BioLineRx - Q1 2024

Transcript

Operator (participant)

Ladies and gentlemen, thank you for standing by. Welcome to the BioLineRx first quarter 2024 financial results conference call. All participants are presently in a listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. I would now like to turn over the call to John Lacey, Head of Investor Relations and Corporate Communications. John, please go ahead.

John Lacey (Head of Investor Relations and Corporate Communications)

Thank you, operator. Welcome, everyone. Thank you for joining us on our first quarter 2024 results conference call. Earlier today, we issued a press release, a copy of which is available in the Investor Relations section of our website. It was also filed as a 6-K. I'd like to remind you that certain statements we make during the call will be forward-looking. Because such statements deal with future events and are subject to many risks and uncertainties, actual results may differ materially from those in the forward-looking statements. For a full discussion of these risks and uncertainties, please review our annual report on Form 20-F and our quarterly reports on Form 6-K that are filed with the U.S. Securities and Exchange Commission. At this time, it is now my pleasure to turn the call over to Mr. Philip Serlin, Chief Executive Officer of BioLineRx.

Philip Serlin (CEO)

Thank you, John, and good morning, everyone, and thank you for joining us on today's call. Joining me today are Holly May, President of BioLineRx USA, and Mali Zeevi, our Chief Financial Officer. In addition, Ella Sorani, our Chief Development Officer, will be joining the call for Q&A. I will begin with a brief update on the significant progress that we are making on our efforts to launch, then turn the call over to Holly, who will go into our commercialization progress in more detail. I will then provide an update on our very promising pancreatic cancer and sickle cell disease programs. Finally, Mali will review our financial results. We will then open up the call to your questions. Let me begin with an APHEXDA commercialization update. As we've noted previously, transplant centers, the end users of APHEXDA, are a well-defined group in the U.S.

Approximately 80 of the 212 centers in the U.S. perform roughly 85% of all transplant procedures. In this foundational year for APHEXDA, we focused our efforts on these top centers and are making strong progress. To date, we have established formulary placement at centers that manage approximately 26% of all multiple myeloma-related transplant procedures in the top 80 centers, up from 20% last quarter. Importantly, we remain on track to achieve our 35% target by the end of the second quarter and 60% by the end of this year. As a result of this work, we saw steady growth and adoption in this, the first full quarter since launch.

While it is very early in the launch, we are nonetheless pleased, not only with the sales trajectory that we are on, but on the progress that we continue to make getting APHEXDA on more transplant center formularies and treatment protocols. Furthermore, feedback from transplant centers on the clinical benefits has been positive. They are experiencing APHEXDA's value firsthand, which simply put, is greater certainty. Greater certainty in collection, time to collection, and scheduling. This is a new era for multiple myeloma patients and transplant centers. Patients are more often older and increasingly receive quad induction therapy, which can increase mobilization risk. Additionally, transplant centers are seeing increased competition for apheresis chair time while experiencing staffing challenges. Greater certainty is the innovation that APHEXDA is providing this new era, and it is having a positive impact on patients as well as nursing and technical staffing.

Our team is excited to be introducing a new standard of care for the mobilization of stem cells for multiple myeloma patients. Staying on the topic of stem cell mobilization, recall that last October, we closed an exclusive license agreement with Gloria Biosciences for the development and commercialization of motixafortide across all indications in Asia. Gloria's IND for a small stem cell mobilization bridging study, a requirement for commercialization approval in China, was recently accepted by the Center for Drug Evaluation of the National Medical Products Administration in China. We expect that this study will commence with the first patient dosed in the second half of this year. Additionally, for countries in Asia that do not require a bridging study, Gloria is making great progress. We anticipate commercialization to begin in the Wuhan region of China, in Singapore, and in Macau over the next few quarters.

We estimate that Asia had over 51,000 reported cases of multiple myeloma, the largest number of cases globally. Stem cell mobilization is therefore a significant opportunity for both companies in the region. At this point, I'd like to turn the call over to Holly May, President of BioLineRx USA, for a more detailed review of our early efforts to commercialization progress. Holly, please go ahead.

