Vascular Biogenics Ltd (VBLT) 2015 Q2 法說會逐字稿

Good morning and welcome. A press release with the Company's second-quarter 2015 financial earnings became available at 8:00 a.m. Eastern Time today and can be found on the investors section of the Company's website at IR. VBLRX.com.

Before we begin I would like to remind callers 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, August 13, 2015. VBL undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call.

We will begin with prepared comments from VBL, and then we will open the call for your questions. I would now like to turn the call over to Dr. Dror Harats.

Thank you, Hannah. Good morning, everyone, and thank you for joining us on today's conference call. VBL made important progress in the second quarter as we announced meaningful interim data readouts for our lead compound, VB-111, in both recurrent glioblastoma -- or recurrent GBM -- and platinum-resistant ovarian cancer and prepared to initiate our pivotal Phase 3 GLOBE Study in recurrent GBM.

I'm pleased to review these achievements today and to preview milestones for the balance of 2015 as we continue to pursue our mission to discovering, developing, and commercializing first-in-class treatment for cancer. Let me begin by discussing VB-111, our late-stage, gene-based biologic for the treatment of cancer.

As you know, VB-111 is an intravenously administrated antiangiogenic agent for the treatment of solid tumor indications and is currently being evaluated in recurrent GBM and ovarian cancer. We have received orphan drug designation for the treatment of GBM in both the United States and Europe, and Fast Track designation in the US, and are looking forward to initiating our pivotal, singly-needed Phase 3 study of VB-111 in the coming weeks under a Special Protocol Assessment agreement with the FDA.

As you know, glioblastoma is devastating, rapidly growing brain tumor that affects about 10,000 to 12,000 Americans each year, with a median time from patient diagnosis to patient death of about 12 to 15 months and a median survival from time of recurrence of about six months. In recurrent GBM, existing treatment regimens consists of both symptomatic and palliative therapies. However, with currently available treatment recurrent GBM remains fatal, and there is a clear and compelling need for new and effective medicine.

Given this treatment landscape, we are particularly encouraged by the interim data collected to date for our Phase 2 study of VB-111. At the Drug Discovery and Therapy World Congress, or DDTWC, in Boston in July, we announced updated interim results which showed a strengthened, statistically significant improvement in overall survival in patients with recurrent GBM who received VB-111 as a standalone drug and who, upon further progression, were treated with VB-111 in combination with Avastin, compared to patients who received VB-111 as a standalone drug and who, upon further progression, were treated with Avastin alone.

Even though this trial was not powered to show differences in overall survival, VB-111 in combination with Avastin demonstrated statistically significant improved median overall survival of 16 months compared to 8 months in patients on Avastin alone, with a p-value of 0.05. VB-111 was also demonstrated as statistically significant improvement over the historical bevacizumab or Avastin [dapacet] from the BELOB trial, which looks at the efficacy of Avastin, lomustine, or a combination of both agents, and reported a median overall survival of 8 months for Avastin in 50 patients with recurrent GBM, representing a p-value of 0.003. Consistent with its mode of action, which in recurrent GBM may require more than several weeks to demonstrate clinical effects, VB-111 did not affect the time to the first progression.

At the DDTWC conference, we also announced data suggesting that VB-111 induced an immune therapeutic effect. On the 46 patients who received VB-111, 25 spiked a fever post-dosing of VB-111 at least once, while 21 did not. Feverish patients demonstrated a median overall survival of 16 months, compared to non-feverish patients who demonstrated a median overall survival of 8.5 months or a p-value of 0.03. This correlation between clinical efficacy and fever suggests that VB-111 can induce an immune response in patients and supports our belief that the immune system plays a role in start of VB-111 mechanism of action. We look forward to reporting updated data from this Phase 2 trial at the medical meetings later on this year.

Turning now to our GLOBE Study in recurrent GBM, we are looking forward to the initiation of this singly-needed pivotal Phase 3 trial shortly. As you know, this trial is a randomized, controlled, double-arm, open-label study of VB-111 dosed every two months in combination with biweekly Avastin compared to Avastin monotherapy. We expect the trial to enroll 252 patients with recurrent GBM and to recruit patients from numerous sites in the US, Canada, and Israel, and are particularly pleased to be initiating this trial under Special Protocol Assessment granted by the US FDA.

The primary efficacy endpoint of the study is overall survival. Secondary endpoint includes progression-free survival and tumor response as measured by the gold standard RANO. We expect interim analysis data upon 91 events at the end of 2016 or the beginning of 2017, and full readout of the trial upon 151 events is expected at the end of 2017.

We are also happy to announce today that we had a successful pre-clinical trial application meeting with Health Canada's Centre for Evaluation of Radiopharmaceuticals and Biotherapeutics, or CERB. The meeting took place with the support of the Canadian Brain Tumor Consortium, who stated that the GLOBE Study received the CBTC's full endorsement. At the meeting, the CERB team expressed its support for our investigational medicinal product dossiers and declared adequate to support a Canadian CTA.

