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BLRX At 90c Offers Multi-Bagger Potential With Several Significant Catalysts In 2H 2018

|About: BioLineRx Ltd. (BLRX), Includes: JAZZ, MRK, NVS, PFE, RHHBY

Summary

The company expects to deliver several major milestones during 2H 2018 including 2 data readouts at the EHA congress in Stockholm, Sweden June 14 - June 18, 2018.

The company will report lead-in results of the Phase 3 GENESIS study in stem-cell mobilization for autologous transplantation in mid 2018.

Top-line results in immuno-oncology Phase 2a COMBAT study in pancreatic cancer for BL-8040 in combination with KEYTRUDA, under collaboration with Merck will be reported in H2 2018;

Phase 1/2a trials of new oncology asset AGI-134 will start in 2H 2018. Preclinical studies showed AGI-134 induced complete tumor regression in 50% and 67% of two mice melanoma models.

Per 1Q 2018 CC comments the company is funded to 2020 with the company holding $44.2 million in cash, cash equivalents and short-term bank deposits as of March 31, 2018.

Discussion

BiolineRx (NASDAQ:BLRX) is a clinical-stage bio-pharmaceutical company having a broad and rich pipeline in different therapeutic areas, primarily in oncology and immunology. The current cash on hand is expected to fund operations to 2020.

For a company with a market cap of less than $100M, BioLineRx has major collaborations with leading pharma companies like Novartis (NYSE:NVS), Merck (NYSE:MRK), and Genentech/Roche (OTCQX:RHHBY). The strategic collaboration with Novartis is for the co­-development of selected Israeli­ sourced novel drug candidates. With Merck, the company is running a Phase 2 study in pancreatic cancer using the combination of its lead compound BL­8040, and Merck's KEYTRUDA. Through the collaboration agreement with Genentech, the company is investigating the combination of BL­8040 and Genentech's atezolizumab (Tecentriq) in multiple solid tumor indications and AML.

The Novartis collaboration was announced on December 16, 2014. Through the multi-year partnership, Novartis will have access to the best drug candidates identified by BiolineRx in the area of immunology. Novartis invested an initial $10 million by acquiring 5 million BLRX shares in a private transaction at $2.00 a share. Once a project is selected, Novartis is expected to pay BioLineRx an option fee of $5 million and fund half the remaining development costs in the form of an additional equity investment in the company.

2018 has been a very busy year for BiolineRx thus far in an effort to continue to build a growing body of evidence supporting the therapeutic potential of lead drug candidate BL-8040 and its new solid-tumor candidate AGI-134. But the second half of the year promises to be even more exciting for the company and its shareholders with several strong positive catalysts starting in mid June 2018

The company listed the following milestones for the remainder of the year in the May 22, 2018 1Q 2018 financial results:

  • Results from the lead-in part of the Phase 3 GENESIS study in stem-cell mobilization for autologous transplantation in mid-year 2018;
  • Top-line results in immuno-oncology Phase 2a COMBAT study in pancreatic cancer for BL-8040 in combination with KEYTRUDA, under collaboration with Merck, expected in H2 2018;
  • Initiation of Phase 1/2a immuno-oncology study for AGI-134 in several solid tumor indications expected in mid-2018;
  • Full top-line results of Phase 2 study for BL-8040 in stem-cell mobilization for allogeneic transplantation to be presented at the 23rd Congress of European Hematology Association (EHA) in June 2018.
  • Additional overall long-term survival data from Phase 2a trial in relapsed/refractory AML to be presented at EHA in June 2018.

I put together the following pipeline summary table showing the many programs the company is advancing simultaneously, alone and in partnership with Merck, Genentech, and Novartis. Please note that the majority of the markets where BiolineRx drugs will be competing are multi-billion dollar markets

Pipeline Catalyst Summary Table

Category

Drug

Indication

Phase

Partner/ Drug

Catalyst

Market Size, $


Liquid Tumors

BL-8040

Stem Cell Mobilization

3

None

Data Mid 2018

$5B

BL-8040

Consolidation AML

2b

None

June 2018 at EHA

Several $B

BL-8040

Allogeneic Transplant

None

Data 2H 2018

Several $B

BL-8040

Maintenance AML

1b/2

Genentech/Tecentriq

Initiation 2H 2018

Several $B



Solid Tumors

BL-8040

Pancreatic Cancer

2

Merck/KEYTRUDA

Data 2H 2018

Several $B

BL-8040

Pancreatic, Gastric, NSCLC

1b/2

Genentech/Tecentriq

Initiation 2H 2018

Several $B

AGI-134

Solid Tumors

To IND

None

2H 2018

Several $B


Immunology

BL-9020

Type 1 Diabetes

Pre clinical

Novartis

TBA

Several $B

BL-2020

Liver Failure - NASH

Pre clinical

Novartis

TBA

Several $B

BL-1230

Dry Eye Syndrome

Pre clinical

Novartis

TBA

Several $M

Commercial

BL-5010

Skin Lesions

License

Perigo

Revenues

Several $M

Note: EHA - 23rd Annual Congress of the European Hematology Association (EHA), to be held June 14-17, 2018 in Stockholm, Sweden.

