Ladies and gentlemen, thank you for standing by. Welcome to the BioLineRx Q3 2022 results conference call. All participants are presently in a listen-only mode. Following management's formal presentation, instructions will be given for the Q&A session. For operator assistance during the conference, please press star zero. I would now like to turn over the call to John Lacey, Head of Corporate Communications and Investor Relations. Please go ahead.
Thank you, operator. Before turning the call over to management, I would like to make the following remarks concerning forward-looking statements. All statements in this conference call other than historical facts are indeed forward-looking statements. The words anticipate, believe, estimate, expect, intend, guidance, confidence, target, project, and other similar expressions are used typically to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and may involve and are subject to certain risks and uncertainties and other factors that may affect BioLineRx's business, financial condition, and other operating results. These include, but are not limited to, the risk factors and other qualifications contained in BioLineRx's annual report on Form 20-F, quarterly reports filed on Form 6-K, and other reports filed by BioLineRx with the SEC to which your attention is directed.
Actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements. BioLineRx expressly disclaims any intent or obligation to update these forward-looking statements. At this time, it is now my pleasure to turn the call over to Philip Serlin, Chief Executive Officer of BioLineRx.
Thank you, John, and good morning, everyone. Thank you for joining us on our Q3 results conference call today. Earlier this morning, 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. As is our practice, I will begin with an overview of our Q3. Then Mali Zeevi, our Chief Financial Officer, will provide a discussion of our financial results. We will then open up the call and are looking forward to your questions. Also joining the call for Q&A are Abi Vainstein-Haras, our Chief Medical Officer, Ella Sorani, our Chief Development Officer, and Holly May, President of BioLineRx USA.
The key highlight since our last quarterly update is unquestionably the submission and subsequent acceptance by the FDA of our new drug application for Motixafortide, now known by its brand name APHEXDA, in stem cell mobilization for autologous bone marrow transplantation for multiple myeloma patients. The agency has assigned a PDUFA target action date of September ninth, 2023. The NDA was based on the overwhelmingly positive top-line results from our GENESIS phase 3 trial, which compared APHEXDA on top of GCSF versus placebo on top of GCSF. Recall that we held a successful pre-NDA meeting with the agency this past December and gained alignment on key aspects of the filing, most notably that a single phase 3 study, GENESIS, would be sufficient to support a submission.
The study met all primary and secondary endpoints with a very high degree of statistical significance, a P value of less than 0.0001. Notably, approximately 90% of patients in the GENESIS study went directly to transplantation after mobilizing the optimal number of stem cells following only one administration of APHEXDA and in only one apheresis session, compared to less than 10% of those receiving G-CSF alone. In addition, patients in the APHEXDA plus G-CSF arm collected a median of approximately 11 million stem cells per kilogram in only one apheresis session versus approximately 2 million in the G-CSF arm. The combination was also found to be safe and well-tolerated.
This high success rate has a substantial clinical benefit, especially when considering that new induction treatments are more effective than ever before, but cause subsequent difficulty in mobilizing the target number of stem cells for transplantation. The high success rate may also confer significant benefits to transplant institutions through the more efficient use of apheresis units, where there is often a lack of available machines. Given that the potential benefits of APHEXDA over the current standard of care accrue to multiple healthcare stakeholders, we anticipate rapid uptake in the market if and when approved. We plan to commercialize APHEXDA in the U.S. independently. We have made this decision after a careful and lengthy review of our options led by Holly May, President of our U.S. operations.
Commercializing APHEXDA ourselves will both accelerate its availability to multiple myeloma patients, while at the same time allow us to maximize the value of the asset for our company. Recall the third-party market research that we commissioned earlier this year concluded that in 2021, the U.S. stem cell mobilization market was approximately $360 million annually and growing steadily, and it was in excess of $500 million annually on a global basis. We have indicated before that the stem cell mobilization market is highly concentrated, as approximately 80 transplant centers out of 212 perform approximately 80% of stem cell procedures. Therefore, the commercialization expenses and footprint required would be limited relative to a more traditional oncology launch in a broader indication.