We plan to submit the CTA package in the beginning of September and expect to receive Health Canada's final approval in the fourth quarter of 2015. Health Canada's concurrence is particularly important to us, given that we expect to enroll about a third of our GLOBE patients in Canada and in Israel.

VB-111 is also being studied in an investigator-initiated phase 1/2 -- now it's a Phase 2 already -- open-label clinical trial in recurrent platinum-resistant ovarian cancer at Mass General Hospital and Dana-Farber Cancer Institute in Boston under VBL's IND. At the American Society of Clinical Oncology -- at the ASCO -- Cancer Meeting in June, we announced promising interim results from the Phase 2 stage of this ongoing study, which demonstrated evidence of clinical benefit in patients who received VB-111 in conjunction with weekly paclitaxel with 60% of high-dose patients meeting the GCIG response criteria based on the reduction of at least 50% in the CA-125 tumor market levels. In this study, VB-111 was safe and well tolerated with anticipated toxicities.

We keep on recruiting to this trial, and we keep on getting similar clinical benefits with this drug. We continue to be encouraged by this promising data, all the more so because VB-111 is the first and lead compound to emerge from our Vascular Targeting System, or VTS, our innovative gene therapy technology, which enables the targeted and specific expression of a gene of choice in angiogenic blood vessels, through unique super-enhancer DNA regulatory sequences.

The VTS platform is made up of three elements: a viral vector; our proprietary semi-artificial PPE-1-3x promoter; and the transgene which works in tandem to target genes exclusively to angiogenic blood vessels. Once the gene therapy has reached angiogenic blood vessels, our genetically modified promoter activates transgene expression to produce the desired protein in the endothelial cells of those vessels.

In cancer application, the transgene selected is designed to destroy angiogenic blood vessels that feed solid tumors. We believe VTS is a real platform enabling the discovery and development of truly innovative oncologies and other therapies. We are also continuing to explore the potential of our platform in indications beyond recurrent GBM and ovarian cancer.

I'll now turn the call over to Amos Ron, our Chief Financial Officer. Amos?

Thank you, Dror. Earlier this morning we issued a press release detailing our financial results for the second quarter of 2015. I will review financial highlights and also speak to our cash position and our financial guidance.

We ended the quarter with $31.5 million in cash, cash equivalents, and short-term deposits, compared to $36.8 million as of December 31, 2014. Research and development expenses were $4 million for the six-month period ended June 30, 2015, compared to $5.3 million for the same period in 2014. G&A expenses were $1.9 million for the six-month period ended June 30, 2015, compared to $1.5 million for the same period in 2015.

Net loss for the quarter was $3 million, compared to $3.7 million for the same period in 2015. 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 estimated working capital requirements, fund planned operations, and support the advancement of our development plan with both the Vascular Targeting System and Lecinoxoid platform technology through the second quarter of 2017.

Now I'd like to turn the call over to the operator for any Q&A.

(Operator Instructions) Mike King, JMP Securities.

Good morning, guys. Thanks for taking the question. Pretty up to speed on most aspects of the story. I'm just wondering, Dror, if you can talk about the possibility of sampling patients during therapy or perhaps on autopsy to look for the presence of things like killeds and other immune infiltrates, to further validate the immune modulatory aspects of 111.

Definitely we would like to do it, because we think that that's very important. In the ongoing trial that we are running now in ovarian, in the protocol we are allowed it to get biopsies, of course; and the patient need to consent for that.

And we're trying to get samples from these ovarian patients. Hopefully we will have samples soon because, as you can guess, we are also very interested to do this pathological evaluation.

Of course, in brain tumor, in GBM, it's much more complicated. So the aim is to do it in the platinum-resistant ovarian cancer.

Great. Thank you.

Joe Pantginis, ROTH Capital Partners.

Hey, guys; thanks for taking the question. First two questions are around the Phase 3, if you don't mind. First, can you just maybe remind us the statistics around the Phase 3, the powering, and maybe what the stopping rules are for the interim analysis.

And the second question is, at ASCO at your analyst event, you went through an interesting flowchart where it seems like you've really gone through a significant amount of work to make sure that patients stay on study -- to do what you can to make sure the patients stay on study. I'm just wondering if you could just walk us through again how patients can stay on study effectively, based on potential progression in the study. Thanks a lot.

Thank you, Joe. The study, the Phase 3 study, is an event-driven trial, which means that when we'll get to 91 events, 91 deaths, we are going to do the interim analysis. And this is mainly for a futility, so if we see that the lines are actually going up together and there is no or only a small fraction of chance that we will have a successful trial, then we'll stop the trial for futility.

It is not meant to be an interim analysis for efficacy. Although of course, if the data will keep on in a similar way to what we do see in the Phase 2, we might even see a statistical significance even there.

