Vascular Biogenics Ltd. (VBLT) CEO Dror Harats on Q3 2021 Results - Earnings Call Transcript
Nov. 15, 2021 2:08 PM ETVascular Biogenics Ltd. (VBLT)
Vascular Biogenics Ltd. (NASDAQ:VBLT) Q3 2021 Earnings Conference Call November 15, 2021 8:30 AM ET
Company Participants
Dror Harats - Chief Executive Officer
Sam Backenroth - Chief Financial Officer
Conference Call Participants
Kevin DeGeeter - Oppenheimer
Swayampakula Ramakanth - H.C. Wainwright
Jonathan Aschoff - ROTH Capital Partners
Jonathan Kreizman - Valore Research
Operator
Good morning and welcome to VBL Therapeutics Third Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode and please note that this conference is being recorded. A question and answer session will follow the formal presentation. [Operator Instructions]
I would now turn the conference over to our host from VBL team. Please go ahead.
Unidentified Company Representative
Thank you. Good morning, everyone, and thank you for joining VBL Therapeutics third quarter 2021 financial results and corporate update call. Joining me on the call is Professor Dror Harats, Chief Executive Officer; and Sam Backenroth, Chief Financial Officer. The press release of the company's financial results was issued earlier this morning and is available on the Investor Relations page of the VBL's website at ir.vblrx.com.
Before turning the call over to Dror and Sam, I would like to remind everyone that during this conference call, forward-looking statements made by management are intended to fall within the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934 as amended. As set forth in our press release, forward-looking statements involve risks and uncertainties that may affect the company's business and prospects, including those discussed in our filings with the SEC, which include, among other things, our annual report on Form 20-F. These filings are available from the SEC or on our website.
Any forward-looking statements made on today's conference call speak only as of today's date, Monday, November 15, 2021, and the company does not intend to update any of these forward-looking statements to reflect events or circumstances that occur after today's date. As a reminder, this call is being recorded and will be available for audio rebroadcast on the company's website. There will be a Q&A session following the company's prepared remarks.
With that, I'd like to turn the call over to Professor Harats. Dror please go ahead.
Dror Harats
Thank you, [Eric] and good morning, everyone. Joining me on today's call is Sam Backenroth, our new Chief Financial Officer, who will discuss the third quarter financial results for 2021.
We continue to execute on our development programs and strategic objectives and look forward to 2022 which we believe is going to be transformational year for VBL. We expect to have data from multiple VB-111 clinical trials in high value indications including the progression free survival co-primary endpoint from the phase III overall study in ovarian cancer. We also anticipate beginning first in human studies evaluating VB-601, our monocytes targeting antibody for the treatment of chronic immune inflammatory diseases.
Our overall clinical trial registration enabling phase III study of VB-111 in ovarian cancer has now enrolled over 85% of the targeted study patient population and we expect to complete enrollment in the first quarter of 2022. Also, in the first quarter of next year, we expect to have another DSMC review, which will include a dataset of almost 100%, if not a 100% of the total study population. The next milestone in the OVAL trial we are looking forward to is a readout of the progression free survival co-primary endpoint in the second half of 2022.
This is particularly important and successfully meeting the PFS endpoint has the potential to enable us to submit BLA one year ahead of plan compared to our original projections, which were based on the readout of the overall survival primary endpoint, which remain anticipated in 2023.
In addition to the readout in ovarian cancer in 2022 we also expect preliminary data from the investigator sponsored clinical trial of VB-111 in colorectal cancer in the first half of 2022 and from the recurrent GBM trial in the second half of 2022. We believe that VB-111 based on its dual mechanism of action, targeting tumor vasculature and immune recruitment has the potential to change the standard of care in multiple solid tumor indications.
As for our pipeline, we continue to advance our monocytes targeting program and expect to initiate a first in human study for our lead candidate VB-601 in 2022. We believe that VB-601 add a new and differentiated approach in the landscape of anti-inflammatory agents by specifically targeting monocytes which are crucial for the development of chronic immune inflammatory diseases. Based on our promising preclinical data, VB-601 may have applicability for a range of high value immune inflammatory indications.
To prepare the company for the continued growth and the commercialization of VB-111 we’ve recently strengthened our management and board and opened a U.S. office in addition to the appointment of Sam Backenroth as CFO. We also added Mike Rice and Alison Finger to the board. Mike has many years of capital markets and IR experience with particular expertise in helping emerging biopharma companies, attract a high quality investors. Alison bring nearly three decades of leadership experience in biotech and pharma. She was previously Chief Commercial Officer at Bluebird Bio, where she built the commercial infrastructure in Europe and the U.S. in advance of Bluebirds first gene and cell therapy product launches.
