Vascular Biogenics Ltd (VBLT) 2021 Q3 法說會逐字稿

Good morning, and welcome to VBL Therapeutics Third Quarter 2021 Earnings Call. (Operator Instructions) Please note that this conference is being recorded. (Operator Instructions)

I would now like to turn the conference over to Erez from the VBL team. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining the VBL Therapeutics Third Quarter 2021 Financial Results and Corporate Update Call. Joining me on the call is Professor Dror Harats, Chief Executive Officer; and Sam Backenroth, Chief Financial Officer. The press release for the company's financial results was issued earlier this morning and is available on the Investor Relations page of VBL's website at ir.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. 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, Monday, November 15, 2021, 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, Please go ahead.

Thank you, Erez, and good morning, everyone. Joining me on today's call is Sam Backenroth, our new Chief Financial Officer, who will discuss the third quarter financial results for 2021. We continue to execute on our development programs and strategic objectives and look forward to 2022, which we believe is going to be a transformational year for VBL. We expect to have data from multiple VB-111 clinical trials in high-value indications, including the progression-free survival co-primary endpoint from the Phase III OVAL study in ovarian cancer. We also anticipate beginning first-in-human studies evaluating VB-601, our monocytes targeting antibody for the treatment of chronic immune inflammatory diseases.

Our OVAL clinical trial, a registration-enabling Phase III study of VB-111 in ovarian cancer has now enrolled over 85% of the targeted study patient population and we expect to complete enrollment in the first quarter of 2022. Also, in the first quarter of next year, we expect to have another DSMC review, which will include a data set of almost 100%, if not 100% of the total study population. The next milestone in the OVAL trial, we are looking forward to is a readout of the progression-free survival co-primary endpoint in the second half of 2022. This is particularly important and successfully meeting the PFS endpoint has the potential to enable us to submit a BLA 1 year ahead of plan compared to our original projections, which were based on the readout of the overall survival primary endpoint, which remain anticipated in 2023.

In addition to the readout in ovarian cancer, in 2022, we also expect preliminary data from the investigator-sponsored clinical trial of VB-111 in colorectal cancer in the first half of 2022 and from the recurrent GBM trial in the second half of 2022. We believe that VB-111 based on its dual mechanism of action, targeting tumor vasculature and immune recruitment has a potential to change the standard of care in multiple solid tumor indications.

As for our pipeline, we continue to advance our monocytes targeting program and expect to initiate a first-in-human study for our lead candidate, VB-601 in 2022. We believe that VB-601 adds a new and differentiated approach in the landscape of anti-inflammatory agents by specifically targeting monocytes, which are crucial for the development of chronic immune inflammatory diseases.

Based on our promising preclinical data, VB-601 may have applicability for a range of high-value immune inflammatory indications. To prepare the company for the continued growth and the commercialization of VB-111, we recently strengthened our management and Board and opened a U.S. office. In addition to the appointment of Sam Backenroth as CFO, we also added Mike Rice and Alison Finger to the Board.

Mike has many years of capital markets and IR experience with particular expertise in helping emerging biopharma companies attack a high-quality investors.

Alison brings nearly 3 decades of leadership experience in biotech and pharma. She was previously Chief Commercial Officer at bluebird bio, where she built the commercial infrastructure in Europe and the U.S. in advance of bluebird's first gene and cell therapy product launches.

VBL is well capitalized with the expected cash runway into the fourth quarter of 2023 significantly beyond the PFS readout and potential BLA filing, and we are excited to be building momentum as we head into 2022, a year with a number of potential catalysts and multiple opportunities to create value.

At this point, I would like to introduce Sam Backenroth, our Chief Financial Officer, to the audience. Sam has proven track record in corporate, finance, strategy, operations and business development. And I'm confident that his leadership and strong investor and banking relationships will help VBL as we enter a new era of innovation and growth.

With that, I will hand over to Sam to discuss the third quarter 2021 financial results. Sam, please go ahead.

