Vascular Biogenics Ltd. (NASDAQ:VBLT) Q3 2016 Earnings Conference Call November 10, 2016 8:30 PM ET
Michael Wood - LifeSci Advisors
Dror Harats - CEO
Ruth Avissar - Financial Controller
Sarah Weber - Piper Jaffray
Joe Pantginis - Roth Capital Partners
Swayampakula Ramakanth - H.C. Wainwright
Good day everyone and welcome to the VBL Therapeutics Third Quarter 2016 Financial Results Conference Call. Today’s call is being recorded.
And now your host for today's conference Mr. Michael Wood, of LifeSci Advisors. Mr. Wood, please go ahead sir.
Thank you operator and thank you all for participating in today's third quarter 2016 financial results and corporate update conference call. Leading the call today from the company will be Dror Harats, CEO of VBL Therapeutics and Ruth Avissar the company's Financial Controller.
A press release with the company’s financial results became available at 7:00 AM Eastern Time today and can be found on the Investor’s Web page of the company’s Web site 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 Acts of 1995. VBL cautions that these forward-looking statements are subjects of 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 Thursday November 10, 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 the company's Web site. As the operator mentioned all operators are initially in listen only mode and there will be a brief Q&A session following the company's prepared remarks.
With that I'd like to turn the call now to Dr. Dror Harats CEO of VBL Therapeutics. Dror please go ahead.
Thank you Michael and good morning to everyone joining us on our call. We appreciate the opportunity to review our third quarter financials and provide you with corporate update. So far 2016 has been a very successful year for VBL and we continue to make progress during the quarter and in recent weeks, both in clinical and operational fronts.
We are focusing our resources primarily on advancing VB-111 our innovative anti-cancer unique biologic agent that we are developing to treat a wide range of solid tumors. VB-111 whose generic name is ofranergene obadenovec has a dual mechanism of action which combines targeting of the tumor vasculature together with ability to induce a specific anti-tumor immune response. We have now evidence of a significant clinical benefit in three cancer types, recurrent glioblastoma GBM, thyroid cancer and ovarian cancer.
Before I review the company highlights and relate to further catalyst, I believe that the major news we have today relates to recruitment for our GLOBE study of VB-111 in recurrent GBM. We announced earlier today in our press release that VBL expects to complete the enrollment for our pivotal GLOBE study by the end of this year, at least five months ahead of projection an event driving interim analysis is expected to occur in mid-2017. I will discuss the status of the GLOBE studies with more color in a few moments.
But before that let's review what the company has achieved recently. The first nine months of 2016 has been extremely busy for us, highlights include presentation at the ASC committee in June, where we reported positive response rate and survival data from our Phase 2 trial with VB-111 in platinum resistant ovarian cancer. Also at ASCO we presented a new analysis of VB-111 in recurrent GBM which helps put the data we have generated thus far in this indication in context with historical data that has been published in recurrent GBM.
On the strength of the ASCO presentation we were able to complete a successful registered direct equity offering raising about $22 million in access [ph] fees. For VB-111 the tumor indication in which we are farthest along is recurrent GBM. We have an ongoing Phase 3 pivotal trial, the GLOBE trial which is being conducted under special protocol assessment or SPA at the centers in the US, Canada and in Israel in patients with recurrent GBM.
These are patients whose tumor has previously failed treatment with [indiscernible], chemotherapy and surgery. The study is comparing two groups in a one-to-one randomization, one group is treated with bevacizumab or Avastin alone, while the second group is getting bevacizumab in combination with ofranergene obadenovec or VB-111. The primary end point is survival. As you know that's the only end point that the FDA will accept now-a-days in recurrent GBM. The recruitment target in this steady as about 252 patients. This study is proceeding well and I am pleased to say is recruiting patient ahead of schedule. We expect to complete enrollment for the GLOBE study by the end of 2016, which is at least 5 months ahead of projection.
As you know, this is an event driven trial. We said before, that the timing of pre-defined interim analysis and trial population will depend both on enrollment and on the activity of VB-111. Since enrollment is closed to completion, the timing of both the event driven interim analysis and timing results will depend primarily on the rate of accumulation of events.
We currently expect to have an interim analysis in mid '17. However, if it will take longer time to meet the pre-specified 35 number of event. It may suggest a high probability for a positive effect of VB-111 on overall survival. We expect to have final data early in 2018.
As we think about the reminder of 2016 an important upcoming events will be further data from the Phase II trial in VB-111 in thyroid cancer. As a reminder, this open label dose escalating study is designed to assess the safety and efficacy of single or multiple dose of VB-111 as a mono-therapy in patients with advanced recently progressive differentiated thyroid cancer that is unresponsive to radioactive iodine.
In many of this patients the tumor previously failed several lines of therapy including CKI. You will recall that in December of 2014, we announced data showing that 35% of patient in the therapeutics dose cohort of this trial met the primary endpoint of six months progression free survival, compared with 25% in the low-dose cohorts. The trial also provides evidence of disease stabilization and the positive safety profile. Since then, we have continued to follow the patients and now time the trial in substantially completed.
