BioLine RX Ltd (BLRX) 2022 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the BioLineRx third-quarter 2022 results conference call. (Operator Instructions) I would now like to turn over the call to John Lacey, Head of Corporate Communications and Investor Relations. Please go ahead.

Thank you, operator. Before turning the call over to management, I would like to make the following remarks concerning forward-looking statements. All statements in this conference call, other than historical facts, are indeed forward-looking statements.

The words anticipate, believe, estimate, expect, intend, guidance, confidence, target, project, and other similar expressions are used typically to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and may involve and are subject to certain risks and uncertainties and other factors that may affect BioLineRx's business, financial condition, and other operating results.

These include, but are not limited to, the risk factors and other qualifications contained in BioLineRx's annual report on Form 20-F, quarterly reports filed in a 6-K, and other reports filed by BioLineRx with the SEC to which your attention is directed. Actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements. BioLineRx expressly disclaims any intent or obligation to update these forward-looking statements.

At this time, it is now my pleasure to turn the call over to Phil Serlin, Chief Executive Officer of BioLineRx.

Thank you, John, and good morning, everyone. And thank you for joining us on our third-quarter results conference call today. Earlier this morning, we issued a press release, a copy of which is available in the Investor Relations section of our website. It was also filed as a 6-K.

As is our practice, I will begin with an overview of our third quarter, then Mali Zeevi, our Chief Financial Officer, will provide a discussion of our financial results. We will then open up the call and are looking forward to your questions. We are also joining the call for Q&A are Abby Weinstein, our Chief Medical Officer, Ella Sorani, our Chief Development Officer; and Holly May, President of BioLineRx USA.

The key highlight since our last quarterly update is unquestionably the submission and subsequent acceptance by the FDA of our new drug application for motixafortide, now known by its brand name Aphexda, in stem cell mobilization for autologous bone marrow transplantation for multiple myeloma patients.

The agency has assigned a PDUFA target action date of September 9, 2023. The NDA was based on the overwhelmingly positive top-line results from our GENESIS Phase 3 trial, which compared Aphexda on top of G-CSF versus placebo on top of G-CSF. Recall that we held a successful pre-NDA meeting with the agency this past December and gained alignment on key aspects of the filing, most notably that a single Phase 3 study, GENESIS, would be sufficient to support a submission.

The study met all primary and secondary endpoints with a very high degree of statistical significance, a p-value of less than 0.0001. Notably, approximately 90% of patients in the GENESIS study went directly to transplantation after mobilizing the optimal number of stem cells following only one administration of Aphexda and in only one apheresis session, compared to less than 10% of those receiving G-CSF alone.

In addition, patients in the Aphexda plus G-CSF arm collected a median of approximately 11 million stem cells per kilogram in only one apheresis session versus approximately 2 million in the G-CSF arm. The combination was also found to be safe and well-tolerated. This high success rate has a substantial clinical benefit, especially when considering that new induction treatments are more effective than ever before but cause subsequent difficulty in mobilizing the target number of stem cells for transplantation.

The high success rate may also confer significant benefits to transplant institutions through the more efficient use of apheresis units, where there is often a lack of available machines. Given that the potential benefits of Aphexda over the current standard of care accrue to multiple healthcare stakeholders, we anticipate rapid uptake in the market if and when approved.

We plan to commercialize Aphexda in the US independently. We have made this decision after a careful and lengthy review of our options, led by Holly May, President of our US operations. Commercializing Aphexda ourselves will both accelerate its availability to multiple myeloma patients, while at the same time allow us to maximize the value of the asset for our company.

Recall that third-party market research that we commissioned earlier this year concluded that in 2001, the US stem cell mobilization market was approximately $360 million annually and growing steadily, and it was in excess of $500 million annually on a global basis. We have indicated before that the stem cell mobilization market is highly concentrated, as approximately 80 transplant centers out of 212 perform approximately 80% of stem cell procedures.

