BioLineRx Ltd. (BLRX) Q4 2024 Earnings Call Transcript

Ladies and gentlemen, thank you for standing by. Welcome to the BioLineRx Fourth Quarter and Full Year 2024 Financial Results Conference Call. All participants are present in 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 Irina Koffler, Investor Relations. Irina, please go ahead.

Thank you, operator. Welcome, everyone. Thank you for joining us on our fourth quarter and full year 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 Phil Serlin, Chief Executive Officer of BioLineRx.

Thank you, Irina, and good morning, everyone, and thank you for joining us on today's call. As has been our practice, I will begin with a few prepared remarks before turning the call over to Mali Zeevi, our Chief Financial Officer to briefly recap our financials. Afterwards, we will take your questions. Ella Sorani, our Chief Development Officer will also be available for Q&A. It has been a little over four months since we announced a major strategy shift highlighted by the transformational licensing agreement with Ayrmid Pharma Ltd. that we announced in November. That transaction enabled us to return to our roots as a highly innovative company in complex drug development, with a very experienced team and a validated track record of clinical and regulatory success. Since that announcement, we have been laser focused on evaluating early clinical stage and late pre-clinical stage therapeutic assets in oncology and rare diseases that would allow us to leverage our expertise in drug development and expand our pipeline. Today, I am pleased to report that we are evaluating several promising candidates that fit our criteria. Importantly, the subsequent development of any candidates that we identify will be partly funded through milestones and royalties from our license agreements. We continue to conduct due diligence and advance discussions with a number of parties, and I’m optimistic that we will be in a position to make a definitive announcement this year. In the meantime, I would like to once again express my thanks to our shareholders, who have been so supportive as we work to make this vision as a company a reality. At this point, I'd like to take a step back and briefly review the salient terms of the Ayrmid agreement. In November, we executed an exclusive license agreement with Ayrmid Pharma Ltd. for motixafortide, which you may recall is sold in the U.S. under the brand name, APHEXDA. APHEXDA is our commercially available stem cell mobilization agent indicated in combination with GCSF for the collection and subsequent autologous transplantation in patients with multiple myeloma. As we previously indicated, the management team of Ayrmid is very experienced and has a successful track record. The team established Ayrmid Bio (ph) in 2015 to focus on rare diseases. In less than eight years, they grew Ayrmid revenue to an annual run rate of several hundred million dollars, ultimately selling Ayrmid in 2023 for approximately $1.5 billion. Additionally, Ayrmid markets omni-search (ph), a cell therapy for patients with blood cancers who are in need of a stem cell transplant. This product is extremely complimentary to APHEXDA, and we believe the team's entrenchment in the transplant space should create a tailwind for APHEXDA growth in both the short and long-term. We are very pleased to have been able to entrust APHEXDA to an ideal partner in order to maximize its full commercial potential. In addition, recall that APHEXDA motixafortide is also being evaluated in patients with sickle cell disease undergoing gene therapy with two Phase 1 investigator initiated trials ongoing. Hematopoietic stem cell transplantation after genetic modification is potentially curated for patients with sickle cell disease. The first sickle cell disease trial is being sponsored by Washington University in St. Louis. An abstract detailing the initial results from this proof-of-concept study was presented at the 66th American Society of Hematology or ASH Annual Meeting this past December. The findings suggest that patients with sickle cell disease given motixafortide alone or in combination with natalizumab can mobilize and potentially collect the number of stem cells required for approved gene therapies in a single apheresis cycle. The second sickle cell disease trial is being sponsored by St. Jude's Children's Research Hospital in Memphis and is being executed by some of the leading sickle cell disease researchers in the world. Earlier this quarter, the first patient was dosed in this important trial. Stem cell mobilization is a challenge for many sickle cell disease patients as currently available gene therapies for sickle cell disease rely on the collection of significant quantities of CD34+ hematopoietic stem cells. And this collection process also often requires multiple apheresis sessions, which adds cost and complicates the patient journey. In addition, many patients are ineligible for stem cell transplantation because they are unable to mobilize the required number of cells for successful transplant. The Ayrmid agreement covers all indications, stem cell mobilization, sickle cell disease and others with a notable exception of solid tumors like pancreatic ductal carcinoma or PDAC, and all territories with the exception of Asia. This transaction is very beneficial for BioLineRx. First, it generated $10 million in upfront payments. In addition, we are eligible to earn $87 million potential milestones and very healthy double-digit sales royalties in the range of 18% to 23%. In parallel, we will continue to support the development of motixafortide in PDAC, where randomized Phase 2b clinical trial sponsored by Columbia University and supported by both Regeneron and BioLineRx is currently enrolling. Results of this trial could be a significant milestone for the company in the future. Looking now at the new BioLineRx, Concurrent with the closing of the Ayrmid agreement in November, we shut down our U.S. operations with a substantial portion of our BioLineRx commercial team transitioning to Ayrmid. In addition to the shutdown of our U.S. operations, we also implemented a head count reduction in Israel, where BioLineRx continues to be based. Together, these actions have allowed us to reduce our ongoing operating cash burn