Holly May (President, BioLineRx USA)

Thank you, Phil. As mentioned, this is a new era for patients with multiple myeloma planning for a stem cell transplant. Patients are receiving transplants at increased age, and in the U.S., they are now often treated with quadruplet induction therapy, which leads to the highest rate of complete responses and prolonged progression-free survival. These are both great achievements with strong benefits for patients. However, increased age and the combination of drugs used in quad therapy are both known to contribute to poor stem cell mobilization. As a result, the number of patients categorized as predicted poor mobilizers is increasing. This outcome is impacting, in real time, long-held mobilization treatment paradigms at centers. This quarter, we presented two posters that highlighted the innovation benefits of APHEXDA on center efficiency and economics.

This data, which was presented at the American Society for Apheresis Annual Meeting, or ASFA, and at the International Society for Pharmacoeconomics and Outcomes Research, or ISPOR, is supporting decision-makers at centers as they consider new mobilization strategies. Results from the analysis presented at ASFA, which assumed an institution averaging 20 transplants per month, showed that switching to G-CSF plus APHEXDA could increase apheresis capacity by 52 patient days per month versus G-CSF alone, or by 12.3 patient days per month versus G-CSF in combination with plerixafor. Additionally, the analysis presented at ISPOR showed that even with APHEXDA's higher drug costs compared to other mobilization regimens, specifically G-CSF alone or G-CSF plus generic plerixafor, the combination of G-CSF plus APHEXDA may confer a similar or better overall financial impact.

Early adopting centers understand how this efficiency can offer a better economic outcome to them and to the healthcare system overall. They are also seeing the tangible value that APHEXDA is bringing to their patients, and this knowledge is being shared peer-to-peer at other transplant centers. Like any newly launched drug in a hospital setting, where there can be a longer ramp-up cycle, APHEXDA is in its foundational period. Our commercial team is making strong and steady progress with centers, and as a result, we continue to see APHEXDA added to the formularies at the top centers, and we predict continued growth. In summary, I'm very pleased with our momentum since launch and the powerful messages of innovation, efficiency, and value that we are able to convey to patients, physicians, and transplant center leaders. Now, let me turn the call back over to Phil.

John Vandermosten (Senior Biotechnology Analyst)

Thank you, Holly. Turning now to our second development indication for motixafortide pancreatic cancer. Our randomized phase II study collaboration in first-line pancreatic cancer, sponsored by Columbia University and supported equally by BioLineRx and Regeneron, is actively enrolling. Data from the 11-patient pilot phase of this trial, known as Chemo4METPANC, continues to show encouraging findings. We recently announced new data from an abstract accepted at this week's American Society of Clinical Oncology, or ASCO's, 2024 annual meeting. The new analysis of paired pre- and on-treatment biopsy samples demonstrated a significant increase in CD8-positive T cell density in tumors from all 11 patients treated with the combination of motixafortide, PD-1 inhibitor cemiplimab, and standard of care chemotherapies gemcitabine and nab-paclitaxel, with a P value of less than 0.007.

These biopsy sample findings continue to confirm immune cell activation and tumor microenvironment modulation initially observed in the earlier COMBAT phase II-A clinical trial. PD-1 immunotherapies have previously shown limited to no efficacy in pancreatic cancer. We believe that motixafortide can alter tumor resistance in pancreatic cancer and potentially other solid tumor types, helping to overcome a significant obstacle for immunotherapies, including PD-1s. In addition to the Chemo4METPANC trial, as part of our license agreement with Gloria Biosciences, we are working with them on the design of an additional randomized phase II-B clinical trial, evaluating motixafortide in combination with Gloria's commercial PD-1 inhibitor, zimberelimab, and standard of care combination chemotherapy in first-line pancreatic cancer. That trial in China is expected to commence in the first half of 2025.

In summary, we believe the combination potential of motixafortide and PD-1 inhibitors in pancreatic cancer, as well as over 20 other solid tumor types with high levels of CXCR4 expression, could be a significant multibillion-dollar opportunity. Turning now to sickle cell disease. We are also making great progress pursuing motixafortide's potential to support gene therapy for patients with sickle cell disease, which requires significant quantities of hematopoietic stem cells for genetic manipulation, manufacturing, and transplant success. The most commonly used drug for collection of stem cells, G-CSF, is contraindicated in patients with sickle cell disease, and the current strategy using plerixafor has shown limitations, including the need for multiple collection cycles to achieve the necessary hematopoietic stem cell yields. For some, gene therapy may be prohibited by the failure to obtain adequate numbers of hematopoietic stem cells.

