Analyst Conference Summary

conference date: November 16, 2020 @ 5:30 AM Pacific Time
for quarter ending: September 30, 2020 (Q3, third 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 $0.1 million, down sequentially from $0.2 million, and up from $0.0 million year-earlier.

Net income was negative $5.8 million, flat sequentially from negative $5.8 million, and down from negative $4.9 million year earlier.

Diluted earnings per share (EPS) was negative $0.12, up sequentially from negative $0.14, and up from negative $0.14 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 clinical development program for VB-111, our unique gene therapy for solid tumors, continues to advance well. Patient enrollment in the OVAL Phase 3 study in ovarian cancer continues to be ahead of plan, with almost 200 patients enrolled to date. We had two positive DSMC analyses, indicating that our OVAL trial remains on the right track. While it is important to note that the study remains blinded, we are encouraged by the very high response rate (RR), over 50%, that we continue to see to date. This RR is impressively higher than expected for standard-of-care treatments, for which RR is typically in the teens. If successful, the OVAL trial has the potential to establish VB-111 as a new standard of care in a challenging disease setting where patients currently have limited options."

The Phase 3 trial of VB-111 with chemotherapy in platinum-resistant ovarian cancer continued enrollment as planned, reaching 50%. 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 on track for initiation. The IND was submitted by Dana-Farber Cancer Institute. Despite the failure of the earlier Phase 3 trial, we see renewed interest from the oncology community. The Phase 2 combo study for metastatic colorectal cancer started in Q3 2020.

The MOSPD2 inflamation (NASH) program, VB-601 submitted a pre-IND to the FDA in June 2020 with plans enter the clinic in 2H 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. IND second half of 2021.

Cash ended the quarter at $37 million, down sequentially from $41 million.

Cost of revenue was $0.1 million. Gross profit $0.1 million. R&D expense $4.8 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:

50% response rate in OVAL, details? Evaluable patients have CA125 about twice normal. The patients who have been on drug long enough to evaluate is over 150. We believe we will have an over 50% response rate in the total population.

DSMB meeting should be in the middle of Q1. The will see the OS and PFS data and the safety, but they keep it blinded, so they do not report very much, just if there is a green light to go on.

Colorectal cancer study design? It is being done with the NCI. Patients recruited are beyond standard of care and checkpoint inhibitors. Must be a cold tumor. Single arm study. First VB111, the nivolomab two weeks earlier. But half will get a biopsy in-between to see what 111 is doing with the immnune system. Could test up to 40 patients, could do less depending on preliminary results. It is a teasing study to see if it repeats what we see in ovarian cancer.

In OVAL a very minimal number of patients have had Covid-19, and they remained in the trial.

Does not know how good the results would have to be to stop the trial for positive efficacy. Would have to be statisical significance, P less than 0.05. It would also require a special meeting with the FDA.

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