With our NDA now accepted, we look forward to working with the agency during its review process, while in parallel advancing our multifaceted pre-launch plan, including the ongoing build-out of U.S. infrastructure so that we are well-positioned for a robust launch if and when. To ensure that we are financially well positioned to execute the most effective launch possible, subsequent to the submission of our NDA, we announced the completion of 2 financings that in the aggregate give us access to up to $55 million of additional funds. First, we announced a $40 million non-dilutive debt financing agreement with Kreos Capital. Kreos is a leading provider of innovative and flexible debt solutions to equity-backed Pan-European, Israeli high-growth companies in the technology and healthcare sectors. Per the terms of the agreement, the first tranche of $10 million was made available to us upon execution of the definitive agreement.
The remaining $30 million will be made available in 2 additional tranches, subject to the achievement of pre-specified milestones. The tranches are available for drawdown at our discretion at various time points through October 1, 2024. Borrowings under the financing will bear interest at a fixed rate of 9.5% per annum, approximately 11%, including associated cash fees. In addition, Kreos will be entitled to mid- to high single-digit royalties on net sales up to a predefined cap. Following the close of the debt financing agreement, we also completed a $15 million registered direct equity offering of American depository shares.
With the funds received from these transactions, our cash balance at September 30, 2022 was $57.3 million, which, including the additional potential amounts available to us under the debt financing agreement, we believe positions us very well financially to execute the targeted commercial launch that we are planning should it be approved. Turning now to our Motixafortide pancreatic cancer or PDAC program. Recall that earlier this year, we entered into a development collaboration agreement with Genfleet Therapeutics. Under the terms of this agreement, Genfleet plans to execute a rigorously designed randomized phase 2b clinical study in approximately 200 first-line metastatic PDAC patients in China. Importantly, we maintain full rights to Motixafortide across all indications and geographies, while Genfleet would be entitled to a small single-digit sales royalty should it ultimately be approved.
This collaboration is based on the positive results that we reported from our phase 2a COMBAT/KEYNOTE-202 triple combination study of Motixafortide in combination with Merck's anti-PD-1 Keytruda and chemotherapy as a second-line therapy. As a reminder, data from the phase 2a study demonstrated a substantial improvement across all study endpoints as compared to historical data, including median overall survival, median progression-free survival, confirmed overall response rate, overall response rate, and disease control rate. Based on their development capabilities in China, including experience in conducting combination trials in the immuno-oncology space, we believe we have found the ideal partner to advance Motixafortide in pancreatic cancer and look forward to the initiation of this trial in 2023. Also recall that Motixafortide is being evaluated in a separate investigator-initiated PDAC trial in collaboration with Columbia University.
That phase 2 study is evaluating Motixafortide in combination with the anti-PD-1 Libtayo and chemotherapy as a first-line PDAC therapy. That study continues to progress, and we will share additional updates, including the potential timing of data, which we hope will be during 2023 when available. Our presence at important medical congresses is key to raising awareness of the potential of Motixafortide and the American Society of Hematology meeting next month, December 10th through 13th, is perhaps the most important of the year. We are very pleased this year to announce 2 poster presentations at ASH. The first presentation will detail full results from our pharmacoeconomic study that indirectly evaluated the cost-effectiveness of using Motixafortide as a primary stem cell mobilization agent in combination with GCSF versus Plerixafor in combination with GCSF in multiple myeloma patients undergoing autologous stem cell transplantation.
Data from the study demonstrated meaningful net cost savings with Motixafortide plus GCSF due to a significantly greater proportion of patients in the Motixafortide arm successfully achieving mobilization of the optimal amount of stem cells following a single administration of Motixafortide and in only one apheresis session. The second presentation would detail the design of a phase 1 trial that will assess Motixafortide as part of a novel stem cell mobilization regimen to evaluate its ability to safely produce the sufficient quantity of hematopoietic stem cells required for the genetic manipulation processes used in gene therapy development. The study will further examine the quality of the mobilized stem cells, including immunophenotypic and single-cell transcriptional profiling. The trial will include patients with sickle cell disease, one of the most common inherited genetic diseases globally, and a condition where GCSF mobilization is associated with severe adverse effects.
