Analyst Conference Summary

conference date: May 14, 2020 @ 5:30 AM Pacific Time
for quarter ending: March 31, 2020 (Q1, first quarter 2020)

Forward-looking statements

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

Basic data (GAAP):

Revenue was $0.4 million, sequentially from $na million, and up from $0.2 million year-earlier.

Net income was negative $5.4 million, down sequentially from a loss of $na million, and down from negative $4.2 million year earlier.

Diluted earnings per share (EPS) was negative $0.15, down sequentially from $na, and down from negative $0.12 year earlier.

Full year figures are below, before Q&A

Guidance:

Expects cash can last into Q3 2022.

Conference Highlights:

Dror Harats, M.D., CEO of VBL Therapeutics said "We reached an important milestone in our development of VB-111 in ovarian cancer with the recent positive outcome of the interim analysis of the ongoing Phase 3 OVAL study, which demonstrated the potential benefit of VB-111 over standard-of-care in a randomized-controlled study. A second planned interim analysis which will assess overall survival in the two treatment arms, is expected in the third quarter this year. We are pleased to be making progress also in our MOSPD2 antibody programs. We recently presented promising new data in NASH and colitis models in a Poster of Distinction at Digestive Disease Week, and also published a peer review manuscript on the potential of MOSPD2 antibodies to treat multiple sclerosis (MS). New data on our MOSPD2 bi-specific antibodies will be presented in a late breaking session at the upcoming American Association for Cancer Research (AACR) annual meeting in June. "

The Phase 3 trial of VB-111 with chemotherapy in platinum-resistant ovarian cancer continued enrollment as planned. In Q1 2020 the independent Data Safety Monitoring Committee reviewed un-blinded data from the ongoing OVAL study and determined that the study has met the interim pre-specified criterion, of an absolute percentage advantage of 10% or higher in CA-125 response in the VB-111 treated arm compared to control. The DSMC recommended that the study proceed without modification. The overall CA-125 response rate in the first 60 randomized evaluable patients is 53%. Assuming a balanced randomization, the response rate in the treatment arm is 58% or higher. In patients who had post-dosing fever, which is a marker for VB-111 treatment, the response rate is 69%. The CA-125 response rate observed in the Phase 3 interim analysis is at least as good as the response rate seen in Phase 2. The interim results will be presented at ASCO20 Virtual Scientific Program. The second interim analysis, after 100 patients are followed up for at least 3 months, is expected in Q3 2020.

In February 2020 launched a Phase 2, open-label 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.

In April 2020 received $0.9 million from the Israel Innovation Authority.

In Q1 2020 NanoCarrier Co., Ltd., the Japanese licensee for VB-111, announced its intention to extend the ongoing global Phase 3 OVAL clinical trial in ovarian cancer to patients in Japan. Could result in $100 million in milestones, plus royalties if commercialized.

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.

The MOSPD2 inflamation (NASH) program, VB-601 goal is to file a pre-IND in Q2 2020 and enter the clinic in 2021. VBL will present more data at the International Liver Congress in 2020. A second monoclonal in development is VB-602.

The cancer version of MOSPD2 antibodies will be the bispecific VB-611, with preclinical data to be presented at AACR in 2020.

Cash ended the quarter at $32 million, down sequentially from $37 million. After the quarter ended a stock and warrant offering raised another $13.6 million.

Cost of revenue was $0.05 million. Gross profit $0.3 million. R&D expense $4.8 million. SG&A $1.2 million. Operating loss $5.6 million. Other expense net $0.3 million. The R&D expense is net of government grants.

Q&A summary:

MOSPD2 partnerships? There is an interest, but we only talk about it if there is an actual agreement.

VB-611 targets? In animals in triple-negative breast cancer, cervical cancer, but believe it will work in many solid tumors.

CA-125 is not a primary endpoint, it is a secondary. In second interim will be looking for survival, PFS and OS. Interims will be every 6 months. The most important meeting will be in the beginning of 2021. We are going to 400 patients, have already recruited over 100. We have been recruiting patients "a bit slower" because of the pandemic.

We will run the trial in Japan, but NanoCarrier will fund it, it will accelerate when we get to 400 patients and also make it easier to file in Japan and China.

Fever as marker? It corresponds to a unique cytokine peak, but it is an indicator of which patients are on drug, and does correspond to a better response. The better correlation for response is with CA-125. With chemo there is no correspondence between CA-125 and OS or PFS.

Any difference between European and Japanese patients? So far Japanese are responding very similar to Europeans.

GBM study start? The trial is approved. We are not currently opening centers, due to the pandemic. We will update you when we have a clear picture.

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