We are actively working with leaders in the gene therapy field and look forward to the second half of this year, when early data is expected from our collaboration with Washington University School of Medicine in St. Louis, which is evaluating motixafortide for the mobilization of hematopoietic stem cells in patients with sickle cell disease in a phase I clinical trial. At this point, I'd now like to turn the call over to Mali, who will review our financials. Mali, please go ahead.

Mali Zeevi (CFO)

Thank you, Phil. As is our practice, I will only go over the most significant items in our financial statement: revenues, cost of revenues, research and development expenses, sales and marketing expenses, net loss, and cash. I invite you to review the 6-K contains our financials and press release. The revenues for the quarter ended March 31, 2024, were $6.9 million. We did not record any revenues during the first quarter of 2023. Revenues for the quarter reflect a portion of the upfront payment from the Gloria Biosciences license agreement and the milestone payment achieved under the same license agreement, which collectively amounted to $5.9 million, as well as $0.9 million of net revenues from product sales of APHEXDA in the U.S. Cost of revenues for the quarter ended March 31, 2024, was $1.5 million. We did not record any cost of revenues during the first quarter of 2023.

The cost of revenues for the quarter primarily reflect sub-license fees on a milestone payment received under the Gloria Biosciences license agreement and royalties on net product sales of APHEXDA in the U.S., as well as amortization of intangible assets and cost of goods sold on product sales. Research and development expenses for the quarter ended March 31, 2024, were $2.5 million, as compared to $3.7 million for the same period in 2023. The decrease resulted primarily from lower expenses related to motixafortide FDA supporting activities, as well as termination of the development of AGI-134. Sales and marketing expenses for the quarter ended March 31, 2024, were $6.3 million, as compared to $3.9 million for the same period in 2023.

The increase resulted primarily from the ramp-up of commercialization activities related to motixafortide, including headcount costs associated with fully hired field teams. Net loss for the quarter ended March 31st, 2024, was $0.7 million, compared to $12.2 million for the same period in 2023. The net loss for the 2024 period included $4.5 million in non-cash income, compared to non-operating expenses of $2.9 million for the same period in 2023, both specifically related to the revaluation of warrants. As of March 31st, 2024, the company had cash, cash equivalents, and short-term bank deposits of $28.2 million. Subsequent to the end of the quarter, we accessed an additional $20 million in non-dilutive debt financing under our previously announced agreement with BlackRock, formerly Kreos Capital.

We also completed a $6 million registered direct equity offering. We anticipate that this amount will be sufficient to fund operations as currently planned into 2025. With that, I'll turn the call back over to Phil.

Philip Serlin (CEO)

Thank you, Mali. In closing, as is our custom, I would like to take a few moments to summarize our upcoming milestones. The first is continued commercialization ramp-up of APHEXDA in the U.S. Next, initiation of a bridging study by Gloria Biosciences to support approval of APHEXDA in stem cell mobilization for multiple myeloma in China. Then completion of recruitment in the phase I pilot study of motixafortide for gene therapies in sickle cell disease, led by Washington University School of Medicine, with initial data expected in the second half of this year. Also, continued recruitment in the Chemo4METPANC phase II-B randomized clinical trial in first-line metastatic pancreatic cancer, sponsored by Columbia University and supported by BioLineRx and Regeneron. Lastly, preparation activities with Gloria Biosciences on a phase II-B combination study evaluating motixafortide in first-line pancreatic cancer.

With that, we have now concluded the formal part of our presentation. Operator, we will be happy now to open the call to questions.

Operator (participant)

Thank you. Ladies and gentlemen, at this time, we will begin the question-and-answer session. If you have a question, please press star one. If you want to withdraw, please press star two. If you are using speaker equipment, kindly lift the handset before pressing the numbers. Your questions will be polled in the order they are received. Please stand by while we poll for your questions. The first question is from Joe Pantginis of H.C. Wainwright. Please go ahead.

Joe Pantginis (Managing Director Equity Research)

Hey, everybody. Good morning and good afternoon. Thanks for taking the questions. Very nice to hear all the early factors contributing to the potential strong launch of APHEXDA. So a couple of questions there, if you don't mind. So first, I realize obviously we're ahead of time, there might be a lot of noise around your answers here because it's still early in the launch. But, you know, first off, you know, Phil, you mentioned a few different things, but I guess for you and Holly, what would you say are the top one or two early factors that centers are saying are truly differentiated, even if it's as simple as, you know, access to chairs quicker?