by approximately 70% from over $40 million annually to approximately $12 million annually. With the proceeds from this transaction and a portion of our cash on hand, we repaid a significant portion of our debt and restructured the remainder at terms that we believe are very favorable for our company. Additionally, with the completion of two financings, which raised approximately $19 million. We ended 2024 and started the new year on a firm financial footing with pro forma cash of $29 million and a cash runway projected to fund our operations through the second half of 2026. In summary, with potential revenue from Ayrmid together with a significantly streamlined organization and a strengthened balance sheet, we believe we are very well positioned to advance motixafortide in solid tumor indications such as pancreatic cancer, while evaluating and in-licensing additional assets in oncology and rare diseases. Our goal continues to be to help as many patients as possible while creating enduring value for our shareholders. At this point, I would like to briefly review our PDAC program since we are continuing to support development of motixafortide in this indication. 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 70% of PDAC patients show an overexpression of CXCR4. PD-1 and PDL-1 inhibitors have demonstrated significant efficacy in multiple solid tumor types, but no real 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 2 trial in second-line patients with motixafortide plus a PD-1 inhibitor plus standard-of-care chemotherapy demonstrated improvement across all study endpoints. So while PDAC is an inherently challenging cancer to treat, there is a very strong scientific rationale for continued development by us in this area. At present, motixafortide is being evaluated in an active Phase 2b study led by Columbia University, known as CheMo4METPANC 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 was to be made on advancing to an expansion phase of the study. I'm not going to recap the pilot results in detail again, but suffice it to say that based on those results, which compared very favorable to historic responses and disease control rates reported with the current standard of care. 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, motixafortide, the PD-1 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, Colombia recently activated additional trial sites and the trial is planned for full enrollment by 2027, a prespecified interim futility analysis is planned for when 40% of progression free survival events are observed. The opportunity for us to help patients in dire need of effective new treatment 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 IV, and it has the highest mortality rate among solid tumor malignancies. We look forward to keeping you up to date on our progress with this important program. Now I'd like to briefly touch on APHEXDA’s performance in 2024. Last quarter, we indicated APHEXDA had achieved a 10% market share of total CXCR4 inhibitor usage in the U.S., which compares APHEXDA to branded MOZOBIL and generic plerixafor across all indications. And this is a significant milestone given that APHEXDA had only been on the market since Q4 of 2023. On a year-to-date basis through the closing of the Ayrmid transaction on November 21, i.e., less than 11 months, we generated more than $6 million of net APHEXDA product revenue in the U.S. The BioLineRx commercial team was able to build a solid foundation from which to drive future growth and demand. It is largely due to their efforts that we have a high degree of confidence that APHEXDA will maintain a robust growth trajectory under the stewardship of Ayrmid once it has fully transitioned to the asset. Now let me turn the call over to Mali to provide a financial update. Mali, 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 6-K filing we made this morning, which contains our financials and press release as well as the 20-F. Total revenues for the year ended December 31, 2024 were $28.9 million, an increase of $24.1 million, or 502.1% compared to $4.8 million for the year ended December 31, 2023. The revenues in 2024 primarily reflect a portion of the upfront payments received from Gloria, as well as a milestone payment achieved under the Gloria license agreement, which collectively amounted to $15 million, as well as the upfront payment received from Ayrmid and $6 million of net APHEXDA product revenues. The revenues in 2023 primarily reflect a $4.6 million portion of the upfront payment received from Gloria. Cost of revenues for the year ended December 31, 2024 was $9.3 million, an increase of $5.6 million or 151.4% compared to $3.7 million for the year ended December 31, 2023. Cost of revenues in 2024 primarily reflects the amortization of intangible assets, Biokine's share of the upfront payments received from Ayrmid sub-license fees accrued on a milestone payment recorded under the Gloria agreement, as well as royalties of net APHEXDA product sales and cost of goods sold. The cost of revenues in 2023 primarily reflects Biokine's share of the upfront payment received from Gloria and of net sales. Research and development expenses for the year ended December 31, 2024 were $9.2 million, a decrease of $3.3 million, or 26.4% compared to $12.5 million for the year ended December 31, 2023. The decrease resulted primarily from lower expenses related to motixafortide NDA supporting activities, the termination of the development of AGI-134 and a decrease in payroll and share-based compensation. Sales and marketing expenses for the year ended December 31, 2024 were $23.6 million, a decrease of $1.7 million, or 6.7% compared to $25.3 million for the year ended December 31, 2023. The decrease resulted primarily from the shutdown of our U.S. commercial operations in the fourth quarter of 2024, following the Ayrmid license agreement. Net loss for the year ended December 31, 2024 were $9.2 million compared to a net loss of $60.6 million for the year ended December 31, 2023. As of December 31, 2024, the company had cash, cash equivalents and short-term bank deposits of $19.6 million and approximately $29 million on a pro forma basis taking into account the financing completed in early January 2025. And with that, I'll turn the call back over to Philip.