Thank you, Dror, and good morning, everyone. First of all, I would like to say how thrilled I am to be working with VBL's management team and Board of Directors to capitalize on our tremendous potential to bring novel therapies to people with cancer and immune inflammatory disorders.

What drew me to VBL was the company's cutting-edge science and deep understanding of biology coupled with an experienced and driven team with the ability to develop highly differentiated therapeutics. I'm especially impressed by the corporate culture at VBL and commitment of the entire team to help cancer patients in need and improve the standard of care. I'm excited to be leading the build-out of VBL's U.S. operations as we head towards significant inflection points in 2022 and begin preparing for a potential commercial launch of VB-111. My appointment is consistent with the company's plan to raise awareness with investors, and I look forward to meeting some of you in person in the coming months.

Now on to the third quarter financial results. As of September 30, 2021, we had cash, cash equivalents, short-term bank deposits and restricted bank deposits totaling $50.8 million. After the quarter ended, we received an additional $9.6 million in proceeds from warrant exercises. We expect that our cash and cash equivalents and short-term bank deposits will be sufficient to fund operating expenses and capital expenditure requirements into the fourth quarter of 2023.

Revenues for the third quarter were $0.2 million as compared to $0.2 million for the comparable period in 2020. R&D expenses net was $5 million in -- for the third quarter as compared to $4.6 million in the same period of 2020.

For general and administrative expenses, it was $1.6 million for the third quarter as compared to $1.3 million in the same period for 2020. And finally, comprehensive loss for the third quarter was $6.5 million or $0.09 per ordinary share compared to $5.8 million or $0.12 per basic share in the comparable period in 2020.

With that, I would like to return the call back to the operator for the question-and-answer portion of this morning's call. Thank you.

(Operator Instructions) Our first question comes from Kevin DeGeeter of Oppenheimer.

I guess a few things from us. Dror, congratulations on the progress with OVAL enrollment. I guess with a positive PFS read out, should we think about the time line of clinical data as being the rate-limiting step to a potential regulatory file or there are additional CMC investments that we should also think about as being relevant to as we think about a potential time line for future BLA filing?

So thank you, Kevin. That's a very good question. And as you know, we have our own facility, commercial grade facility here in Israel. And I know that many times in gene and cell therapy, the issue of production is a major issue, but we were actually preparing it ahead of time.

And as you know, the CMC portion of the agency was already reviewing our release test laboratory and actually approved it and also all the batches that were used in the clinical trial and are used in the clinical trial. So I believe that we are actually doing quite well with the CMC. And having a good result on the PFS, we will be able to actually be in a position to work on and submit the BLA, including the CMC.

Great. And then with regard to, I guess, continued patient access to VB-111 ovarian cancer following completion of enrollment early next year. Are there any plans for expanded access or compassionate use program that may be able to gather data that could be helpful from a pre-commercialization perspective?

Okay. So that's always a debate that the company should take because that's before you have a proof of concept that drug is working, although we had a very good Phase II and also the interim analysis give us a good hint that VB-111 is actually working in ovarian but you need full proof. That's on one hand.

On the other hand, you know that we never want to -- actually patient close to VB-111 if they were on the control arm because the second primary endpoint that we are looking for is overall survival. So I believe that from the time that we are going to be fully recruited until the time that we will be able to actually -- been able to talk about the top line results on PFS are not going to be such a long time.

And because of that, the plan is that if we will be in a -- with a positive top line results as we all hoped and expected, then of course, we will start an access program. Although I have to remind everybody that because the study is going also for overall survival, we might be in a position that the PFS is actually working very well, and we are submitting a BLA. But the study will go on for the overall survival.

So we will actually look at it in a very careful way, but we are making enough drug right now to be able to actually use it as an access program and compassionate to patient because, as you all know, this is a deadly disease and VB-111 might be a new way to actually change the standard of care for this patient and bring a hope to this patient.

Our next question comes from Swayampakula Ramakanth of H.C. Wainwright.

Welcome on board, Sam. So a couple of quick questions from me. On the DSM review that is expected to take place in the first quarter. As you said, you would potentially have data from almost all of the patients in the trial. So at that point, what sort of indication are you going to get? And are you going to let investors know from that review?