Plerixafor alone has not demonstrated an ability to reliably yield optimal hematopoietic stem cell numbers for gene therapy applications. We think gene therapy is just one example of how we can ultimately leverage Motixafortide into additional high-need indications. Turning now to our second clinical candidate, the intratumoral anticancer vaccine AGI-134, we are evaluating safety, tolerability, and proof of mechanism in multiple solid tumor types in a Phase 1/2 study. The study is designed to evaluate a wide array of biomarkers and assess both clinical and pharmacodynamic parameters. We believe that AGI-134 coats tumor cells with alpha-Gal to make them look like foreign tissue to evoke an immune response that both destroys existing tumors and provides a vaccine-like effect. We anticipate sharing data from part 2 of the Phase 1/2a trial by year-end.
I would now like to turn the call over to Mali Zeevi, our CFO, who will give a brief overview of our key Q3 financial statement items. Mali, please go ahead.
Thank you, Phil. As is our practice in our financial discussion, we will only go over a few significant items on this call, research and development expenses and cash. Therefore, let me invite you to review the filings we made this morning, which contain our financials, operating and financial review, and press release for additional information. Research and development expenses for the 3 months ended September 30, 2022 were $4.4 million, a decrease of $0.5 million or 11.3% compared to $4.9 million for the 3 months ended September 30, 2021. The decrease resulted primarily from lower expenses related to Motixafortide NDA supporting activities, as well as lower expenses associated with the completed Motixafortide Genesis clinical trial, offset by an increase in payroll and related expenses.
Research and development expenses for the 9 months ended September 30, 2022 were $14.2 million, a decrease of $0.1 million or 1% compared to $14.3 million for the 9 months ended September 30, 2021. The decrease resulted primarily from lower expenses related to NDA supporting activities related to Motixafortide, as well as lower expenses associated with a completed Motixafortide GENESIS Clinical Trial, offset by an increase in expenses associated with the AGI-134 study. Turning to cash, the company held $57.3 million of cash equivalents, and short-term bank deposits as of September 30, 2022.
As Phil indicated, our cash includes $10 million from the Kreos agreement and $13.5 million in net proceeds from the registered direct offering, but does not include the additional $30 million available to us under the Kreos agreement, which is tied to attainment of certain milestones. We believe we're well-financed to achieve multiple potentially value-created milestones into the H1 of 2024. With that, I'll turn the call back over to Phil.
Thank you, Mali. In closing, as is our custom, I would like to take a few moments to summarize our key upcoming milestones. First, announcement of initial results for part 2 of the phase 1/2a trial of AGI-134 in solid tumors by the end of the year. The potential FDA approval of APHEXDA in Q3 2023. Also, the potential U.S. launch of APHEXDA in stem cell mobilization in Q3 2023, and the initiation of a phase 2b randomized study of APHEXDA in PDAC under our collaboration with Genfleet in 2023. Finally, before turning the call over to questions, I'd like to personally thank our CMO, Abi Vainstein-Haras, for her many years of service to the company. Abby has recently decided to move to the U.S. with her family and will be departing the company effective December 31, 2022.
Following that, she will be staying on as an advisor through at least the end of 2023, ensuring a smooth transition of responsibilities, including full support during the FDA review process. The company has started a search for a new CMO and will announce the new appointment at the appropriate time. With that, we have now concluded the formal part of our presentation. Operator, we will now open up the call to questions.
Thank you. Ladies and gentlemen, at this time, we will begin the Q&A session. If you would like to ask a question, please press star one. To withdraw your question, press star 2. If you are using speaker equipment, kindly lift the handset before pressing the numbers. Your questions will be pulled in the order they are received. Please stand by while we pull for your questions. The first question is from Joe Pantginis of H.C. Wainwright & Co. Please go ahead.