VBL is well capitalized with expected cash runway into the fourth quarter of 2023 significantly beyond the PFS readout and potential BLA filing. And we are excited to be building momentum as we head into 2022 a year with a number of potential catalysts and multiple opportunities to create value.
At this point, I would like to introduce Sam Backenroth our Chief Financial Officer to the audience. Sam has proven track record in corporate, finance, strategy, operations, and business development. And I'm confident that his leadership and strong investor in banking relationships will help VBL as we enter a new era of innovation and growth.
With that, I will hand over to Sam to discuss the third quarter 21 financial results. Sam, please go ahead.
Sam Backenroth
Thank you Dror and good morning everyone. First of all, I would like to say how thrilled I am to be working with VBL's management team and board of directors to capitalize on our tremendous potential to bring novel therapies to people with cancer and immune inflammatory disorders. What drew me to VBL was the company's cutting edge science and deep understanding of biology coupled with an experienced and driven team with the ability to develop highly differentiated therapeutics.
I'm especially impressed by the corporate culture at VBL and commitment of the entire team to help cancer patients in need and improve the standard of care. I'm excited to be leading the build-up of VBL's U.S. operations, as we head towards significant inflection points in 2022 and begin preparing for a potential commercial launch of VB-111. My appointment is consistent with the company's plan to raise awareness with investors and I look forward to meeting some of you in person in the coming months.
Now on to the third quarter financial results. As of September 30 2021 we had cash, cash equivalents, short term bank deposits and restricted bank deposits totaling $50.8 million. After the quarter ended, we received an additional $9.6 million in proceeds from warrant exercises. We expect that our cash and cash equivalents and short term bank deposits will be sufficient to fund operating expenses and capital expenditure requirements into the fourth quarter of 2023.
Revenues for the third quarter were $0.2 million as compared to $0.2 million for the comparable period in 2020. R&D expenses net was $5 million for the third quarter as compared to $4.6 million in the same period of 2020. For general and administrative expense it was $1.6 million for the third quarter as compared to $1.3 million in the same period for 2020. And finally, comprehensive loss for the third quarter was $6.5 million or $0.09 per ordinary share compared to $5.8 million or $0.12 per basic share in the comparable period in 2020.
With that I would like to return the call back to the operator for the question and answer portion of this morning's call. Thank you.
Question-and-Answer Session
Operator
Thank you. We will now begin the question and answer session. [Operator Instructions] Our first question comes from Kevin DeGeeter of Oppenheimer. Please go ahead.
Kevin DeGeeter
Hey, thanks for the update. I guess a few things from us, Dror congratulations on the progress with overall enrollment. I guess with a positive PFS readout should we think about the timeline of clinical data is being the rate limiting step to a potential regulatory filing or there additional CMC investments that we should also think about as being relevant to, we think about potential timeline for future BLA filing?
Dror Harats
So thank you, Kevin. That's a very good question. And as you know we have our own facility, commercial grade facility here in Israel and I know that many times in gene and cell therapy, the issue of production is a major issue, but we were actually preparing it ahead of time. And as you know the CMC portion of the agency was already reviewing our release test laboratory and actually approved it and also all the batches that were used in the clinical trial and are used in the clinical trial. So I believe that we are actually doing quite well with a CMC and having a good result on the PFS, we will be able to actually be in a position to work on and submitted BLA including the CMC.
Kevin DeGeeter
Great. And then with regard to, I guess continued patient access to VB-111 ovarian cancer following completion of enrollment early next year, are there any plans for expanded access or compassionate use program that may be able to gather data that could be helpful from a pre-commercialization perspective?
Dror Harats
Okay, so that's always a debate that the company should take because that's before you have a proof of concept that the drug is working, although we had a very good phase II and also the interim analysis give us a good hint that VB-111 is actually working in ovarian but you need the full proof that's on one hand. On the other hand you know that we never want to actually patient close to a VB-111 if they were on the control arm because the second primary endpoint that we are looking for is overall survival.
So I believe that from the time that we are going to be fully recruited, until the time that we will be able actually been able to talk about the top line results on PFS are not going to be such a long time and because of that, the plan is that if we will be in with a positive top line result as we all hoped and expected, then of course, we will start an access Program. Although I have to remind everybody that because the study is going also for overall survival, we might be in a position that the PFS is actually working very well and we are submitting BLA but the study will go on for the overall survival.
So we will actually look at it in a very careful way. But we are making enough drug right now to be able to actually use it as an access program and compassionate to patient because as you all know, this is a deadly disease and VB-111 might be a new way to actually change the standard of care for these patients and bring hope to this patient.
