Vascular Biogenics Ltd (VBLT) 2016 Q2 法說會逐字稿

Thank you, operator, and thank you all for participating in today's second-quarter 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 second-quarter financial results became available at 7 a.m. Eastern Time today and can be found on the investors page of the Company's website at IR.VBLrx.com.

Before we begin I would like to remind everyone that various remarks about future expectations, plans and prospects constitute forward-looking statements for purposes of Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. VBL cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated. Any forward-looking statements made on this conference call speak only as of today's date Monday, August 15, 2016 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 conference call is being recorded and will be available for audio rebroadcast on VBL's website, IR.VBLrx.com. As the operator mentioned, all participants are currently in a listen-only mode and there will be a brief question-and-answer session following the Company's prepared remarks.

With that I would like to turn the call over to Dr. Dror Harats, CEO of VBL Therapeutics. Dror, please go ahead.

Thank you, Paul, and good morning to everyone joining us on our call. We appreciate the opportunity to review our second-quarter operating performance and the progress we have made advancing our clinical and corporate programs.

Among the significant milestones we achieved during the second quarter we reported significant positive clinical data on our lead therapeutic candidate VB-111 in two oncology patients: ovarian cancer and recurrent GBM. We continue to move forward with our ongoing Phase 3 GLOBE study investigating VB-111 in recurrent GBM. And we closed successful public stock offering that gives us the financial flexibility to continue our aggressive corporate and clinical strategies into 2019.

As you can see, we have a lot to cover, so let me begin by updating you on VB-111. The clinical highlight of our quarter was I think you will agree the positive Phase 2 results represented in patients with recurrent platinum resistant ovarian cancers. This data were presented at the ASCO conference and we also discuss them in details during an analyst meeting that was held concurrent with ASCO.

As a reminder, VB-111 is a first-in-class targeted anti-cancer gene therapy agent that we are exploring as treatment for a wide range of solid tumors. The dual mechanism of VB-111 targeting of tumor vasculature with an anti-tumor immune response retains activity regardless of baseline tumor mutations or the identity of the pro-angiogenic factors secreted by the tumor. This drug candidate has obtained fast-track and orphan drug designation and our GLOBE pivotal trial in recurrent GBM is being conducted under an SPA, special protocol assessment.

The primary objective of this ovarian cancer trial were to evaluate the safety and tolerability and identify the dose-limiting toxicity combination of VB-111 and weekly paclitaxel and to explore the efficacy in an expanded cohort of the optimized treatment regimen of VB-111 and weekly paclitaxel. 21 patients with recurrent platinum resistant ovarian cancer were enrolled at Massachusetts General Hospital and Dana-Farber Cancer Institute to receive up to seven doses of treatment. Patients were treatment in two consecutive cohorts: a low-dose cohort of 3 to the 10 to the 12 viral particles and 40 or 80 milligram paclitaxel, which essentially served as a control or as their appointed dose cohort of 10 to the 13 viral particles and 80 milligram paclitaxel.

The data we presented demonstrated a statistically significant increase in overall survival of VB-111 with a median overall survival of 810 days in the VB-111 therapeutic dose arm versus 172 days in the low dose arm. Moreover, nine of the 15 evaluable patients or 60% on the therapeutic dose, had durable GCIG criteria responses as defined by a 50% reduction in the CA-125 biomarker. Durable resistant responses and disease stabilization were also seen.

This response data compares very well with historical controls. Looking at chemotherapy alone you would only expect to see about 11% response rate and with Avastin plus chemotherapy you would expect a 32% response rate. So the response rate we achieved was approximately double that of the current standard of care.

Additionally, we observed a monotherapeutic effect in biopsies taken from patients. Specifically H&E and immunohistochemistry staining showed infiltration of cytotoxic CD8 T cells leading to regions of apoptotic cancer cells following treatment with VB-111.

VB-111 was found to be safe and well tolerated. Toxicity was similar to what you would expect with [paxils] in this patient population and no dose-limiting toxicities were reported at any dose level.

The data are particularly impressive given this trial focused on patients with poor prognosis disease. 48% of the patients were primary platinum resistant or refractory patients. They're a subject that never really responds to platinum chemotherapy.