Philip Serlin (CEO)

Okay. First of all, Joe, good morning. It's a pleasure to hear your voice. I think this one I will turn over to Holly. Holly, can you take this?

Holly May (President, BioLineRx USA)

Yeah. Thanks, Phil, and thanks, Joe, for the question. So certainly it's the chair time. And I think as I spoke in my comments, we had two very interesting posters that talk about the efficiencies that institutions can see using APHEXDA plus G-CSF over whatever their standard mobilization regimen was. But I think the other thing, and I know we've talked in this forum before about the three legs or the three pillars of our value proposition. I think one of the things that is resonating with every center is the clinical benefit, and that is the, you know, the increased number of CD34 stem cells mobilized in a single apheresis.

So the rest of the story is certainly what that means to the center, increased efficiencies, chair time, et cetera. But I think the thing that unequivocally resonates across all of the institutions that are using APHEXDA is this, the number of stem cells that are being able to be harvested in a single session. Exactly what we saw in our phase III data, which is very encouraging. Did that answer the question?

Operator (participant)

The next question is from John Vandermosten of Zacks. Please go ahead.

John Vandermosten (Senior Biotechnology Analyst)

Thank you. So, let me go on some of the questions about just the APHEXDA rollout. And, based on your observations of the formulary committee meetings, are they bunched up around certain parts of the year? I mean, maybe the end of the semester for academic institutions or just at the end of the quarter, you know, when you see a lot of those come through. Can you give me any color on that, Phil?

Philip Serlin (CEO)

Yeah, sure. Hi, John. First of all, thanks for, thanks for dialing in. Holly, you wanna take that?

Holly May (President, BioLineRx USA)

Yeah, sure. Thanks. So thanks, John, for your question. No, not really. There's no kind of phasing by quarter or by year. Most institutions have P&T committee meetings on a monthly basis, so there is a little bit of kind of stickiness on the up ramp in that, you know, we need to talk to the P&T members, get on the schedule for P&T. After P&T approval, after the approval of that committee, then there are protocols that need to be in place and then order sets. So it is a little bit of a longer ramp-up, but to say that these P&T meetings, where these decisions are being made, happen, you know, at a phasing of an end of a quarter or end of a year, that's not necessarily a true statement.

They happen every month, and so our field teams are hard at work, you know, center-by- center to get them the information that they need in order to move forward with those P&T committee meetings and hopefully positive decisions.

John Vandermosten (Senior Biotechnology Analyst)

Okay. And so I guess that suggests that you'd see a steady increase in penetration as we move towards your target for the end of the year.

Philip Serlin (CEO)

I think that's a correct statement. Yes, John.

John Vandermosten (Senior Biotechnology Analyst)

Thank you. There are-- I think I calculated, you know, just by subtracting that there are about 152 bone marrow transplant centers that aren't in your target group. Have any of those picked up the use of APHEXDA? And, how do you anticipate those other centers, I guess, like, peripheral centers, you know, how do you anticipate those actually picking up the product? I mean, maybe by physicians that used it in one of the primary centers, kind of taking it with them or just recognizing the value. How do you see those other guys that you aren't really targeting directly using the product as, you know, as we move through the quarters?

Philip Serlin (CEO)

Holly, did you get that?

Holly May (President, BioLineRx USA)

Yeah, I did. So I am happy to answer that question. So first of all, as I think we've said, stated before, that 86% of all transplants in multiple myeloma occur in those 80 centers. So your math is pretty good there. Those, you know, the extended effort that would need to occur in order to get that additional 14% isn't necessarily efficient, especially for a small company like BioLineRx, that's very much focused on, you know, those top 80 centers. The other thing that we haven't necessarily talked about is that we also are, you know, looking at those institutions that use a booster agent like plerixafor or like APHEXDA.

Many of those institutions that you're speaking of in that additional 14%, you know, still aren't necessarily using a boosting agent to the rate that those top 80 are. So there's many reasons why we are hyper-focused on those top 80. That's not to say that eventually, you know, as we move through the process, that there isn't value in that remaining those remaining institutions, but it will just take a lot more effort from our field teams in order to gain those. So in the first year, we are very much focused on where we can make the greatest impact as quickly as we can.

