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BioLineRx Ltd.
Foreign Filer Report • Aug 16, 2022
6692_rns_2022-08-16_066927ae-6e61-45ed-b293-f22c0021cd75.pdf
Foreign Filer Report
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2022
Commission file number: 001-35223 _______________________
BioLineRx Ltd.
(Translation of registrant's name into English) _______________________
2 HaMa'ayan Street Modi'in 7177871, Israel (Address of Principal Executive Offices) _______________________
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulations S-T Rule 101(b)(1):_____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulations S-T Rule 101(b)(7):_____
On August 16, 2022, the Registrant issued a press release announcing its financial results for the three and six months ended June 30, 2022. The Registrant is also publishing its unaudited interim consolidated financial statements, as well as its operating and financial review, as of June 30, 2022 and for the three and six months then ended. Attached hereto are the following exhibits:
Exhibit 1: Registrant's press release dated August 16, 2022;
This Form 6-K, the text under the heading "Financial Results for the Quarter Ended June 30, 2022" in Exhibit 1, and Exhibit 2 and Exhibit 3 are hereby incorporated by reference into all effective registration statements filed by the registrant under the Securities Act of 1933.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BioLineRx Ltd.
By: /s/ Philip Serlin
Philip Serlin Chief Executive Officer
Dated: August 16, 2022
For Immediate Release
BioLineRx Reports Second Quarter 2022 Financial Results and Provides Corporate Update
- Submission of New Drug Application to FDA for Motixafortide in stem cell mobilization (SCM) for autologous stem cell transplantation expected within next 4-6 weeks -
- Announced appointment of commercial strategy and operations veteran Holly May as U.S.-based Chief Commercial Officer -
- Entered into collaboration agreement with GenFleet Therapeutics to advance Motixafortide in pancreatic cancer (PDAC) -
- Management to hold conference call today, August 16, at 10:00 am EDT -
Tel Aviv, Israel, August 16, 2022 -- BioLineRx Ltd. (NASDAQ: BLRX) (TASE: BLRX), a pre-commercial-stage biopharmaceutical company focused on oncology, today reports its financial results for the second quarter ended June 30, 2022 and provides a corporate update.
Significant events and achievements during the second quarter 2022 and subsequent period:
- Progressed the New Drug Application (NDA) for Motixafortide in stem cell mobilization (SCM), with submission to the FDA expected within the next 4-6 weeks;
- Appointed commercial strategy and operations veteran Holly May as Chief Commercial Officer, based in the U.S.;
- Continued to advance critical pre-launch activities with respect to Motixafortide commercialization in the U.S., if approved;
- Entered into a development collaboration agreement with GenFleet Therapeutics to execute a randomized Phase 2b clinical trial of Motixafortide, in combination with anti-PD1 and chemotherapy, for firstline treatment in approximately 200 pancreatic cancer (PDAC) patients in China;
- Ended the second quarter on solid financial footing, with cash and cash equivalents of \$43.2 million, sufficient to fund operations, as currently planned, into the first half of 2024.
"Since our last quarterly update, we achieved significant progress across both our Motixafortide stem cell mobilization and pancreatic cancer (PDAC) programs," stated Philip Serlin, Chief Executive Officer of BioLineRx. "With respect to stem cell mobilization, we are in the final stages of preparing for submission of our NDA to the FDA. With Holly May on board as our new Chief Commercial Officer, we are rapidly advancing critical pre-launch activities while we continue to assess all of our options with respect to commercialization of Motixafortide in the U.S., if approved."
"The totality of data that we have compiled in stem cell mobilization, both clinical and pharmacoeconomic, make an extremely strong case for Motixafortide as the standard of care in this indication for all multiple myeloma patients undergoing autologous stem-cell transplantation, which is a highly concentrated end market estimated to be \$360 million in the U.S. alone and growing consistently."
"In PDAC, the development collaboration agreement that we announced with GenFleet builds upon the positive results from our COMBAT/KEYNOTE-202 study, and we look forward to the initiation of a randomized Phase 2b PDAC trial next year. Importantly, this collaboration allows us to advance the development of Motixafortide in PDAC while retaining rights to the molecule across all indications and geographies."
"Finally, we are nearing a significant milestone for our second program, the anti-cancer vaccine AGI-134, with the upcoming release of proof-of-mechanism data from part 2 of a Phase 1/2a trial in solid tumors. If positive, we plan to initiate a randomized Phase 2 study next year."
"In summary, we believe we are well-positioned to deliver several meaningful potential regulatory, commercial and clinical catalysts over the next 12-18 months," concluded Mr. Serlin.
Upcoming Expected Milestones:
- Submission of NDA to FDA for Motixafortide as novel mobilization agent for multiple myeloma patients undergoing autologous stem cell transplantation in next 4-6 weeks;
- Initial results from Part 2 of Phase 1/2a trial of AGI-134 in solid tumors in H2 2022;
- Potential FDA approval of Motixafortide in 2023;
- Potential US launch of Motixafortide in SCM in 2023;
- Initiation of randomized Phase 2b study in PDAC under collaboration with GenFleet in 2023;
- Potential initiation of randomized Phase 2 study of AGI-134 in 2023.
Financial Results for the Quarter Ended June 30, 2022:
Research and development expenses for the three months ended June 30, 2022 were \$5.4 million, an increase of \$0.3 million, or 5.0%, compared to \$5.1 million for the three months ended June 30, 2021. The increase resulted primarily from an increase in expenses associated with the AGI-134 study, offset by lower expenses associated with the completed Motixafortide GENESIS trial, as well as lower expenses related to NDA supporting activities related to Motixafortide. Research and development expenses for the six months ended June 30, 2022 were \$9.8 million, an increase of \$0.4 million, or 4.4%, compared to \$9.4 million for the six months ended June 30, 2021. The reason for the increase is similar to the aforementioned increase in the three-month period.
Sales and marketing expenses for the three months ended June 30, 2022 were \$1.2 million, an increase of \$0.8 million, or 250.9% compared to \$0.3 million for the three months ended June 30, 2021. The increase resulted primarily from initiation of pre-commercialization activities related to Motixafortide, as well as an increase in market research. Sales and marketing expenses for the six months ended June 30, 2022 were \$1.8 million, an increase of \$1.3 million, or 270.9% compared to \$0.5 million for the six months ended June 30, 2021. The reason for the increase is similar to the aforementioned increase in the three-month period.
General and administrative expenses for the three months ended June 30, 2022 were \$1.0 million, similar to the comparable period in 2021. General and administrative expenses for the six months ended June 30, 2022 were \$2.1 million, similar to the comparable period in 2021.
The Company's operating loss for the three months ended June 30, 2022 amounted to \$7.6 million, compared to an operating loss of \$6.5 million for the comparable period in 2021. The Company's operating loss for the six months ended June 30, 2022 was \$13.7 million, compared to \$12.0 million for the comparable period in 2021.
Non-operating income (expenses) for the three and six months ended June 30, 2022 and for the three and six months ended June 30, 2021 primarily relate to fair-value adjustments of warrant liabilities on the Company's balance sheet.
