Analyst Conference Summary

Vascular Biogenics
(VBL Therapeutics)

VBLT

conference date: March 28, 2019 @ 5:30 AM Pacific Time
for quarter ending: December 31, 2018 (Q4, fourth quarter 2018)


Forward-looking statements

Overview: Continues clinical development, with VB-111 for ovarian cancer in a Phase 3 trial with an interim efficacy readout expected before the end of 2019.

Basic data (GAAP):

Q4 2018 results were not given. See below for full 2018 resutls. Revenue was $ million, down sequentially from $0.1 million, and up from $ million year-earlier.

Net loss was $ million, down sequentially from a loss of $5.4 million, and from a loss of $6 million year earlier.

Diluted loss per share (EPS) was $, down sequentially from $0.15, and up from $ year earlier.

Guidance:

Has cash sufficient for operations through 2021.

Conference Highlights:

Dror Harats, M.D., CEO of VBL Therapeutics said "We continue to advance our clinical program for VB-111 in ovarian cancer and are also exploring additional oncology indications. The ongoing Phase 3 OVAL trial in platinum resistant ovarian cancer continues to enroll patients and we expect an interim efficacy readout by year end 2019."

The Phase 3 trial of VB-111 with chemotherapy in platinum-resistant ovarian cancer continued enrollment. 350 patients will be enrolled with overall survival as the primary endpoint. VB-111 has orphan drug designation in this indication. There will be an interim analysis in Q4 2019.

At the Society of Gynecologic Oncology conference data presented showed that in 3 out of 3 ovarian cancer patients, VB-111 induced recruitment of infiltrating T-cells into the tumor, turning it from cold to hot. This suggests that VB-111 may be applied to other cold tumors in which checkpoint inhibitors show limited or no efficacy. We are encouraged that in the open label part of the Phase 3 study, data seem to recapitulate the activity of VB-111 in our prior Phase 2 trial for ovarian cancer. We expect the launch of a Phase 2 clinical trial with the National Cancer Institute, of VB-111 in colon cancer in combination with a checkpoint inhibitor, in 2H 2019.

Despite the failure of the earlier Phase 3 trial, we see renewed interest from the oncology community in the potential of VB-111 to treat recurrent Glioblastoma (rGBM) based on MRI analyses performed by UCLA. This seems to indicate the monotherapy was more effective than the combination therapy used in the Phase 3 trial. Recruitment in an investigator-sponsored study for VB-111 in rGBM is expected to commence in Q2 2019.

We signed a strategic exclusive option license agreement for VB-201, an anti-inflammatory molecule, for veterinary use, with potential payments to VBL that may exceed 50 million euros during the license term. Partner was not named, nor the upfront payment amount. VBL retained worldwide rights for VB-201 for the treatment of humans.

Has a strong preclinical pipeline. The MOSPD2 program goal is to file an IND in 2020 to start clinical trials. VBL presented more preclinical data on VB-600 MOSPD2 platform at the European Committee for Treatment and Research in Multiple Sclerosis (or ECTRIMS) conference in October 2018.

Continues to develop its lecinoxoid preclinical program for renal fibrosis.

An IND for bi-specific antibody for treatment of solid tumor indications is planned for 2H 2020.

Cash ended the quarter at $50.5 million, down sequentially from $53 million.

Cost of revenue was $0 million. Gross profit $ million. R&D expense $ million. SG&A $ million. Operating loss $ million. Other income net $ million.

For the full year 2018 revenue was $0.6 million. Cost of revenue $0.2 million. R&D expense $15.9 million. SG&A $5.6 million. Operating loss $20.2 million. Financial income $0.7 million. Net loss $20.4 million. EPS negative $0.62. 33 million shares outstanding.

Q&A:

VB-201 deal potential timeline? Because it is veternary, the timeline is relatively short, 2.5 to 3 years to market. There are milestone payments during that time.

MOSPD2 program, bispecific tumor types targetted?? Testing in vitro on different types of tumor cells. It is mostly solid tumors. We are working on getting to preclinical models in the next couple of months. We want to show the specificity of the MOSPD2 and also the effect of the bispecifics with minimal toxicity

VBL-111 for colon cancer choice? NCI interested because colon cancer patients mostly don't respond to checkpoint inhibitors. Preclinical work combining VB-111 with inhibitors showed evidence of efficacy. If VB-111 acts as a primer it would be a major breakthrough. NCI plans to recruit patients who have failed one or two lines of therapy. Biopsies will be taken before and after dosing with VB-111. It will be a single-arm study. Could have first data in 2020.

We are giving a modest grant for the investigator inititated trials, and we will own the data. In the NCI trial we are supporting by giving the drug.

VB-111 bar to beat for median overall survival of the control group? In Phase 2 trial patients were severe cases. So it was not surprising median survival was 6 months. But for the current trial it will be higher, somewhere between 6 months and 13 months. Even at 13 months we expect the median overall survival of the VB-111 arm will be much higher.

Colon cancer lesions mainly show up in the liver, which should be a good target for VB-111. The trial will be short and single arm to tell us if this is a good target.

GBM has no new drug in the last 25 years. Investigators are looking for a way to put a new drug on the market and had discussions with agencies. Agreed to small studies with surrogate markers to go for conditional, earlier registrations. Marker would be immune changes in the tumor. With our Phase 2 data that might qualify for early registration, followed by a large Phase 3 trial. The investigators think the signal from the VB-111 trial was objective.

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Disclaimer: My analyst call summaries may include both condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. These are my personal notes which I share with other investors and which I use as the basis of my blog and Seeking Alpha articles.

Copyright 2019 William P. Meyers