Therefore, the commercialization expenses and footprint required would be limited relative to a more traditional oncology launch in a broader indication. With our NDA now accepted, we look forward to working with the agency during its review process, while in parallel advancing our multifaceted pre-launch plan, including the ongoing build-out of US infrastructure, so that we are well-positioned for a robust launch if and when approved.

To ensure that we are financially well-positioned to execute the most effective launch possible, subsequent to the submission of our NDA, we announced the completion of two financings that in the aggregate give us access to up to $55 million of additional funds.

First, we announced a $40 million non-diluted debt financing agreement with Kreos Capital. Kreos is a leading provider of innovative and flexible debt solutions to equity-backed pan-European and Israeli high-growth companies in the technology and healthcare sectors. Per the terms of the agreement, the first tranche of $10 million was made available to us upon execution of the definitive agreement.

The remaining $30 million will be made available in two additional tranches, subject to the achievement of pre-specified milestones. The tranches are available for drawdown at our discretion at various time points through October 1, 2024.

Borrowings under the financing will bear interest at a fixed rate of 9.5% per annum, approximately 11% including associated cash fees, and in addition, Kreos will be entitled to mid-to-high single-digit royalties on Aphexda's sales, up to a pre-defined cap. Following the close of the debt financing agreement, we also completed a $15 million registered direct equity offering of American depository shares.

With the funds received from these transactions, our cash balance at September 30, 2022 was $57.3 million, which, including the additional potential amounts available to us under the debt financing agreement, we believe positions us very well financially to execute the targeted commercial launch that we are planning should Aphexda be approved.

Turning now to our motixafortide pancreatic cancer, or PDAC program, recall that earlier this year we entered into a development collaboration agreement with GenFleet Therapeutics. Under the terms of this agreement, GenFleet plans to execute a rigorously designed, randomized Phase 2b clinical study in approximately 200 first-line metastatic PDAC patients in China. Importantly, we maintain full rights to motixafortide across all indications and geographies, while GenFleet would be entitled to a small, single-digit sales royalty should Aphexda ultimately be approved.

This collaboration is based on the positive results that we reported from our Phase 2a COMBAT/KEYNOTE-202 Triple Combination Study of motixafortide in combination with Merck's anti-PD1 Keytruda and chemotherapy as a second-line therapy. As a reminder, data from the Phase 2a study demonstrated a substantial improvement across all study endpoints as compared to historical data, including median overall survival, median progression pre-survival, confirmed overall response rate, overall response rate, and disease control rate.

Based on their development capabilities in China, including experience in conducting combination trials in the immuno-oncology space, we believe we have found the ideal partner to advance Aphexda pancreatic cancer and look forward to the initiation of this trial in 2023. Also recall that motixafortide is being evaluated in a separate investigator-initiated PDAC trial in collaboration with Columbia University.

That Phase 2 study is evaluating motixafortide in combination with the anti-PD1, Libtayo, and chemotherapy as a first line PDAC therapy. That study continues to progress, and we will share additional updates, including the potential timing of data, which we hope will be during 2023 when available.

Our presence at important medical congresses is key to raising awareness of the potential of motixafortide, and the American Society for Hematology meeting next month, December 10 to 13, is perhaps the most important of the year. We are very pleased this year to announce two poster presentations at ASH. The first presentation will detail full results from our pharmacoeconomic study that indirectly evaluated the cost-effectiveness of using motixafortide as a primary stem cell mobilization agent in combination with G-CSF versus plerixafor in combination with G-CSF in multiple myeloma patients undergoing autologous stem cell transplantation.

Data from the study demonstrated meaningful net cost savings with motixafortide plus G-CSF due to a significantly greater proportion of patients in the motixafortide arm successfully achieving mobilization of the optimal amount of stem cells following a single administration of motixafortide and in only one apheresis session.

