Vascular Biogenics Ltd.
Q1 2022 Earnings Call Transcript

Published: 17 May 2022

[Operator:]

Greetings, and welcome to the VBL Therapeutics First Quarter 2022 Earnings Confernce Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. . As a reminder, this conference is being recorded. I would now like turn the conference over to your host, Mr. Dan Ferry of LifeSci Advisors. Please go ahead, Dan.

[Dan Ferry:]

Thank you, Operator. Good morning, everyone, and thank you for joining the VBL Therapeutics first quarter 2022 financial results and corporate update call. Joining me on the call is Professor Dror Harats, Chief Executive Officer; and Sam Backenroth, Chief Financial Officer. A press release with the company's financial results was issued earlier this morning and is available on the Investor Relations page of the VBL's website at vblrx.com. Before turning the call over to Dror, and Sam, I would like to remind everyone that during this conference call, forward-looking statements made by management are intended to fall within the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995, and Section 21E of the Securities Exchange Act of 1934, as amended. As set forth in our press release, forward-looking statements involve risks and uncertainties that may affect the company's business and prospects, including those discussed in our filings with the SEC, which include, among other things, our annual report on Form 20-F and Form 6-K. These filings are available from the SEC or on our website. Any forward-looking statements made on today's conference call speak only as of today's date, Tuesday, May 17, 2022, and the company does not intend to update any of these forward-looking statements to reflect events or circumstances that occur after today's date. As a reminder, this call is being recorded and will be available for audio rebroadcast on our website. There will be a Q&A session following the company's prepared remarks. With that, I'd like to turn the call over to Professor Dror Harats. Dror?

[Dror Harats:]