Net financial expenses for the three months ended June 30, 2022 amounted to \$0.3 million, compared to net financial expenses of \$0.1 million for the three months ended June 30, 2021. Net financial expenses for the 2022 period primarily relate to loan interest paid and losses recorded on foreign currency (primarily NIS) cash balances due to the strengthening of the US dollar during the period, offset by investment income earned on bank deposits. Net financial expenses for the 2021 period primarily relate to loan interest paid, offset by investment income earned on bank deposits. Net financial expenses for the six months ended June 30, 2022 amounted to \$0.4 million, compared to net financial expenses of \$0.3 million for the six months ended June 30, 2021. The composition of the expenses is similar to the aforementioned composition detailed in the three-month periods.
The Company's net loss for the three months ended June 30, 2022 amounted to \$7.4 million, compared with a net loss of \$6.8 million for the comparable period in 2021. The Company's net loss for the six months ended June 30, 2022 amounted to \$12.4 million, compared with a net loss of \$17.0 million for the comparable period in 2021.
The Company held \$43.2 million in cash, cash equivalents and short-term bank deposits as of June 30, 2022.
Net cash used in operating activities was \$11.9 million for the six months ended June 30, 2022, compared with net cash used in operating activities of \$13.1 million for the six months ended June 30, 2021. The \$1.2 million decrease in net cash used in operating activities between the two periods was primarily the result of changes in operating asset and liability items in the two periods, i.e., a smaller increase in prepaid expenses and other receivables in 2022 versus 2021, as well as an increase in accounts payable and accruals in 2022 versus decrease in the 2021 period.
Net cash provided by investing activities was \$15.1 million for the six months ended June 30, 2022, compared to net cash used in investing activities of \$42.3 million for the six months ended June 30, 2021. The changes in cash flows from investing activities relate primarily to investments in, and maturities of, short-term bank deposits.
Net cash used in financing activities was \$1.6 million for the six months ended June 30, 2022, compared to net cash provided by financing activities of \$56.0 million for the six months ended June 30, 2021. The cash flows in 2022 primarily reflect the repayments of the loan from Kreos Capital. The cash flows in 2021 primarily reflect the underwritten public offering of the Company's ADSs in January 2021, warrant exercises and net proceeds from the ATM facility, offset by repayments of the loan from Kreos Capital.
Conference Call and Webcast Information
BioLineRx will hold a conference call today, Tuesday, August 16 at 10:00 a.m. EDT. To access the conference call, please dial +1-888-281-1167 from the US or +972-3-918-0685 internationally. The call will also be available via webcast and can be accessed through the Investor Relations page of BioLineRx's website. Please allow extra time prior to the call to visit the site and download any necessary software to listen to the live broadcast.
A replay of the conference call will be available approximately two hours after completion of the live conference call on the Investor Relations page of BioLineRx's website. A dial-in replay of the call will be available until August 18, 2022; please dial +1-888-295-2634 from the US or +972-3-925-5904 internationally.
(Tables follow)
About BioLineRx
BioLineRx Ltd. (NASDAQ/TASE: BLRX) is a pre-commercial-stage biopharmaceutical company focused on oncology. The Company's lead program, Motixafortide (BL-8040), is a cancer therapy platform that was successfully evaluated in a Phase 3 study in stem cell mobilization for autologous bone-marrow transplantation, has reported positive results from a pre-planned pharmacoeconomic study, has successfully completed a pre-NDA meeting with the FDA, and is currently in preparations for an NDA submission. Motixafortide was also successfully evaluated in a Phase 2a study for the treatment of pancreatic cancer in combination with KEYTRUDA® and chemotherapy, and is currently being studied in combination with LIBTAYO® and chemotherapy as a first-line PDAC therapy.
BioLineRx is also developing a second oncology program, AGI-134, an immunotherapy treatment for multiple solid tumors that is currently being investigated in a Phase 1/2a study.
For additional information on BioLineRx, please visit the Company's website at www.biolinerx.com, where you can review the Company's SEC filings, press releases, announcements and events.
Various statements in this release concerning BioLineRx's future expectations constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include words such as "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "should," "will," and "would," and describe opinions about future events. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of BioLineRx to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause BioLineRx's actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to: the initiation, timing, progress and results of BioLineRx's preclinical studies, clinical trials and other therapeutic candidate development efforts; BioLineRx's ability to advance its therapeutic candidates into clinical trials or to successfully complete its preclinical studies or clinical trials; BioLineRx's receipt of regulatory approvals for its therapeutic candidates, and the timing of other regulatory filings and approvals; the clinical development, commercialization and market acceptance of BioLineRx's therapeutic candidates; BioLineRx's ability to establish and maintain corporate collaborations; BioLineRx's ability to integrate new therapeutic candidates and new personnel; the interpretation of the properties and characteristics of BioLineRx's therapeutic candidates and of the results obtained with its therapeutic candidates in preclinical studies or clinical trials; the implementation of BioLineRx's business model and strategic plans for its business and therapeutic candidates; the scope of protection BioLineRx is able to establish and maintain for intellectual property rights covering its therapeutic candidates and its ability to operate its business without infringing the intellectual property rights of others; estimates of BioLineRx's expenses, future revenues, capital requirements and its needs for and ability to access sufficient additional financing; risks related to changes in healthcare laws, rules and regulations in the United States or elsewhere; competitive companies, technologies and BioLineRx's industry; statements as to the impact of the political and security situation in Israel on BioLineRx's business; and the impact of the COVID-19 pandemic and the Russian invasion of Ukraine, which may exacerbate the magnitude of the factors discussed above. These and other factors are more fully discussed in the "Risk Factors" section of BioLineRx's most recent annual report on Form 20-F filed with the Securities and Exchange Commission on March 16, 2022. In addition, any forward-looking statements represent BioLineRx's views only as of the date of this release and should not be relied upon as representing its views as of any subsequent date. BioLineRx does not assume any obligation to update any forward-looking statements unless required by law.
