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spk06: Greetings and welcome to the VBL Therapeutics full year 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to Dan Ferry of LifeSci Advisors. Thank you. You may begin.
spk05: Thank you, operator. Good morning, everyone, and thank you for joining the VBL Therapeutics Full Year 2021 Financial Results and Corporate Update Call. Joining me on the call is Professor Jorah Horatz, Chief Executive Officer, and Sam Backenroth, 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 VBL's website at 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 20F. 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, Wednesday, March 23, 2022. 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 Jorah Haratz. Jorah?
spk00: Thank you, Dan, and good morning, everyone. 2021 was a very productive year for VBL, and the excellent progress we made both in the clinic and operationally set us up for further success in 2022. Our lead candidate, Ofravec, also known as VP111, recently completed patient enrollment and is now in the late stages of the Oval Phase III Registrational Trial in Platinum-Resistant Ovarian Cancer. Recently, we also announced that the Independent Data Safety Monitoring Committee overseeing this trial made a unanimous recommendation that the oval trial should continue as planned. We are expecting data readout on the progression-free survival primary endpoint from this trial in the second half of this year. If successful, this will be a transformational event for VBL as it would position us to get ready to submit a BLA in ovarian cancer, which we would expect to occur in the first half of 2023. We have a number of other significant catalysts to look forward to this year, including clinical data in two other high-value cancer indications, colorectal cancer and glioblastoma. We have also recently successfully completed toxicology studies for VB601, the first anti-inflammatory candidate from our novel MTT technology targeting monocytes to fight chronic immune inflammatory disease and plan to enter the clinic with this program in the second half of 2022. Beginning with Ofravec, our first-in-class gene-based approach to treating cancer, which is highly differentiated in the oncology space. Ofravec has a unique dual mechanism of action designed to combine the blockage of blood vessels formation that are required for tumor growth with an anti-tumor immune response that recruits T cells into the tumor microenvironment. Therefore, it has a broad potential to change the standard of care in multiple solid tumor indications. In addition to ovarian cancer, our lead indication, it has also shown objective responses in phase two trials in GBM and in thyroid cancer and has been shown to have a good safety profile to date. In more than 300 patients, in completed clinical trials, we have not seen significant bone marrow toxicity or other concerning side effects. Importantly, it has a dosing schedule that is convenient for both the physician and the patient as it is administrated every eight weeks and is not expected to require any special monitoring. We were very pleased to announce earlier in March that Oval, the phase three trial evaluating Ofravec in recurrent platinum resistant ovarian cancer is now fully enrolled with a total of 409 patients. We also announced on the same day that the independent data safety monitoring committee overseeing this trial made a unanimous recommendation that the trial should continue as planned. This pre-planned analysis is particularly important as the committee provided its recommendation following the review of unblinded data from 370 patients, which at the time represented more than 90% of targeted population of the trial. The oval trial is designed with two individual primary endpoints, progression-free survival and overall survival. Based on regulatory guidance, successfully meeting either of these endpoints should be sufficient to support a BLA submission. Readout of the PFS primary endpoint is expected in the second half of this year. With a positive outcome in the PFS endpoint, we would expect to submit a BLA for FDA approval in the first half of 2023. As a reminder, all of the other existing drugs approved for ovarian cancer, including PARP inhibitors and Avastin, were approved based on PFS data, and they have not demonstrated an overall survival benefit to date. As we get ready for success, We had two important senior management hires recently. Matthew Trudeau to the new created position of Chief Commercial Officer earlier this year, and Sam Beckenross as a CFO during the fourth quarter. Matt will be responsible for all commercialization activity around Ofravec. He brings more than 25 years of U.S. and international experience commercializing complex biologic products and has worked on all aspects of commercial practice at both small and large biotech companies. Both Matt and Sam will be based in the U.S. I think it's important to see these appointments in the context of a broader strategic initiative to establish a U.S. presence for VBL and to prepare the company for future success in advance of the Oval readout. As part of our strategy to increase awareness for Ofravec and the company in general, we