Assessing BioLineRx As A Buy After Drug Approval
Sep. 18, 2023 1:28 AM ETBioLineRx Ltd. (BLRX)
Summary
BioLineRx has received approval for their stem cell mobilizing compound, motixafortide, for certain forms of blood cancer.
The compound has shown impressive results in mobilizing stem cells in patients, with a high success rate in optimal stem cell collection.
However, there are concerns about competition from generic versions of a similar drug and the decreasing need for immediate autologous transplants in patients with multiple myeloma.
Topline Summary
BioLineRx (NASDAQ:BLRX) is a biotech company focused mainly on developing a stem cell mobilizing compound to help patients with certain forms of blood cancer. Their exciting news is that they've received a first approval for their compound, but there is reason for caution moving forward, given that their setting of choice continues to be questioned in the literature. There's also generic competition, although BLRX has attempted to get in front of this with a post-hoc analysis suggesting better benefits with their drug. Long story short: this stock is sitting at a bargain price if they're able to capitalize decently on their recent approval.
Pipeline Overview
Motixafortide
The main compound being developed by BLRX is motixafortide, an inhibitor of CXCR4. This target has numerous potential benefits for patients with cancer and blood diseases, but the most advanced in BLRX's pipeline is as a stimulator of blood stem cell production and mobilization.
Why? Transplant of blood stem cells, either from the patients themselves (autologous) or from a donor (allogeneic), has been a core piece of managing blood cancers like leukemia and lymphoma for decades. In patients with multiple myeloma, autologous stem cell transplantation was for a long time one of the best options for patients.
That is, it's one of the best options if you're able to get the body to move stem cells into the blood so you can collect them. And a large number of patients are unable to present enough of these stem cells in the blood with standard procedures. Addition of the CXCR4 inhibitor plerixafor and the growth factor G-CSF (filgrastim) has improved this rate of mobilization, but many patients continue to struggle with getting the optimal number of stem cells, which can negatively impact how well they do post-transplant.
Motixafortide is a more potent CXCR4 inhibitor that was assessed in the phase 3 GENESIS trial, part 2 of which compared motixafortide plus filgrastim versus placebo plus filgrastim. This study showed impressive mobilization of stem cells with motixafortide, with 96.3% of patients achieving optimal stem cell collection by day 3, compared with 36.5% in the placebo group. Moreover, optimal collection was achieved after just one round of apheresis in 88.8% of patients with motixafortide.
Outcomes post-transplant, like engraftment of cells and graft durability, were similar between the two arms, suggesting that motixafortide did not negatively alter the stem cells that were collected. Almost 2 years since that presentation, motixafortide was approved on September 11, 2023, in combination with filgrastim to help mobilize hematopoietic stem cells in patients with multiple myeloma.
At ASH 2022, the company presented an indirect comparison of motixafortide versus plerixafor that suggested motixafortide could achieve optimal stem cell mobilization in fewer rounds of treatment, with concomitant potential benefit in terms of cost overall.
BLRX is continuing to develop motixafortide in different applications, mainly in sickle cell disease, but few developments have been announced in this direction.
More recently, the company announced that an investigator-initiated, randomized, phase 2 trial to investigate motixafortide plus cemiplimab plus gemcitabine/nab-paclitaxel in patients with advanced pancreatic cancer, hoping to build on results they observed in the COMBAT study in the second-line setting.
Financial Overview
As of their Q2 2023 filing, BLRX held $10.1 million in cash and equivalents, with another $22.7 million in short-term bank deposits. This was set against a $9.9 million operating loss, most of which went to expansion of their sales capabilities in anticipation of their approval. There was an unusual $7.7 million in non-operating income loss, as well, related to the revaluation of outstanding warrants, so the net loss reached $18.5 million for the quarter, compared with $7.4 million in the same fiscal quarter 2022.
Assuming this net loss was anomalous, BLRX has approximately 3 quarters of cash and current assets on hand to fund operations from the end of Q2. That gives them approximately 7 months to get a launch off the ground.
Strengths and Risks
A drug approval is the holy grail for developmental biotechs, and now BLRX gets to begin the transition into a commercial entity. That is indisputable, and now the company is going to be able to gain traction.
The only question, then, is how much traction? There are 2 red flags that come to mind for motixafortide. First, the GENESIS trial did not include plerixafor as a comparator, and their attempts to compare the cost/benefit of the 2 agents in a post-hoc analysis underscores how important a question it is to answer whether the new drug is as good or better than the old.
You cannot do this convincingly by these kinds of analyses. So it will remain a question whether a clinician should use plerixafor or motixafortide. A future head-to-head study could definitively answer the question, which would be a boon because the cost-effectiveness of plerixafor has also been called into question.
Now that plerixafor has multiple generic versions launched, BLRX may have an uphill battle.
The other potential red flag is that novel therapies have continuously undermined the role of upfront stem cell transplant for patients with multiple myeloma. Most recently, the DETERMINATION trial demonstrated that stem cell transplant offered no overall survival benefit after RVD therapy compared with RVD alone.
Long story short: newer, better therapies are delaying and preventing the need for a costly stem cell transplant in more patients than ever, which could tighten the pool of patients that could potentially benefit from motixafortide. Of course, it is approved to mobilize stem cells for storage in case of a future transplant, and a lot of patients may opt for that strategy.
But it's uncertainty, meaning that motixafortide is very much not a slam dunk as a commercial product. We'll have to watch carefully how BLRX handles the rollout.
That said, all of these risks cannot trump that motixafortide has impressive phase 3 data and drug approval. Some analysts on Seeking Alpha have proposed that BLRX is a strong buyout candidate, but that is very much speculative. Cash is another issue BLRX will need to solve in the near term. Hopefully, they can launch motixafortide sales before they need to do an equity raise.
Bottom-Line Summary
BLRX has a drug approved, full stop. This is a big landmark for any company, and their drug definitely has a role to play in multiple myeloma. Exactly how big a role remains a question, since there's generic plerixafor competition now (even if plerixafor is marginally worse than motixafortide), and fewer patients need immediate autologous transplants. This stock is worth a close watch, since if they can bounce off this approval into decent sales relatively quickly, then the current market cap of $120 million is basically a joke.
