April 6. Importantly, we expect to have the interim data with our lead candidate VB-111 in rGBM in mid ’17 and, as I said, the top line data early in 2018. Finally as a reminder, we will be hosting a key opinion leader breakfast for the investment community in New York on Thursday, April 6, 2017 at 8

[Operator:]

[Operator instructions] We’ll take our first question from Gbola Amusa from Chardan Capital Markets.

[Gbola Amusa:]

Hi, it’s Gbola Amusa at Chardan. Thanks for taking my call. I have a couple questions. First, obviously you have lots of catalysts around the middle of the year, but I was wondering if you plan to have data or a presence at ASCO 2017; and then secondly, what would you say is the reason for the recent success in recruiting for GLOBE, and should we expect something similar for timing in terms of recruitment for ovarian cancer when you move further in trials there?

[Dror Harats:]

So thank you, Gbola. For the first question, of course, I can’t be sure about anything about ASCO because it’s always a question if what we’re submitting would be accepted to ASCO, so I never like to say that for sure we will present. But I expect that we are going to present in the next coming months more data on our MOSPD2 at AACR, more data on the combination of VB-111 with checkpoint inhibitors, preclinical work that we were doing showing efficacy, and we intend to present individual data on our GBM trials, including spiders [ph], which hopefully will speak for themselves, and some more data that’s actually showing the immune mechanism of VB-111, so that’s planned for the next coming months until mid-June. Regarding why do we think that we had such success in recruiting for the GBM, so always there is an option that this is a deadly disease and there is nothing else, but we know that we were competing with other trials that actually included checkpoint inhibitors, and the point that we were recruiting very well in a trial which is a control randomized by open trial, which means that the doctors and the physicians know what they are getting, we are the only blinded party in this trial, is in my mind might be a meaningful thing that at least the patients and the doctors felt that there is a good chance that this will be a great drug, and that’s why they’re recruiting. I think that similar things might--or we hope will happen in the ovarian study as well because for platinum resistant ovarian cancer, there is not much to offer that really extends survival, and the VB-111 is actually at a time that we are going to run [indiscernible] trial, already have proof of concept in GBM that this can actually extend the survival in quite a difficult solid tumor like GBM. I believe that the recruitment will go very fast.

[Gbola Amusa:]

Great, thank you.

[Dror Harats:]

Thank you.

[Operator:]

Again, that is star, one to ask any questions. We’ll take our next question from Charles Duncan with Piper Jaffray.

[Sarah Weber:]

Good morning, this is Sarah on for Charles. So two quick questions. First, how do you believe the evolving standard of care in GBM may impact results of the GLOBE trial versus, say, the previous Phase II or previous [indiscernible]?

[Dror Harats:]

So it’s very difficult to say, because we all know that people are trying or doctors trying checkpoint inhibitors in almost every disease, including GBM. From previous data that we know about GBM, it might be that it won’t be as successful as in other therapies, but as a physician I would welcome any drug that will prolong survival in GBM, and I think that it’s not going to hurt our results in any way because if we do believe - and we do believe - that VB-111 is actually active and working in this disease, all patients that will go off trial will try other study medications and there shouldn’t be a difference between the different arms in terms of the efficacy of other study medications, so I don’t think it will affect the results. If in the field we will have more than one drug, that would be really welcome, but it’s too early to say anything because they didn’t have any data so far that will encourage anybody that’s what’s going to happen. And of course, any drug from the checkpoint inhibitor can always be combined with VB-111, and because none of the drug is really going to affect all patients and create a cure to many patients, the combination would be more than welcome.

[Sarah Weber:]

Great, thanks. Then just a follow-up, so have you looked at dropout on a blinded basis, and has that been in line with your expectations for the GLOBE trial?

[Dror Harats:]

Actually, the dropout looks quite good so far on the blinded data, yes. In the beginning of the trial, just the first couple of patients, we expected the patients that were assigned to Avastin, a few of them actually left the trial on the first day and we knew that that’s something that will happen. Then we had a discussion with all the centers and we were mentioning that they shouldn’t recruit patients that wouldn’t be willing to take Avastin or don’t think that they want to take Avastin, and since then we didn’t have any issues like that.