will be hosting a live in-person KOL event in New York on Monday, April 11th. The event will provide investors with the opportunity to learn more about Ofravec and the ovarian cancer space in general and will feature presentations and panel discussion by three world-renowned experts in the field, Dr. Bradley Monk, Dr. Richard Penson, and Dr. Kathleen Moore. This is a timely event, giving the upcoming PFS readout from Oval and the increasing interest we are seeing in Ofravec from the medical community. This will be our first in-person event for investors in over two years, so we are looking forward to seeing many of you there. You can find a link to register on the investor relations section of our website and also in the earning press release that we issued this morning. I would like to remind the audience that OfraVec is also being evaluated in two other clinical trials that are expected to generate preliminary data in 2022. The first is Phase II clinical trial in combination with Opdivo, an immune checkpoint inhibitor for the treatment of metastatic colorectal cancer. It is being conducted under a cooperative research and development agreement with the National Cancer Institute. The purpose of the trial is to see if Ofravec, can recruit the immune system into the gut environment, which behave quite different than the rest of the body. The result will teach us if simple systemic dosing with Ofravec can turn the colorectal tumor immunologically hot and will help inform the company on whether this is an application we should pursue further in additional studies. The second is a randomized controlled phase two trial investigating Ofravec in neoadjuvant and adjuvant setting in recurrent GBM patients who are undergoing a second surgery. It is sponsored by the Dana-Farber Cancer Institute in collaboration with a group of top neuro-oncology centers and enrollment is ongoing. We expect preliminary data from both the colorectal and GBM study later in 2022. Turning to our pipeline, we continue to make excellent progress with our monocytes targeting program and are on track to initiate the first in human study for our lead candidate, VB601, which aims to offer a novel and differentiated approach to treat prevalent chronic inflammatory diseases such as multiple sclerosis, rheumatoid arthritis, steatohepatitis, inflammatory bowel diseases, and others. BB601 is a monoclonal antibody that targets a receptor known as MOSPD2, the monowalk protein, and is engineered to prevent monocytes from exciting the bloodstream and traveling to inflamed tissue. Monocytes are believed to be one of the key cell types involved in inflammation and have been implicated specifically in the development of chronic diseases. We believe our approach has a broad potential and is differentiated from the majority of current anti-inflammatory agents which work mostly through T and B cells. We have generated preclinical proof of concept showing disease modifying activity in animal models of multiple sclerosis rheumatoid arthritis, steatohepatitis, and inflammatory bowel disease, and demonstrated ex vivo activity of VB601 in monocytes isolated from patients with various chronic inflammatory indications. We had a successful pre-IND meeting with the FDA regarding our development plan for VB601. We have since completed IND-enabling toxicology studies that demonstrated favorable tolerability profile that support moving the product into the clinic. We are now conducting a GMP manufacturing run of VB601 and expect to initiate a clinical trial in the second half of this year. To summarize, with Oval now being fully enrolled and with the DSMC unanimously recommendation to proceed following review of over 90% of the study population, We look forward to the PFS preliminary endpoint top line data readout in the second half of this year and to transformational year for VBL in 2022. I will hand it over now to Sam to discuss the full year financial results. Sam, please go ahead.
spk07: Thank you, Gerard, and good morning, everyone. Moving to the financials, our revenues for the year ended December 31st, 2021 were $0.8 million as compared to $0.9 million in 2020. Total operating expenses for the year ended December 31st, 2021 were approximately $30.4 million consisting of $22.7 million in R&D expenses net and $7.7 million in general and administrative expenses. This compares with total operating expenses of $25.1 million in the year ended December 31, 2020, which was comprised of $19.7 million in R&D expenses net and $5.4 million in general and administrative expenses. For the year ended December 31, 2021, VBL reported a net loss of $29.9 million or $0.45 per basic share as compared to a net loss of $24.2 million or $0.55 per basic share in 2020. At December 31st, 2021, the company had cash equivalents, short-term bank deposits, and restricted bank deposits of $53.5 million. Based on our current projections, we expect that this cash position will be sufficient to fund planned operating expenses and capital expenditures for at least 12 months from the date of the readout of top line PFS data from the phase three oval trial. With that, I would like to turn the call back over to the operator for the Q&A portion of this morning's call. Thank you.