Kevin DeGeeter
Well, congratulations on your progress and thank you for taking our questions.
Dror Harats
Thank you very much Kevin.
Operator
Our next question comes from Swayampakula Ramakanth of H.C. Wainwright. Please go ahead.
Swayampakula Ramakanth
Thank you. Good afternoon, folks and welcome aboard Sam. So a couple of quick questions from me on the DSM review that is expected to take place in the first quarter as you said you would potentially have data from almost all of the patients in the trial. So at that point, what sort of indication are you going to get and are you going to let investors know from that review?
Dror Harats
So RK I'll take this question. When the DSMC is looking at the full data, we are seeing only the blended total population data. So we don't know who is who. But we do see the results on each of the endpoint, but we are not talking about it. We're very careful about it. On the other hand, the DSMC is actually seeing the full data including all the primary endpoint where they can compare and get a data on each separate group. But it's, of course, not the clean data. It wasn't the data after all the queries. So although it's going to be 100%, they will be patient and wait a little bit, until we clean the data and get top line results.
So my guess is that they will have the chance to tell us that we got the green light, and we should go forward and they of course might indicate to us if we should expedite and get things cleaned up. But they'll never stop a trial without looking at clean up data.
Sam Backenroth
Yes and just to add to that, I think just importantly from a disclosure perspective what you'd likely to see as an investor, or somebody looking at the story, would be something very similar to what we've disclosed in the past, the DSMC has their meeting, and then we give the very high level results and that, whatever their recommendation was with regard to moving forward.
Swayampakula Ramakanth
Thank you. And then, as it stated next year the Europe data on VB-111. So thinking about colorectal cancer and GBM, I understand this are being run by independent investigators. And it's up to them as to what sort of data but in general, what should be the expectations from these groups on both the indications?
Dror Harats
So as you know RK, when it is a NCI or investigator initiated trial, we depend on the NCI and all the doctors who run the trial. So it's more difficult to ask to say exactly the date or thing that we expect. Having saying that I have to say a couple of things. First, in the colorectal, as I'm saying always on these calls and I'm saying it whenever we meet with investors, we're looking to see if we can bring the immune system into their colon because the colon has a different immune system.
And that's the goal of the trial in our point and we will know that hopefully in the first half of ‘22 but I can't say exactly when. In regarding to the GBM, the trial is a double blind, placebo control, just as a reminder, and it has three groups. The group A is actually getting VB-111 as a new adjuvant before a second surgery.
All patients are recurrent GBM. All patients already failed surgery, radiation and chemotherapy. So they have quite a great prognosis. But they're going to second operation. The first group will get a VB-111 as new adjuvant then later on after surgery as adjuvant. The second group is getting a placebo as a new adjuvant and then VB-111. And the third group is getting placebo as new adjuvant and then the standard of care. So the idea is in this trial is that we are getting the tissue of the tumor and a third of the patient we get VB-111 before surgery.
So we will be able to know if VB-111 indeed bring immune cell and change of genetic of GBM as we think it should do and as we have evidence in animal models and other indication in human being but never in the brain of that will be an opportunity to see that. From that on the trial is actually not a blinded because who is on standard of care and who is getting VB-111. And we're looking at six months, PFS and overall survival. When we will have enough patient and the investigator will think that that's a good time to summarize the data. We will come to the market of course with these results usually with some a presentation at the clinical conference.
Swayampakula Ramakanth
Okay. So do you think that data if everything goes right, is that enough to go to the FDA or do you need to do another trial to file for VB-111 and GBM?
Dror Harats
Okay. The GBM trial was planned, I believe in a good way it's not a big trial, but it's a randomized controlled trial. And even when we got the results of the phase II trial that that was successful, the issue that the agency had to give us accelerate a registration was because it wasn't a controlled trial.
So even in a small control trial if you can show evidence of efficacy in this deadly disease, where nothing else working, we will apply for accelerate approval for GBM, if we will get it or not, we will have to discuss it with the agency. And of course, it all depends on the strength of the data that we will get here.
Swayampakula Ramakanth
Okay. So one last question from me. I know, oncology is one of the major focuses for VBL. With the start of the VB-601 study next year, how far would you take this molecule in development before seeking a partner for further development and commercialization?
Sam Backenroth
Yes. So that's a great question. And it's Sam here. I think that really remains to be seen. And we're designing a first in human clinical trial that we think is going to get us both safety as well as potential proof of concept in the ability to target monocytes, which as you know are one of the three cell types that are implicated in inflammation, yet we don't really have therapeutics that can go ahead and address the monocytes specifically.