The second presentation would detail the design of a Phase 1 trial that will assess motixafortide as part of a novel stem cell mobilization regimen to evaluate its ability to safely produce the sufficient quantity of hematopoietic stem cells required for the genetic manipulation processes used in gene therapy development. The study will further examine the quality of the mobilized stem cells including immunophenotypic and single cell transcriptional profiling.

The trial will include patients with sickle cell disease, one of the most common inherited genetic diseases globally, and a condition where G-CSF mobilization is associated with severe adverse effects. Plerixafor alone has not demonstrated an ability to reliably yield optimal hematopoietic stem cell numbers for gene therapy applications. We think gene therapy is just one example of how we can ultimately leverage motixafortide into additional high-need indications.

Turning now to our second clinical candidate, the intra-tumoral anti-cancer vaccine, AGI-134, we are evaluating safety, tolerability, and proof of mechanism in multiple solid tumor types in a Phase 1/2a study. The study is designed to evaluate a wide array of biomarkers and assess both clinical and pharmacodynamic parameters.

We believe that AGI-134 coats tumor cells with alpha-Gal to make them look like foreign tissue to evoke an immune response that both destroys existing tumors and provides a vaccine-like effect. We anticipate sharing data from part two of the Phase 1/2a trial by year-end.

I would now like to turn the call over to Mali Zeevi, our CFO, who will give a brief overview of our key third-quarter financial statement items. Mali, please go ahead.

Thank you, Phil. As is our practice, in our financial discussion, we will only go over a few significant items on this call: research and development expenses and cash. Therefore, let me invite you to review the filings we made this morning, which contain our financials, operating and financial review, and press release for additional information.

Research and development expenses for the three months ended September 30, 2022 were $4.4 million, an increase of $0.5 million, or 11.3%, compared to $4.9 million, for the three months ended September 30, 2021. The decrease resulted primarily from lower expenses related to motixafortide NDA-supporting activities, as well as lower expenses associated with the completed motixafortide GENESIS clinical trial, offset by an increase in payroll and related expenses.

Research and development expenses for the nine months ended September 30, 2022, were $14.2 million, a decrease of $0.1 million, or 1%, compared to $14.3 million, for the nine months ended September 30, 2021. The decrease resulted primarily from lower expenses related to NDA-supporting activities related to motixafortide, as well as lower expenses associated with the completed motixafortide GENESIS clinical trial, offset by an increase in expenses associated with the AGI-134 study.

Turning to cash, the company held $57.3 million of cash, cash equivalents, and short-term bank deposits as of September 30, 2022. As Phil indicated, our cash includes $10 million from the Kreos agreement and $13.5 million in net proceeds from the Registered Direct Offering but does not include the additional $30 million available to us under the Kreos agreement, which is tied to attainment of certain milestones. We believe we are well-financed to achieve multiple potentially value-created milestones into the first half of 2024.

And with that, I'll turn the call back over to Phil.

Thank you, Mali. In closing, as is our custom, I would like to take a few moments to summarize our key upcoming milestones. First, announcement of initial results for part two of the Phase 1/2a trial of AGI-134 in solid tumors by the end of the year.

Then, the potential FDA approval of Aphexda in Q3 2023, also the potential US launch of Aphexda in stem cell mobilization in Q3 2023, and the initiation of a Phase 2b randomized study of Aphexda in PDAC under our collaboration with GenFleet in 2023.

Finally, before turning the call over to questions, I'd like to personally thank our CMO, Abby Weinstein-Harris, for her many years of service to the company. Abby has recently decided to move to the US with her family and will be departing the company effective December 31, 2022.

Following that, she will be staying on as an advisor through at least the end of 2023, ensuring a smooth transition of responsibilities, including full support during the FDA review process. The company has started a search for a new CMO and will announce the new appointment at the appropriate time.

With that, we have now concluded the formal part of our presentation. Operator, we will now open up the call to questions.

(Operator Instructions) Joe Pantginis, H.C. Wainwright.