spk06: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.
spk04: One moment, please, while we poll for your questions.
spk06: Our first questions come from the line of Jonathan Ashoff with Roth Capital Partners. Please proceed with your questions.
spk09: Thank you. Good morning and congrats on a timely miss of a lot of things. Can you please explain to us how this European Innovation Council accelerator thing works and when you will get the money and have to issue those shares? And has any cash from that come in yet? The press really espouses the institution, but doesn't help me a lot with the nuts and bolts of it.
spk07: Sure. Thanks, Jonathan. This is Sam here. So as you mentioned, we announced in December that we were awarded a 17.5 million euro blended finance grant from the European Innovation Commission. 2.5 million euros of that is non-dilutive in grant form, and we expect to get the first part of that sometime during this quarter. In addition, as well, as you can see in the 20F, the additional 15 million direct investment is something that has to go through a process, which we are working through right now, and we would expect likely within the next quarter to be able to go ahead and finalize the documentation and be able to bring that in. The understanding is that those are shares that would be issued at the market at the time of the signing of the agreement. So sometime during this quarter, we would likely have that issuance.
spk09: Okay, Sam, thank you. Can you guys please describe for us the kinds of preliminary data we expect to see later this year from these two phase two trials? you know, any rough sense of patient number and endpoints?
spk00: So the two preliminary data, it's Rolf speaking. Thank you, Jonathan, for asking the question. In the colorectal cancer, actually we are looking to see the histology results of the biopsies we had on this patient before they were treated with Ofravec and after they were treated with Ofravec alone and after they were treated with a combination of of Ofravec and the immune oncology or checkpoint inhibitor drug. And the idea is to see if indeed with a viral product like Ofravec, you can bring the immune system or T cells, CD8 and CD4, into the colorectal cancer. If indeed we can do that, that would be a major step forward for this very big, deadly indications because you know that about 90% of the patients with GI tract tumors, including colorectal, actually have what we call a completely cold tumor. There is no immune system to recognize the tumor, and therefore, even if you try to treat them with checkpoint inhibitors, nothing works. But if indeed, like in other tissues, as we showed it in ovarian cancer and in preclinical in many other tissues, including lungs and other, you can bring these T cells to the tumor. Then of course later on a trial that will show if a combination of Ofravec with a checkpoint inhibitor can be for the benefit of patients or the 90% of the patients that can not enjoy from the whole field of new immune oncology drugs. So this is a very important data that we are expecting to get. If it's positive, it's opening a big avenue both for us and for the patient. if indeed, even with a viral product like Ofravec, you can bring it to the gut, then at least we won't spend time and time of patience in trying to do trials that actually don't work in the mechanism of action of Ofravec. So that's why it's a very important trial, and that's why the NCI actually offered to do the trial with us. So this is one part for one answer to your question. Regarding the Recurrent GBM, you know, it's a randomized controlled trial, and the first part of it is completely blinded, and the patients are recruited when they already failed surgery, chemotherapy, Timodar, basically, and radiation, and now they've progressed, and they are ready to go to a second resection, which becomes much more common in GBM. And before that, a third of them are going to get Ofravec as a neoadjuvant, and two-thirds are going to get placebo. And then, of course, you will get the tumor or the doctors will get the tumor and we'll be able to evaluate if indeed we're bringing the immune system there and if we are changing the genetic of this disease. But this data we are not going to come with in 2022. From that point on, the patients are in three groups, two of them getting Ofravec and one of them getting standard of care, but it's a randomized but open label part of the trial. and we are following the patient for six months PFS and OS. When we will have enough patient and enough data, we can start talking if we are seeing the same signal that we saw in our successful phase two. And what I mean is that we will be able to say what we do see in the six months PFS in these patients. And I'll be more specific, because expected six months PFS in this population is about 10%. If we are seeing a much bigger number of patients that actually getting to six months PFS as we were seeing it in our successful phase two, we will know that actually we are repeating what we've seen in our phase two and actually that this drug is working in GBM. That's the data we are expecting as a preliminary data. Later on when it's fully recruited, we will of course have six months PFS, OS, and the histology data. And if it's coming positive, we will try to actually go and submit it for conditional approval for recurring GPM.