John Vandermosten (Senior Biotechnology Analyst)

Okay. That's helpful. And, another question on the gene therapy side. Again, I know I always ask one of those. But, you know, Phil, you and I have talked in the past and, Holly, too, maybe on just how part of the goal of the current trial that's going on at Washington University is to establish safety. I guess after you achieve that and the data is made available, do you anticipate that there'll be a lot of demand in gene therapy clinical trials for the use of your product?

I mean, do you see that that is something that, you know, maybe other studies are looking at and kinda waiting to kinda get the validation from the sickle cell trial to kinda use it themselves?

Philip Serlin (CEO)

Yeah. So, John, that's a, that's a really good question. And, you know, and I can also ask perhaps, Holly and, and Ella to chime in as well. But, we are actively speaking with a number of potential collaboration of partners, both in the industry as well as at academic institutions. And so we certainly do believe we certainly do see in the future, additional, clinical trials in this area. Does that answer your question, or do you want any additional information?

John Vandermosten (Senior Biotechnology Analyst)

No, that's helpful. I mean, unless you have anything else that elaborate on that. I do have one more on the finance side. I mean, that does answer it. Didn't wanna leave Mali out. I was looking at gross margin and wanted to see if there's any guidance you could give us in terms of trying to estimate that as we move through the year based on our forecast for product sales.

Mali Zeevi (CFO)

Yeah. So, I mean, I think that you can see in our financial statements that gross margins are well in excess of 90% and significantly in excess of 90%, and I don't think that that's going to change.

John Vandermosten (Senior Biotechnology Analyst)

Okay. All right. Thank you for taking my questions.

Philip Serlin (CEO)

You're welcome. Have a great day.

Operator (participant)

The next question is from Joe Pantginis of H.C. Wainwright. Please go ahead.

Joe Pantginis (Managing Director Equity Research)

Hey there. Thanks for taking the follow-up. I just wanted to ask. Look, I don't wanna overstate or understate, but I really wanted to get your comment as to the potential importance of the work that you did ahead of time to be able to get the pass-through status for CMS, you know, with regard to hospital bundling. And then second, anything that we need to consider with regard to drug supply and manufacturing efforts for additional ramp-up? Thank you.

Philip Serlin (CEO)

Okay. So I will turn that first question over to Holly, and I'll take the second question. Go ahead, Holly.

Holly May (President, BioLineRx USA)

Yeah. I don't know if I heard the question in there, but, I will attempt to answer this, and if I didn't, if I didn't clearly get to your concern, please ask the question again. So we are quite pleased with the work that our account team has done. We have three different types of field individuals. We have our sales professionals, we have our medical team, and then we also have our account payer team, and they are focused on the payers, both commercial and government payers, to ensure that we have access. We are quite pleased where we are right now with about 95% of the lives covered. And as you said, also we are in the first quarter, we have attained that pass-through status.

So we feel like we are well-positioned, and we have not to date had any issues with any sort of access or denial of patients to receive APHEXDA. Now, did I answer your question? I'm not exactly sure.

Joe Pantginis (Managing Director Equity Research)

You did, Holly. You did. Thank you.

Holly May (President, BioLineRx USA)

Okay.

Philip Serlin (CEO)

And on the supply side, Joe, we are very well positioned from a drug supply perspective, both for all of our commercial needs as well as our clinical needs. So there's really no issue there whatsoever.

Joe Pantginis (Managing Director Equity Research)

Great. Thanks for the follow-up.

Philip Serlin (CEO)

You're welcome.

Operator (participant)

There are no further questions at this time. Before I ask Mr. Philip Serlin to go ahead with his closing statement, I would like to remind participants that a replay of this call is scheduled to begin two hours after the conference. In the U.S., please call 1-888-295-2634. In Israel, please call 03-925-5904. Internationally, please call 97-239-255-904. Mr. Serlin, would you like to make your concluding statement?

Philip Serlin (CEO)

Yes. Thank you, operator. In closing, we are progressing through 2024 with significant momentum, both with the ongoing commercial ramp of APHEXDA, as well as the advancement of our development programs in pancreatic cancer and sickle cell disease. I am excited for what we are poised to accomplish over the remainder of this year and next. Thank you all very much for your continued interest in BioLineRx. We look forward to providing our next comprehensive quarterly update in August. Be safe and have a great day.

Operator (participant)

Thank you. This concludes--