So, RK, I'll take this question. And you know that when the DSMC is looking at the full data, we are seeing only the blended total population data. So we don't know who is who, but we do see the results on each of the endpoint, but we are not talking about it. We're very careful about it.

On the other hand, the DSMC is actually seeing the full data, including all the primary endpoint, where they can compare and get the data on each separate group. But it's, of course, not a clean data. It wasn't the date after all the queries. So although it's going to be 100%, they will be patient and wait a little bit until we clean the data and get top line results. So my guess is that they will have the chance to tell us that we got the green light and we should go forward. And they, of course, will might indicate to us if we should expedite and get things cleaned up, but they'll never stop a trial without looking at clean up data.

Yes. And just to add to that, I think just importantly, from a disclosure perspective, what you'd likely to see as an investor or somebody looking at the story would be something very similar to what we've disclosed in the past, the DSMC has their meeting and then we give the very high-level results and that whatever their recommendation was with regard to moving forward.

And then as you stated, next year is the year of data on VB-111. So thinking about colorectal cancer and GBM, I understand these are being run by independent investigators, and it's up to them as to what sort of data. But in general, what should be the expectations from these groups on both the indications?

So as you know, RK, when it is NCI or investigator-initiated trial, we depend on the NCI and on the doctors who run the trial. So it's more difficult to us to say exact date or things that we expect. Having saying that, I have to say a couple of things. First, in the colorectal, as I'm saying always on these calls, and I'm saying it whenever we meet with investors. We are looking to see if we can bring the immune system into the colon because the colon has a different immune system. And that's the goal of the trial in our point. And we will know that, hopefully, in the first half of '22 but I can't say exactly when.

In regarding to the GBM, we -- the trial is double-blind, placebo controlled just as a reminder, and it has 3 groups. The group a is actually getting VB-111 as a new adjuvant before a second surgery. All patients are recurring GBM. All patients already failed surgery, radiation and chemotherapy. So they have quite a great prognosis, but they're going to a second operation. The first group will get VB-111 as new adjuvant and later on after surgery as adjuvant.

The second group is getting placebo as neoadjuvant and then VB-111. And the third group is getting placebo as neoadjuvant and then the standard of care. So the idea in this trial is that we are getting the tissue of the tumor and 1/3 of the patient will get VB-111 before surgery. So we will be able to know if VB-111 indeed bring immune cell and change the genetic of GBM as we think it should do and as we have evidence in animal models and other indication in human being, but never in the brain, that would be an opportunity to see that.

From that on, the trial is actually not blinded because you know who is on standard of care and who is getting VB-111. And we're looking at 6 months PFS and overall survival. When we will have enough patients and the investigator will think that, that's a good time to summarize the data, we will come to the market, of course, with these results, usually with some presentation at the clinical conference.

Okay. So do you think that data, if everything goes right, is that enough to go to the FDA? Or do you need to do another trial to file for VB-111 in GBM?

Okay. The GBM trial was planned, I believe, in a good way. It's not a big trial, but it's a randomized controlled trial. And even when we got the results of the Phase II trial that you know that was successful, the issues that the agency had to give us accelerate registration was because it wasn't a controlled trial. So even in a small control trial, if you can show evidence of efficacy in this deadly disease when nothing else working, we will apply for accelerated approval for GBM.

If we will get it or not, we will have to discuss it with the agency. And of course, it all depends on the strength of the data that we will get here.

Okay. So one last question from me. I know oncology is one of the major focuses for VBL. With the start of the VB-601 study next year, how far would you take this molecule in development before seeking a partner for further development and commercialization?

Yes. So that's a great question, and it's Sam here. I think that really remains to be seen, and we're designing a first-in-human clinical trial that we think is going to get us both safety as well as potential proof of concept in the ability to target monocytes, which, as you know, are one of the 3 cell types that are implicated in inflammation, yet, we don't really have therapeutics that can go ahead and address the monocytes specifically.