spk09: Thank you for that. You know, given that you've done the 601 IND enabling tox studies, I would like to ask you when you start giving this to people, what are you going to be monitoring most closely for? You know, what have you learned to look out for having done those studies?
spk00: Okay, so actually we were trying to be quite careful when we were saying that the toxicology actually was favorable. Indeed, we were, as we expected from the mechanism of action, we didn't see much in the toxicology. So there is nothing that we should look in a very careful way. But of course, we are going to monitor everything as you normally do in a phase one first in men. And we are going to start with the low dose and increasing the dose. The most important thing, although it's in healthy volunteers, we are actually developed and we are developing more bioassays that will enable us to do not just the PK, but also the PD for this new drug. And that's going to be a fundamental part in every new trial that we will do in patients, because we will be able not just to look for the blood level of the drug, but also to know if the drug is actually doing what we expect that they will do to the monocytes. So we will have bioassays that we look both on monocytes migration and adhesion because that's the way the drug is working actually. Prevent migration and actually stuck or prevent the monocytes from walk. And if we can show that in the right dosing we get there, we will know that at least the drug is working according to the mechanism of action and then of course we can go to specific indications.
spk09: Okay, and if you'll indulge me in just one more question, it just needs a nice monosyllabic yes or no. The 370 patient interim analysis, you know, unblinded, I just want you to say yes or no to this. Was it 100% safety and absolutely 0% efficacy, futility, or any analysis like that?
spk00: The DSMC are very careful because they see everything in an unblinded fashion. and what we got for them is unanimously green light to go forward. Our interpretation is as good as anybody else.
spk09: Okay. All right. Thank you, George. Thank you, Sam.
spk06: Thank you. Our next question has come from the line of Kevin DeGieter with Oppenheimer. Please proceed with your questions.
spk02: Hi, George. This is actually Susan on for Kevin. Just a couple questions from us. I wanted to know if we could get any additional color on the timelines and scope of commercial preparation in the US. You kind of gave us a little bit with the event in April, but you know anymore.
spk07: Yeah, so this is Sam here. I'm not sure that we can give you any more color other than to say that you know we're really happy with the progress so far. And as you saw in early. Early this year, we brought on Matt Trudeau, who's been a fantastic hire for us and has the right pedigree and background in order to really go ahead and drive all the pre-commercialization activities that we need to do, starting to look at global strategy, market access, the logistics of taking the drug and getting it to the end users, and ultimately building out the market research. So we're really pretty deep within that, and we're doing the pre-commercialization activities as we prepare for really building out once we have the PFS data.
spk02: Great, thanks. And then just to follow up, do you anticipate the KOL discussion will include more thoughts on expansion in ovarian? Will it be mostly focused on the current study?
spk07: Yeah, so from the, you know, for the KOL event, I mean, we think that, you know, we've brought, you know, some really good KOLs to the table over here. It's going to be a great discussion both, you know, on Oprevec as well as the market in general, and there have been some really great advances as we, you know, get towards our goal ultimately of, you know, having better patient outcomes in platinum-resistant ovarian cancer where prognosis is fairly poor at the moment. I think that the discussion, knowing the people involved, is going to be fairly lively. And investors are welcome to go ahead and ask questions. And certainly, the KOLs over there would be the right people to answer general market questions, but also their ideas as to where we go from here. I mean, ultimately, the oval trial is in platinum resistant ovarian cancer, later lines of therapy. But our goal is not really to stop there. It's really just a starting point. And we do plan on moving into earlier lines. first-line maintenance, for example, and we do plan on broadening the label to be able to go ahead and use with standard of care or other chemotherapies of choice.
