BioLineRx Ltd. Price & Performance (BLRX)

Thank you for joining us on our third quarter twenty twenty four results conference call. Earlier today, we issued a press release, a copy of which available in the Investor Relations section of our website. It was also filed as a six k. I'd like to remind you that certain statements we've made 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 please review our annual report on Form 20 f and our quarterly reports on form six k that are filed with the US Securities and Exchange Commission. At this time, it is now my pleasure to turn the call over to mister Phil Serwin, chief executive officer of BioLineRx. Thank you, John, and good morning, everyone. And thank you for joining us on today's call. I'll begin this morning with a recap of the significant licensing agreement that we announced last week with AIR MID Limited. Followed by a review of our third quarter performance and then Mali Zevi, our Chief Financial Officer, will briefly recap our financials.

Afterwards, we will take your questions. Ella Sorani, our Chief Development Officer, is also available for Q and A. Last week, we announced that we executed an exclusive license agreement Aramid Limited, the parent company of Gamida Cell Limited for motixafortide which is sold in The US under the brand name Effexa. Recall that Effexxa is our FDA approved and commercially available stem cell mobilization agent indicated in combination with G CSF for the collection and subsequent autologous transplantation in patients with multiple myeloma. The agreement covers all indications with the notable exception of solid tumors like pancreatic ductal carcinoma or PDAC. And all territories with the exception of Asia, where we previously entered into a license agreement with Gloria Biosciences for motixafortide in that region. This transaction is very beneficial for BioLineRx. With a $10,000,000 upfront payment dollars 87,000,000 in potential commercial milestones and very healthy royalties of between 1823%. In addition, we received another $9,000,000 in form of an equity investment from Highbridge Capital. This aggregate cash influx has enabled the company to finalize an agreement with BlackRock to repay a significant portion its outstanding debt. And restructure the remaining debt on favorable terms. With the transfer of our commercial program to Aramid Gamida Cell, we have also reduced our cash burn in a very substantial manner.

With our cash runway now extending into 2026. And I will provide more financial details about this shortly. Lastly, the agreement allows us to return to our drug development routes, with a streamlined organization that has a proven track record in clinical development and regulatory affairs. To that end, we will continue to support development of metixafortide in metastatic pancreatic cancer through our existing collaborations, which have the potential to create near term value for shareholders. Over the next year, we also plan to evaluate early stage clinical assets in the areas of oncology and rare disease, where we think we can leverage our expertise complex drug development and create long term shareholder value. We believe the choice of Gamida Cell as our commercial partner is a fortuitous one. Gamida Cell adds a highly differentiated mobilization agent in Effexxa to a commercial portfolio that already includes Omnisurge, the first and only FDA approved NAM modified cell therapy for patients hematologic malignancies in need of an allogeneic hematopoietic cell transplant. We envision Gamida cell meaningfully growing affects the cells, by leveraging its portfolio for improved access to its transplant center customers. As part of this transaction, Gamida Cell is seeking to transition a significant number of former members of the BioLineRx commercial team.

Who have been so instrumental in the early commercial success of Effexxa. Driving penetration to over 40% of our target centers and capturing 10% of the market at the end of Q3. In addition, recall that EFFECT is also being evaluated in patients with sickle cell disease undergoing gene therapy. With two phase one investigator initiated trials ongoing. One at Washington University in St. Louis and the other at Saint Jude Children's Research Hospital. We view this as another opportunity long term value creation. Quickly reviewing the terms of the agreement in exchange for the license we received a $10,000,000 upfront payment We also are eligible to receive up to an additional $87,000,000 potential commercial milestones plus royalties on net sales of Effexxa ranging from 18% to 23%. We will also supply motixafortide on a cost plus basis both for commercial and development supply. In addition, certain funds managed by Highbridge Capital Management have made a $9,000,000 equity investment in BioLineRx. This equity investment and the combined future potential commercial milestones from licensing agreements with Aramid and Luria Biosciences as well as royalties on net sales are expected to provide a strong foundation for our company. Looking now at the new BioLineRx, concurrent with the partnering transaction, we are shutting down our US commercial operations.