Hey, everybody. Good morning and good afternoon. Thanks for taking the question. Let me start off by wishing Abby well as in her future endeavors, and it was great working with you here. Let me just focus on Motixafortide first. First, I just wanna see, do you have any indication about whether the FDA might look to have an AdCom?
The FDA has stated they're not currently planning to hold an advisory committee meeting to discuss the application.
Okay, perfect. Then maybe for everybody, but you know, Holly especially. You know, based on your comments, Phil, obviously this is a limited commercial expense type of indication, very focused group. You know, Holly, what do you think is the primary rate limiting step for this launch? A lot of times a new drug might be education, bringing on the sales force. I mean, but this seems pretty, you know, focused. So I'm just curious what you feel are the primary rate limiting steps to initial commercial success.
Yeah, I mean, I am not worried about any rate-limiting step, just to be clear, and part of it is for the exact reason that you spoke of. This is a very manageable, sort of launch, concentrated launch. It's the ideal for a company like BioLineRx to enter into. There's many things, though, that could be rate-limiting steps, but I feel like we are very much ahead of those. There's a lot of what I would call long lead time items, like being able to actually have product in the marketplace through, you know, serialization, and we're well on the process there. We've selected a 3PL partner. We've got our secondary packager up and running.
We are really well attuned to what the demand drivers are in this, in this market, and even more so since the last time we spoke, because we have done even deeper market research. I've got almost all of my frontline leaders on board now. They're all deep subject matter experts. We have been doing what I think is just some of the best market research that I've been a part of on both understanding landscape, on that that's completed. On top of that, research around payer and value proposition and value messaging to really understand. Then on top of that, will be the pricing and access type of insight generation. I think we've got a really good plan.
What could have been a rate-limiting step and still remains kind of in the forefront of my mind is the ability to develop relationships. We know that takes time. If I had to pick one thing, it could be that. That said, we are also on top of that because we now have a full complement of medical science liaisons who are going to these top transplant centers that Phil spoke of. We've got a very targeted view on how to go about doing that for the fastest kind of market share uptake. We're there, too. I'm not worried. I'm really not that concerned and worried because I think we've thought about all of these various parts.
Certainly, you know, we do need to develop relationships, and we do need to get the word out. The last thing I guess I'll say is that we have now, through our pillar, started to formulate a scientific communication plan. Some of that Phil's already spoke about, you're going to see that at ASH. I would highly encourage you to look at the. There are going to be a couple posters, but one of the abstracts that was submitted and accepted that we're very excited about is not just the speaking of the pharmacoeconomic story, which you've probably all heard in the past, but this poster is going to start to tie together the meaningful outcomes of both the clinical story and that pharmacoeconomic story.
We're really excited for that, and I would certainly encourage, you know, everyone to look for that coming out of ASH. I don't know if I answered your question because I think you want me to be super concerned. I'm just not really concerned about this launch.
No, no. You certainly addressed my question. It wasn't from a point of concern. It was more of, look, I mean, a lot of times, if it's a new drug to the market, you have to do a lot of education or what have you. You certainly addressed my question and not from a concern standpoint. Thanks for that. I guess, Phil, from a broader standpoint of the company, it's great to see that, you know, PDAC's moving forward with Genfleet. It was, you know, a very nice partnership to sign for China.
I guess, you know, now how you would define the current status as you view PDAC and additional tumor indications, for the rest of the world and sort of where that stands, in your sort of business development, a company view, you know, sort of wholesale, views on this topic?
Yeah. I mean, we've always looked at PDAC as sort of a prototype for you know other solid tumor indications. We're right now focusing on that collaboration, that phase 2b study. I think as I pointed out in my prepared remarks, we also have a collaboration with Columbia University also in first-line you know stage 4 metastatic pancreatic cancer. We're gonna focus on those 2 trials right now. Once the data becomes available, obviously we will look to partner out you know the solid tumor indications to a larger company to maximize the potential value in all indications.