Contact:
Tim McCarthy LifeSci Advisors, LLC +1-917-679-9282 [email protected]
or
Moran Meir LifeSci Advisors, LLC +972-54-476-4945 [email protected]
BioLineRx Ltd. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
| December 31, 2021 |
June 30, 2022 |
|
|---|---|---|
| in USD thousands | ||
| Assets | ||
| CURRENT ASSETS | ||
| Cash and cash equivalents | 12,990 | 14,000 |
| Short-term bank deposits | 44,145 | 29,146 |
| Prepaid expenses | 127 | 717 |
| Other receivables | 142 | 240 |
| Total current assets | 57,404 | 44,103 |
| NON-CURRENT ASSETS | ||
| Property and equipment, net | 952 | 810 |
| Right-of-use assets, net | 1,331 | 1,221 |
| Intangible assets, net | 21,704 | 21,704 |
| Total non-current assets | 23,987 | 23,735 |
| Total assets | 81,391 | 67,838 |
| Liabilities and equity | ||
| CURRENT LIABILITIES | ||
| Current maturities of long-term loan | 2,757 | 1,013 |
| Accounts payable and accruals: | ||
| Trade | 5,567 | 7,338 |
| Other Current maturities of lease liabilities |
1,227 168 |
1,132 149 |
| Total current liabilities | 9,719 | 9,632 |
| NON-CURRENT LIABILITIES | ||
| Warrants | 1,859 | 186 |
| Lease liabilities | 1,726 | 1,452 |
| Total non-current liabilities | 3,585 | 1,638 |
| COMMITMENTS AND CONTINGENT LIABILITIES | ||
| Total liabilities | 13,304 | 11,270 |
| EQUITY | ||
| Ordinary shares | 21,066 | 21,157 |
| Share premium | 339,346 | 339,670 |
| Warrants | 975 | 975 |
| Capital reserve | 13,157 | 13,596 |
| Other comprehensive loss | (1,416) | (1,416) |
| Accumulated deficit | (305,041) | (317,414) |
| Total equity | 68,087 | 56,568 |
| Total liabilities and equity | 81,391 | 67,838 |
BioLineRx Ltd. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
| Three months ended June 30, | Six months ended June 30, | |||
|---|---|---|---|---|
| 2021 | 2022 | 2021 | 2022 | |
| in USD thousands | in USD thousands | |||
| RESEARCH AND DEVELOPMENT EXPENSES | (5,139) | (5,395) | (9,417) | (9,830) |
| SALES AND MARKETING EXPENSES | (330) | (1,158) | (484) | (1,795) |
| GENERAL AND ADMINISTRATIVE EXPENSES | (1,044) | (1,049) | (2,061) | (2,056) |
| OPERATING LOSS | (6,513) | (7,602) | (11,962) | (13,681) |
| NON-OPERATING INCOME (EXPENSES), NET | (217) | 458 | (4,778) | 1,726 |
| FINANCIAL INCOME | 130 | 80 | 247 | 147 |
| FINANCIAL EXPENSES | (242) | (379) | (541) | (565) |
| NET LOSS AND COMPREHENSIVE LOSS | (6,842) | (7,443) | (17,034) | (12,373) |
| in USD | in USD | |||
| LOSS PER ORDINARY SHARE - BASIC AND DILUTED | (0.01) | (0.01) | (0.03) | (0.02) |
| WEIGHTED AVERAGE NUMBER OF SHARES USED IN CALCULATION OF LOSS PER ORDINARY SHARE |
669,138,994 | 715,365,554 | 614,780,845 | 715,260,781 |
BioLineRx Ltd. CONDENSED INTERIM STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
| Ordinary shares |
Share premium |
Warrants | Capital reserve in USD thousands |
Other comprehensive loss |
Accumulated deficit |
Total | |
|---|---|---|---|---|---|---|---|
| BALANCE AT JANUARY 1, 2021 |
9,870 | 279,241 | - | 12,322 | (1,416) | (277,987) | 22,030 |
| CHANGES FOR SIX MONTHS ENDED JUNE 30, 2021: |
|||||||
| Issuance of share capital, net | 8,386 | 37,495 | 975 | - | - | - | 46,856 |
| Warrants exercised | 2,235 | 18,967 | - | - | - | - | 21,202 |
| Employee stock options exercised | 5 | 41 | - | (39) | - | - | 7 |
| Employee stock options forfeited and expired |
- | 143 | - | (143) | - | - | - |
| Share-based compensation | - | - | - | 832 | - | - | 832 |
| Comprehensive loss for the period | - | - | - | - | - | (17,034) | (17,034) |
| BALANCE AT JUNE 30, 2021 | 20,496 | 335,887 | 975 | 12,972 | (1,416) | (295,021) | 73,893 |
| Ordinary shares |
Share premium |
Warrants | Capital reserve |
Other comprehensive loss |
Accumulated deficit |
Total | |
| in USD thousands | |||||||
| BALANCE AT JANUARY 1, 2022 |
21,066 | 339,346 | 975 | 13,157 | (1,416) | (305,041) | 68,087 |
| CHANGES FOR SIX MONTHS ENDED JUNE 30, 2022: |
|||||||
| Issuance of share capital, net | 89 | 177 | - | - | - | - | 266 |
| Employee stock options exercised | 2 | 12 | - | (12) | - | - | 2 |
| Employee stock options forfeited | |||||||
| and expired | - | 135 | - | (135) | - | - | - |
| Share-based compensation | - | - | - | 586 | - | - | 586 |
| Comprehensive loss for the period | - | - | - | - | - | (12,373) | (12,373) |
| BALANCE AT JUNE 30, 2022 | 21,157 | 339,670 | 975 | 13,596 | (1,416) | (317,414) | 56,568 |
BioLineRx Ltd. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
| Ordinary shares |
Share premium |
Warrants | Capital reserve in USD thousands |
Other comprehensive loss |
Accumulated deficit |
Total | |
|---|---|---|---|---|---|---|---|
| BALANCE AT APRIL 1, 2021 | 18,731 | 321,920 | 975 | 12,616 | (1,416) | (288,179) | 64,647 |
| CHANGES FOR THREE MONTHS ENDED JUNE 30, 2021: |
|||||||
| Issuance of share capital, net | 1,581 | 12,516 | - | - | - | - | 14,097 |
| Warrants exercised | 184 | 1,444 | - | - | - | - | 1,628 |
| Employee stock options exercised | - | 3 | - | (1) | - | - | 2 |
| Employee stock options forfeited | |||||||
| and expired | - | 4 | - | (4) | - | - | - |
| Share-based compensation | - | - | - | 361 | - | - | 361 |
| Comprehensive loss for the period | - | - | - | - | - | (6,842) | (6,842) |
| BALANCE AT JUNE 30, 2021 | 20,496 | 335,887 | 975 | 12,972 | (1,416) | (295,021) | 73,893 |
| Ordinary shares |
Share premium |
Warrants | Capital reserve |
Other comprehensive loss |
Accumulated deficit |
Total | |
| in USD thousands | |||||||
| BALANCE AT APRIL 1, 2022 CHANGES FOR THREE MONTHS ENDED JUNE 30, 2022: |
21,066 | 339,444 | 975 | 13,315 | (1,416) | (309,971) | 63,413 |
| Issuance of share capital, net | 89 | 177 | - | - | - | - | 266 |
| Employee stock options exercised | 2 | 12 | - | (12) | - | - | 2 |
| Employee stock options forfeited | |||||||
| and expired | - | 37 | - | (37) | - | - | - |
| Share-based compensation | - | - | - | 330 | - | - | 330 |
| Comprehensive loss for the period | - | - | - | - | - | (7,443) | (7,443) |
| BALANCE AT JUNE 30, 2022 | 21,157 | 339,670 | 975 | 13,596 | (1,416) | (317,414) | 56,568 |
BioLineRx Ltd. CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENTS (UNAUDITED)
| Six months ended June 30, | ||
|---|---|---|
| 2021 | 2022 | |
| in USD thousands | ||
| CASH FLOWS - OPERATING ACTIVITIES | ||
| Net loss for the period | (17,034) | (12,373) |
| Adjustments required to reflect net cash used in operating activities | ||
| (see appendix below) | 3,977 | 498 |
| Net cash used in operating activities | (13,057) | (11,875) |
| CASH FLOWS – INVESTING ACTIVITIES | ||
| Investments in short-term deposits | (58,000) | (9,000) |
| Maturities of short-term deposits | 15,776 | 24,141 |
| Purchase of property and equipment | (38) | (62) |