Thank you, Mali, and thank you to everyone joining this call. We will continue to update you on our progress identifying new assets over the course of the year. 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. [Operator Instructions] The first question is from Joe Pantginis of H.C. Wainwright. Please go ahead.

Good morning, Phil and Mali. Thanks for taking the questions. So one of my usual questions I'm going to start with, especially, since it's the first bullet point of your press release and in your commentary today. And that is any more color you can give with regard to meaningful progress in evaluating assets to potentially bring in, when you talk about the potential maturity levels of these meaningful discussions.

Yeah. So first of all, it's good to speak to you, Joe. Ella is here as well. I just want to say that we can't really give that much information business development discussions. It's difficult to really assuage when, how they will ripen and what the right time for disclosure is. But as we've indicated, we're looking for early-stage clinical assets in oncology and rare diseases. We're having a number of very meaningful discussions, but I can't give any time line or anything like that with regard to when we're going to make an announcement.

No, that's totally fair. Like I said, it's my usual question and I had to ask. I guess when you look at the internal programs now, especially, with WashU and sickle cell, I wanted to get a little more color on, first, how are we looking to benchmark the data that are -- that will be upcoming with regard to number of cells produced? And when the study reads out, what would you consider a positive outcome as you benchmark the data?

Yeah. I think I can maybe also ask this if Ella has nothing to add. But I think the number of cells that are needed is somewhere in the $20 million to $25 million range per kilogram, which is much, much more than is needed for multiple myeloma. And right now, they generally have to go through a number of cycles of apheresis and each one has to have a washout period of anywhere between 14 and 28 days. And so it's a long process. It can take several months right now in order to mobilize in upsells. And there are, as I said, also a number of patients that are not able to mobilize enough cells at all in order to even do the gene therapy. And so from our perspective, I think that we would see a huge win if we could, in one cycle, mobilize enough cells in a number of apheresis sessions, but in one cycle, in order to mobilize enough cells to go to the manufacturing and then go forward to gene therapy. That doesn't mean that it has to be in one cycle, but I think certainly, that would be a huge win. But even so, I think that anything that we could do to significantly reduce the number of apheresis sessions and the number of cycles for these patients would be a big win as well.

I want to add to that. Hi, Joe. This is Ella speaking. As you know, during the last ASH, actually, there was an oral presentation of the WashU data, initial WashU data, which Dr. Chris (ph) gave during that meeting. And they already presented at least the kinetics of CD34 cells following mobilization of motixafortide and the results look very, very, very encouraging. I don't know if you had a chance to look at those. So sales mobilized following administration of motixafortide where median of approximately 200 cells per microliter or a mean of 300 cells per microliter, which is really, really positive as compared when you look at the literature of what you see following mobilization with [indiscernible]. So this is something that -- and it is also correlated with the amount of sales collected afterwards in the [indiscernible]. So I think this is some encouraging results that you can also already look at. I hope this is helpful a little bit.