Hey, everybody. Good morning and good afternoon. Thank you for taking the question and let me start off by wishing Abby well in her future endeavors and it was great working with you here. So let me just focus on motixafortide first. So first, I just want to see, do you have any indication about whether the FDA might look to have an AdCom?

Yeah. So the FDA has stated they are not currently planning to hold an advisory committee meeting to discuss the application.

Okay, perfect. And then maybe for everybody, but Holly especially, based on your comments, Phil, obviously this is a limited commercial expense type of indication, very focused group. Holly, what do you think is the primary rate limiting step for this launch?

A lot of times a new drug might be education, bringing on a sales force, I mean -- but this seems pretty focused, so I'm just curious what you feel are the primary rate limiting steps to initial commercial success.

Yeah. I mean, I am not worried about any rate limiting steps, just to be clear, and part of it is for the exact reason that you spoke of. This is a very manageable sort of launch, concentrated launch, and it's the ideal for a company like BioLine to enter into the US market.

So what's the things -- there's many things, though, that could be rate limiting steps, but I feel like we are very much ahead of those. So there's a lot of what I would call long lead time items, like being able to actually have product in the marketplace through serialization, and we have -- we're well on the process there. We've selected a 3PL partner.

We've got our secondary packager up and running. We are really well attuned to what the demand drivers are in this market, and even more so since the last time we spoke, because we have done even deeper market research.

I've got almost all of my frontline leaders on board now. They're all deep subject matter experts, and we have been doing what I think is just some of the best market research that I've been a part of on both understanding landscape.

That's completed on top of that research around payer and value proposition and value messaging to really understand, and then on top of that will be the pricing and access type of insight generation. So I think we've got a really good plan.

What could have been a rate limiting step and still remains kind of in the forefront of my mind is the ability to develop relationships. We know that takes time. So if I had to pick one thing, it could be that. That said, we are also on top of that because we now have a fully -- a full complement of medical science liaisons who are going to these top transplant centers that Phil spoke of.

We've got a very targeted view on how to go about doing that for the fastest kind of market share uptake. So we're there, too. I'm not worried. I'm just not -- I'm really not that concerned and worried because I think we've thought about all of these various parts. But certainly, we do need to develop relationships and we do need to get the word out.

So the last thing I guess I'll say is that we have now, through our medical affairs pillar, started to formulate a scientific communication plan. Some of that Phil's already spoke about. You're going to see that at ASH. I would highly encourage you to look at the -- there are going to be a couple of posters, but one of the abstracts that was submitted and accepted that we're very excited about is not just the speaking of the pharmacoeconomic story, which you've probably all heard in the past, but this poster is going to start to tie together the meaningful outcomes of both the clinical story and that pharmacoeconomic story.

So we're really excited for that, and I would certainly encourage everyone to look for that coming out of ASH. I don't know if I answered your question because I think you want me to be super concerned. I'm just not really concerned about this launch.

No, no, no. You certainly addressed my question. It wasn't from a point of concern. It was more of look, I mean, a lot of times if it's a new drug to the market, you have to do a lot of education, or what have you. But you certainly addressed my question and not from a concern standpoint. Thanks for that.

And then I guess, Phil, from a broader standpoint of the company, it's great to see that PDAC is moving forward with GenFleet. It was a very nice partnership to sign for China. I guess now how you would define the current status as you view PDAC and additional tumor indications for the rest of the world and where that stands in your business development, a company view, wholesale views on this topic.

Yeah. So, I mean, we've always looked at PDAC as a prototype for other solid tumor indications. And so we're right now focusing on that collaboration and that phase to be studied. And I think, as I pointed out in my prepared remarks, we also have a collaboration at Columbia University with Columbia University also in first line, stage four metastatic pancreatic cancer.

So we're going to focus on those two trials right now. And once the data becomes available, obviously, we will look to partner out the solid tumor indications to a larger company to maximize the potential value in all indications.

Got it. Thanks for all the color, guys.

Okay. Thank you very much. Have a great day.

Mark Breidenbach, Oppenheimer.