Thank you, Dan, and good morning, everyone. Thank you for joining us on today's call. 2022 is off to a very promising start for VBL with continued progress and important milestones in both our late-clinical program evaluating ofra-vec in ovarian cancer, as well as is in our pipeline. We continue to execute on our strategic plan and remain on-track to announce the readout of the progression-free survival primary endpoint from the OVAL registration enabling trial in the second half of this year, which is positive, would be transformative event for VBL. Recently, we were pleased to announce that the FDA has granted fast-track designation for ofra-vec for platinum-resistant ovarian cancer, which may help expedite a time-to-market for our lead candidate ofra-vec. Ofra-vec a is also being evaluated in two other high-value cancer indication; colorectal cancer and glioblastoma with preliminary data expected from both of these studies in 2022. We are also advancing VB-601, the first anti-inflammatory candidate from our novel monocyte targeting technology toward the clinic. We believe this catalyst set us up to continue to build VBL into a well-positioned company providing unique and differentiated solutions to patients in need. Beginning with our late program, ofra-vec, is the first-in-class gene-based approach to treating cancer, which is highly differentiated in the oncology space. It has unique dual mechanism of action, designed to combine the blockage of blood vessels formation that are required for tumor growth with the anti-tumor immune response that recruits T-cells into the tumor microenvironment. In March, we completed the enrollment in OVAL, our Phase 3 registration enabling trial evaluating ofra-vec in recurrent platinum-resistant ovarian cancer with a total of 409 patients. We announce that at the same time that the independent data safety monitoring committee overseeing this trial made unanimous recommendations that the trial should continue as planned. Importantly, the committee provides its recommendation following a review of unblinded data from 370 patients who were on study at the cut-off of date of December 31, representing at the time more than 90% of the targeted population of the trial. We designed the OVAL trial with two individual independent primary endpoints; progression-free survival and overall survival. Based on regulatory guidance, successfully meeting either of these endpoints should be sufficient to support a BLA submission. Readout of the first of these, the PFS primary endpoint is expected in the second half of 2022. A positive outcome in the PFS endpoint should set us up to submit a BLA for FDA approval in the first half of 2023. Its important to note, that all the other existing drugs approved for ovarian cancer including the three PARP inhibitors and Avastin were approved based on PFS data, and they have not demonstrated an overall survival benefits to-date. We were pleased to announce in April that the FDA has granted Fast Track designation for ofra-vec for platinum-resistant ovarian cancer. Fast Track designation as a reminder is a process facilitate development and expedite the review of therapies with the potential to treat serious unmet medical needs. There are important benefits that go along with this designation, including eligibility for accelerated approval and priority review, the opportunity for more frequent meetings and written communication with FDA, as well as opportunity for a rolling BLA submission. Ultimately, having Fast Track designation may help expedite the time-to-market for ofra-vec. On April 11, we hosted a live KOL event for the investment community in New York to discuss the ovarian cancer space in general, as well as ofra-vec clinical program, the science that support it, and the commercial opportunity. We had presentation by three world-renowned experts in the field; Dr. Bradley Monk, Dr. Richard Penson and Dr. Kathleen Moore. The presentations and discussion reinforce the high level of interest, which we are seeing in the oncology community about ofra-vec and the growing excitement around the upcoming OVAL top line PFS announcement. The webinar is archived on our corporate website for those of you who have not yet had a chance to listen. We believe ofra-vec may have a broad applications in other cancer due to its dual mechanism of action. And part of our strategy is to identify new oncology indications beyond ovarian cancer. There are currently two other ongoing clinical trials that are expected to generate preliminary data in 2022. The first, is a Phase 2 Clinical Trial in combination with Opdivo, an immune checkpoint inhibitor for the treatment of metastatic colorectal cancer. This is being conducted under a cooperative research and development agreement with the National Cancer Institute. In this trial, we are looking to see whether ofra-vec immune recurrent mechanism, which has seen in organ throughout the body also replicate in the gastrointestinal system. The GI system regularly sees viruses, pathogens, and foreign proteins and therefore it may react differently to ofra-vec compared to other organ system. This study is important to us, as it will tell us whether GI cancer should be further explored with ofra-vec. The second clinical trial is randomized control Phase 2 investigating ofra-vec in neoadjuvant and adjuvant setting in recurrent GBM patients who are undergoing a second surgery. This trial is sponsored by Dana-Farber Cancer Institute in collaboration with a group of top neuro-oncology centers and enrollment is ongoing. We expect preliminary data from both the colorectal and the GBM studies later on in 2022. Moving on to our pipeline. We are on track to initiate the first in human study for our lead candidates VB-601, which is designed to offer a novel and differentiated approach to treat prevalent chronic inflammatory diseases, such as multiple sclerosis, rheumatoid arthritis, non-alcoholic steatohepatitis, ulcerative colitis, IBD, and others. VB-601 is a monoclonal antibody, the target MOSPD2. A surface protein that is expressed on the cell membrane of monocytes and enable them to migrate to inflammatory organs. Monocytes are one of the key cell types involving an inflammation and have been implicated in the development of chronic diseases. We believe our approach has a broad potential and is differentiated from the majority of current anti-inflammatory agents, which were mostly through targeting T-and-B lymphocytes. New data from this program, which gives insight into the mechanism of our approach were presented at the Immunology 2022 Conference on May 8. We showed for the first time a molecular mechanism explain how VB-601 inhibit the ability of monocytes to walk by changing the dynamic process of adhesion and detachment from molecule on the blood vessels and the extracellular matrix in the tissue. VB-601 act by fixing monocytes in an adherent state, thereby preventing them from getting into inflamed tissue. In addition to this presentation, we provide a more general overview of our VB-601 program last week at the LifeSci Immunology and Inflammation Symposium. A replay of this presentation, as well as a copy of the poster we presented at Immunology 2022 can be found on the Investor Relations section of our website. Regarding our development plan for VB-601, we previously had successful pre-IND meeting with FDA. We have since completed IND-enabling toxicology studies that demonstrated a safety profile that support moving the product into the clinic. We expect to initiate a clinical trial in the second half of this year. So, to summarize thus far, we had meaningful progress in 2022, including completing enrollment in the OVAL Phase 3 registration enabling trial, and we are on track for top line results in the second half of the year. Second, Fast Track designation for ofra-vec that can facilitate the dialogue with FDA and potentially expedite time-to-market for ofra-vec. Third, continued progress with the ongoing recurrent GBM and metastatic colorectal cancer clinical trial. And fourth, develop advancement in the VB-601 mechanism of action and toxicology studies, which support our plan for the first in human trial with this novel candidate later this year. With that, I will hand over to Sam to discuss the quarterly result. Sam, please go ahead.

[Sam Backenroth:]

Thank you, Dror, and good morning everyone. Revenues for the first quarter ended March 31, 2022 were $0.1 million, compared to $0.2 million for the comparable period in 2021. Total operating expenses for the first quarter were approximately $10.7 million, consisting of $7.5 million in R&D expenses net, and $3.2 million in general and administrative expenses. This compares with total operating expenses of $6.5 million in the comparable period in 2021, which was comprised of $4.8 million in R&D expenses net, and $1.7 million in general and administrative expenses. For the first quarter of 2022, VBL reported a net loss of $10.4 million or $0.13 per basic share, compared to a net loss of $6.3 million or $0.12 per basic share in the comparable period in 2021. At March 31, 2022, VBL had cash, cash equivalents, short term bank deposits and restricted bank deposits of $44.8 million. Based on our current projections, we expect that this cash position will be sufficient to fund planned operating expenses and capital expenditures for at least 12 months from the date of the readout of top line PFS data from the Phase 3 OVAL trial, which we anticipate receiving in the second half of 2022. With that, I will return the call back to the operator for the Q&A portion of this morning's call. Thank you.

[Operator:]

At this time, we'll be conducting a question and answer session. Our first question comes to line of Jonathan Aschoff with ROTH Capital Partners. You may proceed with your question.

[Jonathan Aschoff:]

Hi, guys. Thank you. Good morning. Juggling a few 8.30 calls here. My only question is and maybe you've answered it. Is a how much of the €17.5 million is already baked into the 1Q, 2022 cash number?