We intend to provide top line data for this trial including overall survival in the near future. We also planned to meet with the FDA before the end of the year to discuss our ovarian cancer program. We will provide more information about the VB-111 path for ovarian cancer in due time. You should hopefully have seen the news in October that we signed a lease for new standalone facility in Medine, Israel. The site will be house to VBL’s local biological drugs manufacturing facility and this is obviously a very important step to have this in place as we prepare for a potentially commercialization of VB-111.
The design we have chosen enables modular expansion of the manufacturing capacity to supply growing demand following future approval and commercialization. The new facility will also include our new headquarter, discovery research and clinical development departments. Our plan is to relocate to the new site in the second half of '17. I would stress that this new facilities requires only limited capital resources in the initial stage and near term investments is not expected to materially impact VBL’s cash position.
Now I would like to turn the call over to Ruth Avissar our controller who will give you more details about our financial results. Rosa please.
Thank you Dror. Earlier this morning we issued a press release detailing our financial results for the third quarter of 2016. We’ll review the financial highlights and also speak to our cash position in our financial guidance.
At September 30th 2016, VBL has cash and cash equivalent and short term bank deposits totaling 48.9 million compared to 51.6 million at June 30th. Working capital at September 30th was 46 million, research and development expenses were approximately 2.2 million for the third quarter of 2016 compared to approximately 5 million in the third quarter of 2015. This difference relates to on level spending in 3Q 2015 and the variance is leveled though on the nine months results.
General and administrative expenses were approximately 1.1 million for the third quarter of 2016 compared to 0.8 million in the third quarter of 2015. For the third quarter we reported a net loss of approximately 3.2 million or $0.12 per ordinary share compared to a net loss of 5.8 million or $0.29 per ordinary share in our third quarter 2015. We continue to reiterate our guidance that our resources would be sufficient to meet the working capital requirements fund planned operation and supported best advancement of platform technologies into 2019.
For additional details on our financials, including the results for the nine month period ending September 30th 2016 please refer to our Form 6-K filed with the SEC.
Now I would like to return the call over to the operator for any questions and answers.
[Operator Instructions] And for our first question we go to Charles Duncan with Piper Jaffray.
Good morning this is Sarah on for Charles, congratulations on the progress on GLOBE.
Thank you Sarah.
Yes so about that, can you talk a little bit about what you believe drove the enrollment in GLOBE, is it interest in the mechanism or something else? And then can you provide any color around how drop out look between the two arms at this point in the trial?
As you all know this is a randomized controlled trial and we are in the company blinded to the data. So I cannot tell you anything that is not on a completed blinded data. So I cannot tell you on drop out of the different arms, but we have very low dropout so far, so I don’t think that this is an issue in any way.
We have people which are not blinded, especially looking at this in a very careful way and it was great between the investigators and the recruited patients that whoever is not willing to stay on Avastin is not going to be a new recruit to these trial. I believe just in the beginning there were few that didn’t get this whole point, but since then I heard from the people who are monitoring the trial that we have no issue is a drop out.
Why doctors and patient have interest in the trial and why recruitment is going so much better than expected. Well there are couple of things, but this can happen and you know that my guess is as good as everybody else’s guess. It is a deadly disease, the result of the Phase II looks very promising and people know that. The doctor who treated patients in Phase II and the doctor who start treating patient in this trial most probably are encouraged by what they are -- with what they are seeing and so far they are recruiting very well.
Actually we've got some -- we’re almost done with recruiting, so as you can guess we don’t wants to open anymore centers, but we get a request from centers that are ready to be opened, the patients are waiting in line to get this treatment and doctor believe that that should be the right trial for them.
So it's encouraging, although we have to wait and see the result of course.
Great. Thank you and just one follow-up about the ovarian cancer program. So can you just give us an update about where you are, has than the Phase II happened, are you in active discussions with regulators about the next step?
We already have a date for the end of Phase II meeting and we will elaborate more after this meeting. We prepared the meeting in a very careful way, both with our advisors and with one of the organizations that deals with the ovarian cancer. But we will elaborate much more later this year or just in the beginning of next year.
Great. Thank you.
And for our next question we go to Joe Pantginis with Roth Capital Partners.
Hey good morning. Thanks for taking the question. Dror I just wondering can you may be discuss a little bit of the and remind us a little bit of the working parts around the interim analysis for GLOBE. Is this something that the street will basically just get a continues plan type of release or is there a potential to see data and what are the stopping roles et cetera?
Okay, so because we should be blinded even at the interim analysis I don’t be that we are going to see that, and also not you. So we are going to get from the independent certification and the [indiscernible] just as we should continue in the trial. I believe that a there will be significant number of events by that time that's how it’s plan. And if the results are planned to go forward that should be a very good positive signal because by that time if there is any utility, we should know that quite well.
If they will see in any comment that study should be terminated early. We actually agreed with the FDA that we won't terminate this earlier, that under an FDA unless the FDA agrees to it or that's a result of so sound that we will make a decision actually to break the SPA and stop the trial.
