BioLineRX (TASE:BLRX) Q4 2024 Earnings Call

0:00 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 at 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.

0:29 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 6K. 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 20F and our quarterly reports on Form 6K that are filed with the U.S. Securities and Exchange Commission.

1:18 At this time, it is now my pleasure to turn the call over to Mr. Phil Serlin, Chief Executive Officer of BioLineRx.

1:27 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 Aramid Pharma Limited 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.

2:17 Since that announcement, we have been laser focused on evaluating early clinical stage and late preclinical 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 am 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 of the company a reality.

3:07 At this point, I'd like to take a step back and briefly review the salient terms of the Airmint Agreement. In November, we executed an exclusive license agreement with Airmint Pharma Limited for Motixifortide, which you may recall is sold in the U.S. under the brand name Afexta. Afexta is our commercially available 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 AirMid is very experienced and has a successful track record. The team established Amrit Bio in 2015 to focus on rare diseases. In less than eight years, they grew Amrit revenue to an annual run rate of several hundred million dollars ultimately selling Amrit in 2023 for approximately $1.5 billion.

4:03 Additionally, AirMid markets AmiSurge, a cell therapy for patients with blood cancers who are in need of a stem cell transplant. This product is extremely complementary to Afexta and we believe the team's entrenchment in the transplant space should create a tailwind for Afexta We are very pleased to have been able to entrust Aphexta to an ideal partner in order to maximize its full commercial potential. In addition, recall that Aphexta is also being evaluated in patients with sickle cell disease undergoing gene therapy with two Phase I investigator-initiated trials ongoing. Hematopoietic stem cell transplantation after genetic modification is potentially curative for patients with sickle cell disease.

4:53 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 motixifortide alone or in combination with natalizumab can mobilize and potentially collect the 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.

5:38 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 positive 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 Airman 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.

6:33 First, it generated $10 million in upfront payments. In addition, we are eligible to earn $87 million in 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 Metixifortide 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 AirMid agreement in November, we shut down our U.S. operations with a substantial portion of our BioLineRx commercial team transitioning to AirMid. In addition to the shutdown of our U.S.

7:22 operations, we also implemented a headcount 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 Jr., and John Lacey. With potential revenue from AIRMED together with a significantly streamlined organization and a strengthened balance sheet, we believe we are very well positioned to advance Metixifortide in solid-term indications such as pancreatic cancer.

8:31 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'd like to briefly review our PDAC program, since we are continuing to support development of metixifortide in this indication. Recall that metixifortide 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 PD-L1 inhibitors 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 two trial in second line patients with mitoxifluorotide plus a PD1 inhibitor plus standard of care chemotherapy demonstrated improvement across all study endpoints. So while PDAC is an inherently challenging cancer to treat, There is very strong scientific rationale for continued development by us in this area. At present, Metixifortide is being evaluated in an active phase-to-be study led by Columbia University known as Chemo4MetPank,

10:01 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 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. Metixifortide, the PD-1 inhibitor Simiplimab and standard of care chemotherapy versus standard of care chemotherapy alone. The trial's primary endpoint is progression-free survival.

10:57 Secondary objectives include safety, response rate, disease control rate, duration of clinical benefit, and overall survival. To further accelerate enrollment, Columbia recently activated additional trial sites, and the trial is planned for full enrollment by 2027. A pre-specified 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 multi-billion dollar market opportunity is significant. PDAC is a very difficult cancer to treat given that it is often asymptomatic until stage four and it has the highest mortality rate among solid tumor malignancies.

11:43 We look forward to keeping you up to date on our progress with this important program. Now I'd like to briefly touch on Afexta's performance in 2024. Last quarter we indicated that Effexa had achieved a 10% market share of total CXCR4 inhibitor usage in the U.S., which compares Effexa to branded Mozaville and generic Plurixifor across all indications. This is a significant milestone given that Effexa had only been on the market since Q4 of 2023. On a year-to-date basis through the closing of the Airmid transaction on November 21st, i.e. less than 11 months, we generated more than $6 million of net effects of 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 Affecta will maintain a robust growth trajectory under the stewardship of Airmint once it has fully transitioned the asset.

12:45 Now let me turn the call over to Mali to provide a financial update. Mali, please go ahead.

12:51 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 6K filings we made this morning, which contains our financials and press release, as well as the 20F. 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 31st, 2023. The revenues in 2024 primarily reflect the portion of the upfront payment received from Gloria, as well as the milestone payment achieved under the Gloria license agreement, which collectively amounted to $15 million, as well as the upfront payment received from Hermit and $6 million of net effects to product revenues.

13:57 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 31st, 2024 was $9.3 million, an increase of $5.6 million or 151.4% compared to $3.7 million for the year ended December 31st, 2023. The cost of revenues in 2024 primarily reflect the amortization of intangible assets, biocon's share of the upfront payments received from Airmid, sub-license fees accrued on a milestone payment recorded under the GLOIA agreement, as well as royalties of net effects of product sales and cost of goods sold. The cost of revenues in 2023 primarily reflects biocon's share of the upfront payments received from GLOIA and of net sales.

