BioLineRx Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to the BioLine RX second quarter 2022 results conference call. All participants are presently in listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. For operator assistance during the conference, please press star zero. I would now like to turn over the call to Tim McCarthy of LifeSci Advisors. Please go ahead.

Thank you, operator. Before turning the call over to management, I would like to make the following remarks concerning forward-looking statements. All statements in this conference call, other than historical facts, are indeed forward-looking statements. The words anticipate, believe, estimate, expect, intend, guidance, confidence, target, project, and other similar expressions are used typically to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and may involve and are subject to certain risks and uncertainties and other factors that may affect BioLine Rx's business, financial condition, and other operating results. These include, but are not limited to, the risk factors and other qualifications contained in BioLine Rx's annual report on Form 20F, quarterly reports filed in the 6K, and other reports filed by BioLine Rx with the SEC to which your attention is directed. Actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements. BioLine Rx expressly disclaims any intent or obligation to update these forward-looking statements. At this time, it is now my pleasure to turn the call over to Mr. Phil Surlin, Chief Executive Officer of BioLine Rx.

Thank you, Tim, and good morning, everyone. And thank you for joining us on our second quarter results conference call today. Earlier this morning, we issued a press release, a copy of which is available in the investor relations section of our website. It was also filed as a 6K. I will begin with an overview of our second quarter, then Molly Zebi, our Chief Financial Officer, will provide a discussion of our financial results. We will then open up the call and are looking forward to your questions. Also joining the call for Q&A are Abby Weinstein, our Chief Medical Officer, Elos Sarani, our chief development officer, and Holly May, our chief commercial officer. During the second quarter and subsequent period, we made significant progress across both our stem cell mobilization and pancreatic cancer programs for our lead compound, Motixivortide. At the same time, we were approaching a key data readout for our second program, the anti-cancer vaccine, AGI134, which I will discuss shortly. Turning to our most advanced opportunity, stem cell mobilization. In stem cell mobilization, we are nearing completion of our new drug application and anticipate submitting the package to the FDA within the next four to six weeks. Recall that we held a successful pre-NDA meeting with the agency this past December and gained alignment on key aspects of the filing, most notably that a single phase three study, Genesis, would be sufficient to support a submission. As a brief reminder, our Genesis Phase III trial of metixifortide in stem cell mobilization met all primary and secondary endpoints with a very high degree of statistical significance, a p-value of less than 0.0001. Approximately 90% of patients underwent transplantation after mobilizing the target number of stem cells following only one administration of metixifortide on top of GCSF and in only one apheresis session. versus approximately 11% in the GCSF arm. In addition, patients in the motixifortide plus GCSF arm collected an average of 11 million cells per kilogram in only one apheresis session versus approximately two million in the GCSF arm. We believe the clear clinical advantage to patients of a significantly reduced number of apheresis sessions is quite compelling. While the high level of certainty regarding the number of apheresis sessions will enable more efficient utilization of apheresis units at transplantation institutions, where there is often a shortage of available machines. In contrast, the use of GCSF alone, one of the main current treatments for mobilization, generally requires multiple apheresis days to reach the target number of cells for collection. And in a substantial number of instances, there are still patients who remain unable to produce the target number of cells for autologous transplantation. Not only does this add significantly to the cost of treatment, but it becomes logistically challenging to hospital apheresis units that, as just pointed out, are already quite burdened. Similarly, even with the addition of Plurixifortide to GCSF, which is the other main treatment in this indication, multiple administrations and apheresis sessions are generally required to achieve the target number of stem cells. Given that we have shown that Motixifortide on top of GCSF can achieve the target mobilization with a single administration of metixifortide and in a single aporesis session, the advantages of this combination over the existing treatment protocols are abundantly clear. In this regard, recall that we commissioned two pharmacoeconomic studies in the U.S. over the last year, one comparing metixifortide against GCSF and the second comparing metixifortide against plurixifor. Both of these studies were performed by the Global Health Economics and Outcomes Research Team of IQVIA and were rigorously designed and executed. Both studies identified significant cost savings from using motixifortide, driven by its ability to optimize the mobilization and collection of stem cells and therefore reduce the number of apheresis sessions, in turn driving benefits to the patients, the centers, and the payers. Against GCSF alone, motixifortide plus GCSF was associated with a statistically significant decrease in health resource utilization during the autologous stem cell transplantation process, with lifetime estimates showing a net cost savings of approximately $19,000, not including the cost of Metixifortide, against GCSF alone. Against Plurixifor in combination with GCSF, IQVIA did a cross-study comparison, and these results even surpassed the economic benefits seen in the pharmacoeconomic study versus GCSF alone. with lifetime estimates showing a net cost savings of approximately $30,000, not including the cost of motixifortide for motixifortide plus GCSF versus plurixifor plus GCSF. I'd also like to take a moment to mention the extensive analyses that we have done to understand the addressable market for motixifortide in stem cell mobilization, including a market assessment that we commissioned through a well-respected third-party vendor, ZS Associates. The conclusion is that in 2021, the value of the US stem cell mobilization market was estimated at approximately $360 million and is continuing to grow. Globally, we believe the addressable market exceeds $500 million. With the advancement of new induction treatment