I would like to thank Holly May, who headed our U. S. Commercial operations for her tireless commitment to building a world class team and ensuring a successful launch. It is largely due to her efforts that we are experiencing strong momentum for Effexxa. Particularly among top tier transplant centers that are leaders with respect to installing new therapies on formulary and into daily clinical practice. This transformation along with additional cost reductions will allow us to reduce our annual cash burn by more than 70% effective 01/01/2025 and we focus our efforts on clinical development in Israel. With the proceeds from this transaction, entered into an agreement with BlackRock to repay $616,500,000.0 of the approximately $29,000,000 in outstanding debt with the remaining balance restructured at terms very favorable to our company including at the pre existing annual interest rate of 9.5%. With potential revenue from two licensing agreements, together with a significantly streamlined organization, with a greatly reduced cost structure and restructured debt. We are very well positioned to advance our near and long term value creation strategy for investors. At this point, I'd like to review our PDAC program. Which we continue to advance through our existing collaborations that require de minimis investment.

Recall that motixafortide is an inhibitor of CXCR4. Which plays a critical role in establishing and maintaining tumors. It is highly expressed in over 20 different tumor types and it is estimated that greater than seventy percent of PDAC patients show an overexpression of CXCR4. PD one and PD L one inhibitors have demonstrated significant efficacy in multiple solid tumor types. But no survival benefit in a large randomized PDAC trial comparing combination immunotherapy and standard of care chemotherapy versus standard of care chemotherapy alone.

In contrast, a phase two trial in second line patients with the metixafortide plus PD-one inhibitor plus standard of care chemotherapy demonstrated improvements across all study endpoints. So while PDAC is an inherently challenging cancer to treat, there is very strong scientific and clinical rationale for continued development. Motixafortide is being evaluated in an active phase two b study led by Columbia University known as chemo for med panc, which is supported equally by BioLineRx and Regeneron. Recall that this trial had an initial pilot phase and based on the results of this pilot phase, an assessment would be made on advancing to an expansion phase of the study. Seven of eleven patients in the pilot phase or sixty four percent experienced a partial response of which five were confirmed PRs as of the July 2023 cutoff date. With one patient experiencing complete resolution of the metastatic lesion in the liver. Along with the three patients are twenty seven percent experiencing stable disease, this resulted in a disease control rate of ninety one percent. These findings compare favorably to historic partial response and disease control rates of twenty three percent and forty eight percent respectively, reported with the current standard of care.

Based on these compelling data, we, along with Columbia and Regeneron, agreed to amend the original expansion phase of the study from a single arm expansion study with a target enrollment of 30 patients to a much larger randomized Phase 2b study of 108 patients with two arms. Metixafortide, Regeneron's PD one inhibitor cemiplimab and standard of care chemotherapy versus standard of care chemotherapy alone. The trial's primary endpoint is progression free survival. Secondary objectives include safety, response rate, disease control rate, duration of clinical benefit, and overall survival. To further accelerate enrollment, Columbia plans to activate an three trial sites over the next two quarters. In addition to the two that are currently enrolling. We anticipate that the trial should be fully enrolled by 2027. Metixafortide is also planned to be evaluated in a planned phase two b PDAC study in China led by Gloria Biosciences pursuant to the license agreement that we signed with Gloria in October of last year. That study will evaluate metixafortide in combination with Gloria's commercially approved PD one inhibitor, zimberlimab, and standard of care combination chemotherapy in first line pancreatic cancer. The opportunity for us to help patients in dire need of effective new options, while addressing a multibillion dollar market opportunity is significant.

PDAC is a very difficult cancer to treat, given that it is often asymptomatic until stage four. It has the highest mortality rate among solid tumor malignancies. Globally, nearly half a million people were diagnosed with PDAC in 2020 alone. We look forward to keeping you up to date on our progress in this important program. Now, I'd like to briefly review some key performance indicators for Effexxa during the third quarter, as I believe they reflect the many benefits to transplant centers and patients that key decision makers are increasingly realizing particularly as they pertain to center efficiency and economics. We've noticed previously transplant centers, the end users of Effexxa are well defined group in The US. Approximately 80 of the two twelve centers in The US perform roughly 85% of all transplant procedures. Among those 80 centers, by the end of the third quarter, we secured formulary placement at institutions managing over 40% of transplant procedures. We also continue to see steady growth in the number of centers we ordering product. Furthermore, we saw an approximate 40% increase in the number of institutions ordering affected during the third quarter as compared to the second quarter. As the third quarter was only the third full quarter since launch, we are very pleased with the traction that we've seen as especially with the availability of Plyrxophore or generic Mozabil, entered the market shortly before our launch.

