Vascular Biogenics Ltd.
Q3 2015 Earnings Call Transcript

Published: 12 Nov 2015

[Operator:]

Good day and welcome to the VBL Therapeutics third quarter 2015 financial results conference call. Today’s conference is being recorded. At this time I’d like to turn the conference over to Mr. Brian Ritchie of LifeSci Advisors. Please go ahead.

[Brian Ritchie:]

Good morning and thank you for joining us. With me today are Dr. Dror Harats, CEO and Amos Ron, Chief Financial Officer. The press release with the company’s third quarter 2015 financial earnings became available at 8 AM Eastern Time today and can be found on the investor section of the company's website at ir.vblrx.com. I am required to remind you that the information discussed on the call today is covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act. I caution listeners that VBL's management will be making forward-looking statements. Actual results could differ materially from those stated or implied by VBL's forward-looking statements, due to risks and uncertainties associated with VBL's business. These forward-looking statements are qualified in their entirety by the cautionary statements contained in today's press release and VBL's SEC filings. The content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, November 12, 2015. VBL undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. I would now like to turn the call over to Dror.

[Dror Harats:]

Thanks, Brian. I will focus my remarks on progress made for VB-111, our novel intravenously administrated anti-antigenic agent. During the third quarter, we reached an important milestone with the initiation of the GLOBE study, our pivotal Phase 3 trial of VB-111 in recurrent glioblastoma. As you may know, this trial is proceeding under a special protocol assessment granted by the FDA. It’s important because we have agreed with the agency that if successful, this single Phase 3 trial will be sufficient for approval. Last week we completed the public offering which raised $15 million gross proceeds to VBL, the lion’s share of this new money will be used for the development of VB-111 and is expected to take us all the way through read-out of the results from the GLOBE pivotal trial which are expected in the end of 2017. The primary endpoint in the GLOBE trial is overall survival and secondary includes progression free survival, tumor response as measured by response assessment in neuro-oncology or the RANO criteria and quality of life. As many of you know, GLOBE is a randomized controlled double arm open label study of VB-111 dosed every two months in combination with Avastin dose every two weeks, compared to Avastin monotherapy. The trial is expected to enrol 252 patients with recurrent GBM at about 50 sites in the United States, Canada and Israel. Key including criteria include first or second progression of glioblastoma following standard care of treatment with temozolomide and radiation, a histologically confirmed diagnosis of glioblastoma and measurable disease by RANO criteria at progression. I should also remind you that VBL has received fast-track designation for recurrent GBM in the US and orphan drug status in both the US and the EU. Interim data from the pivotal Phase 3 trial is expected in the first quarter of 2017. We were pleased to report this quarter at the European Cancer Conference full data from the Phase 2 clinical trial of VB-111 in recurrent GBM. We reported a statistically significant overall survival benefit in patients treated with VB-111 continued with VB-111 in combination with Avastin upon disease progression compared to patients treated with VB-111 followed by Avastin alone upon disease progression. Specifically, patients treated with the continuous exposure of VB-111 had the median overall survival of about 15 months compared to overall survival of about 8 months in patients with limited VB-111 exposure. The p-value was 0.048. In addition, for the first time the company reported overall response rate of 29% or seven out of the 24 with two complete responders in the continuous exposure cohort compared to 9% or 2 out of 22 with no complete responders in the limited exposure cohort. In summary, we are encouraged by the promising results reported with VB-111 to date and believe that it has the potential to change the treatment paradigm for recurrent GBM patients who are at greater need for an effective therapy. Furthermore, as we noted in our press release today, VB-111 has also shown promising efficacy signals in both platinum-resistant ovarian cancer and progressive, differentiated thyroid cancer. For example, we reported positive results from the thyroid trial at the recent International Thyroid Conference showing that we achieved the primary endpoint of 6 months progression free survival for at least 25% of the enrolled patients. You’ll remember that the study which was designed to assess the safety and efficacy of VB-111 enrolled 29 patients with metastatic radioiodine resistant differentiated thyroid cancer (RAIR-DTC), whose disease had progressed within the 6 months prior to enrollment. Most of the patients' cancers had previously not responded to various therapeutic interventions including radiation, tyrosine kinase inhibitors and cytotoxic agents. In the second quarter we reported promising interim results from the Phase 2 investigator initiated trial of multiple dose of VB-111 in patients with platinum resistant ovarian cancer at the ASCO conference. We showed them that VB-111 in conjunction with weekly paclitaxel yielded a 60% response rate of high dose patients meeting the CGIC response criteria based on a reduction of at least 50% in the CA-125 tumor-marker levels. Of course, we keep following the patients and recruiting more patients and we are going to report about it later on. In summary, we are generally excited and encouraged by this promising data. While I don’t want to diminish the potential importance of VB-111, I would be remiss not to point out that VB-111 is the fresh compound of its kind to emerge from our Vascular Targeting System or VTS gene therapy platform. VTS enables the targeted and specific expression of a gene of choice in angiogenic blood vessels through unique proprietary DNA regulatory sequence. We believe VTS is a true platform enabling the discovery and development of truly innovative oncology therapies. I will resist my temptation to continue on VTS in general and VB-111 in particular and would welcome any questions you may have on the technology later. Finally, yet importantly, I would like to reiterate that we strengthened our balance sheet with the successful completion in November of a public offering which raised $15 million in gross proceeds to VBL. The lion shares of this new money is expected to take us all the way through read-out of the results from the GLOBE pivotal trial. Now I’d like for Amos Ron, our Chief Financial Officer, to give you more details about the financing and our current financial status of affairs. Amos?