| Net cash provided by (used in) investing activities | (42,262) | 15,079 |
| CASH FLOWS – FINANCING ACTIVITIES | ||
| Issuance of share capital and warrants, net of issuance costs | 46,856 | 266 |
| Exercise of warrants | 10,907 | - |
| Employee stock options exercised | 7 | 2 |
| Repayments of loan | (1,648) | (1,812) |
| Repayments of lease liabilities | (122) | (88) |
| Net cash provided by (used in) financing activities | 56,000 | (1,632) |
| INCREASE IN CASH AND CASH EQUIVALENTS | 681 | 1,572 |
| CASH AND CASH EQUIVALENTS - BEGINNING | ||
| OF PERIOD | 16,831 | 12,990 |
| EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS | (28) | (562) |
| CASH AND CASH EQUIVALENTS - END OF PERIOD | 17,484 | 14,000 |
BioLineRx Ltd. APPENDIX TO CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENTS (UNAUDITED)
| Six months ended June 30, | |||
|---|---|---|---|
| 2021 | 2022 | ||
| in USD thousands | |||
| Adjustments required to reflect net cash used in operating activities: | |||
| Income and expenses not involving cash flows: | |||
| Depreciation and amortization | 362 | 314 | |
| Exchange differences on cash and cash equivalents | 28 | 562 | |
| Fair value adjustments of warrants | 4,889 | (1,673) | |
| Share-based compensation | 832 | 586 | |
| Interest and exchange differences on short-term deposits | (103) | (142) | |
| Interest on loan | 176 | 68 | |
| Exchange differences on lease liability | (26) | (205) | |
| 6,158 | (490) | ||
| Changes in operating asset and liability items: | |||
| Increase in prepaid expenses and other receivables | (1,212) | (688) | |
| Increase (decrease) in accounts payable and accruals | (969) | 1,676 | |
| (2,181) | 988 | ||
| 3,977 | 498 | ||
| Supplemental information on interest received in cash | 39 | 146 | |
| Supplemental information on interest paid in cash | 350 | 217 | |
| Supplemental information on non-cash transactions: | |||
| Acquisition of right-of-use asset | 171 | - | |
| Exercise of warrants (portion related to accumulated fair value adjustments) | 10,295 | - | |
| 11 |
BioLineRx Ltd. CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) AS OF JUNE 30, 2022
BioLineRx Ltd. CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) AS OF JUNE 30, 2022
TABLE OF CONTENTS
| Page | |
|---|---|
| Condensed consolidated interim statements of financial position | F-1 |
| Condensed consolidated interim statements of comprehensive loss | F-2 |
| Condensed consolidated interim statements of changes in equity | F-3 - F-4 |
| Condensed consolidated interim cash flow statements | F-5 - F-6 |
| Notes to the condensed consolidated interim financial statements | F-7 - F-9 |
BioLineRx Ltd. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
| December 31, | June 30, 2022 |
|
|---|---|---|
| 2021 | ||
| in USD thousands | ||
| Assets | ||
| CURRENT ASSETS | ||
| Cash and cash equivalents | 12,990 | 14,000 |
| Short-term bank deposits | 44,145 | 29,146 |
| Prepaid expenses | 127 | 717 |
| Other receivables | 142 | 240 |
| Total current assets | 57,404 | 44,103 |
| NON-CURRENT ASSETS | ||
| Property and equipment, net | 952 | 810 |
| Right-of-use assets, net | 1,331 | 1,221 |
| Intangible assets, net | 21,704 | 21,704 |
| Total non-current assets | 23,987 | 23,735 |
| Total assets | 81,391 | 67,838 |
| Liabilities and equity | ||
| CURRENT LIABILITIES | ||
| Current maturities of long-term loan | 2,757 | 1,013 |
| Accounts payable and accruals: | ||
| Trade | 5,567 | 7,338 |
| Other | 1,227 | 1,132 |
| Current maturities of lease liabilities | 168 | 149 |
| Total current liabilities | 9,719 | 9,632 |
| NON-CURRENT LIABILITIES | ||
| Warrants | 1,859 | 186 |
| Lease liabilities | 1,726 | 1,452 |
| Total non-current liabilities | 3,585 | 1,638 |
| COMMITMENTS AND CONTINGENT LIABILITIES | ||
| Total liabilities | 13,304 | 11,270 |
| EQUITY | ||
| Ordinary shares | 21,066 | 21,157 |
| Share premium | 339,346 | 339,670 |
| Warrants | 975 | 975 |
| Capital reserve | 13,157 | 13,596 |
| Other comprehensive loss | (1,416) | (1,416) |
| Accumulated deficit | (305,041) | (317,414) |
| Total equity | 68,087 | 56,568 |
| Total liabilities and equity | 81,391 | 67,838 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
BioLineRx Ltd. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
| Three months ended June 30, | Six months ended June 30, | ||||
|---|---|---|---|---|---|
| 2021 | 2022 | 2021 | 2022 | ||
| in USD thousands | in USD thousands | ||||
| RESEARCH AND DEVELOPMENT EXPENSES | (5,139) | (5,395) | (9,417) | (9,830) | |
| SALES AND MARKETING EXPENSES | (330) | (1,158) | (484) | (1,795) | |
| GENERAL AND ADMINISTRATIVE EXPENSES | (1,044) | (1,049) | (2,061) | (2,056) | |
| OPERATING LOSS | (6,513) | (7,602) | (11,962) | (13,681) | |
| NON-OPERATING INCOME (EXPENSES), NET | (217) | 458 | (4,778) | 1,726 | |
| FINANCIAL INCOME | 130 | 80 | 247 | 147 | |
| FINANCIAL EXPENSES | (242) | (379) | (541) | (565) | |
| NET LOSS AND COMPREHENSIVE LOSS | (6,842) | (7,443) | (17,034) | (12,373) | |
| in USD | in USD | ||||
| LOSS PER ORDINARY SHARE - BASIC AND DILUTED | (0.01) | (0.01) | (0.03) | (0.02) | |
| WEIGHTED AVERAGE NUMBER OF SHARES USED IN CALCULATION OF LOSS PER | |||||
| ORDINARY SHARE | 669,138,994 | 715,365,554 | 614,780,845 | 715,260,781 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
BioLineRx Ltd. CONDENSED INTERIM STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
| Ordinary shares |
Share premium |
Warrants | Capital reserve |
Other comprehensive loss |
Accumulated deficit |
Total | |
|---|---|---|---|---|---|---|---|
| in USD thousands | |||||||
| BALANCE AT JANUARY 1, 2021 | 9,870 | 279,241 | - | 12,322 | (1,416) | (277,987) | 22,030 |
| CHANGES FOR SIX MONTHS ENDED JUNE 30, 2021: |
|||||||
| Issuance of share capital, net | 8,386 | 37,495 | 975 | - | - | - | 46,856 |
| Warrants exercised | 2,235 | 18,967 | - | - | - | - | 21,202 |
| Employee stock options exercised | 5 | 41 | - | (39) | - | - | 7 |
| Employee stock options forfeited and expired |
- | 143 | - | (143) | - | - | - |
| Share-based compensation | - | - | - | 832 | - | - | 832 |
| Comprehensive loss for the period | - | - | - | - | - | (17,034) | (17,034) |
| BALANCE AT JUNE 30, 2021 | 20,496 | 335,887 | 975 | 12,972 | (1,416) | (295,021) | 73,893 |
| Ordinary shares |
Share premium |
Warrants | Capital reserve |
Other comprehensive loss |
Accumulated deficit |
Total | |
| in USD thousands | |||||||
| BALANCE AT JANUARY 1, 2022 | 21,066 | 339,346 | 975 | 13,157 | (1,416) | (305,041) | 68,087 |
| CHANGES FOR SIX MONTHS ENDED JUNE 30, 2022: |
|||||||
| Issuance of share capital, net | 89 | 177 | - | - | - | - | 266 |
| Employee stock options exercised | 2 | 12 | - | (12) | - | - | 2 |