In fact, during the third quarter, we achieved a 10% market share milestone of total CXCR4 inhibitor usage in The U. S. Which compares Efexxa to branded mozavil and generic pelarexophore across all indications. We believe that this strong growth trajectory will continue through Gamida Cell commercial program, building on the strong foundation in place. As we have discussed on prior conference calls, there are a number of factors that are driving the need for more effective mobilization regimens. First, multiple myeloma patients are getting older and these patients are more challenged to achieve the required stem cell yields for transplantation. In addition, the growing use of quad induction therapy is well beneficial to patients can negatively impact stem cell yields. Last quarter, we cited the PERCEUS trial in which a recent FDA approved quad therapy was shown to reduce risk of disease progression or death in multiple myeloma patients by sixty percent pointing to the trend toward quad therapies as a new standard of care induction therapy. It is against this backdrop of a rapidly changing stem cell mobilization treatment landscape that we believe affects that can address significant unmet needs in the market. We are pleased to have entrusted its future success to an ideal partner like Gamida Cell with the expertise and infrastructure to maximize Afeksa's commercial potential.

Now let me turn the call over to Molly to provide a financial update. Molly, please go ahead.

Thank you, Phil. As is our practice, I will go over the most significant items in our financial statements. Revenues, cost of revenues, research and development expenses, sales and marketing expenses, net loss, and cash. I invite you to review the six k filing we made this morning that contains our financials and press release. Total revenue for the three month ended 09/30/2024 was $4,900,000. The company did not record any revenue during the third quarter of twenty twenty three. Revenue for the quarter reflect a portion of the upfront payment from the Gloria Biosciences license which amounted to $3,200,000 as well as $1,700,000 for the net revenue from product sales of Effexxa in The US. Cost of revenue for the three months ended 09/30/2024 was $800,000. The company did not record any cost of revenue during the third quarter of twenty twenty three. Cost of revenue for the quarter primarily reflects the amortization of intangible assets, royalties on net product sales of Effexxa in The US, and cost of goods sold on product sales. Research and development expenses for the three months ended 09/30/2024 were $2,600,000, compared to $2,700,000 for the same period in 2023. The decrease resulted primarily from lower expenses related to the termination of the development of a g r one thirty four and a decrease in payroll and share based compensation.

Sales and marketing expenses for the three months ended 09/30/2024 were $5,500,000 compared to $8,100,000 for the same period in 2023. The decrease resulted primarily from lower expenses of commercialization activities related to motixafortide. The higher expenses in the corresponding period of 2023, reflect the ramp up of pre commercialization activities related to motixafortide. General and administrative expenses for the three month ended 09/30/2024. Were $1,400,000 compared to $1,500,000 for the same period in 2023. The decrease resulted primarily from small decreases in a number of G and A items. Net loss for the three month ended 09/30/2024 was $5,800,000 compared to net loss of $16,000,000 for the same period in 2023. The net loss for the 2024 period included $800,000 in non operating income. Compared to nonoperating expenses of $3,100,000 for the same period in 2023. Both primarily related to noncash reevaluation of warrants. As of 09/30/2024, the company had cash, cash equivalents, and short term bond deposits of $29,200,000. Following the outlicense to Armed, the equity investment from Highbridge and the debt repayment of to BlackRock, the company's cash, cash equivalents, and short term bank deposits are expected to be approximately $20,000,000 which we believe will be sufficient to fund operations into '26 as currently planned.

And with that, I'll turn the call over to Phil.

Thank you, Molly. In closing, I would like to take a moment to summarize our revised milestones. Over the next two quarters, we anticipate adding three new clinical trial sites the ongoing chemo for med penc phase 2b randomized clinical trial in first line PDAC sponsored by Columbia University. And anticipate interim data in 2026. Working with Gloria Bio, we look forward to continued progress the planned stem cell mobilization bridging study and the phase 2b combination study evaluating whatixafortide first line pancreatic cancer. Finally, in 2025, we will evaluate additional early stage clinical assets for in licensing and further development. Seeking to add one new asset in 2025 and an additional one in 2026. With that, we have now concluded the formal part of our presentation. Operator, we will now open the call to questions.

Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. If you would like to ask a question, please press 1. You would like to withdraw your question, please press 2. If you are using speaker equipment, kindly lift the handset before pressing the numbers. Please stand by while we poll for your questions. The first question is from Joe Pantginis of H. C. Wainwright. Please go ahead.