But because the curves separate very quickly, but much more so later on, we don't expect to get a very meaningful result for efficacy then, unless it will actually imitate what we have in the Phase 2 or doing even better.

When we calculated this study, actually, we were estimated we will get about a 12 months median overall survival in the treatment group, which is VB-111 with Avastin, compared to about a 9.2 months, which is the best ever shown for a Avastin alone; and that's with and 85% power. But now that we do see that the overall survival is even longer, and we expect to have significant number of patients actually alive on 12 months, we might even get to a stronger power for this drug.

You mentioned in your second question a very important issue, because we know that it takes time for the drug to work; and if the patients are off the drug before they really had a chance to respond, then we are losing patients that might be responsive to the drug. Therefore we work together with Patrick Wen -- who actually wrote the RANO criteria, and he is the Chairman of the Steering Committee of this trial, and he was the Chairman of the Phase 2 trial that we run -- and the FDA, to make sure that we give the drug as long as possible and keep the patients on the VB-111.

So the way we do it, we're going to use the RANO criteria for progression. So if the patient's tumor is increased by 25%, and then it doesn't matter if this is a tumor itself or just a flare around it, that's called progression. So that will be for the progression-free survival in the secondary endpoint.

But for the trial itself, the rules are going to be as follows. If the tumor is not growing -- the tumor itself, not the flare -- by at least 50%, the patient will stay on the drug unless there is a major clinical deterioration. So even if the tumor grew by 25% the patient will stay on the drug.

And the second thing, if there is a flare it is not considered as grow of the tumor unless a flare is keep growing in the next MRI two months later. So even if there is a flare, the patient will be treated at least by two doses of VB-111.

And if the flare subsides, which we have seen in most cases in our studies, then the patient will stay on the drug. So this will ensure that the patient will get the benefit of doubt and will get enough of the drug so that we can detect efficacy of this drug.

Great. Thanks a lot, guys.

Wendy Lam, Oppenheimer.

Hi; thanks for taking my question. Can you just remind us when we should expect the next updates for 111 in thyroid cancer, what data we should expect, and then your developmental plan going forward? Thanks.

As you know, we also keep following the patient in our Phase 2 thyroid cancer. The Phase 2 thyroid cancer started quite early after the Phase 1, when we noticed that we have two out of two in the Phase 1 study with thyroid cancer that had an objective response.

So in the thyroid cancer, we have two groups of patients: one group of patients that got 3 times 10 to the 12th, which is a low dose, as a single dose, and that's our control group; and a second group that were getting the full dosing, which is 10 to the 13th is every two months. We already announced that in the group that got a full dose we got 35% 6 months progression-free survival, which was the primary endpoint of this trial, which is much more than the expected 2 months progression-free survival, which is really not any progression-free survival because that's the time that you do the next imaging.

But we are following the patient and we are going to announce data, including survival data, in the October meeting of the American and International Thyroid Cancer Association in Florida. That's going to take place in October, and we are going to announced exact data that we are going to present there.

Are you ready for the next question?

Sure.

Mike King, JMP Securities.

Thanks for taking the follow-up. You took care of part of my answer -- my question with the last answer, Dror. But if you could remind us, I know you guys had a fairly active fourth quarter -- or second half of 2015 calendar of meetings. I recall you said you might have some follow-up data at SNO.

Could you just remind us if that's correct, and what we might see there? And I thought there was another meeting as well, but that might have been the thyroid meeting that you just talked about.

Actually, you're completely right, Mike. We have a quite crowded calendar of meetings.

We are going to present at the ESMO meeting in Europe on September 27, and that's going to be an oral presentation where we are going to actually present the full data of the Phase 2 GBM trial, including more up-to-date survival data. We still have patients on the drug, and we still have patients that we are following that are alive on the arm that's treated with VB-111 and then with a combination of VB-111 and Avastin. By the way, on the VB-111 alone arm all the patients are dead now or -- there was one patient lost to follow-up, so it has to be considered as a death.

And on this conference we're going to also show some response rate of the drug. As we said all the time, it takes time for the drug to actually show the shrinkage of the tumor. So we're going to announce data on this as well, and this is going to be quite compelling.

In October we're going to show that thyroid data, as I said. Then at the SNO meeting, we are going to actually show the wrap-up of the Phase 2 trial in GBM.

And we are going to have there a satellite conference where we're going to discuss the program in GBM and the GLOBE trial that we are going to be already recruiting at that time. And at this event, hopefully we will show some comparison to a historical control data of multiple trials with Avastin, so that we will have a solid ground to go after that to the FDA to have a status meeting on VB-111 in recurrent GBM.

As there are no further questions, I would like to turn the call back to the presenter for any further remarks.

Thank you for participation today in today's call. We look forward to updating you again soon. Thank you very much.