Discussion Major Catalysts For 2H 2018

1) Stem Cell Mobilization - Soon To Be Reported Phase 2 and Phase 3 Data

The company is advancing its GENESIS study, a Phase III registrational study for BL-8040. This study evaluates BL-8040 as a stem cell mobilization agent for autologous bone-marrow transplantation in multiple myeloma patients. The study is evaluating the safety, tolerability and efficacy of the combination treatment of BL-8040 and G-CSF, the current standard of care, versus the control arm of placebo in G-CSF.

The Food and Drug Administration approved G-CSF (filgrastim - Neupogen) for the treatment of congenital and acquired neutropenias and for mobilization of peripheral hematopoietic progenitor cells for stem cell transplantation. 

Specifically, BiolneRx is looking into the therapeutic potential of treatment with BL-8040 in a single administration and up to two day collection regimen. This would represent a significant improvement over the current treatment program using G-CSF, which requires multiple administrations and up to four apheresis sessions. This includes treatments with G-CSF plus Sanofi's Plerixafor (Mozobil) which also require several apheresis sessions. This is particularly true for patients with severely compromised bone-marrow who are considered poor mobilizers.

One added advantage of a single administration of BL-8040 and G-CSF is that it may prevent or minimize mobilization and stem cell harvesting failure. Such failures make it impossible to perform autologous transplantation. Investigators recently discovered that in hematologic malignancies it is very important to collect stem cells in time, in order to reduce mobilization failure. They have shown that multiple lines of chemotherapy, with or without radiotherapy can lead to mobilization failure.  Despite this limitation, sales of Mozobil have increased steadily from $80M in 2011 to almost half a billion dollars in 2017 Global sales of Amgen's filgrastin amount to about $5B/year.

At the upcoming 23rd Annual Congress of the European Hematology Association (EHA), to be held June 14-17, 2018 in Stockholm, Sweden BiolineRx will present full top line Phase II clinical trial results assessing BL-8040 as a single agent for allogeneic stem cell mobilization. 

In summary, a single treatment with BL-8040 showed similar efficacy in only one administration to the current practice of  using a four to five day treatment cycle with G-CSF and a one to two day apheresis procedure. In addition, BL-8040 showed non-inferiority in recipient engraftment, with all transplanted recipients successfully engrafting with BL-8040-mobilized grafts.

Regarding these results, CEO Philip Serlin commented:

"These robust results in an allogeneic setting continue to strongly support BL-8040's mechanism of action and demonstrate the ability of BL-8040 as a fast and effective mobilizing agent, thereby giving us further confidence in our ongoing Phase 3 study in stem cell mobilization for autologous transplants. 

We intend to further evaluate the allogeneic transplant landscape in order to decide on the best development pathway forward for this complementary indication."

As shown on the above table, the company is set to present results from the lead-in part of the Phase 3 GENESIS study in stem-cell mobilization for autologous transplantation in mid-year 2018. This means not long after the two EAH presentations are delivered in Stockholm, Sweden, June 14 - June 18, 2018. One on Phase II stem cell mobilization results (June 18, 2018) as stated above, and the other showing that BL-8040 in combination with Cytarabine  (June 16, 2018) resulted in significantly improved overall survival compared to historical data of difficult-to-treat relapsed or refractory AML (r/r AML) patients as discussed below.

2) Results Of Phase 2a Study in Relapsed/Refractory AML - EAH Results To Be Presented June 16, 2018

The abstract  for this presentation " THE CXCR4 INHIBITOR BL-8040 IN COMBINATION WITH CYTARABINE RESULTS IN A SIGNIFICANTLY EXTENDED OVERALL SURVIVAL OF RELAPSED/REFRACTORY AML PATIENTS" provides data regarding positive long term survival data from the dose expansion part of  Phase 2a study in relapsed/refractory AML. The data shows that the combination of BL-8040 with Pfizer's (PFE) cytarabine, high-dose Ara-C  (HiDAC), in this difficult to treat patient population significantly improved overall survival compared with historical data from HiDAC monotherapy.

Specifically, median overall survival was 9.1 month compared to historical data for patients treated only with HiDAC, showing overall survival of approximately 6.1 months. These results are comparable to those achieved by  recently-approved Vyxeos drug made by Jazz Pharmaceuticals (JAZZ). In addition, the subset of patients exhibiting a response showed prolonged overall survival of 16.7 months. 

Regarding these results CEO Serlin commented: 

"We are extremely encouraged with the overall survival data continuing to flow from this proof-of-concept study. The study included a very difficult-to-treat patient population, in which 81% were either refractory to one or two inductions, or experienced progression-free survival of less than 12 months after first-line therapy. These data continue to give us confidence in the AML space, where we have two important studies ongoing – a large, randomized controlled Phase 2b study in consolidation AML, and a Phase 1b/2 study in maintenance AML under our collaboration with Genentech,”

"As previously disclosed, we are currently working towards performing an Interim Analysis on the Phase 2b study in consolidation AML towards the end of the year, subject among other things to reaching an appropriate number of events in the study to provide the analysis for the appropriate level of statistical power." 