Hey, everybody. Good morning. Good afternoon. A few questions if you don't mind. So first, Phil, I just wanted to make sure I heard you correctly with regard to pipeline growth. Did you say potential in licing of one asset in '25 and one in '26? Yeah. I think that's what our that's what our plan is. We have a number of assets that we're already looking at. It's hard to say, you know, BD don't always go exactly according to plan, but I think overall that's our plan. No. Of course. Okay. So then going to your current announcements, and thank you for all the details today. They were very helpful. With regard to, say, the pancreatic program, I guess, how do we mix that with, you know, the potential for metixafortide in additional solid tumor indications, plus the ability to potentially potentially have a business development discussions around that.

Can you discuss the level of maturity of these discussions? Yeah. So, as far as the PDAC, I think that we look at PDAC as sort of as a prototype so to speak for other solid tumors. We are probably not going to put a lot more money at this point into PDAC As you know, we have the two collaborations that are ongoing that are really running in the background with at a very you know, low cost to the company, basically drug, you know, the supply of drug product. And so we think the best use for our current cap capital is to bring some new assets into the pipeline while these programs are still ongoing. And we hope that there will be some initial data sometime, you know, next year in '20 I'm sorry, next in 2026 some interim data from the Columbia study, which then would serve as probably the launching off point for some business development discussions, etcetera. That's very helpful. And then, with regards to the Amarin effects to sale, couple of things here. So just from a logistical standpoint, do they have any potential option on the solid tumor program?

They do not. They do not. Okay. That's simple enough. And I guess two things here. So with regard to the company restructuring, it sounds like that it's mostly or largely the field force they'll be assimilating.

Not necessarily. I mean, you know, I don't we're at liberty to tell you, you know, to speak for them. But they have they are taking a piece of our organization or, know, a number of our and I don't think it's only limited to field to customer facing employees. Okay. And and then my last question is, I guess, from a financial standpoint and the and the important details you shared regard to the drug launch to date, how should we sort of view to the level of detail you can, sort of the integration time within their program of effects and how that might impact any potential lags or dips in sales, especially as we go into the first quarter and insurance resets, etcetera.

Yes. So I mean, I'm hoping that there won't be too much of a, you know, of a lag in anything. I mean, they're taking, like I said, significant number of employees with them. We're also a agreement, we're providing them with transition services for the next number of months. And so we think we're going to ASH we'll probably going to tandem as well. So I think that we believe that transition period should be quite seamless. And I don't believe there'll be a significant lag in sales or in the uptick of sales.

Alright, Joe. Have a great day.

The next question is from Justin Walsh of Jones Trading. Please go ahead.

Hi. Thanks for taking the question. I'm wondering if you can provide some color on where you view the company's core competencies as we wait to hear more about the addition of potential assets to your pipeline?

Thanks, Justin. Good morning. So, you know, I mean, as we mentioned, we'll be returning to our roots as an Israeli base development company. But with many I think we have many positive attributes that other companies may not have. We have a highly experienced development team with fully validated capabilities from early stage projects all the way to approval and of course commercialization, but I'll just talk about in until approval. So those are some of our capabilities we have Our Israeli team has full capabilities in in regulatory affairs and CMC, in quality assurance, in clinical operations, in preclinical development, etcetera. So I mean, we've got in medical affairs and etcetera. So we've got a full complement of the disciplines necessary to move forward in development. I think if you're just even to go further with that, I think that we also have cash flows from two partnering arrangements that will provide commercial milestones and royalty revenues on an ongoing basis.

That that other development companies might have. And we also have, as I mentioned, we have the significant trials in PDAC that are ongoing under these meaningful collaborations that are really moving forward at a de minimis cost to the company. So I think all in all, I think that we feel that we're very well placed moving forward. And again, as I mentioned, we're looking to bring in two new assets in the 2025, 2025, 2026 period. We have a list of potential in licensed candidates All of them sort of meet our criteria of a low upfront payment in oncology and rare disease. With relatively modest and affordable clinical development program. So mean, that's sort of how we see ourselves moving forward. I hope that gave you comprehensive answer to your question.

Yeah. Definitely. Thanks for taking the question.

Great.

The next question is from John Van Der Mosten of Zacks. Please go ahead.

Thank you, and hello, Phil and Molly. Looking at the 2025 expenses, I I think you indicated there'd be a 70% reduction in in spend. Next year. And and I guess, you know, if we look at kind of the the estimates out there, seems like we just take out sales and marketing expense and leave r and d and g and a kind of as they have been? Is it is that a is that a fair way to look at it? And, also, obviously, take out the cost of goods sold as well.