| Employee stock options forfeited and expired |
- | 135 | - | (135) | - | - | - |
| Share-based compensation | - | - | - | 586 | - | - | 586 |
| Comprehensive loss for the period | - | - | - | - | - | (12,373) | (12,373) |
| BALANCE AT JUNE 30, 2022 | 21,157 | 339,670 | 975 | 13,596 | (1,416) | (317,414) | 56,568 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
BioLineRx Ltd. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
| Ordinary shares |
Share premium |
Warrants | Capital reserve |
Other comprehensive loss |
Accumulated deficit |
Total | |
|---|---|---|---|---|---|---|---|
| in USD thousands | |||||||
| BALANCE AT APRIL 1, 2021 | 18,731 | 321,920 | 975 | 12,616 | (1,416) | (288,179) | 64,647 |
| CHANGES FOR THREE MONTHS ENDED JUNE 30, 2021: |
|||||||
| Issuance of share capital, net | 1,581 | 12,516 | - | - | - | - | 14,097 |
| Warrants exercised | 184 | 1,444 | - | - | - | - | 1,628 |
| Employee stock options exercised | - | 3 | - | (1) | - | - | 2 |
| Employee stock options forfeited and expired |
- | 4 | - | (4) | - | - | - |
| Share-based compensation | - | - | - | 361 | - | - | 361 |
| Comprehensive loss for the period | - | - | - | - | - | (6,842) | (6,842) |
| BALANCE AT JUNE 30, 2021 | 20,496 | 335,887 | 975 | 12,972 | (1,416) | (295,021) | 73,893 |
| Ordinary shares |
Share premium |
Warrants | Capital reserve |
Other comprehensive loss |
Accumulated deficit |
Total | |
| in USD thousands | |||||||
| BALANCE AT APRIL 1, 2022 | 21,066 | 339,444 | 975 | 13,315 | (1,416) | (309,971) | 63,413 |
| CHANGES FOR THREE MONTHS ENDED JUNE 30, 2022: |
|||||||
| Issuance of share capital, net | 89 | 177 | - | - | - | - | 266 |
| Employee stock options exercised | 2 | 12 | - | (12) | - | - | 2 |
| Employee stock options forfeited and expired |
- | 37 | - | (37) | - | - | - |
| Share-based compensation | - | - | - | 330 | - | - | 330 |
| Comprehensive loss for the period | - | - | - | - | - | (7,443) | (7,443) |
| BALANCE AT JUNE 30, 2022 | 21,157 | 339,670 | 975 | 13,596 | (1,416) | (317,414) | 56,568 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
F - 4
BioLineRx Ltd. CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENTS (UNAUDITED)
| Six months ended June 30, | |||
|---|---|---|---|
| 2021 | 2022 | ||
| in USD thousands | |||
| CASH FLOWS - OPERATING ACTIVITIES | |||
| Net loss for the period | (17,034) | (12,373) | |
| Adjustments required to reflect net cash used in operating activities | |||
| (see appendix below) | 3,977 | 498 | |
| Net cash used in operating activities | (13,057) | (11,875) | |
| CASH FLOWS – INVESTING ACTIVITIES | |||
| Investments in short-term deposits | (58,000) | (9,000) | |
| Maturities of short-term deposits | 15,776 | 24,141 | |
| Purchase of property and equipment | (38) | (62) | |
| Net cash provided by (used in) investing activities | (42,262) | 15,079 | |
| CASH FLOWS – FINANCING ACTIVITIES | |||
| Issuance of share capital and warrants, net of issuance costs | 46,856 | 266 | |
| Exercise of warrants | 10,907 | - | |
| Employee stock options exercised | 7 | 2 | |
| Repayments of loan | (1,648) | (1,812) | |
| Repayments of lease liabilities | (122) | (88) | |
| Net cash provided by (used in) financing activities | 56,000 | (1,632) | |
| INCREASE IN CASH AND CASH EQUIVALENTS | 681 | 1,572 | |
| CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 16,831 | 12,990 | |
| EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS | (28) | (562) | |
| CASH AND CASH EQUIVALENTS - END OF PERIOD | 17,484 | 14,000 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
BioLineRx Ltd. APPENDIX TO CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENTS (UNAUDITED)
| Six months ended June 30, | |||
|---|---|---|---|
| 2021 | 2022 | ||
| in USD thousands | |||
| Adjustments required to reflect net cash used in operating activities: | |||
| Income and expenses not involving cash flows: | |||
| Depreciation and amortization | 362 | 314 | |
| Exchange differences on cash and cash equivalents | 28 | 562 | |
| Fair value adjustments of warrants | 4,889 | (1,673) | |
| Share-based compensation | 832 | 586 | |
| Interest and exchange differences on short-term deposits | (103) | (142) | |
| Interest on loan | 176 | 68 | |
| Exchange differences on lease liability | (26) | (205) | |
| 6,158 | (490) | ||
| Changes in operating asset and liability items: | |||
| Increase in prepaid expenses and other receivables | (1,212) | (688) | |
| Increase (decrease) in accounts payable and accruals | (969) | 1,676 | |
| (2,181) | 988 | ||
| 3,977 | 498 | ||
| Supplemental information on interest received in cash | 39 | 146 | |
| Supplemental information on interest paid in cash | 350 | 217 | |
| Supplemental information on non-cash transactions: | |||
| Acquisition of right-of-use asset | 171 | - | |
| Exercise of warrants (portion related to accumulated fair value adjustments) | 10,295 | - |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
BioLineRx Ltd. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 – GENERAL INFORMATION
a. General
BioLineRx Ltd. ("BioLineRx"), headquartered in Modi'in, Israel, was incorporated and commenced operations in April 2003. BioLineRx and its subsidiaries (collectively, the "Company") are engaged in the development of therapeutics, primarily in clinical stages, with a focus on the field of oncology.
The Company's American Depositary Shares ("ADSs") are traded on the NASDAQ Capital Market, and its ordinary shares are traded on the Tel Aviv Stock Exchange ("TASE"). Each ADS represents 15 ordinary shares.
In March 2017, the Company acquired Agalimmune Ltd. ("Agalimmune"), a privately held company incorporated in the United Kingdom, with a focus on the field of immuno-oncology.
Although the Company has succeeded in generating significant revenues from a number of out-licensing transactions in the past, it cannot determine with reasonable certainty if and when it will become profitable on a current basis. Management believes that the Company's current cash and other resources will be sufficient to fund its projected cash requirements into the first half of 2024. However, in the event that the Company does not begin to generate sustainable cash flows from its operating activities in the future, the Company will need to carry out significant cost reductions or raise additional funding.
b. Approval of financial statements
The condensed consolidated interim financial statements of the Company as of June 30, 2022, and for the three and six months then ended, were approved by the Board of Directors on August 15, 2022, and signed on its behalf by the Chairman of the Board, the Chief Executive Officer and the Chief Financial Officer.