The upcoming catalysts for these programs can be seen in the pipeline summary table above.

3) Top-line Results Phase 2a COMBAT Study In Pancreatic Cancer For BL-8040 In Combination With KEYTRUDA

A good preview for the upcoming results of the this study was given at the ASCO Gastrointestinal Cancers Symposium in January 2018. The company presented partial results from the monotherapy portion (point 5 in the following slide) of BL-8040's Phase 2a COMBAT study.  The aim here is to expose pancreatic cancer cells by priming the micro-tumor environment with BL-8040 so that KEYTRUDA can go to work and kill the tumors more effectively:

The partial, BL-8040 monotherapy portion of the trial, showed up to a 15-fold increase in CD3+ T cells, and up to a 2-fold increase in CD8+ T cells, in the tumor micro-environment (TME) of 43% of the patients, after five days of BL-8040 monotherapy. In this study BL-8040 was safe and well-tolerated. 

The following slide is BiolineRx depiction on how BL-8040 is envisioned to work in the tumor micro-environment (TME), which was confirmed with this data: (from December 2017 company presentation):

Lead investigator, world-renowned oncology expert Dr. Manuel Hidalgo commented:

"This is the first time we see results of BL-8040 in pancreatic cancer patients. The results of the monotherapy part of the COMBAT trial are extremely encouraging as they confirm the mechanism of action of BL-8040 in this difficult-to-treat patient population, resulting in T-cell infiltration into the tumor after only 5 days of monotherapy with BL-8040. These results support the rationale for combining BL-8040 with checkpoint inhibitors, and I am looking forward to the topline results of the COMBAT study expected later this year."

4) Initiation of Phase 1/2a New Solid Tumor Drug  AGI-134 

Also in January 2018, the company presented AGI-134 preclinical data at the ASCO-SITC conference. The data showed regression of established primary and distant tumors after injection with AGI-134. In two melanoma models, data demonstrated complete tumor regression in 50% and 67% of mice treated intratumorally with AGI-134. Treatment with AGI-134 also showed a beneficial effect on survival compared to the control group.

During the 1Q 2018 conference call CEO Serlin commented:

"We look forward to data from additional preclinical studies planned for AGI-134 and we are on track to initiate a first in human Phase 1/2a clinical study in the next few months. Similar to our BL-8040 platform, we believe there are significant opportunities for combination treatments using AGI-134 with other immunotherapies, especially checkpoint inhibitors."

The data presented at ASCO_SITC validates AGI-134's envisioned mode of action which has the ultimate the of killing the injected as well as the distant metastasized tumors as shown on the slide below (December 2017 company presentation):

Melanoma is the most serious type of skin cancer because it can spread or metastasize to other tissues and organs in the body. Metastatic melanoma often spreads to the tissue under the skin, lymph nodes, lungs, liver and brain. 

The pipeline catalyst summary table shows more milestones for 2H 2018, but those discussed above are the most important in my opinion.

Analyst Ratings

Analyst Mark Breidenbach with Oppenheimer reiterated its Outperform rating and assigned a $3/share price target on the stock in December 2017. In a research note he commented, "We believe BL-8040 could generate sufficient sales revenues as a stem cell mobilizer to see the company cash flow positive by 2021. Additionally, the drug may prove to be an effective chemo-sensitizer for patients with leukemia, and the next 12-18 months are replete with catalysts." Maxim Group has a $3.00 price target while HC Wainwright set a $4.00 target price on BiolineRx on a research note issued on December 25, 2017.

Institutional ownership

BiolineRx has very strong institutional support with a current 40% ownership up from 15% a year ago. Bvf Inc is the largest holder and currently owns about 30% of the company's common stock. Novartis owns 5.4M shares of BLRX stock. Deutsche Bank Ag, Morgan Stanley, Senvest Management, and other large investors have been adding in recent quarters. 

Risks and uncertainties

As with any biotech in the clinical-development stage, there are several potential risks that should be considered. Investors are encouraged to review the most recent filings with the SEC to mitigate risk.

Conclusions

As analyst Mark Breidenbach with Oppenheimer recently stated, the rest of 2018 is also loaded with major catalysts as discussed in this article. I believe BLRX is now poised for a major breakout after several months of consolidation.

With potentially 3 significant data readouts in June starting with two during the 23rd Annual Congress of the European Hematology Association (EHA), to be held June 14-17, 2018 in Stockholm, Sweden, and followed with Phase 3 stem cell mobilization data, the stock price should start moving towards the $3/share analyst PT. Many investors are keenly interested in the upcoming topline results of BL-8040 COMBAT Phase 2 pancreatic cancer clinical trials with MRK's KEYTRUDA. Positive results could turn BL-8040 into the next blockbuster drug.

With strong and growing institutional ownership, a solid balance sheet, and a robust and strong pipeline, BLRX is destined to become a significant gainer in the biotech world going forward. As the company keeps delivering strong results for its lead candidate BL-8040 it is just a matter of time when large pharma will take notice (if they haven't yet), and take action, as in a partnership or a buyout.

Disclosure: I am/we are long BLRX.