It’s unlikely to happen in the interim analysis. But if they in this patient will die very slowly on the treatment on and the non-blinded full cohort survival curve, will look so much better than the known Avastin curve than we might at a certain point make a decision to stop the drive early before we get to enough events, at the end point of the trial. But that's too early to call. So far the death rate is not high but it's too early to say anything about it yet.
In the future we will say what we think about the non-blinded survival curve or what we think about the time that we will get to the interim analysis. The projection wasn't done by the company, it was done by the people that prepared the SPA, which means the SPA and their perception [ph] and ours of the patient. So when I'm saying that we are recruiting almost six months ahead of progression, more than five months, that's not something that the company put a target and then we're doing better which is nice, but not the right way to do it. So it's actually what the FDA and the [indiscernible] saw that will happen.
And the same thing is for the interim analysis and the full data. So I believe if it will take longer that would be a very good sign for us.
Thank you very much.
[Operator Instructions] And for our next question we got to Swayampakula Ramakanth from H.C. Wainwright.
Good morning Dror thank you for taking my questions, just to confirm on the -- for the interim look for the GLOBE study, is it still 91 events for the full analysis that's 151.
I was very careful not to mention numbers because we are just submitting to the FDA the change that we discussed before because recruitment went very well, we had to calculate what would be the right time and not harming the trial in any way, we’re making it a better trial. So the planning not to do it in 151, but to do it when we get to 75% of events in the end.
But I don't want to say anything is hard data before we got the agreement with FDA. Because you know it’s under an SPA, if it wasn't under an SPA I could have told you that we already made this decision to go for a 75% of event as the end point for the end of the trial and about 109 events, not 91 for the interim.
But because we are just talking about it with FDA, I prefer to come to you and the market with a definite number the moment that we’ll know that.
Fair enough, that's perfectly fine. Regarding the ovarian trial, I know I did hear that you're still in the process of getting the meeting going when I'm thinking about the ovarian trial, the GLOBE study and potentially the thyroid study coming up in the next year and on top of all this not that you have enough on your plate, you want to get on to this manufacturing facility at Medine, how are you juggling around the resources, do you need to put more in and is this becoming a strain on your current resources?
Okay, so let me make things clear. Although the thyroid study met the primary end point and soon you will see the survival data, it's never meant to show any statistical significant, but you will see the curve. We're not going to develop the thyroid indication by ourselves, maybe later on it can be Decision by our staff may be later on or it can be investigator initiated or any other ways because this is a rare often indication only about 2,000 patient to in the U.S. market and it's a long trial and we don’t want to spend resources there.
So we are going to run actually two trials. One which is the GLOBE trial which is actually close to a complete recruitments, so you can guess we actually going to just a keep on with the trial and follow the patients and do what's needed and the ovarian trial when you'll see after the meeting with the FDA was planned for the trial, you will see that we managed to get a descent sized, but not very big sized trials that can be potentially registration trial. But before we meet with the FDA we do not guarantee this so I’m careful. But it's not going to take more resources than we can.
As for the facilities, it’s very important for as all you to understand that we are working with [indiscernible] as you know on making VB-111 in the scale up and to keep on doing it. But having a facility is where it’s going actually not to expend experiences that we are putting or not in the very significant way forward because Israeli government in supporting having the facility in Israel and that gives us very nice control on our process and an ability to proceed it in a much faster way and a much cheaper way.
So that's the reason that we are doing it. Of course we will have the right personal to do that. So everything that we are doing is in a very focused way and we don’t intend to a do more than we can. Right now we have almost $50 million in the bank as you know and that should take us all the way through the first quarter or 2019 with all of plans that we just described, well beyond the results of the GLOBE trial.
Thanks for that and actually it helps me get into the next question. Regarding the manufacturing facility, you did say that you'd get some help from the government, is that in terms of tax breaks and other like R&D credits or some other credits that you'd get that can help you financially in generating this facility or is it beyond just the current help that you'd get. Because you provide employment and whatnot?
It's much beyond the tax benefited we will get. It's actually we get support from the chief scientist office and by making the production in Israel it will give us much more freedom in any deal in the future. Just for a sample, everything we do in the country, for example, process validation or whatever can be qualify to get a dollar for a dollar from this really government. So we can cut expenses by 50%. That’s not diluted money.
That's great. And then in terms of getting additional non dilutional capital, since you have such and deep pipeline. What are your plans or what are your thoughts regarding utilizing some of that into getting into some kind of a collaborative deal or out licensing or any form that you can generate non-diluted to capital?
So right now, we are not discussing VB-111 we are too close to the finish line here and it's not actually I mean we talking to a potential strategic partners, but it's valuation of the company right now, that's not what we're expecting.
On the other hand on other stuff we have in our pipeline, we are actually -- we will monetize some of them or have a collaboration with some others. But I believe that to -- actually in the beginning of 2017 we will discuss more the pipeline that we have and it would be much clearer.
Thank you, thank you very much for taking all my questions.
Thank you very much RK.
And with that ladies and gentlemen we have no further questions on our roster, therefore Mr. Harats I will turn the conference back over to you for any closing remarks.
Well thank you all for participating in our call today and have a wonderful day.
And ladies and gentlemen this will conclude today's conference thank you for your participation, you may now disconnect.