BioLineRx Ltd. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
NOTE 2 – BASIS OF PREPARATION
The Company's condensed consolidated interim financial statements as of June 30, 2022 and for the three and six months then ended (the "interim financial statements") have been prepared in accordance with International Accounting Standard No. 34, "Interim Financial Reporting" ("IAS 34"). These interim financial statements, which are unaudited, do not include all disclosures necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with International Financial Reporting Standards ("IFRS"). The condensed consolidated interim financial statements should be read in conjunction with the Company's annual financial statements as of December 31, 2021 and for the year then ended and their accompanying notes, which have been prepared in accordance with IFRS. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the entire fiscal year or for any other interim period.
The preparation of financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity and expenses, as well as the related disclosures of contingent assets and liabilities, in the process of applying the Company's accounting policies. These inputs also consider, among other things, the implications of pandemics and wars across the globe on the Company's activities, and the resultant effects on critical and significant accounting estimates, most significantly in relation to the value of intangible assets. In this regard, U.S. and global markets are currently experiencing volatility and disruption following the escalation of geopolitical tensions and the ongoing military conflict between Russia and Ukraine. Although the length and impact of the ongoing military conflict are highly unpredictable, the conflict in Ukraine could lead to market disruptions, including significant volatility in commodity prices, credit and the capital markets. As of the date of release of these financial statements, the Company estimates there are no material effects of this conflict on its financial position and results of operations.
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES
The accounting policies and calculation methods applied in the preparation of these interim financial statements are consistent with those applied in the preparation of the annual financial statements as of December 31, 2021 and for the year then ended.
BioLineRx Ltd. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
NOTE 4 – AT-THE-MARKET ("ATM") SALES AGREEMENT WITH HCW
The Company maintains an ATM facility with H.C. Wainwright & Co., LLC ("HCW") pursuant to an ATM sales agreement entered into in September 2021. In accordance with the agreement, the Company is entitled, at its sole discretion, to offer and sell through HCW, acting as sales agent, ADSs having an aggregate offering price of up to \$25.0 million throughout the period during which the ATM facility remains in effect. The Company has agreed to pay HCW a commission of 3.0% of the gross proceeds from the sale of ADSs under the facility. During the six months ended June 30, 2022, the Company issued a total of 203,775 ADSs under the program for total gross proceeds of approximately \$0.3 million. From the effective date of the agreement through the issuance date of this report, 606,102 ADSs have been sold under the program for total gross proceeds of approximately \$1.4 million.
NOTE 5 – SHAREHOLDERS' EQUITY
As of December 31, 2021 and June 30, 2022, share capital is composed of ordinary shares, as follows:
| Number of ordinary shares | |||
|---|---|---|---|
| December 31, | June 30, | ||
| 2021 | 2022 | ||
| Authorized share capital | 1,500,000,000 | 1,500,000,000 | |
| Issued and paid-up share capital | 715,156,008 | 718,283,665 | |
| In USD and NIS | |||
| December 31, | June 30, | ||
| 2021 | 2022 | ||
| Authorized share capital (in NIS) | 150,000,000 | 150,000,000 | |
| Issued and paid-up share capital (in NIS) | 71,515,600 | 71,828,367 | |
| Issued and paid-up share capital (in USD) | 21,066,368 | 21,157,309 | |
OPERATING AND FINANCIAL REVIEW
You should read the following discussion of our operating and financial condition and prospects in conjunction with the financial statements and the notes thereto included elsewhere in this 6-K, as well as in our Annual Report on Form 20-F filed on March 16, 2022 (the "Annual Report").
Forward Looking Statements
The following discussion contains "forward-looking statements," including statements regarding expectations, beliefs, intentions or strategies for the future. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forwardlooking statements. In some cases, you can identify forward-looking statements by terms including "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "should," "will," "would," and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions, and are subject to risks and uncertainties. You should not put undue reliance on any forward-looking statements. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those listed below as well as those discussed in the Annual Report (particularly those in "Item 3. Key Information – Risk Factors"). Unless we are required to do so under U.S. federal securities laws or other applicable laws, we do not intend to update or revise any forward-looking statements.
Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to:
- the initiation, timing, progress and results of our preclinical studies, clinical trials and other therapeutic candidate development efforts;
- our ability to advance our therapeutic candidates into clinical trials or to successfully complete our preclinical studies or clinical trials;
- our receipt of regulatory approvals for our therapeutic candidates and the timing of other regulatory filings and approvals;
- the clinical development, commercialization and market acceptance of our therapeutic candidates;
- our ability to establish and maintain corporate collaborations;
- our ability to integrate new therapeutic candidates and new personnel;
- the interpretation of the properties and characteristics of our therapeutic candidates and of the results obtained with our therapeutic candidates in preclinical studies or clinical trials;
- the implementation of our business model and strategic plans for our business and therapeutic candidates;
- the scope of protection we are able to establish and maintain for intellectual property rights covering our therapeutic candidates and our ability to operate our business without infringing the intellectual property rights of others;
- estimates of our expenses, future revenues, capital requirements and our needs for and ability to access sufficient additional financing;
- risks related to changes in healthcare laws, rules and regulations in the United States or elsewhere;
- competitive companies, technologies and our industry;
- statements as to the impact of the political and security situation in Israel on our business; and
- the impact of the COVID-19 pandemic and the Russian invasion of Ukraine, which may exacerbate the magnitude of the factors discussed above
Risk Factors
There are no material changes to the risk factors previously disclosed in our Annual Report on Form 20-F for the year ended December 31, 2021.
Overview
General
We are a late clinical-stage biopharmaceutical development company with a strategic focus on oncology. Our current development and commercialization pipeline consists of two clinical-stage therapeutic candidates – motixafortide (BL-8040), a novel peptide for the treatment of stem-cell mobilization, solid tumors and AML, and AGI-134, an immuno-oncology agent in development for solid tumors. In addition, we have an offstrategy, legacy therapeutic product called BL-5010 for the treatment of skin lesions. We have generated our pipeline by systematically identifying, rigorously validating and in-licensing therapeutic candidates that we believe exhibit a high probability of therapeutic and commercial success. To date, except for BL-5010, none of our therapeutic candidates have been approved for marketing or sold commercially. Our strategy includes commercializing our therapeutic candidates through out-licensing arrangements with biotechnology and pharmaceutical companies and evaluating, on a case-by-case basis, the commercialization of our therapeutic candidates independently.
Motixafortide
Motixafortide is a novel, short peptide that functions as a high-affinity antagonist for CXCR4, which we are developing for the treatment of stem-cell mobilization, solid tumors and acute myeloid leukemia, or AML.
Stem cell mobilization
- ➢ In March 2015, we reported successful top-line results from a Phase 1 safety and efficacy trial for the use of motixafortide as a novel stem cell mobilization treatment for allogeneic bone marrow transplantation at Hadassah Medical Center in Jerusalem.
- ➢ In March 2016, we initiated a Phase 2 trial for motixafortide in allogeneic stem cell transplantation, conducted in collaboration with the Washington University School of Medicine, Division of Oncology and Hematology. In May 2018, we announced positive top-line results of this study showing, among other things, that a single injection of motixafortide mobilized sufficient amounts of CD34+ cells required for transplantation at a level of efficacy similar to that achieved by using 4-6 injections of G-CSF, the current standard of care.