Hey, thanks for taking the questions. Congrats, of course, on the PDUFA date. And of course, we're sad to hear Abby is leaving. Just a couple of quick ones. (multiple speakers)

Just a couple of quick ones. First of all, is there a particular forum in mind for the AGI-134 data? I know we're kind of running out of medical conferences this year. Are these data going to be announced at a conference or by a press release?

And then I'm also wondering about the natalizumab-motixafortide combination that's, I guess, being studied in sickle cell as a mobilizing regimen in sickle cell patients. First of all, has natalizumab plus plerixafor been previously tested as a mobilizing combination? And if this combination that you're running in this study works in sickle cell, would you consider maybe testing this as a more general G-CSF free mobilizing regimen? Would love to hear comments on that. Thanks for taking my questions.

Okay. So, Abby, do you want to first take the part about the gene therapy?

Yes. Thanks, Marc, for bringing us and give us the opportunity to present this new project, let's say, for the BL-8040 for motixafortide. The patients with sickle cell anemia are not able to receive for autologous transplantation G-CSF because G-CSF produced veno-occlusive event and doctors are seeking for new drugs for mobilization.

Plerixafor has been used because there is no other choice. However, the number of cells that are mobilized might not be enough or there is a need for several and -- several apheresis in order to get a huge number of cells. In order to do, in general, gene therapy, you need a large number of cells and primitive cells.

And the idea here, when we combine with natalizumab, is that data from Washington University have shown that the combination of BLA-4 inhibitors together with BL-8040 have shown a robust mobilization of stem cells in pre-clinical model. And the idea is to bring this to the clinics and to have a proof of concept of this combination to give the possibility to these patients to go for autologous transplantation. The thing is that these patients, in general, can get potentially allogeneic transplantation, which is very difficult and have a lot of adverse events.

Ideally, it's to give them the opportunity to have autologous transplantation with gene therapy. And we expect that this combination will allow the gene therapy to be available for this patient population.

So, has it been previously tested with plerixafor? I'm just curious.

No, no. Plerixafor has been used for -- as a monotherapy for patients with sickle cell anemia, because, again, they cannot receive G-CSF, but the number of cells might not be enough, or the number of apheresis is very large.

And we are seeking for -- and the doctors are seeking for better mobilizers and the combination for mobilization. And we believe that the combination of BLA-4 inhibitors together with motixafortide will allow us to have a very high number of cells. Hopefully, with one apheresis, probably two. The idea is to test how much -- how many apheresis and how many cells we will be able to harvest.

Okay, but you're not -- I'm sorry, but we're not aware of a study between both as a lead (multiple speakers)

No, no, no. Natalizumab, no. No.

Right, okay. So, that's the answer to the second part of your question. I'll go back to the first part, Marc, which was about AGI and the data. So, we're planning to release a press release by the end of the year with data from the study. And, of course, we will also look to present at a conference sometime next year as well. But there will be data coming out in a press release by the end of the year.

Okay. Thanks so much for that clarity, and congratulations.

All right. Thanks so much. Have a great day.

John Vandermosten, Zacks.

Good day, everyone. As you build up towards the PDUFA day, what do you anticipate the size of the sales force will be, and how do you anticipate structuring it?

Yeah, Holly, would you like to take that, please?

Yeah. So, we are -- well, while we have pre-conceived ideas on what we think the size of the sales force is, we are, at this point, not giving exact numbers. What I can -- because we're still going through more of the segmentation analysis, et cetera, and I'm in the process of hiring the sales leader who will help with that segmentation.

I will say we have already hired a head of business insights and analytics, and he has been extremely instrumental in confirming many of our assumptions and helping us think through that segmentation. We will have sales professionals out ahead of launch, I can say that, to make sure that we're doing the appropriate amount of communication with healthcare providers.

But I'm not giving the exact number at this point in time, because we're still going through some of our analytics on that side. What I can say is that we will be focused on the top -- those top transplant centers. And so, if you are thinking about typical pharma biotech models, you can probably yourself also back in the fact -- into the fact that this is a fairly small national footprint in order to target those key accounts.