[Sarah Weber:]

Great, thanks. Just last question, can you remind us what information you plan to share at the interim, and then what conclusions we should draw from a continuation?

[Dror Harats:]

So at the interim, it’s actually a futility analysis. It’s going to be quite close to the endpoint of the study or to the top line results, and therefore it was agreed with the FDA that no matter what the results are for the point, this is a single study that they are going to allow or need to put the drug on the market, and they need the safety data. We are not going to say that we are actually moving patients from one arm to the other. The only thing that we will have in this interim analysis is the green light to go forward, but because at that point a trial will already be at the position that half of the patients will have at least one year follow-up, if we will get the green light to go on with the trial, then we believe that that will be a great signal.

[Sarah Weber:]

Great, thanks. Congrats on the progress.

[Dror Harats:]

Thank you.

[Operator:]

We’ll take our next question from Swayampakula Ramakanth from HC Wainwright.

[Swayampakula Ramakanth:]

Good afternoon, Dror, this is RK from HCW. A couple of quick questions. On the pivotal ovarian cancer study that you’re planning for in the second half of ’17, could you give us a little bit more color on the patient population, what you’re looking for, how the design is being planned for?

[Dror Harats:]

So actually, I can say a couple of words about it, although it’s not finalized completely, and it’s not finalized completely because we are still negotiating with some of the organizations that might take part in this trial. But in general, it’s going to be a one-to-one randomization where we are going to give chemotherapy alone or a combination of VB-111 plus chemotherapy in platinum resistant ovarian patients, very similar to our Phase II and very similar to already the trial that was done with Avastin. The endpoint is going to be overall survival. Of course, we are planning for interim analysis, and we are planning this study as an adoptive trial in a way that even if the [indiscernible] inhibitor are going to delay a little bit the time the patient will go on rGBM trials and it might be that the control arm will look a little bit different than one we know from the historical data so far, we will be able to adjust the number of patients in the trial during the trial, so we will have a very good chance of probability for success in this trial. But there will be more details and we are going to discuss it hopefully in the next quarter call.

[Swayampakula Ramakanth:]

Okay, thank you. That’s helpful. Then regarding the exploratory study in the lung cancer, the combination therapy with VB-111, I’m trying to understand how you want to position this, especially with three drugs already in the market for lung cancer. Is there a certain niche population that you’re going to be looking at in your exploratory study? Any color would be helpful.

[Dror Harats:]

Okay, so we all know that lung cancer is a major field and is a major market, and there is still a big unmet need in lung cancer in non-small cell lung cancer. Even with the new treatment with checkpoint inhibitors, if you read very carefully the studies, you do see that the percentage of patients that are responding is good but not really covering most of the population, and when you compare that to some of the chemotherapy we used to be in lung cancer, it actually looks better but every doctor in lung cancer will tell you that basically we were very poor in our treatment in lung cancer, including with chemotherapy. So we are progressing, but not progressing enough, and everybody is thinking about combinations that will be needed in lung cancer. That’s especially true to patients that are not expressing high percentage of PD1 or PD-L1, and we all know that the study with [indiscernible] was done in patients that were having at least 60% expression levels. A lot of the patients don’t have it, so they will need other drugs, and when you look at the studies that were done in the lower expression levels like second line with [indiscernible], then of course the percent of responders was much smaller. So I think that there is a real big room for a combination of drugs in lung cancer. Now, because we know that the immune system is very important in this disease and because VB-111 is such a safe drug, we believe that combining two immuno drugs that work systemically, we know, it’s not just believe is extremely toxic, and that’s a major problem. Because VB-111 works on the tumor locally, on the immune system at the tumor locally and not systemically, and therefore it’s such a safe drug, that should be a great candidate to go on in combination in a disease like lung cancer.

[Swayampakula Ramakanth:]

Thank you, Dror. Looking forward to talking to you soon.

[Dror Harats:]

Thank you.

[Operator:]

As a reminder, that is star, one to ask any questions.

[Operator:]

At this time, there are no other questions. This concludes today’s call. Thank you for your participation. You may now disconnect.