Vascular Biogenics Ltd (VBLT) 2021 Q1 法說會逐字稿

Greetings. Welcome to VBL Therapeutics First Quarter 2021 Earnings Call. (Operator Instructions) Please note this conference is being recorded.

I would now like to turn the conference over to Lee Roth with Burns McClellan. Thank you. You may begin.

Thank you, Cherry. Good morning, everyone, and thank you for joining today's VBL Therapeutics First Quarter 2021 Financial Results and Corporate Update Conference call. Leading the call this morning will be Professor Dror Harats, Chief Executive Officer; and Amos Ron, 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 company's website at vblrx.com.

Before I turn the call over to management, I'd 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 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, May 11, 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, the call is being recorded and will be available for audio rebroadcast on the company's website. And we will have a Q&A session following today's prepared remarks.

With that said, I'd now like to turn the call over to Professor Harats. Go ahead, Dror.

Thank you, Lee, and good morning, everyone. Joining me on today's call is Amos Ron, our Chief Financial Officer, who will discuss the first quarter financial results for 2021. I'm pleased to say that it has been another productive quarter for VBL with continued progress for our lead program, VB-111, our novel gene therapy for solid tumors.

We continue to be encouraged by the ongoing progress with our Phase III OVAL pivotal trial in ovarian cancer, which, if successful, has the potential to reshape cancer therapeutics and to establish a new standard of care in challenging disease setting where patients currently have limited options.

In today's call, I would like to focus on 2 significant points, the first of which is the progress of the OVAL trial towards potential BLA; and the second is VBL's cash position as we prepare for the success, and hopefully, for commercialization of VB-111.

Starting with the OVAL study. As a reminder, OVAL is an international placebo-controlled, double-blind Phase III registration-enabling study in recurrent platinum-resistant ovarian cancer. To date, we have had 3 successful DSMC reviews of the study, the most recent of which was in February. Following the review, looking at 200 patients, the DSMC again gave us the green light to proceed as planned.

Enrollment in the OVAL is going very well and is now 2/3 through. As we continue to advance the study, we look forward to the next DSMC review in the third quarter of this year, and they're achieving a full enrollment at the end of this year. We remain encouraged by the high response rate in the total blinded data set as well as by the safety profile of the study population and intend to provide an update on the OVAL trial at the upcoming ASCO conference in June.

We are excited to advance VB-111 for the potential benefit of ovarian cancer patients, and would like to thank all the patients and their families as well as investigators, health care professionals who are taking part in this important international study. As for the financial state of the company, we are pleased to announce in mid-April that we closed a straightforward public offering at market price to raise $28.3 million from existing shareholders as well as institutional funds from the U.S. and Israel.

Together with an additional $12.3 million that was injected into the company during the first quarter, mostly through the exercising of warrants that were issued in 2020, our cash position is now over $60 million. This is expected to fund the company until year-end 2023 through many milestones, and most importantly, the readout from the OVAL study and potential BLA submission for VB-111 in ovarian cancer. We appreciate the continued support from our investors and look forward to rewarding their confidence in us as we continue to execute on our key strategic objectives.

Before I hand the call over to our Chief Financial Officer, Amos Ron, I would like to say that we have continued the momentum we experienced in 2020 into 2021 and are encouraged by the significant advancements of VB-111 and our additional programs. We look forward to sharing updates on our ongoing program, specifically on the OVAL study during the upcoming ASCO conference and later through the rest of 2021.

With that, I will hand off the call to Amos, who will discuss the financial results for the first quarter. Amos?

Thank you, Dror. Good morning, everyone. As of March 31, 2021, we had cash, cash equivalents, short-term bank deposits and restricted bank deposits totaling $36.6 million and working capital of $30.7 million.

As Dror mentioned, in early Q2, we completed the public offering of common stock and prefunded warrants, which generated gross proceeds of approximately $28.3 million. For those unfamiliar with the term, prefunded warrants are class of securities that allow investors that have restrictions on their ability to own company stock above the designated ownership threshold to invest additional capital. In practice, the prefunded warrants are the equivalent to ordinary shares without voting rights. We expect that our cash and cash equivalents and short-term bank deposits will be sufficient to fund operating expenses and capital expenditure requirements until year-end 2023.

Revenues for the first quarter were $185,000 as compared to $366,000 for the comparable period in 2020. Research and development expenses net was $4.8 million for the quarter compared to $4.5 million in the same period in 2020.

General and administrative expense was $1.7 million for the quarter compared to $1.3 million in the same period in 2020.

And finally, comprehensive loss for the first quarter was $6.3 million or $0.12 per share, compared to $5.4 million or $0.15 per share last year.

With that, I will return the call back to the operator for the Q&A portion of this morning's call.

(Operator Instructions) Our first question is from Kevin DeGeeter with Oppenheimer.

