Analyst Conference Summary

conference date: March 19, 2020 @ 5:30 AM Pacific Time
for quarter ending: December 31, 2019 (Q4, fourth quarter 2019)

Forward-looking statements

Overview: Continues clinical development, with VB-111 for ovarian cancer in a Phase 3 trial.

Basic data (GAAP):

Revenue was $na million, flat sequentially from $0.1 million, and flat from $ million year-earlier.

Net loss was $na million, down sequentially from a loss of $4.9 million, and up from a loss of $ million year earlier.

Diluted loss per share (EPS) was $na, down sequentially from $0.14, and up from $ year earlier.

Full year figures are below, before Q&A

Guidance:

Expects cash can last into 2021.

Conference Highlights:

Dror Harats, M.D., CEO of VBL Therapeutics said "The ongoing Phase 3 OVAL trial in platinum resistant ovarian cancer continues to enroll patients as planned and we expect the readout from an important interim analysis by the end of the first quarter. VBL made significant advancement during 2019 on all fronts. We now look forward to 2020 as a potential turn around year for the company, with three parallel clinical trials for VB-111 and upcoming results from our MOSPD2 programs for inflammation and oncology."

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 in Q1 2020, but just for the CA-125 response. Results from a Phase 1/2 trial of VB-111 for patients with recurrent platinum resistant ovarian cancer were presented at the 2019 ASCO meeting. Demonstrated a median overall survival (OS) of 498 days in the VB-111 therapeutic-dose arm, versus 172.5 days in the low-dose arm (p=0.03). 58% of evaluable patients treated with the therapeutic dose of VB-111 had a GCIG CA-125 response.

In February 2020 launched a Phase 2 clinical trial with the National Cancer Institute, of VB-111 in colon cancer in combination with Opdivo, a checkpoint inhibitor. Preliminary results could be available beginning of 2021.

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

The investigator-sponsored Phase 2 trial of VB-111 in recurrent glioblastoma (rGBM) is expect to begin in Q2 2020. The IND was submitted by Dana-Farber Cancer Institute. Details on the trial were presented at the Annual Meeting of the Society for Neuro-Oncology, November 20 - 24, 2019 and published in Neuro-Oncology. 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 inflamation program goal is to file a pre-IND in Q2 2020. VBL will present more data at the International Liver Congress in 2020.

The cancer version of MOSPD2 antibodies will be the bispecific VB-602, with preclinical data to be presented at AACR in 2020.

VBL executed a strategic exclusive option to license agreement with one of the world-leading European animal health companies for the development of the anti-inflammatory molecule, VB-201, for veterinary use. VBL received an undisclosed up-front payment. Upon exercise of the license option, VBL expects to receive additional milestones and royalties, which have the potential to exceed €50 million. VBL retains worldwide rights for the use of VB-201 for the treatment of humans.

VBL's gene therapy pharmaceutical grade manufacturing facility in Modiin, Israel, that was established to support the commercial supply of VB-111 for the first indication, was certified by an EU Qualified Person as being in compliance with EU Good Manufacturing Practices (GMP). This will support commercialization of VB-111, if approved.

Cash ended the quarter at $37 million, down sequentially from $41.1 million.

4Q numbers not given, lumped into FY 2020 numbers. Cost of revenue was $ million. Gross profit $ million. R&D expense $ million. SG&A $ million. Operating loss $ million. Other income net $ million. The R&D expense is net of government grants.

FY 2020 results: Income $0.6 million. Cost of revenue was $0.2 million. Gross profit $0.4 million. R&D expense $15.5 million. SG&A $4.9 million. Operating loss $20.0 million. Other income net $0.6 million. The R&D expense is net of government grants.

Q&A summary:

Ovarian cancer interim, resizing option? Do not think will be a resizing due to the interim analysis because it is not looking at overall survival. But later interim analysis could affect OS.

Completion of enrollment for ovarian cancer study? Recruitment rate is currently at a good pace. But cannot predict effects of COVID 19.

AACR abstract acceptance, data release? Considering releasing some data early.

For the NCI study our only costs are administrative.

GBM trial is blinded and randomized, so study results in 2021, mayber end of.

The bispecific results, VB-602 are looking good so far, we hope to release more information as the year goes on.

Ovarian trial recruitment won't be complete until towards the end of 2021. Then another 12 to 18 months to get sufficient events for data.

Effect of coronavirus going forward likely depends on how optional the cancer treatments are. There are a lot of unknowns. Agencies are saying okay for delays in monitoring and imaging, so they want to keep trials on track if possible.

Checkpoint inhibitors have not done well in ovarian cancer because they are cold tumors. But our drug might combine well, we will learn more from our colon cancer combination trial. PARP inhibitor combinations may make sense, too. Our ovarian trial patients have often already failed Avastin or a PARP inhibitor.

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