[Amos Ron:]

Thank you, Dror. We ended the quarter with cash, cash equivalents and short term bank deposits of $27.6 million, compared to $36.8 million at the year-end 2014. As Dror mentioned, on November 6 we closed on an offering of 2.5 million ordinary shares together with accompanying warrants to purchase an aggregate of 1.25 million ordinary shares. The combined offering price of each ordinary share and accompanying warrant was $6 per share. The gross proceeds to VBL Therapeutics from this offering were $15 million, before deducting underwriting discounts and commissions and other estimated offering expenses payable by VBL Therapeutics. Research and development expenses for the third quarter of 2015 were $4.9 million compared to $2.9 million in the third quarter of 2014. This increase in R&D expenses was due to the commencement of VB-111 Phase 3 trial, partially offset by the cessation of our Phase 2 clinical trials with VB-201. Research and development expenses for the nine-month period ended September 30, 2015, were $9 million compared to $8.3 million in the comparable period in 2014. General and administrative expenses were $771,000 in the third quarter of 2015 compared to $423,000 in the third quarter of 2014. The increase in G&A expenses was due primarily to costs associated with being a public company. General and administrative expenses for the nine months period were $2.7 million compared to $1.5 million in the comparable period in 2014. The net loss for the third quarter was $5.8 million or $0.29 loss per share compared to a net loss of $3.5 million or $2.45 per share in the third quarter of 2014. Net loss for the nine months period was $11.7 million or $0.59 per share compared to a net loss of $12.3 million or $9.98 per share in the same period of 2014. The increase in the net loss is attributable to the commencement of the GLOBE study and its related expenses. It is in line with our budgeted work plan. In summary, we continue to have resources in place to execute on our corporate objectives. We expect that our cash and cash equivalents will be sufficient to meet the estimated working capital requirements, fund planned operations, and support the advancement of our development plan with both the Vascular Targeting System and Lecinoxoid platform technologies at least until mid 2018. Now, I would like to turn the call over to the operator for any Q&A.

[Operator:]

[Operator Instructions] We’ll go first to Charles Duncan with Piper Jaffray.

[Charles Duncan:]

Hi folks, congrats on the GLOBE initiation and recent equity raise, also thanks for taking my questions. Dror, I had a question regarding the GLOBE study enrollment or perhaps clinical site initiation. Can you give us some quantitative information on that and plans to update this quantitative information at least broad strokes?

[Dror Harats:]

So as you all know, we initiated study late in the third quarter, and because we are dealing with a gene therapy product the initiation is slow as expected. Every site has to go not just through the IRB but also a safety committee. We expect the major initiation of sites to start toward the end of this year and the beginning of next year and we expect to have most, if not all sites open by the end of the first quarter of ’16 and that’s all go by according to the plan as we headed for the study. The real inauguration of the trial is actually going to happen about 10 days from today at the SNO conference where we are having meeting with most of the PI from the different centers that’s going to take part of it. But I can say that now that we have basically an approval both from the FDA of course for the study but also from Israeli authorities and the Canadian authorities, world health authorities where are quite advancing the process I believe as many centers are going to be open both in the US, Canada and Israel very soon.