Got it. Thanks for all the color, guys.
Okay, thanks very much. Have a great day.
The next question is from Mark Breidenbeck of Oppenheimer. Please go ahead.
Hey, thanks for taking the questions. Congrats, of course, on the PDUFA date, and, of course, we're sad to hear Abby is leaving. Just a couple of quick ones for me. First of all, is there a particular forum in mind for the AGI-134 data? I know we're kind of running out of medical conferences, you know, this year. Are these data gonna be announced at a conference or via press release? I'm also wondering about the natalizumab Motixafortide combination, that's being studied in sickle cell as a mobilizing regimen in sickle cell patients. First of all, has natalizumab plus Plerixafor been previously tested as a mobilizing combination?
If this combination that you're running in the study works in sickle cell, would you consider maybe testing this as a more general GCSF-free mobilizing regimen? Would love to hear comments on that. Thanks. Thanks for taking my questions.
Okay. Abi Vainstein-Haras, do you want to first take the part about the gene therapy?
Yes. Thanks, Mark, for bringing us and giving us the opportunity to present this new project, let's say, for the BL-8040 for Motixafortide. The patients with sickle cell anemia are not able to receive, for autologous transplantation G-CSF, because G-CSF produce veno-occlusive event, and doctors are seeking for new drugs for mobilization. Plerixafor has been used as because there is no other choice. However, the number of cells that are mobilized might not be enough, or there is a need for several apheresis in order to get a huge number of cells. In order to do in general gene therapy, you need a large number of cells and primitive cells.
The idea here, when we combine with natalizumab, is that data from Washington University have shown that the combination of VLA-4 inhibitors together with BL-8040, have shown a robust mobilization of stem cells in preclinical models. The idea is to bring this to the clinics and to have a proof of concept of this combination to give the possibility to these patients to go for autologous transplantation. The thing is that these patients in general can get potentially allogeneic transplantation, which is very difficult and have a lot of adverse events. Ideally, it's to give them the opportunity to have autologous transplantations with gene therapy.
We expect that this combination will allow the gene therapy to be available for this patient population.
Has it been previously tested with Plerixafor? I'm just curious.
No, no. Plerixafor has been used for as a monotherapy for patients with sickle cell anemia because, again, they cannot receive G-CSF, but the number of cells might not be enough or the number of apheresis is very large. We are seeking for, and the doctors are seeking for, better mobilizers and the combination of for mobilization. We believe that the combination of VLA-4 inhibitors together with Motixafortide will allow us to have a very high number of cells, hopefully with one apheresis, probably 2. The idea is to test how much, how many apheresis and how many cells we will be able to harvest.
I'm sorry, but we're not aware of a study between.
No. No.
Plerixafor as a lead.
No. Natalizumab, no.
Right. Okay.
No.
That's the answer to the second part of your question. I'll go back to the first part, Mark, which was about AGI and the data. We're planning to release a press release by the end of the year with data from the study. Of course, we will also look to present at a conference, you know, sometime next year as well. There will be data coming out in a press release by the end of the year.
Okay. Thanks so much for that clarity and congratulations.
All right. Thanks so much. Have a great day.
The next question is from John Vandermosten of Zacks. Please go ahead.
Good day, everyone. As you build up towards the PDUFA date, what do you anticipate the size of the sales force will be, and how do you anticipate structuring it?
Yeah. Holly, would you like to take that, please?
We have preconceived ideas on what we think the size of the sales force is. We are, at this point, not giving exact numbers. Because we're still going through more of the segmentation analysis, etc. I'm in the process of hiring the sales leader who will help with that segmentation. I will say we have already hired a head of business insights and analytics, and he has been extremely instrumental in, you know, confirming many of our assumptions and helping us think through that segmentation. We will have sales professionals out ahead of launch, I can say that, to make sure that we're doing the appropriate amount of communication with healthcare providers.