spk00: If I can add, there are two points here. One is, I don't know if you're familiar with it, but the guideline in the U.S. right now for platinum-resistant ovarian cancer is first to try and put the patient on a clinical trial because basically there is no treatment. in platinum resistant ovarian cancer. So coming with a new drug with such a novel technology is actually a big expectation for both the patients and the doctors, and that's why it's important to have this KOL event ahead of the data and ask all the right questions. If indeed Offerback is showing what we hope and expect that it will show in platinum resistant ovarian cancer, that's going to be just the tip of the iceberg for this compound. It's going to go much beyond ovarian cancer because the mechanism of action is actually aimed for many more solid tumors, and we have at least hints and sub-objective responses in other indications.
spk02: I'm looking forward to it. That's all from us. Thank you.
spk06: Thank you. Thank you. Our next questions come from the line of RK with HC Wainwright. Please proceed with your questions.
spk01: Thank you. Good afternoon, Dror, and good morning, Sam. A couple of quick questions. As you know, there are multiple clinical candidates putting out late-stage data for platinum-resistant ovarian cancer this year. So keeping that in mind, you know, what sort of hurdle PFS do you think OfferWeck needs to achieve so that you would feel comfortable filing a regulatory application based on that data?
spk00: Good morning, RK, and thank you for asking this question. First, usually in general, I don't want to talk about other companies' product. I'm very careful about it, but For the sake of patient, any good drug that will work in platinum resistant of iron cancer, it will be a blast. And we all think about the patient as well. Having saying that, when you talk about clinical significant PFS, it's not just a number. It's multiple factors, and actually it's always a discussion with the agency. So with the positive results, we are going to have much more than just PFS in the analysis that we are doing. And when we... We'll present the stop-line results. We won't present just BFS, and hopefully the results will speak for themselves. And, of course, then you have a meeting with the agency to discuss a BLA submission. Actually, in writing, in our discussion with the FDA, which we are not disclosing right now, we also agreed on what will be the discussion that we are going to have with them.
spk01: Perfect. Thank you for that. And then in terms of the 601 getting into the clinic later this year, can you give us a decent idea of how large of a trial this initial study is going to be and anything at all on the design?
spk00: Yes, of course. So the trial is going to be by purpose in healthy volunteer. And we are going to actually, as I was saying before, trying to get the right bioassay for the trial that we will do with different indications. And of course, in this trial, we are hoping to get what is the right dosing. I'm not sure that we will get to the maximum tolerated dose. As I was saying, this drug is look to be extremely safe. But anyway, one has to be sure that we are not getting to any maximum tolerated dose, and then of course you have to use a lower one. And if not, we will have to see at which dose we get to a good evidence that we are getting the right PK and PD. How big is it? It's going to be a couple of tens of patients. It's not going to be a big trial. It's going to be done in steps, starting with lower dose and then increasing it. We are going to have a lot of bioassays that we are going to do on fresh blood and fresh cells, just to be sure that it's not just safety that we are checking for, but also beginning to see efficacy of this drug, or at least some proof that the mechanism of action is actually working in vivo in human beings.
spk01: Thank you. I know you discussed extensively on the colorectal and GBM studies, but these studies being done by collaborators outside of VBL, you know, how confident are you on the timing of able to release the data in 2022?
spk07: Yeah, so we do feel very confident, but, you know, RK, as you probably have noticed, you know, the metastatic colorectal cancer results, which we originally expected in first half 22, we've now broadened the guidance to full year 2022. And the reason for that being is not because we don't expect the results here in the near term, but it is, as you mentioned before, these are you know, third party studies and we're relying on the timing, you know, for those external third parties. And it's one of those things where, you know, as we sit here late in the first quarter, you know, we know there's only about three months left. It could be a couple of weeks. It could be a couple of months until we get those results. So we wanted to just make sure that we had the guidance that fit within what we currently know today. But we do expect to get those results here in the near to mid-term and continue to move forward, obviously, with the GBM study as well. And to the extent that there's any update with timing of that, naturally, we will continue to update the market on those things.