- ➢ In December 2017, we commenced a randomized, placebo-controlled Phase 3 registrational trial for motixafortide, known as the GENESIS trial, for the mobilization of HSCs, for autologous transplantation in patients with multiple myeloma. The trial began with a lead-in period for dose confirmation, which was to include 10-30 patients and then progress to the placebo-controlled main part, which was designed to include 177 patients in more than 25 centers. Following review of the positive results from treatment of the first 11 patients, the Data Monitoring Committee, or DMC, recommended that the lead-in part of the study be stopped and that we should move immediately to the second part. Additional positive results from the lead-in period were reported at the annual meeting of the European Society for Blood and Marrow Transplantation held in March 2019, where it was announced that HSCs mobilized by motixafortide in combination with G-CSF were successfully engrafted in all 11 patients.
➢ In August 2020, we announced a decision to perform an interim analysis on approximately 65% of the original study sample size, primarily based on a significantly lower-than-anticipated patient-dropout rate in the study. In October 2020, we announced positive results from the interim analysis. Based on the statistically significant evidence favoring treatment with motixafortide, the study's independent DMC issued a recommendation to us that patient enrollment may be ceased immediately, without the need to recruit all 177 patients originally planned for the study. In accordance with the DMC's recommendation, study enrollment was complete at 122 patients. In May 2021, we announced positive top-line results from the Phase 3 trial. Based on an analysis of data on all 122 enrolled patients (the intent to treat population) we found highly statistically significant evidence across all primary and secondary endpoints favoring motixafortide in addition to G-CSF, as compared to placebo plus G-CSF (p<0.0001). The addition of motixafortide to G-CSF also allowed 88.3% of patients to undergo transplantation after only one apheresis session, compared to 10.8% in the G-CSF arm – an 8.2-fold increase. The combination was also found to be safe and well tolerated.
We continue to follow-up on the GENESIS study patients for relapse-free and overall survival. In addition, we continue to perform detailed analyses of the data according to the statistical analysis plan agreed-upon with the FDA, as well as certain post hoc analyses. In December 2021, we held a pre-NDA meeting with the FDA. The purpose of the meeting was to obtain agreement from the FDA on the content of the proposed NDA, and, in particular, to confirm that our single Phase 3 pivotal study, GENESIS, is sufficient to support an NDA submission. During the pre-NDA meeting, the FDA agreed that the proposed data package is sufficient to support an NDA submission, which we anticipate will occur within the next 4-6 weeks.
- ➢ In October 2021, we announced positive results from a pharmacoeconomic study evaluating the cost-effectiveness of using investigational drug motixafortide as a primary stem cell mobilization agent on top of granulocyte colony stimulating factor (G-CSF), versus G-CSF alone, in multiple myeloma patients undergoing autologous stem-cell transplantation (ASCT). The study was performed by the Global Health Economics and Outcomes Research (HEOR) team of IQVIA, and was a pre-planned study conducted in parallel with the GENESIS Phase 3 trial. The study concluded that the addition of motixafortide to G-CSF (the current standard of care) is associated with a statistically significant decrease in health resource utilization (HRU) during the ASCT process, compared to G-CSF alone. Based on the significantly higher number of mobilized cells and the lower number of apheresis sessions, lifetime estimates show quality-adjusted-life-year benefits and net cost savings of ~\$19,000 (not including the cost of motixafortide), versus G-CSF alone.
- ➢ In March 2022, we announced results from a follow-on pharmacoeconomic study performed by the HEOR team of IQVIA. This study indirectly evaluated the cost-effectiveness of using motixafortide as a primary stem cell mobilization agent in combination with G-CSF, against plerixafor in combination with G-CSF, in multiple myeloma patients undergoing ASCT. The additional study results show that motixafortide in combination with G-CSF, versus plerixafor in combination with G-CSF, demonstrates a statistically significant decrease in HRU during the ASCT process. Based on the significantly higher number of mobilized cells and the lower number of apheresis sessions, lifetime estimates show QALY benefits and net cost savings of ~\$30,000 (not including the cost of motixafortide), versus plerixafor plus G-CSF. The study findings strengthen the assessment that the use of motixafortide in combination with G-CSF, as the potential new standard of care in mobilization for ASCT, would be a cost-effective option in the US, based on accepted willingness-to-pay (WTP) values for healthcare payers.
- ➢ We believe these results, together with the highly significant and clinically meaningful data from the GENESIS trial, strongly support the potential use of motixafortide, on top of G-CSF, as the standard of care in stem cell mobilization for autologous stem cell transplantation. While we continue to seek a third-party collaborator to commercialize motixafortide, we are also undertaking selected precommercialization activities necessary for an NDA submission, and for a timely launch, if approved by the FDA, with a view to obtaining potential FDA approval and potentially launching sales in 2023. In this regard, in June 2022, we appointed biopharmaceutical veteran executive Holly W. May as our Chief Commercial Officer who is responsible for the commercial planning, positioning and launch oversight for motixafortide in the stem cell mobilization indication across the U.S. market, assuming FDA approval.
Solid tumors
- ➢ In January 2016, we entered into a clinical collaboration with MSD (a tradename of Merck & Co., Inc., Kenilworth, New Jersey) in the field of cancer immunotherapy. Based on this collaboration, in September 2016 we initiated a Phase 2a study, known as the COMBAT/KEYNOTE-202 study, focusing on evaluating the safety and efficacy of motixafortide in combination with KEYTRUDA® (pembrolizumab), MSD's anti-PD-1 therapy, in 37 patients with metastatic pancreatic adenocarcinoma, or PDAC. The study was an open-label, multicenter, single-arm trial designed to evaluate the clinical response, safety and tolerability of the combination of these therapies as well as multiple pharmacodynamic parameters, including the ability to improve infiltration of T-cells into the tumor and their reactivity. Top-line results showed that the dual combination demonstrated encouraging disease control and overall survival in patients with metastatic pancreatic cancer. In addition, assessment of patient biopsies supported motixafortide's ability to induce infiltration of tumor-reactive T-cells into the tumor, while reducing the number of immune regulatory cells.
- ➢ In July 2018, we announced the expansion of the COMBAT/KEYNOTE-202 study under the collaboration to include a triple combination arm investigating the safety, tolerability and efficacy of motixafortide, KEYTRUDA ® and chemotherapy. We initiated this arm of the trial in December 2018. In December 2019, we announced that preliminary data from the study indicated that the triple combination therapy showed a high level of disease control, including seven partial responders and 10 patients with stable disease out of 22 evaluable patients. In February 2020, we completed recruiting a total of 43 patients for the study and in December 2020, we announced the final results of the study. The results of the study showed substantial improvement as compared to comparable historical results of other pancreatic cancer studies across all study endpoints. Of the 38 evaluable patients, median overall survival was 6.5 months, median progression free survival was 4.0 months, confirmed overall response rate was 13.2%, overall response rate was 21.2% and disease control rate was 63.2%. The combination was generally well tolerated, with a safety profile consistent with the individual safety profile of each component alone; adverse event and severe adverse event profiles were as expected with chemotherapy-based treatment regimens.
