Vascular Biogenics Ltd (VBLT)

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VBL Therapeutics: Feeling Bullish After VB-111 Clinical Trial Amendment

Jun. 10, 2021 9:15 PM ETVascular Biogenics Ltd. (VBLT)

Summary

VBL Therapeutics recently announced that they were allowed to add progression-free survival as a second primary endpoint for VB-111's Phase III OVAL study in ovarian cancer.

The addition of the PFS endpoint could reduce VB-111's regulatory timeline by one year. Thus, moving VBL closer to commercialization.
I reveal my plans for managing my VBLT position.

VBL Therapeutics (Vascular Biogenics Ltd. (VBLT)) continues to progress their flagship candidate, VB-111, an innovative gene therapy for solid tumors. Recently, the company announced that their Phase III OVAL pivotal trial in ovarian cancer has been amended to add progression-free survival “PFS” as an additional primary endpoint. This amendment could hasten their BLA submission and move the regulatory finish line significantly closer. This news was embraced by the market and the share price responded positively. For me, I see the amendment to be an extremely bullish event for the company and improves the likelihood that VB-111 gets the thumbs up from the FDA.

I intend to review the VB-111 program for ovarian cancer and will explain how this update impacts the regulatory process. In addition, I will discuss why this has amplified my bullish near term and long-term outlook for VBLT.

Background on VB-111 Ovarian

VBL’s VB-111 is a gene therapy candidate that targets the diagnosed cancer by blocking the tumor’s vasculature and stimulates the immune system to attack the tumor. What is more, VB-111 has the prospects to work on any tumor mutation, so it is possible that it is effective against all solid tumors.

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Figure 1: VBL-111 MOA (Source: VBLT)

VB-111’s Phase III OVAL study in platinum-resistant ovarian cancer is moving closer to the finish line. So far, VB-111’s data has been impressive with a 58% or higher response rate, which is significantly higher than standard-of-care treatments for which response rate is stuck between 10% and 20% (Figure 2).

Figure 2: VB-111 ORR (Source: VBLT)

In addition to the strong data, VB-111 has several other advantages over some of the other leading treatments (Figure 3). Personally, I would like to point out the advantageous IV dosing regimen of every 8 weeks, which would be an improvement over AVASTIN’s IV every 2-3 weeks (Figure 3).

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Figure 3: VB-111 vs. Ovarian Competition (Source: VBLT)

In terms of safety, the DSMC saw “no safety issues with the trial and recommended its continuation as planned.” The next DSMC review is expected to occur during Q3 of this year. As for enrollment, the company reported that they have about 2/3 of the patients needed and should be fully enrolled by year-end (Figure 4).

Figure 4: OVAL Enrollment Status (Source: VBLT)

Amendment

Recently, VBL publicized the primary endpoint amendment of VB-111’s OVAL Phase III study. The clinical trial now has two separate primary endpoints, of progression-free survival and overall survival “OS”. To review, overall survival is if the patient has not died from any cause, whereas progression-free survival is survival without progression of the disease.

VBL believes that either primary endpoint is anticipated to be adequate to warrant a BLA submission. The PFS endpoint is expected to have a readout in 2022, which could hasten BLA submission by roughly one year compared to original projections based on the readout of the OS primary endpoint that remains anticipated in 2023.

Why is this significant?

The PFS endpoint will show VB-111's potential to prevent the disease/symptoms from getting worse, whereas, overall survival will demonstrate how patients who are on VB-111 + paclitaxel live longer than patients who are taking placebo + paclitaxel. The OS endpoint is obviously the end-all of endpoints because most patients want to live longer. However, OS is a broad endpoint and doesn't always tell the whole story. The PFS endpoint should reveal how a patient is living/dealing with cancer. It is one thing to live longer with cancer, but it is also important to live longer without dealing with deteriorating health and amplifying symptoms.

Another positive result of having another primary endpoint is that it will provide some insurance if the data from one of the endpoints falls short. This way, VBL, and VB-111 will be able to use the successful endpoint and still have a shot at approval. Moreover, the addition of PFS should fast-track the clinical readout and to a potential approval because the PFS data is anticipated to be revealed in 2022 vs 2023 for an OS readout.

What is more, the fact the company was able to keep the OS as a primary endpoint should be applauded. Having an OS as a primary endpoint will offer them the opportunity to distinguish VB-111 from contemporary ovarian cancer treatments, of which the majority were approved on their PFS data (Figure 3). Not only would this help in terms of an approval, but would be a great selling point when on the market.

Amplified Bullish Outlook
The endpoint amendment has amplified my bullish outlook for VBLT in the near term and long term. I believe that if approved, VB-111 has the potential to reform cancer therapeutics and possibly launch a new standard of care in several cancers. Now with the PFS endpoint, we could see VB-111 on the market one year earlier than expected, which could lead to an earlier launch and influx of revenues. As a result, we would have one less year of “all burn and no earn” in the financial statements.

This is an important point because the company now has over $60M in cash, which is expected to fund the company until year-end 2023. So, it is now possible that we could see a Phase III readout and a BLA before the company has to pull a trigger on another offering. Prior to the endpoint amendment, I was anticipating two secondary offerings before a potential approval. Now, we might only see one financing deal before a potential approval and executed at a higher valuation.

Indeed, it is hard to accept that simply adding the PFS endpoint to the trial has significantly amplified my bullishness. However, I believe this simple update has improved VB-111’s chances of approval, shortened the regulatory timeline, moved the company closer to pulling in some revenue, and provided a key data point to use in commercialization. Essentially, almost everything improved for VB-111’s regulatory and commercial prospects.

Plan
In my previous VBLT article, I discussed how I was going to make a technical entry and add once the company hits key milestones. Unfortunately, VBLT’s daily chart (Figure 5) did not give me that clear signal I was looking for, so I never amassed the position size I was hoping to have at this time. Admittedly, I wasn’t looking to “load up” at this point in time because of the lack of a clear completion date for OVAL and the impending threat of dilution.

Figure 5: VBLT Daily (Source: VBLT)

Now with some extra cash in the bank and a potentially reduced time to a PDUFA date, I will be looking to add on dips and selling on rips to accumulate an upsized position while still banking profits. Long term, I am still willing to give VBLT at least five years to get VB-111 on the market for ovarian and at least two other oncology indications. On the other hand, if VB-111 fails to hit the OVAL endpoints, I will liquidate my position and will revisit the ticker after the company decides their next course of action.

After years of working in the medical field, I have developed a passion for biotech and lifesaving therapies. Now, I am a full-time biotech investor who is in search of the next breakthrough therapy, device, or pharmaceutical. My trade focus is around catalysts and potential acquisitions.

Disclosure: I am/we are long VBLT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.