Additionally, 52% of the patients had tumors that had failed or responded to prior anti-angiogenic agents including Avastin. Typically most patients in Phase 2 trials have a better prognosis, making this already a unique trial. So while we designed the trial primarily to look at safety, we were happy to see such significant efficacy.

The second set of data to come out at ASCO was a meta-analysis comparing clinical outcomes with VB-111 with pool data from eight different historical studies that investigated Avastin in recurrent glioblastoma. The analysis showed that median overall survival for patients in our Phase 2 trials who had received a continuous exposure dose of VB-111 was 59 weeks compared with 32 weeks in the historical pooled Avastin trial. 12 months overall survival was 57% in patients on continuous exposure of VB-111 who were treated through a progression compared with 24% in historical pooled Avastin trial with a p-value of 0.03.

As you know, we are currently enrolling patients in a pivotal Phase 3 registration study with VB-111 in recurrent GBM. I pleased to say that this ongoing study known as the GLOBE study is proceeding well and recruiting patients on schedule at centers in the US, Canada and Israel. It is designed to compare VB-111 in combination with Avastin to Avastin alone with a recruitment target of about 252 patients. The study is proceeding under special protocol assessment or SPA that we negotiated with the FDA.

As we have said, we plan to conduct an event-driven interim analysis in the GLOBE according to the study protocol. While the timing of such analysis depends on the enrollment and VB-111 activity, our expectation is that we will conduct it in the first half of 2017. Full trial results are expected in early 2018.

In regards to VB-111 in patients with GBM we agreed with the FDA on an access program which we will initiate in due time. We continue to receive unsolicited interest from patients and we would like to accommodate them in a way that does not jeopardize our GLOBE registration trial.

And, of course, drug development is a capital intensive undertaking. So we took advantage of this very positive data at ASCO to raise an additional about $22 million net without warrants through a registered direct offering with institutional investors. We are very grateful for the confidence and support of our investors and now have the financial flexibility to fund our programs into 2019. Including finishing the ongoing recurrent GBM trial and the potential registration ovarian trial.

At the end of June I was pleased to announce that Dr. Rachel Humphrey joined us as the head of our Scientific Advisory Board. She is currently the Chief Medical Officer of CytomX and previously was Senior Vice President and head of Immuno-Oncology at AstraZeneca and also held senior position at both Bristol-Myers and Bayer. Her track record of success in managing product development from pre-IND stage to commercialization will be invaluable as we continue to advance BB-111 another product candidates through the clinic.

Looking to the second half of the year, we are now preparing for an end of Phase 2 meeting with the FDA to discuss next steps with VB-111 in ovarian cancer. Based on the recent positive data at ASCO we hope that the next study in this disease setting will be a potential registration trial.

The other important milestones we expect in the second half of 2016 will be further data from our ongoing exploratory Phase 2 clinical trial with VB-111 in thyroid cancer. This open-label dose-escalating trial study is designed to assess the safety and efficacy of single or multiple dose of VB-111 in patients with advanced, recently progressive, differentiated thyroid cancer that is unresponsive to radioactive iodine.

You will recall that in December 2014 we announced data showing that 35% of patients in the therapeutic dose cohort of this trial met the primary endpoint of six months progression-free survival compared with 25% in the low dose cohort. Since then we continue to follow the patient and we should provide a full Phase 2 report including overall survival data by the year and.

So our VB-111 continues to generate very promising data and is moving forward. We are well-financed and we have strengthened our advisory board. Against almost every measure of our second quarter was positive and I look forward to continuing to report to you as we move our program closer to the market.

Now I'd like to turn the call over to Amos Ron, our Chief Financial Officer, who will give you more details about our financial results. Amos?

Thank you, Dror. Earlier this morning we issued a press release detailing our financial results for the second quarter of 2016. I will review the financial highlights and will speak to our cash position and our financial guidance.

We ended the quarter with $51.6 million in cash, cash equivalents and short-term deposits compared to $37.1 million as of December 31, 2015. Research and development expenses were $6.2 million for the six-month period ended June 30, 2016 compared to $4 million for the same period in 2015.

G&A expenses were $1.9 million for the six-month period ended June 30, 2016, the same level of $1.9 million it was for the same period in 2015. Net loss for the quarter was $3.3 million compared to $3 million for the same period in 2015. We continue to reiterate our guidance that our resources will be sufficient to meet the working capital requirements, fund planned operations and support advancement of our platform technologies into 2019.