So I think that that would probably be the right time once we have that proof of concept to start thinking about potentially bringing on a partner that will allow us to go after some much larger applications whether that's rheumatoid arthritis, whether that's ulcer colitis, Crohn's or other diseases like MS that will remain to be seen, but certainly we would believe at that point that it would make sense for us to go at it with a good strong partner.
Swayampakula Ramakanth
Thank you, Sam. Thanks Dror. Talk to you soon.
Dror Harats
Thank you, RK.
Operator
Our next question comes from Jonathan Aschoff of ROTH Capital Partners. Please go ahead.
Jonathan Aschoff
Thanks. Good morning, guys and welcome aboard, Sam. Can you be more specific about what you're currently doing to prepare for potentially successful OVAL at the PFS readout, such that you'd be in an optimal position to swiftly file for approval and commercialize VB-111 saying something that would perhaps help us judge your PFS optimism?
Sam Backenroth
Yes. So Jonathan, that's a great question. And we're really full steam ahead on all fronts right now as Dror mentioned before, we're doing the CMC preparatory work in order to enable us to be able to file BLA as soon as possible once we have the PFS results and we're investing in that right now. In addition to that, we are in the process of conducting a search for a Chief Commercial Officer to do all the pre-commercialization work, market access, pricing, reimbursement and everything that we really need to do to get ahead of things to be ready for hopefully a positive PFS readout.
And then ultimately the launch of a drug. So we are doing everything that we can in order to accelerate and prepare ourselves for a positive result that will allow us to go ahead and file this off of a PFS.
Jonathan Aschoff
Okay, thank you very much Sam.
Sam Backenroth
Thanks, Jonathan.
Operator
[Operator Instructions] Our next question comes from Jonathan Kreizman of Valore Research. Please go ahead.
Jonathan Kreizman
Hi, everyone. Hi, Sam. Congrats for assuming the role and wishing you all the best in this exciting phase of the VBL's lifetime, also want to congratulate Amos for the long year leadership and involvement in the long journey to develop VBL-111 and the rest of the programs. So congrats to both of you. Question for Dror. I noticed some of the timelines for several programs have moved a little further. Maybe if you could elaborate on the reasons for some of these delays for instance, 601 entering the clinic in the second half of ‘22 and colorectal cancer study which you initially expected to read out in the end of ‘21.
Dror Harats
I think it's quite obvious in what we are facing right now in the world with the pandemic. There are issues with a chain of commerce and there are issues with having a place to actually make the antibody because we know that a lot of effort was a actually shifted towards a producing vaccines for the COVID-19. And actually, we are basically ready for a submitting an IND or starting the clinical trial except for the concluding of the production of the GMP manufacturing of 601. And that was a bit delayed because of the pandemic. And I think that that's the only reason.
So nothing is changing the programming, it's just the change that we are having now in the landscape of a production in the world. And I'm glad to say that right now we are on track. And that's why I could mention that we are planning to have first in [men] already in 2022.
As far as other clinical trials as I was saying before, the colorectal is actually a NCI study. And the GBM is an investigator initiated study and you always depend on the investigators in this. But I don't think it's a bad signal when a clinical trial where you look for a clinical events in oncology is taking a longer period of time and we're depends on having enough patient, that we'll have enough biopsies in the colorectal trial before we can come with any results. And of course, it's not us that going to summarize these result and when we will get it from the NCI we will definitely share it with the market.
Jonathan Kreizman
Okay, great. Question for Sam. So I'd appreciate to hear some of your thoughts as you're working through the learning curve of gaining familiarity with a company and besides that, if you could share any points or particular observations on which you intend to act upon in the short and medium term. Thanks.
Sam Backenroth
Yes, no, great question. And I think, my learning curve has been relatively short here, because I've spent the last couple years in genetic medicines. So that my understanding of the technology, or at least the basic elementary understanding is there. And now that I've been here for about six weeks, certainly continuing to learn and now I'm already getting out there and starting to talk to investors about the story and you're looking both at the VB-111 as well as the 601 program and its application across multiple different inflammatory disorders.
I will say that working with the team has been fantastic so far. We've really been able to come together and further the goals of the company to really accelerate drug development and bring these very important cutting edge novel therapeutics to patients as soon as possible. And I think we continue to execute on that plan. And we've really set up 2022 be an incredibly exciting year for the company on both programs, multiple data readouts on the clinical side, and then entering the clinic and the second program. I think we're really primed for, a great 2022 here.
Jonathan Kreizman
Okay, great. Thanks and good luck again.
Sam Backenroth
Thank you.
Operator
This concludes the question and answer session. I would like to turn the conference back over to the company for any closing remarks.
Dror Harats
So thank you everybody for joining us on today call and have a wonderful day. Thank you very much.
Operator
This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