Maybe just 2 quick ones on OVAL, and then I have a follow-up. Dror, can you just comment a bit about, at least the general scope of the update at ASCO in early June. And then with regard to enrollment, terrific to hear, you had continued success there. But could you talk a little bit about geographic enrollment specifically, certain geographies where you hope to be able to make some incremental enrollment in the Phase III to support future regulatory and commercial uptake. Then I have a follow-up.

Kevin, thank you for the questions. As you can guess, we're always a bit limited about what we can say about what we're going to show at the ASCO meeting. The abstract of the ASCO meeting are going to be public in May 19. And as a lot of you know, sometimes the abstract itself is actually quite dull and not giving a lot of information, but the driving progress poster that we are going to present at ASCO going to have meaningful news about the study. And you all should be tuned to the ASCO meeting, where we will be able to talk more about the trial that we are running right now, the OVAL trial. As regard to geographic enrollment, as you know, the major part of the centers are in the U.S., and that's most important market that we are looking for. But actually, recruitment is going very well, both in Europe, in U.S. and in Israel. And all of that, in spite of the COVID-19 and the COVID-19 is quite -- was quite tough in Europe in the last 3 or 4 months, nevertheless, we are recruiting very well. And actually, we are over 2/3 of the patients. So we are really on track to get to where we want to be by year-end.

Regarding the Japan market, and I guess you are talking about it as well. We have some centers open right now, but we will announce when we have first patient randomized. And I have to remind everybody that this is a gene therapy based technology and our experience that it always takes time to start the studies in centers. But then when it start, it goes very well. So we expect to see some patients in Japan as well in the near future.

Great. And then my follow-up question is on colorectal. I think we were looking for an update later this year. Any update on the progress of that study?

So first, let me take the opportunity to say a couple of things about the other trials besides the OVAL trial that we are running with 111. The GBM trial is actually going well. We are opening centers, recruiting patients and things going according to plan. And when we will have more information, we will, of course, talk about it. Regarding the colorectal study, it's going very well. It is done with a National Cancer Institute, as you know. In this trial, the major thing we are looking for is actually to see if, indeed, with a viral product, you can bring the immune system into the gut in a similar way that we can bring it to other organs. In human being, we have evidence that we are bringing it quite significantly in ovarian cancer. In animal models, we had a lot of information about other organs including lung, liver and other, and we know that we bring the immune system there. The major question, of course, is the gut, because the gut is completely -- work differently in the immune system. And as we all know, there are bugs and viruses in our gut, normally. And the question is, of course, if viruses can bring the immune system into tumor in the gut. We are expecting to have this data later on this year. It all depends, not really just on recruitment, there is a decision then when we will get to enough biopsy specimens that we can say meaningful things about this question, then the people at the NCI going to actually look at all the slide and see if they can show, indeed, the immune system actually can be changed in tumors in the gut. So I would actually expect to see results in the next 3 to 6 months.

(Operator Instructions) Our next question is from Arthur He with H.C. Wainwright.

This is Arthur for RK. So just to follow-up on the COVID-19 study. I just wonder when could we expect the data update from the study? I know you had about 2/3 patient enrolled. If -- could you give us some color on that part?

So let me -- thank you, Arthur, for asking the question. Let me make it completely clear about how we view the COVID-19 story. So what I meant is that with the VB-111, our gene therapy, we are over 2/3 recruited regardless of the story that it's difficult to recruit in the COVID-19. Our program in COVID-19 with 201 is actually completely different. And I'll explain how and why. The COVID-19 pandemic is actually a major problem globally, but vaccination is working extremely well. And in the pipeline, there are antiviral therapies. So although VB-201, our drug that's working on monocytes and can help in the pneumonia that you have in COVID-19, I believe that this type of drugs are actually not going to be very helpful in the future, especially that we will have antiviral specific drugs and the vaccines that actually work extremely well more than expected and the immunity is stayed for quite significant time, and it's good so far for most of the mutated viruses that has been tested. So we started this trial in Israel. Right now we don't have that many patient in Israel, almost none. And we are not going to actually extend it outside of the country, because we believe that this is an effort to distract us from the main programs that we have at VBL. And actually, by the time that this study can be done, we believe that the issues will be completely different. Would that compound has a role in other viral infection where there is chronic inflammatory disease, it's remained to be seen, and we might have a collaboration on that with some major medical centers. But when that will be relevant, we will actually talk about it.

Then my second question is regarding the MOSPD2 program. Could you give us an update on the VB-601 process?

Actually, thank you for asking this question. I didn't mention that because I wanted to mention mainly the news that we have in the company right now. But the 601 program is going very well and according to plan. And we are actually finishing the IND-enabling studies, including toxicology. When we will have the reports, we will announce it. But so far, the drug seems to be very safe, and we will discuss it later on this year. We are now in the middle of production of the batch for the clinical trial, and we expect to see first-in-man in the beginning of 2022.

There are no further questions at this time. I would like to turn the conference back over to Professor Harats for closing comments.

So thank you all for joining us this morning on our financial call. Thank you, and have a good day.

Thank you. This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.