spk00: And maybe, Arke, I'll just add one thing. In the recurring GBM, as we are talking about six months PFS, it all depends on the investigators that recruit the trial and the follow-up, enough follow-ups that we are getting. And when it is investigator-initiated trials, as you were saying, we cannot be 100% sure when exactly we are getting it. So we assume that it should be in 22. But in every investigator-initiated trial, it might be delayed by a couple of months or so. So everybody should take it with this way, knowing that this is not completely in our control.
spk01: Yeah, yeah, got it. Thank you very much. Thanks for taking my questions.
spk00: Thanks, Arkadiy. Thank you very much.
spk06: Thank you. Our next questions come from the line of Somit Roy with Jones Research. Please proceed with your questions.
spk03: Hello, everyone. Thank you for taking the question, and congrats on the progress. If you could remind me, in the top-line data for the oval, If you're going to look at the entire population and then would you also present us in the subgroup by, I don't know, the mutation status or maybe the fewer subgroup, those would be revealed at the same time? Or if the ITD population fails, would you still do it? How are you thinking through presenting this data?
spk00: So, of course, this is a randomized controlled trial. And this look at the PFS, it all depends. If it's coming positive, we are going to see all the data and we are going to share this data, including subgroup analysis and all of this, of course, which is all preplanned. If indeed the trial is not meeting its primary endpoint, which we hope that it will, and at that time we are looking at interim look at OAS, And if there is a good fair of chance to meet actually the OS, and you know that from the mechanism of action, OS is very important with AlphaVec, we actually agreed with the agency that we'll keep on the trial, but then it's going to be in a blinded fashion, and then we won't be able to disclose any numbers.
spk04: Got it. Thank you. That's very helpful. Looking forward to the Q&A call.
spk06: Thank you. Thank you. Thank you. Our next questions come from the line of Jonathan Kreisman with Velour Research. Please proceed with your questions.
spk08: Hi, Juan. So most of my questions have been answered. Maybe if you could just provide more color on the final breakdown of patients in the OBO trial geographically or, you know, any additional criteria from the pool data. patient stage, histology, resistant versus refractory, previous PARP treated patients. Any data could be helpful. Thanks.
spk00: Yeah, I will try to be very careful not to disclose anything that it's not in the public domain. So I can say that this is a very difficult to treat population to start with because of the indication. We allowed up to five line of therapies. So we are talking about heavy treated population. And we already disclosed that about 70% of them were a vaccine failure and about 50% of them were a PARP inhibitor failure, maybe even more than this. And we were disclosing that about 50% of them are what we call a platinum refractory, which means that they progress in less than three months after the last time that they were getting platinum. So we didn't give ourselves any discounts here. I mean, we were taking the patients as they are in real life, and we didn't select for any better population. And it's very similar to what we've done in the Phase IIs. One can look at our Phase II data and assume from there what we are expecting to see. Beside of that, I just want to remind everybody that we had a very important interim analysis after the first 60 patients, and we know that we have more responders, actually significant more responders in the treatment arm. So we hope to actually get it translate into the primary endpoint that we are looking for. But I cannot disclose more data right now.
spk08: Maybe just geographically, if there's any, breakdown you can provide in terms of the European patients and Japanese patients from your patients all together?
spk00: So most patients came from the US and that's what the FDA expected and that's what we did and that's what it should be. In Japan, the PMDA actually insisted we will recruit at least 30 patients to this trial and actually we were successfully recruited even a bit more. In terms of the rest, in Europe we recruited quite significant number of patients and also in Israel. So it's all actually a real international trial.
spk04: Okay, great. That's helpful. Thanks.
spk06: Thank you. There are no further questions at this time. I would like to turn the call back over to Dror Horatz for any closing comments.
spk00: So thank you all for participating in our call today, and all of you have a wonderful day. Thank you.
spk06: Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.
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