I I think it I think it's gonna be a little bit more than that. I think we're going to, you know, as a, you know, as a a company that also had operations in The U. S. Besides the actual U. S. Commercial operations, I think that some of our spend from [indiscernible] U. S. Subsidiary that was active created some additional spend. So I think it's a little bit more than that. I think you can expect a decrease decrease in G and A expenses as well and etcetera.

So we're looking to to be lean and mean going forward. And as I said, we believe that we will be on the right track with moving forward with development only in Israel. Again, I think I also want to mention that Israel itself is sort of a low cost you know, place to, you know, to have development. And so I that, you know, we are looking at that, you know, over 70% reduction overall in the in in the spend.

Okay. And then on the r and d side, should we think of that kind of continuing on at the the same level? And what are those obligations gonna be? I mean, I think there's PDAC in there. Is there anything else in there that that's ongoing?

Yeah. So we so we are we have some obligations regarding some five year commitment post marketing commitment with the FDA. But that's not very significant. And as well, our PDAC commitments are more, you know, our drug supply plus some small grant, nothing significant. So I mean, we're going to have be having two PDACs, two Phase 2b studies hopefully ongoing at almost no cost to the company. The post marketing commitment will be quite low. And then the rest of our spend will be on new projects as we bring them in.

Okay. And and as we look at you know, potentially a pivotal or or registrational trial in PDAC, I guess you seem to indicate that that would be taken over by partners. That you would probably have limited contribution there.

Yeah. I mean, listen. I you know, everything is possible, but I think, you know, we believe that that something of this size in solid tumors in general, it would make sense to partner and if we have very robust data from the Phase 2b or from the Phase 2b's. So I think our probably our main path forward would be to you know, to look to partner it out Okay. And this being a and this being such a, you know, a block buster indication, we really think that it would be difficult depending, of course, on the data.

Okay.

So that that seems to orient your attention more towards earlier stage products. So so I guess, how how would you think about, you know, adding a new product? I mean, what stage of development would it be in? You know, I think oncology probably is, you know, an area where where you have some experience What how how would you you know, time to commercialization, stage of development, indication What what are those kind of factors that you're thinking about when you're looking at something to to layer on?

Yes. So, I mean, I said, you know, I think we're looking at oncology rare disease. We're looking at early stage clinical assets. I can't say that that's the only thing that we'd look at. Maybe something very, very late stage preclinical, but I think our focus is primarily on early stage clinical assets with, you know, best in class potential and and, you know, with, you know, small molecules, peptides, things that we've have a lot of experience with previously and to sort of leverage our our capabilities going forward.

Okay. And then on on China, it it seemed like you had, mentioned that there's there's there's clearance there, I guess, in some areas that don't require the bridging study. When when would you expect the first revenues to show up from from that region?

That's hard to say. I mean, I you know, it could it's hard to sit for us to say right now. I mean, we haven't given any guidance on that. We're hoping that 2025 will be a year where there is revenues, although we don't have a lot of you know, we don't have a lot of control over, you know, over what's going on what Glory is doing. We're obviously meeting with them on a regular basis. I would imagine that that first sale should occur sometime in 2025.

Okay.

Thank you, Phil.

Alright. Great. Thanks so much.

If there are any additional questions, please press 1. If you would like to withdraw your question, please press 2. Please stand by while we poll for more questions. A follow-up question from Jon Vandermosten of Zacks. Please go ahead.

Great. Thanks for one more. On the on Gamida Cell, are they are the is the only other product that they're commercializing the Omnisurge product? Or do they have something else besides?

Besides that? Because they're currently Right now, that's what they have. I, you know, I think they may have plans to bring in some additional products. But right now, they have Omnisurge, of course, now they have Effexxa.

Great. Thank you.

There are no further at this time. Before I ask mister Phil 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. The US, please call +1 (888) 295-2634. In Israel, please call 039255904. Internationally, please call 97239255904. Mister Serlin, would you like to make your concluding statement?

Yes. Thank you, operator. In closing, we are very pleased to have entered into this licensing agreement with Aramid Gamida Cell which allows us to return to our drug development routes while simultaneously benefiting from Effex's long term commercial potential in stem cell mobilization, sickle cell disease and other non solid tumor indications. We believe this path forward best positions us to create value for our shareholders while developing novel new therapies for patients with cancer and serious rare diseases. Thank you all very much for your continued interest in BioLineRx. We look forward to providing our next comprehensive quarterly update in March Be safe and have a great day.

Thank you. This concludes the BioLineRx third quarter twenty twenty four conference call. Thank you for your participation. You may go ahead and disconnect.