No, it certainly is especially to Phil's comment that many patients don't even achieve the right amount of cells to move to gene therapy, so definitely looking forward to the results. And then I guess my last question might be a little difficult to answer in the sense that you might refer me to Ayrmid, but I was just guessing any -- or looking towards any commentary you can provide with regard to increased traction of APHEXDA for multiple myeloma. What are the positives you're seeing any potential headwinds such as continuing to educate what is this really a direct to Ayrmid type of question.

I mean, obviously, this is something that Ayrmid should be the ones that are answering. But I can just say from our perspective, we're very impressed with the team. They're doing all the right things. The transition went very smoothly. They already have a product that they're marketing in transplantation Omni-search. We're -- we think that they're going to continue to be successful, and we're very happy with the relationship right now, that's really all I can say at this point.

No. That’s fine and thanks for all the answers.

All right. Have a great day. It’s good speaking to you.

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

Great. Thank you. Hi, Phil. As you mentioned to Joe, you have to be careful about what you say about the whole acquisition process. But I'll throw out a few questions and if you can answer any of them. I'd appreciate it. So I wanted to get a sense of how many assets you might have looked at, how many NDAs, how many second conversations? And then, also perhaps the split between oncology and rare disease. Any color there would be helpful. And as you mentioned, Phil, I know you got to be careful.

Yeah. I'm not sure I can really give you much color at all, unfortunately, John. I mean we're looking at -- we have a process. We've done this many times in the past. We brought in over since the beginning of BioLine's founding, we've looked at -- we brought in over 50 assets, and we've looked at thousands of molecules over the course of the life of the company. But right now, we are focused on a very specific. We're looking at oncology and rare diseases. We're looking at early clinical stage assets, that's where we feel we have that our wheelhouse, so to speak. And so, I think that's really all I can tell you at this point. I think that it would be -- you want to add something.

I think we can say that, yeah, with regards to your question, we are looking -- the majority of the projects are in oncology and only minority in rare diseases.

Okay. I appreciate that. And then a question on just expenses and things like that. I would assume that in the early stages of the year, there are going to be more expenses allocated towards the search process, and then as you acquire something, it would shift more to R&D. Is that kind of how we should think about it?

Yeah. Absolutely. Although, I'd have to say even the search process, if you talk about the search process and even the upfront payment or anything like the economics, our model has been and we intended to continue to be that way to bring in assets with a minimal -- a minimal as much as possible upfront payments. And to look at creative ways of bringing the asset as far as back ended payments, maybe some type of collaboration or joint venture. So we're looking to minimize the amount of spending on the deal itself, so that we can maximize the spending on development and move the asset forward as quickly as possible.

Okay. Got it. And then just in terms of the allocation of kind of effort or work internally and externally for the acquisition process. How is that? Do you have someone helping you that's outside the company or are you sharing that equally? I wasn't quite sure kind of how that process was going?

Yeah. So we have -- our team has a lot of experience in this, and we're doing, I'd say, the majority of the work in-house. Having said that, where we need specific expertise in a very specific area, if it's a disease or some kind of mechanism that perhaps we need to consult with someone, we obviously have a whole list of consultants that are available to us, that we can use from time-to-time. So that’s sort of the way it works. But in general, we have the vast majority of the capabilities in house.

Okay. Thanks, Phil and thanks, Ella as well.

All right. Thanks. Have a good day.

[Operator Instructions] There are no further questions at this time. Before I ask Mr. 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 2 hours after the conference. In the U.S, please call 1 (888) 295-2634. In Israel, please call 03-925-5904. Internationally, please call 9723-925-5904. Mr. Serlin, would you like to make your concluding statement?

Yes. Thank you, operator. In closing, we are excited about our new vision for BioLineRx, and we are working diligently to identify new assets for in-licensing and development that would expand our pipeline and give us additional opportunities for value creation. We are very pleased to have entered into this license agreement with Ayrmid, which allows us to return to our drug development routes with a modest cost structure, while simultaneously benefiting from FX'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 May. Be safe, and have a great day.

Thank you. This concludes the BioLineRx fourth quarter 2024 conference call. Thank you for your participation. You may go ahead and disconnect.