[Sam Backenroth:]

So, none of that is baked into the numbers. So, as you'll see in our 6-K, we are in the process of going through the procedures in order to get those funds. And we do expect both the grant portion, as well as the equity portion in the coming months.

[Jonathan Aschoff:]

Okay. So, as projected before the €2.5 just didn't make it in by the end of March, but should be in far sooner than the equity component, right?

[Sam Backenroth:]

Correct. I mean, we think that they're working on a relatively similar track. All the equity is going to be slightly behind the grand portion.

[Jonathan Aschoff:]

Okay. Thank you very much.

[Sam Backenroth:]

Thanks, Jonathan.

[Operator:]

Our next question comes from the line of Kevin DeGeeter with Oppenheimer. You may proceed with your question.

[Susan Chor:]

Hi. Good morning. This is Susan on for Kevin. My first question is, what can you tell us about the scope of the ASCO posters? I know they're embargoed, but anything?

[Dror Harats:]

As they are embargoed, then we all respect ASCO. I can't say a match on it, Susan. And thank you for asking. But as you can imagine, because the trials are in progress, you shouldn't expect to see a top line results at ASCO.

[Susan Chor:]

Okay. And my follow-up on how to think about the OpEx spend going forward. We were a little low this quarter then I was just wondering. How do you think about that?

[Sam Backenroth:]

Yes. So in terms of the OpEx, obviously, this is going to be a pretty heavy quarter just because of the OVAL trial. And that's really where the primary activity was coming, where we have the most patients on trial, the most activity as we get towards data cleaning and closing out sites that have finished their patients within the trial. So, certainly came in a little bit heavier. But we do expect that over the full year things will start to normalize at least with regard to the OVAL study. And we're going to continue obviously to have activities with regard to pre-commercialization activities and preparing for BLA filing in the first half of 2023.

[Susan Chor:]

Got it. Thank you. That is all from me.

[Operator:]

Our next question comes from the line of RK Ramakanth with H.C. Wainwright. You may proceed with your question.

[RK Ramakanth:]

Thank you. This is RK from H.C. Wainwright. So, Dror, I'm trying to understand what sort of updates would we get and your final data from an OVAL trial?

[Dror Harats:]

Basically, that the trial is on track. And the results, we expect them as we are saying in the second half of 2022. But we are not going to disclose more data as it's a randomized controlled double-blind study and we don't have any information more than anybody else. So, we will all wait patiently to get the results.

[RK Ramakanth:]

Okay. Thank you.

[Operator:]

Our next question comes from the line of Matthew Barcus with Chardan. You may proceed with your question.

[Matthew Barcus:]

Good morning, and congrats on the results from the quarter. Just a couple of short questions from me. So regarding the potential launch of ofra-vec and ovarian cancer, what's the current nature of dialogue happening with payers at the moment?

[Dror Harats:]

Thank you for asking the question there. As you can imagine, this is a unique drug and when we discuss it with the payers, and it wasn't just us, we actually were contracted with clear view to do this analysis. We realized as we expected that the payers are expecting to pay on the high range for a drug like this. And you can make your own calculation as for example, for the PARP inhibitors, they're paying about 25 grants a month. And this drug is given every eight weeks. So you can do the calculation and see what the payer think about our drug. And even with this price, they were saying that that's a no brainer for a drug like this and we heard it from the different payers.

[Matthew Barcus:]

Great. Thanks. And then also I wanted to ask about your VB-601 program. How are you thinking about cadence from that program in terms of data, and also initial target selection-- indication selection?

[Dror Harats:]

So, maybe 601 is a unique and real novel program. First, because it's working on monocytes. And second, because it's working with the monocytes in a completely different way. And it's actually a novel biologist we discovered. We discovered the MOSPD2. And now we discovered the way actually monocytes walk when they get outside of the blood vessels and they walk into the inflamed tissue to get to the right place. And MOSPD2 is a critical molecule to enable monocytes to walk in VB-601 blockade. So this is a completely novel mechanism. And whoever know about chronic immune inflammatory disease, know that the signs show that monocytes play a major role in the chronic phase of these diseases. And unfortunately, we have no drug on the market that actually targeting monocytes directly. So, we are going to start with a healthy volunteers and have a PK and PD there. We are developing an assay that will enable us to know more than just the dosing, but also the efficacy of the drug. And then, their plan right now is to go for MS and mainly to the chronic phase of MS and not their relapsing remitting that you have some therapies, although it's not a ideal. But we also consider other indications that might help us show the proof-of-concept relatively early in the development program. This is successful going to be a huge program for any drug company.

[Matthew Barcus:]

Well, that's exciting. Thank you.

[Sam Backenroth:]

Thanks Matt.

[Operator:]

Ladies and gentlemen, we have reached the end of today's question and answer session. I would like to turn this call back over to Mr. Dror Harats for closing remarks.

[Dror Harats:]

Thank you all for participating in our call today and have a wonderful day.

[Operator:]

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Enjoy the rest of your day.