Now I would like to turn the call over to the operator for any questions and answers.

(Operator Instructions) Charles Duncan, Piper Jaffray.

Good morning, this is Sarah on for Charles. So congratulations on the progress.

I have two questions about the ovarian cancer program. Can you speculate on the approximate number of patients and endpoints that you might use in that pivotal program? And then do you believe the recent raise can cover completion of that study?

So as you know, Sarah, and the rest of you we were actually looking very carefully at the results that we got at the Phase 2 study that we published its results actually at ASCO. And making the right consideration on how many patients we will need for a potential registration trial, I cannot give you the exact number but I can tell you that that's going to be around a little bit more than 100 patients in the two groups of a randomized trial that will give us over 80% confidence in getting statistically significant results.

And we are still debating with the FDA the exact number but it's not going to be a huge number of patients. It's going to be between 100 to 150 patients. And that will be enough to actually be a potentially a registration trial.

As you all know, in some of the trials in ovarian that were done with chemotherapy these studies actually didn't need many patients. And one of the reasons that you need more patients is the compound is not very potent. As we believe that VB-111 actually shows a very significant data in ovarian taking around 120 patients in the study would be more than enough most probably, and that's a plan and that's a discussion with the FDA.

By the way that's why it took us time to go to the FDA because we had to actually reconsider our program in a good way. In terms of the amount of money that we raised and that we have right now would that be enough to complete this trial? The answer is yes.

Thanks.

(Operator Instructions) RK, H.C. Wainwright.

Good morning. A couple of questions on the GLOBE trial or basically the GBM studies.

You know, earlier we have heard from you saying that you are having some conversations with the FDA to see if you want to amend your current GLOBE protocol to increase the number of events to 189 for your final analysis. Are those discussions still on or you are rethinking about that protocol?

The discussions are still on and actually we are calculating it with our biostatistician and the FDA biostatistician. The recruitment goes very well and because the recruitment goes very well it's a very good practice to go for the more common about 75% event rate in terminating the trial. And that's basically the plan.

We didn't get the green light yet from the FDA but I believe that we will get it because it just made the trial even more sensitive to actually show a positive result. So we are actually increasing the confidence in the trial.

And then regarding the expanded access protocol, is it possible for you to give us any more information than what you just said, saying that you would start it in due course and you will be careful not to jeopardize anything which is going on within GLOBE? Is there any additional information that you can tell us?

Yes. I knew that someone will ask about the due course, but that's fine. It's obvious.

So I will tell you what's the plan. The plan is that we have to be very careful not to actually give the opportunity to give it as a compassionate to in any case to patients that already were on our trial. Because that means that that would be like a crossover which we definitely don't want to do.

So the plan is that unless we have a very specific case that we have to do it right now which is out of the trial we will start this program as we are going to actually conclude the GLOBE trial. But we have the opportunity to accommodate some very severe cases just based on a compassionate and we will do it case-by-case. At the time we will actually decide to lock the data up that will be a time that we will have an official program actually enabling patients to get access to the drug until the drug will be on the market.

Okay, thank you for that clarity. Just because you talked about locking the trial data, so where are you in terms of recruitment rate for the GLOBE trial and is it within whatever the internal metrics are?

So actually we are doing very well. We are saying that we are according to plan but actually we are ahead of plan. But one has to be very careful because it goes month by month, but right now the excitement around the trial is quite big and we are recruiting very well.

Last question from me. This is on the molecules VB-201 and VB-703.

So what's management's development plans for these molecules? You mentioned a little bit in your press release.

We know that this compound actually works quite well in atherosclerosis but it was very difficult to develop them. They didn't work well enough in rheumatoid arthritis and in IBD and ulcerative colitis, although I must tell you what we looked at the CSRs it wasn't completely negative.

But nevertheless I think we made the right decision not to develop it for these two indications. But we know that from great clinical work that it works quite well in NASH and in other fibrotic disease. So we're not planning to spread to non-cancer or oncology indications right now as you know, but we will look very carefully to actually develop it in collaboration with a partner later on.

Thank you, Dror.

That concludes today's question-and-answer session. I will now turn the call back over to Dror Harats for closing remarks.

So thank you all for joining our call today. Have a wonderful day. Thank you very much.