regimens for multiple myeloma patients, which generally include multiple therapeutic compounds within the combination, the subsequent risk of mobilization failure continues to increase. To date, higher intensity three or four drug regimens have become the standard of care induction treatment for all autologous stem cell transplant eligible patients. Recent data have demonstrated that use of such higher intensity induction treatments can lead to impairment of stem cell mobilization. In addition, age is a predictor of stem cell mobilization response and elderly patients with a decreased ability to mobilize the target number of stem cells are being treated more frequently than in the past. Based on the above need for better mobilization agents, growth in this market over the last few years has been driven by the increased upfront use of the Plurixifor plus GCSF combination therapy to drive stem cell mobilization, especially in multiple myeloma patients. The Plurixifor unit and dollar volume performance in the U.S. over the past few years indicates increased use of the product in stem cell transplants, and as mentioned, This dynamic has been exacerbated in recent years by the introduction of more effective and aggressive induction therapies, which on the one hand have had higher initial response and remission rates, but on the other hand have negatively impacted stem cell yields, even with plurixifor, which on average requires more than two administrations and two aphoresis sessions in order to reach the target mobilization. This trend highlights the ever-increasing need for a better and more potent mobilizer, and we believe that is motixifortide. Considering the totality of the data that we have compiled on motixifortide and stem cell mobilization, both clinical and pharmacoeconomic, we are confident that a very strong case can be made for motixifortide as part of a new treatment paradigm in stem cell mobilization for all multiple myeloma patients undergoing autologous stem cell transplantation. In addition, longer term, we believe that our product has the potential to expand beyond multiple myeloma to other indications. Now I'd like to speak briefly about our pre-launch activities. In parallel to the NDA submission activities, we continue to evaluate all of our options with regard to the commercialization of Otixofortide in the U.S. In this regard, we are advancing a broad range of pre-launch activities that would be required under any commercialization scenario, whether we commercialize with a partner or independently. As part of our commercial preparedness, in June, we announced the appointment of Commercial Strategy and Operations Veteran Holly May as our new Chief Commercial Officer. In this newly created position, which is based in the U.S., Holly is responsible for the commercial planning, positioning, and launch oversight for Metixifortide in the Stem Cell Mobilization Indication across the U.S. market, assuming U.S. approval. We believe Holly is the perfect fit for this role, Her career trajectory has included 13 commercial launches, and she brings specific expertise in the hematopoietic stem cell mobilization area from her recent work in gene therapy. In addition, we have carried out a number of prelaunch activities with long lead times, such as engaging key vendors with expertise in the pricing and market access areas, initiating medical affairs activities, for example, institution profiling, medical materials, outreach to key stakeholders. drafting brand logo and artwork, and finally engaging commercial packaging organizations, serialization, and third-party logistics partners. We have indicated before that the stem cell mobilization market is highly concentrated. Approximately 80 centers perform approximately 80% of stem cell procedures. Therefore, the commercialization expenses and footprint required would be limited relative to a more traditional oncology launch in a broader indication. In addition, Holly's pre-existing relationships with the majority of these centers will serve us well. So, regardless of the manner in which we commercialize Motixifortide in the U.S., our efforts now will ensure that we are prepared for a robust launch next year that maximizes the value of the asset and ensures that Motixifortide is well positioned to capture a significant share of the estimated 360 million annual market opportunity in the U.S., In addition, as mentioned, our longer-term plans involve expanding metixifortide beyond multiple myeloma into additional indications. Turning now to our Metixifortide Pancreatic Cancer, or PDAC, program. In June, we took a significant step forward with this program by entering into a development collaboration agreement with Genfleet Therapeutics. Under the terms of this agreement, Genfleet will execute a rigorously designed randomized Phase IIb clinical study in approximately 200 first-line metastatic PDAC patients in China. Importantly, we maintain full rights to Motixifortide across all indications and geographies. While Genfleet would be entitled to a small single-digit sales royalty should Motixifortide ultimately be approved. This collaboration is based on the positive results that we reported from our Phase IIa Combat Keynote 202 Triple Combination Study of metixifortide in combination with Merck's anti-PD-1 Keytruda, and chemotherapy as a second-line therapy. As a reminder, data from the Phase IIa study demonstrated a substantial improvement across all study endpoints as compared to historical data, including median overall survival, median progression-free survival, confirmed overall response rate, overall response rate, and disease control rate. Based on their development capabilities in China, including experience in conducting combination trials in the immuno-oncology space, we believe that we have found the ideal partner to advance metixiportide in pancreatic cancer, and we look forward to initiation of this trial in 2023. Regarding our second clinical candidate, the intratumoral anticancer vaccine, AGI-134, Recall that we are evaluating safety, tolerability, and proof of mechanism in multiple solid tumor types in the Phase I-IIa study. The study is designed to evaluate a wide array of biomarkers and assess both clinical and pharmacodynamic parameters. We hypothesized that AGI-134 coats tumor cells with alpha-gal to make them look like foreign tissue in order to evoke an immune response that both destroys existing tumors and provides a vaccine-like effect. We hope to successfully demonstrate this mechanism of action when we read out top-line results from Part 2 of the study. We are on track to do so later this year. If positive, we plan to initiate a Phase 2 study in 2023. I would now like to turn the call over to Molly Zevi, our CFO, who will give a brief overview of our key second quarter financial statement items. Molly, please go ahead.

