Analyst Conference Summary

conference date: August 13, 2020 @ 5:30 AM Pacific Time
for quarter ending: June 30, 2020 (Q2, second 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 $0.2 million, down sequentially from $0.4 million, and up from $0.1 million year-earlier.

Net income was negative $5.8 million, down sequentially from negative $5.4 million, and down from negative $4.7 million year earlier.

Diluted earnings per share (EPS) was negative $0.14, up sequentially from negative $0.15, and down from negative $0.13 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 "The first interim analysis in our OVAL Phase 3 pivotal study in ovarian cancer demonstrated the potential benefit of VB-111 over standard-of-care in a randomized-controlled study, and the recent positive second interim analysis indicates that the trial continues to be on the right track. OVAL has shown strong recruitment despite the COVID-19 pandemic. Also, when the Company blindly reviews response rate data in all trial participants, that is in the treatment and control groups combined, we are very encouraged by the high response rate of over 50% of the total evaluable patients, which has been maintained. The investigator sponsored studies of VB-111 in GBM and colorectal cancer are headed for initiation. Our MOSPD2 programs are gaining momentum, with pre-IND application for our lead candidate VB-601 for inflammation, and recent scientific presentations in NASH and colitis at DDW, in rheumatoid arthritis at EULAR 2020 and in oncology at the AACR meeting."

The Phase 3 trial of VB-111 with chemotherapy in platinum-resistant ovarian cancer continued enrollment as planned. In Q2 2020 the first interim results were presented at ASCO20 Virtual Scientific Program. In Q3 the DSMC second interim analysis determined the study should continue as planned, based on unblinded data from the first 100 patients. The planned enrollment is 400. The un-blinded first interim data from the ongoing OVAL study 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 CA-125 response rate observed in the Phase 3 interim analysis is at least as good as the response rate seen in Phase 2. OVAL study recruitment is going well and being extended to additional geographies. The next interim should be in Q1 2021.

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 Q2 2020 the European animal health company partner, that is evaluating VB-201 for veterinary applications, advised that the program met a pre-determined milestone. This triggered an undisclosed cash payment.

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 submitted a pre-IND to the FDA in June 2020 with plans enter the clinic in 2021. VBL will present more data at the International Liver Congress in 2020. VBL presented new data at the European League Against Rheumatism (EULAR) onthe potential of proprietary anti-MOSPD2 antibodies for treatment of rheumatoid arthritis. The treatment reduced >50% of disease severity and blocked further disease progression. Anti-MOSPD2 demonstrated higher activity than anti-TNFa in the advanced phase of the disease. Also published a paper on the potential to treat multiple sclerosis.

The cancer version of MOSPD2 antibodies will be the bispecific VB-611, with encouraging preclinical data presented at AACR in Q2 2020.

Cash ended the quarter at $41 million, up sequentially from $32 million. In Q2 a stock and warrant offering raised $18 million.

Cost of revenue was $0.1 million. Gross profit $0.1 million. R&D expense $4.9 million. SG&A $1.1 million. Operating loss $5.8 million. Other expense net $0 million. The R&D expense is net of government grants.

Q&A summary:

What triggers the next interim results for VB-111? DSMC meets every 6 months, it is a long trial. Will look at both efficacy and safety. GOG controls the steering committee.

Geographic extension? Currently about 65 centers, in U.S. and Israel. Extension is to Europe and Japan, which helps when submitting to regulators. That was delayed by pandemic. On the whole we are ahead of plan on patient recruitment.

601 trial plan? No decision yet, most likely to start with healthy volunteers.

Survival delta needed in second interim? Not in the public domain. It is still early in the follow up, just 3 months of follow up on 100 patients. Next time should be more meaningful, with 200 patients or more and some with much longer follow-up.

The over 50% number was for CA-125. We will talk about the RECIST response rate in the near future.

The animal therapy trial was postponed by the pandemic, but should start soon.

Timing of MOSPD2 programs? VB601 will be the first to go into the clinic, next year. The first indication could be in MS or in RA. It depends in part on who could be a strategic partner.

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