Analyst Conference Summary

conference date: August 13, 2019 @ 5:30 AM Pacific Time
for quarter ending: June 30, 2019 (Q2, second quarter 2019)

Forward-looking statements

Overview: Continues clinical development, with VB-111 for ovarian cancer in a Phase 3 trial with an interim efficacy readout expected before the end of 2019.

Basic data (GAAP):

Revenue was $0.1 million, down sequentially from $0.2 million, and down from $0.2 million year-earlier.

Net loss was $4.7 million, down sequentially from a loss of $4.2 million, and down from a loss of $4.1 million year earlier.

Diluted loss per share (EPS) was $0.13, down sequentially from $0.12, and flat from $0.13 year earlier.

Guidance:

Has cash sufficient for operations through the end of 2021.

Conference Highlights:

Dror Harats, M.D., CEO of VBL Therapeutics said "Our OVAL Phase 3 potential-registration trial of VB-111 in ovarian cancer continues as planned. The final results from the prior Phase 2 study (presented at ASCO in June) which show statistically significant prolongation of overall survival in platinum-resistant patients, strengthen our belief in the potential of VB-111. An important outcome from Phase 2 was the correlation between CA-125 response and survival benefit. Measurement of CA-125 will, therefore, be the focus of our interim analysis in OVAL, planned for year-end 2019"

The Phase 3 trial of VB-111 with chemotherapy in platinum-resistant ovarian cancer continued enrollment as planned. 350 patients will be enrolled with overall survival as the primary endpoint. VB-111 has orphan drug designation in this indication. There will be an interim analysis near the end of 2019. Final data from the prior Phase 2 study in ovarian cancer demonstrated a statistically significant dose dependent increase in median overall survival in patients treated with therapeutic dose vs. low dose of VB-111. Current therapies on the market showed PFS, but not OS, so VB-111 could be a superior therapy.

We expect the launch of a Phase 2 clinical trial with the National Cancer Institute, of VB-111 in colon cancer in combination with a checkpoint inhibitor, in 2H 2019.

The commercial gene therapy manufacturing facility received certification by the EU in Q2 2019.

Despite the failure of the earlier Phase 3 trial, we see renewed interest from the oncology community in the potential of VB-111 to treat recurrent Glioblastoma (rGBM) based on MRI analyses performed by UCLA. This seems to indicate the monotherapy was more effective than the combination therapy used in the Phase 3 trial. Recruitment in two investigator-sponsored studies for VB-111 in rGBM are expected to commence in H2 2019, one with a checkpoint inhibitor, the details of the other were not announced.

In 2018 signed a strategic exclusive option license agreement for VB-201, an anti-inflammatory molecule, for veterinary use, with potential payments to VBL that may exceed 50 million euros during the license term. Partner was not named, nor the upfront payment amount. VBL retained worldwide rights for VB-201 for the treatment of humans.

Has a strong preclinical pipeline. The MOSPD2 program goal is to file an IND in 2020 to start clinical trials. VBL presented more preclinical data on VB-600 MOSPD2 platform at the European Committee for Treatment and Research in Multiple Sclerosis (or ECTRIMS) conference in October 2018.

Continues to develop its lecinoxoid preclinical program for renal fibrosis.

An IND for bi-specific antibody, VB-611, for treatment of solid tumor indications is planned for 2H 2020.

Cash ended the quarter at $45.1 million, down sequentially from $47.7 million.

Cost of revenue was $0 million. Gross profit $0.1 million. R&D expense $3.7 million. SG&A $1.2 million. Operating loss $4.8 million. Other income net $0.2 million. The R&D expense is net of government grants.

In Q1 2019 VBL was awarded a non-dilutive grant of over 10 million New Israeli Shekels (approximately $2.9 million) by the Israel Innovation Authority to support continued development of VB-111 for 2019.

Q&A summary:

NCI colon cancer study timeline? Timing depends on the investigator. Things are progressing. Believes will start before year end, mayber earlier in Q4. The IND will be for GB-111 plus a checkpoint inhibitor. Hopes to turn colon cancer from cold to hot tumor type.

Ovarian interim analysis timeline? End of year or very early in 2020. CA125 endpoint is important as an early indicator of success.

Capacity of new facility? Should support the first indication globally. The facility is capable of expansion. If we get approval we will also start on a separate facility somewhere else in the world.

MOSPD2 program? Will be VBL-601. Being developed for toxicology and clinical trial. Blocks near 100% of monocyte migration at a very low dose.

611 will be chosen from 6 different antibodies, should be chosen by year-end.

GBM regulatory path if new trial is positive? Planned to combine with prior Phase 2 data that might be enough for registration. Primary endpoint is immune response, but will get an OS result too.

Reviewed typical courses of therapy for ovarian cancer. Believe Phase 3 patients are basically the same as recruited in Phase 2. Because it is a blinded trial we can only give limited interim data when it is available.

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