I'm not giving the exact number at this point in time because we're still going through some of our analytics on that side. What I can say is that we will be focused on those top transplant centers. If you are thinking about, you know, typical pharma biotech models, you can probably also back into the fact that this is a fairly small national footprint in order to target those key accounts.
Okay. Will you build it up quarter by quarter, step by step, as we, you know, arrive to September and the PDUFA date? Is that kinda how it is? Then when you get there, do you plan to have the entire team in place, or are you gonna make an initial entry into the space and then kinda build into 2024 as you develop those relationships further?
Initially, to be clear, there will be field-facing team. There already is a medical team, and they are doing the initial, you know, relationship building and very early discussion as medical teams can do around stem cell mobilization. We will have. It's the intention to also have a payer team in the field to make sure that we are communicating our value story appropriately. We will also have a sales team, and they are actually going to be phased in that, from a timing perspective in that order. It's my intention to have the full team in the field at launch.
I do think that, though, of course we will be continuing to assess what our deployment plans are into the future and what utilization is and what life cycle management is in order to make sure that we're meeting the demands of being able to create the noise that's necessary for a successful launch.
Great. Thank you, Holly. Question on R&D. You know, as we wind down the Motixafortide efforts, and pick up in some of the other areas, how do we expect activity there to be in 2023 relative to 2022?
You're saying from a cost perspective or just, you know, overall?
Probably cost perspective would be most helpful. Also, you know, just the activity. I know some of that is being worked on by your partners, so I'm...
Yeah.
You know.
Right. You know, as I mentioned, you know, we're obviously there is this study being run in China, which will have a limited effect on our budget, the phase 2b in China, going forward, you know, in 2023 and onwards. We still have some work that, you know, follow-up work, and Abbie can maybe talk to a little bit follow-up work for long-term endpoints in the GENESIS study, and so that we will still be doing, obviously. We are participating in some of these, you know, investigator-initiated studies, including Columbia University.
I'd say overall our spending is expected to go down on the R&D side as we increase our spending obviously on the sales and marketing and commercialization side.
Okay. That's very helpful. Abi, did you have anything else to add on that? Or, I mean, I think you answered most of my questions.
I just wanted to add that part of the, you can say, R&D expenses or medical affairs expenses we are not aiming to continue only with the multiple myeloma indication. The idea is to widen as much as we can as we are doing for the sickle cell disease and for the pancreatic cancer. We are exploring opportunities, reviewing opportunities how to expand the indication and potentially in the future the labeling for Motixafortide.
Great. Thank you.
Thanks. Have a good day.
If there are any additional questions, simply press star one. To withdraw your question, press star 2. Please stand by while we pull for more questions. 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 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 972-3-925-5904. Mr. Serlin, would you like to make your concluding statement?
Yes, I would. Thank you, operator. To summarize, we achieved a significant milestone during the Q3 with the submission and acceptance of our NDA for APHEXDA in stem cell mobilization and significantly strengthened our financial position ahead of potential approval next year. We are designing and implementing an efficient yet robust launch and commercialization plan that we intend to execute independently, given the highly concentrated number of transplant centers across the U.S. that perform the vast majority of transplant procedures. We evaluated several different options and concluded that commercializing independently would get APHEXDA to multiple myeloma patients quickly while maximizing the value of the asset for our company. We believe we can capture a significant share of the U.S. market estimated to be in excess of $360 million and growing steadily.
From both a clinical and pharmacoeconomic perspective, we believe APHEXDA on top of GCSF can quickly become the standard of care in this important indication. At the same time, we are pleased to advance Motixafortide in PDAC through our Genfleet agreement, and we are rapidly approaching a key data readout for AGI-134. I am extremely pleased with the progress that we made during the Q3, and I look forward to a catalyst-rich 2023. Thank you all very much for joining today's call, and have a great day.
Thank you. This concludes the BioLineRx Q3 2022 conference call. Thank you for your participation. You may go ahead and disconnect.