14:56 Research and development expenses for the year ended December 31st, 2024, were $9.2 million, a decrease of $3.3 million, or 26.4%, compared to $12.5 million for the year ended December 31st, 2023. The decrease resulted primarily from lower expenses related to Mutixa Forte and 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.

15:45 The decrease resulted primarily from the shutdown of our U.S. commercial operations in the fourth quarter of 2024, following the AirMate license agreement. Net loss for the year ended December 31, 2024, was $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 a short-term bank deposit. of $19.6 million and approximately $29 million on a pro forma basis, taking into account the financing completed in early January 2025.

16:32 And with that, I'll turn the call back over to Phil.

16:36 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. If you would like to ask a question, please press star 1. To withdraw your question, please press star 2. If you're 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 Pangenis of HC Wainwright.

17:21 Please go ahead.

17:23 Good morning, Phil and Mali. Thanks for taking the questions. 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.

17:54 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 how they will ripen and what the right time for We're having a number of very meaningful discussions, but I can't give any timeline or anything like that with regard to when we're going to make an announcement.

18:33 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 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?

19:03 I can maybe also ask this if Ella has something to add, but I think the number of cells that are needed is somewhere in the 20 to 25 million range per kilogram, which is much, much more than is needed for multiple myeloma. 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 enough cells. 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.

19:53 And so from our perspective, I think that we would see a huge win if we could in one cycle mobilize enough cells, you know, in a number of aphoresis 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.

20:29 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 Watch Your Data, which Dr. Kreis gave during that meeting, and they already presented at least the kinetics of CD34 cells following mobilization of motixofortide, and the results look very, very, very encouraging. I don't know if you had a chance to look at those. So cells mobilized following administration of motixifoetide were a median of approximately 200 cells per microliter or mean of 300 cells per microliter, which is really, really, really positive as compared when you look at the literature of what you see following mobilization with plurixifoetide. So this is something that, you know, and it is also correlated with the amount of cells collected afterwards in the after-resist session. So I think this is some encouraging results that you can also already look at.

21:43 I hope this is helpful a little bit.

21:46 No, it certainly is, especially to Phil's comment that, you know, many patients don't even, you know, achieve the right amount of cells to move to gene therapy. So definitely looking forward to the results. And I guess my last question might be a little difficult to answer in the sense that you might refer me to AMRID, but I was just guessing any comment or looking towards any commentary you can provide with regard to, you know, increased traction of effects for multiple myeloma, you know, what are the positives you're seeing, any potential headwinds such as, you know, continuing to educate? What is this really a direct to AMRID type of question?

22:24 I mean, obviously this is, you know, something, you know, that AirMid is, you know, 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, AmiSearch. We're, you know, we think that they're going to continue to, you know, to be successful. The next question is from John Bunder Mouston of Zaxx. 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.

23:21 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, Dylan, you've got to be careful.

23:39 Yeah, I'm not sure I can really give you much color at all, unfortunately, John. I mean, you know, we're looking at, you know, we have a process. We've done this... Many times in the past, since the beginning of BioLine's founding, we've 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, you know, that's our wheelhouse, so to speak. And so I think that's really all I can tell you at this point.

24:26 I think that it would be...

24:28 I think you can say that, yeah, with regards to your question, the majority of the projects are in oncology and only minority in rare diseases.

24:41 I appreciate that. And then a question on just expenses and things like that. You know, I would assume that, you know, 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?

25:00 Yeah, absolutely. Although, you know, I'd have to say even the search process, if you're talking about the search process and even the upfront payment or anything like the economics, you know, our model has been and we intended to continue to be that way to, you know, to bring in assets with a minimal, you know, a minimal as much as possible upfront payment and to look at creative ways of Payments, maybe some type of collaboration or joint venture. 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.

25:48 Got it. In terms of the allocation 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.

26:08 Yeah, so we have, you know, our team has a lot of experience in this, and, you know, we're doing, I'd say, the majority of the work in-house. Having said that, where we need specific expertise in this very specific area, if it's a disease or, you know, some kind of, you know, If there are any additional questions, please press star 1. Want to withdraw from the polling process, press star 2.

27:01 Please stand by while we poll for more questions. 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 two hours after the conference. In the U.S., please call 1-888-295-2634. In Israel, please call 039255-904. Internationally, please call 972-39255-904. Mr. Serlin, would you like to make your concluding statement?

27:38 Yes. Thank you, Operator. In closing, we are excited about our new vehicle. to identify new assets for 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 Aramid which allows us to return to our drug development roots with a modest cost structure while simultaneously benefiting from Effexor'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.

28:23 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.