So I think that, that would probably be the right time once we have that proof of concept to start thinking about potentially bringing on a partner that will allow us to go after some much larger applications whether that's rheumatoid arthritis, whether that's ulcerative colitis, Crohn's or other diseases like MS, that will remain to be seen, but certainly, we would believe at that point that it would make sense for us to go at it with a good strong partner.

Our next question comes from Jonathan Aschoff of ROTH Capital Partners.

Welcome aboard, Sam. Can you be more specific about what you're currently doing to prepare for a potentially successful OVAL at the PFS readout, such that you'd be in an optimal position to swiftly file for approval and commercialize VB-111, saying something that would perhaps help us judge your PFS optimism?

Yes. So Jonathan, that's a great question. And we're really full steam ahead on all fronts right now. As Dror mentioned before, we're doing the CMC preparatory work in order to enable us to be able to file a BLA as soon as possible once we have the PFS results, and we're investing in that right now. In addition to that, we are in the process of conducting a search for a Chief Commercial Officer to do all of the pre-commercialization work, market access, pricing, reimbursement and everything that we really need to do to get ahead of things to be ready for, hopefully, a positive PFS readout and then ultimately, the launch of a drug.

So we are doing everything that we can in order to accelerate and prepare ourselves for a positive result that will allow us to go ahead and file this off of a PFS.

(Operator Instructions) Our next question comes from Jonathan Kreizman of Valore Research.

Sam, congrats for assuming the role and wishing you all the best in this exciting phase of VBL's lifetime. Also want to congratulate Amos for the long year leadership and involvement in this long journey to develop VB-111 and the rest of the programs. So congrats to both of you.

Question for Dror. I noticed some of the time lines for several programs have moved a little further. Maybe if you could elaborate on the reasons for some of these delays for instance, 601 and (inaudible) the second half of '22 and colorectal cancer study, which you initially expected to read out in the end of '21?

I think it's quite obvious in what we are facing right now in the world with the pandemic. There are issues with a chain of commerce and there are issues with having a place to actually make the antibody because we know that a lot of effort was actually shifted towards producing vaccines for the COVID-19. And actually, we are basically ready for submitting an IND or starting the clinical trial, except for the concluding of the production of the GMP manufacturing of 601.

And that was a bit delayed because of the pandemic. And I think that, that's the only reason. So nothing change in the program. It's just the change that we are having now in the landscape of production in the world. And I'm glad to say that right now, we are on track. And that's why I could mention that we are planning to have first in man already in 2022.

As for other clinical trials, as I was saying before, the colorectal is actually an NCI study and the GBM is an investigate or initiated study and you always depend on the investigators in this. But I don't think it's a bad signal when a clinical trial where you look for clinical events in oncology is taking a longer period of time and where it depends on having enough patients that will have enough bioxies in the colorectal trial before we can come with any results. And of course, it's not us going to summarize this result. And when we will get it from the NCI, we will definitely share it with the market.

Okay. Great. A question for Sam. So I'd appreciate to hear some of your thoughts as you're working through the learning curve of gaining familiarity with the company. And besides that, if you could share any points or particular observations on which you intend to act upon in the short and medium term.

Yes, yes. No, great question. And I think my learning curve has been relatively short here because I've spent the last couple of years in genetic medicines. So that -- my understanding of the technology or at least the basic elementary understanding is there, now that I've been here for about 6 weeks, certainly continuing to learn. And now I'm already getting out there and starting to talk to investors about the story and looking both at the VB-111 as well as the 601 program and its application across multiple different inflammatory disorders.

I will say that working with the team here has been fantastic so far. We've really been able to come together and further the goals of the company to really accelerate drug development and bring these very important cutting-edge novel therapeutics to patients as soon as possible. And I think we continue to execute on that plan, and we've really set up 2022 to be an incredibly exciting year for the company on both programs, multiple data readouts on the clinical side and then entering the clinic in the second program, I think we're really primed for a great 2022 here.

This concludes the question-and-answer session. I would like to turn the conference back over to the company for any closing remarks.

So thank you, everybody, for joining us on today's call, and have a wonderful day. Thank you very much.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.