Thank you, Phil. As is our practice, in our financial discussion, we will only go over a few significant items on this call. Research and development expenses and cash. Therefore, let me invite you to review the filings we made this morning, which contain our financials, operating and financial review, and press release for additional information. Research and development expenses for the three months ended June 30, 2022, were $5.4 million, an increase of $0.3 million, or 5%, compared to $5.1 million for the three months ended June 30, 2021. The increase resulted primarily from an increase in expenses associated with the AGI-134 study, offset by lower expenses associated with the completed Motik-Safotad Genesis Trial, as well as lower expenses related to NDA supporting activities related to Motyxophortide. Research and development expenses for the sixth month ended June 30, 2022, were $9.8 million, an increase of $0.4 million, or 4.4% compared to $9.4 million, for the sixth month ended June 30, 2021. The reason for the increase is similar to the aforementioned increase in the three-month period. Turning to cash, the company held $43.2 million of cash, cash equivalents, in short-term bank deposits as of June 30, 2022. We believe we're well-financed to achieve multiple potentially value-creating milestones into the first half of 2024. And with that, I'll turn the call back over to Phil.

Thank you, Molly. In closing, as is our custom, I would like to take a few moments to summarize our key upcoming milestones. First, submission of an NDA to the FDA for motixifortide as a novel mobilization agent for multiple myeloma patients undergoing autologous stem cell transplantation, expected in the next four to six weeks. Secondly, announcement of initial results for part two of the phase 1 to 8 trial of AGI134 in solid tumors in the second half of 2022. And now for some slightly longer-term milestones, potential FDA approval of metixifortide in 2023, potential U.S. launch of metixifortide in stem cell mobilization in 2023, initiation of a phase 2B randomized study in PDAC under our collaboration with Genfleet in 2023, and initiation of phase two study for AGI-134 in 2023. And with that, we have now concluded the formal part of our presentation. Operator, we will now open up the call to questions.

Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. If you would like to ask a question, please press star one. To withdraw your question, please press star two. If you are using speaker equipment, kindly lift the handset before pressing the numbers. Your questions will be polled in the order they are received. Please stand by while we poll for your questions. The first question is from John Pensionis from Swainwright. Please go ahead.

Joe, are you there?

Can you hear me?

Yeah, now we can. Go ahead.

Great. Thank you. Thank you. So a few logistical questions. So first, glad to see that the NDA filing is on track. Just curious in what I's you need to dot and T's to cross that are still outstanding.

They want to know what, you know, what is left to do. Just go ahead.

Hi, Joni Savi speaking. You know, there are several steps when you're doing a submission. You need to write and you need to publish, and we are on track. We are completing our work here in BioLine of Writing, and we are moving forward with all the publishing and all the technical issues. And for this reason, we can already say that we are on track. We are sure about that.

Okay, and then... With regard to sort of pre-launch activities, I'll ask a few questions on that, but first I wanted to ask about the manufacturing preparedness, should you be approved?