[Charles Duncan:]

I was going to ask you about the SNO meeting but before I do, you mentioned the interim analysis possible in the first quarter of 2017. I am wondering if you could remind me of the number or the number of events or patients assumed for their milestone or at least kind of what do you anticipate out of the controlled arm in terms of the events rate or time to events for the milestone.

[Dror Harats:]

So as you all know this is an event driven trial and the interim analysis is going to take place when we get to 91 events and the full data is going to be when we get to 151 events. Event is a depth of a patient, so there is no question about the events unfortunately. And what we would expect that if we look at the total number of patients that are alive at 12 months when we look at different trials with Avastin, it’s actually a little bit less than 30% coming to 28%. We expect that VB-111 arm will have more than 50% of the patients alive at 12 months. So it all depends on the rate of death in the two arms. We expect that Avastin arm won’t change from the different four major trials that was done with Avastin and we are going to show this stuff actually at the SNO conference when we will compare our results to the historical controlled results of the four major trials that were done with Avastin alone and then it will be very clear what is the range in the Avastin arms compared to what we expect in our treatment arm if it will follow what we’ve seen in the Phase 2 and I believe it should follow because we are not changing anything in terms of a patient that we are recruiting.

[Charles Duncan:]

Okay, perhaps you actually just answered my question regarding upcoming SNO meeting presence and what you would anticipate out of that. Maybe I could move to my final question which is, wondering if you are still planning on a programmatic update meeting with the FDA in the first quarter and with that, if it’s possible for you to move into company sponsored study of platinum resistant ovarian cancer in 2016?

[Dror Harats:]

That’s the basic plan and we actually say it all the time that we are planning to approach FDA both on the VB-111 results of the Phase 2 and discuss with them the program but we also want to present to the agency the data from the Phase 1/Phase 2 in platinum resistant trial that we are doing in the ovarian patients and because the response rate is a much higher than expected with chemotherapy alone which is about 11% and what we do see now – what we actually put in the public domain was 60% and I cannot talk about anything else right now but the data keep coming in a very nice way. So we believe that the meeting with FDA which will be an end of Phase 2 meeting, we should actually get a plan to go forward this program in 2016.

[Operator:]

[Operator Instructions] We’ll take our next question from Gbola Amusa with Chardan Capital.

[Gbola Amusa:]

In terms of your progress so far, are there any data that could mature prior to timeline still come, that you could potentially present there, that’s the first question? And then second question, just looking longer term, to the extent your three programs in cancer progressed, would your strategic vision be more to expand into other cancer indications with VB-111 or potentially to use the platform technology in different ways potentially outside cancer?

[Dror Harats:]

So for your first question, yes, we – and nobody can be assured that he will – the Harvard medical school doctors have done the trial, that they will be presented at the ASCO but I am sure that they will -- actually would like to present at the 2016 ASCO the more mature data that we are having in platinum resistant ovarian cancer. The data is quite compelling, so I suspect that we will have a chance to present these at the ASCO. And regarding to what is our plan in developing the vascular targeting system platform technology and/or VB-111, so right now we have on the table quite a significant programs with GBM where we are doing recurrent GBM. Looking at the data, one can guess that we should think about newly diagnosed GBM as well. We have the platinum resistant ovarian, we have data which are very interesting from the thyroid, we cannot do all three together. And in terms of the other indications outside of oncology and the vascular targeting system, I believe that we want to stay and concentrate as an oncology company and we will look actually to have some different collaborations on the other indications in the vascular targeting system which can include severe ischemia or organ regenerative medicine. When you build an organ one of the things that you always need is building vasculature. It’s already been shown that with our technology you can build the stable vasculature that can hook up to the system. So we are looking actually to try and create some collaborative effort where we won’t believe it alone. End of Q&A

[Operator:]

And at this time there are no additional questions in the queue. I’d like to turn the conference back over to Mr. Harats for any additional or closing remarks.

[Dror Harats:]

So thank you for joining the call. We appreciate your participation and interest in the company and look forward to updating you on our next conference call. Thank you very much.

[Operator:]

That concludes today’s call. We appreciate your participation.