Okay. And will you build it up quarter by quarter, step by step as we arrive to September and the PDUFA date? Is that kind of how it is? And then when you get there, do you plan to have the entire team in place, or are you going to make an initial entry into the space and then kind of build into 2024 as you develop those relationships further?

So, initially -- to be clear, there will be three field-facing teams. There already is a medical team, and they are doing the initial relationship building, and very early discussion as medical teams can do around stem cell mobilization. We will have -- it's the intention to also have a payer team in the field to make sure that we are communicating our value story appropriately.

And then we will also have a sales team, and they are actually going to be phased in that -- from a timing perspective in that order. And it's my intention to have the full team in the field at launch. I do think that, though, that, of course, we will be continuing to assess what our deployment plans are into the future and what utilization is and what lifecycle management is in order to make sure that we're meeting the demands of being able to create the noise that's necessary for a successful launch.

Great. Thank you, Holly. And then a question on R&D. As we wind down the motixafortide efforts and pick up in some of the other areas, how do we expect activity there to be in 2023 relative to 2022?

You're saying from a cost perspective or just overall?

Probably a cost perspective would be most helpful, and also, just the activity. I know some of that is being worked on by your partners. So I'm interested.

Right. So as I mentioned we're obviously -- there's the study being run in China, which will have a limited effect on our budget -- the Phase 2b in China, which will have a limited effect on our budget going forward in 2023 and onwards. We still have some work that follow-up work, and Abby can maybe talk to a little bit about the follow-up work for long-term endpoints in the GENESIS study.

And so that we will still be doing, obviously, and we are participating in some of these, investor-initiated studies, including Columbia University. I'd say overall our spending is expected to go down on the R&D side as we increase our spending, obviously, on the sales and marketing and commercialization side.

Okay. That's very helpful.

And, Abby, did you have anything else to add on that? I mean, I think you answered most of it.

I just wanted to add that part of the, you can say, R&D expenses or medical affairs expenses, we are not aiming to continue only with the multiple myeloma indication. The idea is to widen as much as we can as we are doing for the sickle cell anemia and for the pancreatic cancer.

We are exploring opportunities. We are reviewing opportunities how to expand the indication and potentially in the future the label for motixafortide.

Great. Thank you.

Thanks. Have a good day.

(Operator Instructions) There are no further questions at this time. Before I ask Mr. Phil Serlin to go ahead with his closing statement, I would like to remind participants that a replay of this call is scheduled to begin two hours after the conference. In the US, please call 1-888-295-2634. In Israel, please call 03-9255-904. Internationally, please call 972-392-55904. Mr. Serlin, would you like to make your concluding statement?

Yes, I would. Thank you, operator.

To summarize, we achieved a significant milestone during the third quarter with the submission and acceptance of our NDA for Aphexda in stem cell mobilization and significantly strengthened our financial position ahead of potential approval next year. We are designing and implementing an efficient yet robust launch and commercialization plan that we intend to execute independently given the highly concentrated number of transplant centers across the US that perform the vast majority of transplant procedures.

We evaluated several different options and concluded that commercializing independently would get Aphexda to multiple myeloma patients quickly while maximizing the value of the asset for our company. We believe we can capture a significant share of the US market estimated to be in excess of $360 million and growing steadily.

And from both a clinical and pharmacoeconomic perspective, we believe Aphexda, on top of G-CSF, can quickly become the standard of care in this important indication. At the same time, we are pleased to advance motixafortide in PDAC through our GenFleet agreement and we are rapidly approaching a key data readout for AGI-134. I am extremely pleased with the progress that we made during the third quarter, and I look forward to a catalyst-rich 2023. Thank you all very much for joining today's call and have a great day.

Thank you. This concludes the BioLineRx third-quarter 2022 conference call. Thank you for your participation. You may go ahead and disconnect.