Yeah, so I mean, we've already completed our validation batches. Our API is manufactured in the U.S., at a well-known site. Our drug product is manufactured in Europe at a well-known site. you know, we've already started working with secondary packaging, et cetera, et cetera, as we mentioned on the call. So we feel that we are very much, you know, on track for a timely launch, if approved.

Got it. And then, so with regard to commercial prep, and I appreciate all the details you shared in your prepared comments, and definitely great hire in Holly. So I guess, You talk about obviously you're looking at all options in the U.S., so let's just focus on the potential if you were to bring forward yourself, at least in the beginning. So what can you be doing right now but not necessarily pulling the trigger on with regard to, say, pre-hire types of details for a sales force and what kind of size would you potentially be looking at? Because he-monks are generally pretty specific.

I'll turn it over to Holly in a minute. I just want to say, as I mentioned, we have not made any decision at this point. All options are on the table at the moment. We are speaking with potential co-commercialization partners, as well as looking at the potential for going out on our own. We're doing quite a number, as I said, of pre-launch activities, all of which are applicable under any of the scenarios as far as commercialization. So I just want to say that briefly, and I'd be happy to turn it over to Holly to add any more color.

Sure, thanks. This is Holly. And our big goal, whether we, regardless of the commercialization structure, partner, self-commercialization, is to be able to have a launch just as close to PDUFA date as possible. And so there's many activities that, regardless of you know, who is going to market absolutely need to be initiated ahead of time. And we are already, we've already evaluated those and we are well on our way with things such as supply chain, thinking about market access, thinking about customers and, you know, the kind of the overall go to market strategy. I think Phil mentioned some of these, but a little bit more color there is secondary packaging. We're well on our way to the sterilization process. We've got 3PL partners identified. State licensing is another long lead time item that we've considered. We've been looking into through talking with customers and market research demand drivers to be able to really assess the marketplace. establishing through medical affairs outside of commercial, but medical affairs, relationships with both accounts and transplanters. And then, like I said, looking at the most important market access type of decisions, such as pricing variables, et cetera. So regardless of the commercialization strategy that we move forward with, all of those things are items that need to be in the pre-launch period, and we have initiated things in all of those regards.

Got it. Thanks for that, Holly. And then I guess one last question. I mean, maybe not looking to disclose today, so, you know, and it's option dependent as well. When do you think you might be, or Byline might be in the position to describe clinical plans beyond multiple myeloma that you alluded to?

Abby, would you like to take that?

I will take that. Indeed, we are not communicating right now our plans. It doesn't mean that we don't have a lot of plans. Currently, our focus is on the NDA submission. However, we have several ideas on how to continue the development of BLAD40 either in the area of the hematological disease as well as in solid tumor. As you may remember, we have a deal with GenFlip in order to develop BL-8040, to continue the development of BL-8040 in pancreatic cancer. And in this world, we are continuing to work. We have a study, an investigative study also in pancreatic cancer in the U.S., in Columbia University. And we have some other ideas in how to develop, to continue and to expand the development of BL-8040 in the area of hematology, but I think that we will need to wait a little bit more before we can discuss these other ideas.

I appreciate it. Thanks for all the out-of-color guys. All right. Thanks so much. Have a great day, Joe.

The next question is from Mark of Oppenheimer. Please go ahead.

Thanks for taking the questions. Just a couple for me. And just wanted to seek some additional clarity on the cash runway guidance. Is the guidance you're offering today inclusive of all prelaunch expenses that you think are going to be necessary to support commercialization? Or is it right now just really focusing or inclusive of the long lead time items? So that's the first question. A second question, I was just wondering if there's been any news or updates from the academic sponsored trial in Frontline PDAC. Are we possibly going to be seeing any data from that trial later this year? Thanks for taking the questions. Okay, Abby, you want to take the second one first?

Yes, I will. First of all, you know, it's an investigator-initiated study. We have less of, you know... less influence on what happened there, but we hope to have some results to share in the upcoming months and see how we will move forward in this regard in terms of pancreatic cancer. But at the moment, I cannot commit to any specific day, but it should be in the upcoming months.

And as far as the cash runway, you know, we mentioned that we have $43 million in cash, which, again, as we mentioned, is enough to take us to our major upcoming milestones, which include most of the pre-launch activities. And as a, you know, pre-commercial stage company, we believe that, you know, we'll have multiple options available to us if and when the time comes.

All right. Thanks for clarifying, and thanks for taking our questions. Thank you. Have a great day.

The next question is from John Vandermosten of Zacks. Please go ahead.

Hello, everyone, and good morning and good afternoon. I'd like to understand the GenFleet arrangement. So they're doing a trial, a triple combination trial in China. Will it only remain there? Is the deal only in the Chinese geography? And what if it's successful? And how might that expand out to other countries?

Yeah, so I can just say that this is a trial that they are performing a phase 2b randomized study in 200 patients in first line metastatic pancreatic cancer. They do not have any rights to the, no territory, they don't have any territorial rights in China, greater China, anywhere. We are keeping all of the global rights and all of the global indications to the product. They are entitled to a low single-digit royalty if Motixa Fortide is approved. Once we receive, hopefully, if the data is positive, we believe, and since it's positive in a randomized, you know, well-designed randomized controlled phase to be studied, we believe that we will be able to take that data and speak to additional partners, larger global partners, to go forward with a clinical development plan to a phase three study, and again, if successful, then to registration.

And they'd be eligible for that royalty on a global basis as long as it's used in that triple combination, but that's it?

No, they would be entitled to a royalty on motixifortide sales in general, but again, a very small single-digit royalty. And it's also capped. But we haven't given much... you know, given that much guidance on it. We gave overall guidance at this point.

Okay. And the checkpoint inhibitor that they're using, that's their own internally developed checkpoint inhibitor?

Yeah. We haven't disclosed that. I mean, they have access to a checkpoint inhibitor.

Okay. I know there have been a number of them developed in China that, you know, are similar in the way they act compared to the ones developed. That's our feeling. Okay. And Questions on metixifortide in autologous stem cell transplants. If approval comes, it'll be in multiple myeloma patients, but obviously the potential market's a little bit larger. Are there any efforts you can make to use it in a broader transplant setting, such as in perhaps allogeneic transplants or beyond multiple myeloma? And what would you need to do to get there? I mean, perhaps not another trial is necessary, or perhaps it is. What do you see the pathway there for expanding the use outside of the multiple myeloma area?

I will take this question. Again, you are right. There are other places, other indications for stem cell mobilization. However, the biggest and largest indication is in multiple myeloma is the one that we choose. This is one of the reasons for what We choose multiple myeloma because it's the largest, and there were still non-MND that's increasing all the time because of the increase of the induction treatment and the age of the patient. And therefore, this is the larger market. If we want to have an expanded indication in stem cell mobilization, we will need to have some kind of data from clinical trials, the type of clinical trial that we need to do. We need to check it again. But as I said before, there are other opportunities that we are evaluating in parallel, and we will need to decide what is the best for us to invest in order to extend the label.

Okay, great. And last one for me is for you, Molly, on R&D expenditures. Will AGI 134 expenses continue to increase as the year progresses? Is that what we're thinking?

Yes. As we already published, we've completed the recruitment of the AGI-134, and we're working on the analysis of the blood samples. That's why you see the increase in the expenses related to the AGI-134.

Okay, and so they should remain at similar levels or maybe drop off a bit as we move into the second half?

I guess this will drop off a little bit by the end of the year.

Okay, great. Thank you, guys. Appreciate it. Thanks, John. Have a great day. You too.

If there are any additional questions, please press star 1. To withdraw your question, please press star 2. Please stand by while we poll for more questions. There are no further questions at this time. Before I ask Mr. Phil Serlin to go ahead with his closing statement, I would like to remind participants that a replay of this call is scheduled to begin two hours after the conference. In the U.S., please call 1-888-295-2634. In Israel, please call 039255904. Internationally, please call... 972-392-55904. Mr. Serlin, would you like to make your concluding statement?

Yes, I would. Thank you, operator. To summarize, we remain on track to submit our NDA for metixifortide and stem cell mobilization in the next four to six weeks, while in parallel we advance key prelaunch activities. We are evaluating different options with respect to the commercialization of metixifortide in the U.S., either independently or with a partner. In either case, our ultimate goal is to execute a robust launch of approved that maximizes the value of the asset. We believe we can capture a significant share of a U.S. market estimated to be in excess of $360 million and growing rapidly. And from both a clinical and pharmacoeconomic perspective, we believe Motixifortide on top of GCSF can quickly become the standard of care in this important indication. At the same time, we are pleased to advance metixoportide in pancreatic cancer through our GenFleet agreement, and we are rapidly approaching a key data readout for AGI-134. I am very pleased with the progress that we made during the second quarter and look forward to a very productive back half of the year. Thank you all very much for your continued interest in BioLineRx, and we look forward to providing our next comprehensive update in November. Be safe and have a great day.

Thank you. This concludes the BioLineRx second quarter 2022 results conference call. Thank you for your participation. You may go ahead and disconnect.