- ➢ In August 2016, in the framework of an agreement with MD Anderson Cancer Center, or MD Anderson, we entered into an additional collaboration for the investigation of motixafortide in combination with KEYTRUDA in pancreatic cancer. The focus of this study, in addition to assessing clinical response, was the mechanism of action by which both drugs might synergize, as well as multiple assessments to evaluate the biological anti-tumor effects induced by the combination. We supplied motixafortide for this Phase 2b study, which commenced in January 2017. Final results from this study (based on a cutoff in July 2019 from 20 enrolled patients out of which 15 were evaluable) showed that the dual combination demonstrated clinical activity and encouraging overall survival in patients with metastatic pancreatic cancer. In addition, assessment of patient biopsies supported motixafortide's ability to induce infiltration of tumor-reactive T-cells into the tumor.
- ➢ In October 2020, we announced that motixafortide will be tested in combination with the anti-PD-1 cemiplimab (LIBTAYO®) and standard-of-care chemotherapy (gemcitabine and nab-paclitaxel) in firstline PDAC. This investigator-initiated Phase 2 study, led by Columbia University, will initially enroll 10-12 PDAC patients, and will be expanded to a total of 40 patients following an evaluation of the initial 10-12 patients based on pre-defined criteria. The primary endpoint of the study is the overall response rate. Secondary endpoints include safety and tolerability, progression free survival, duration of clinical benefit and overall survival. Data from the study is anticipated in the second half of 2022 (although timelines are ultimately controlled by the independent investigator and are therefore subject to change).
➢ In June 2022, we entered into a collaboration agreement with GenFleet Therapeutics, an immuno-oncology focused biopharmaceutical company based in China, to advance motixafortide through a randomized Phase 2b clinical trial in PDAC. Under the terms of the agreement, GenFleet will fully fund, design and execute a randomized Phase 2b clinical trial that will enroll approximately 200 first-line metastatic PDAC patients in China. This randomized controlled study will aim to evaluate the superiority of motixafortide in combination with an anti-PD-1 and chemotherapy compared to chemotherapy alone, the current standard of care. As part of the collaboration, we will supply motixafortide, while GenFleet will supply the other study drugs for the trial. Trial oversight will be administered by a Joint Development Committee. GenFleet will be eligible to receive low-to-mid-single digit tiered percentage royalties on future motixafortide sales, if approved.
AML
- ➢ During 2016, we completed and reported on a Phase 2a proof-of-concept trial for the treatment of relapsed or refractory acute myeloid leukemia, or r/r AML, which was conducted on 42 patients at six world-leading cancer research centers in the United States and at five premier sites in Israel. The study included both a dose-escalation and a dose-expansion phase. Results from the trial showed positive safety and response rate data for subjects treated with a combination of motixafortide and high-dose cytarabine (Ara-C), or HiDAC. At the annual meeting of the European Hematology Association, or EHA, in June 2018, we presented positive overall survival data from the long-term follow-up part of this study. In March 2021, we completed the monitoring of long-term survival data for patients in the study and, in parallel, are evaluating our next clinical development steps in this indication.
- ➢ In August 2015, we conducted a double-blind, placebo-controlled, randomized, multi-center, Phase 2b trial in Germany, in collaboration with the German Study Alliance Leukemia Group, to assess the efficacy of motixafortide in addition to standard consolidation therapy (cytarabine) in AML patients who have responded to standard induction treatment and are in complete remission. During 2020, we finalized plans with our collaboration partners to conduct an interim analysis on 2/3 (N=128) of the 194 patients originally planned in the study, all of which had already completed treatment. Based on the interim analysis, the investigational arm of motixafortide combined with cytarabine did not demonstrate a statistically significant effect in the study's primary endpoint, and therefore, the DMC recommended not to continue the study. We continue to believe in the relevance of CXCR4 as a viable target in other AML treatment lines, such as rr/AML and induction treatment, and we intend to decide on next steps in AML once we have had an opportunity to review and analyze the unblinded data, including detailed biomarker and subpopulation data, from the study.
ARDS secondary to COVID-19 and other viral infections
➢ During the first half of 2020, we initiated the evaluation of motixafortide as a potential therapy for acute respiratory distress syndrome, or ARDS, resulting from COVID-19 and other viral infections In this regard, substantial data is emerging regarding the involvement of neutrophils, neutrophil extracellular traps (NETs), monocytes and macrophages in the development of ARDS secondary to COVID-19 and other viral infections; as well as the key involvement of CXCR4 as a mediator of those cells in the inflamed pulmonary tissue. Based on the scientific data indicating the importance of blocking the CXCR4/CXCL12 axis during ARDS, we believe that motixafortide may be of potential benefit for patients with ARDS. Following our initial evaluation, in November 2020, we announced initiation of a Phase 1b study in patients with ARDS secondary to COVID-19 and other respiratory viral infections. The study is an investigator-initiated study, led by Wolfson Medical Center, in Israel, to evaluate motixafortide in patients hospitalized with ARDS. The primary endpoint of the study is to assess the safety of motixafortide in these patients; respiratory parameters and inflammatory biomarkers will be assessed as exploratory endpoints. Up to 25 patients will be enrolled in the study, with a preliminary analysis planned after ten patients have completed the initial treatment period. Results of the preliminary analysis are expected in the second half of 2022 (although timelines are ultimately controlled by the independent investigator and are therefore subject to change).
Other matters
- ➢ In addition to the above, we are currently conducting, or planning to conduct, a number of investigator-initiated, open-label studies in a variety of indications, to support the interest of the scientific and medical communities in exploring additional uses for motixafortide. These studies serve to further elucidate the mechanism of action for motixafortide. The results of studies such as these are presented from time to time at relevant professional conferences.
- ➢ Motixafortide has been granted three Orphan Drug Designations by the FDA: for use to mobilize HSCs from the bone marrow to peripheral blood for collection in autologous or allogeneic transplantation (granted in July 2012); for the treatment of AML (granted in September 2013); and for the treatment of pancreatic cancer (granted in February 2019). In January 2020, the European Medicines Agency, or EMA, granted Orphan Drug Designation to motixafortide for the treatment of pancreatic cancer.
AGI-134
AGI-134, a clinical therapeutic candidate in-licensed by our subsidiary, Agalimmune Ltd., is a synthetic alpha-Gal glycolipid immunotherapy in development for solid tumors. AGI-134 harnesses the body's preexisting, highly abundant, anti-alpha-Gal antibodies to induce a hyper-acute, systemic, specific anti-tumor response to the patient's own tumor neo-antigens. This response not only kills the tumor cells at the site of injection, but also brings about a durable, follow-on, anti-metastatic immune response. In August 2018, we initiated a Phase 1/2a clinical study for AGI-134 that is primarily designed to evaluate the safety and tolerability of AGI-134 in unresectable metastatic solid tumors. The multi-center, open-label study is currently being carried out in the United Kingdom, Spain and Israel. Initial safety results from the first part of the study were announced at the beginning of September 2019; at the end of the same month, the second part of the study was commenced. Due to clinical operating issues associated with the COVID-19 pandemic, in April 2020, enrollment to the clinical trial was temporarily suspended. In August 2020, we renewed study enrollment, and in January 2022, we completed enrollment. Initial proof-of-mechanism of action and efficacy results are now expected in the second half of 2022.
Scientific Advisory Board
In December 2021, we established a Scientific Advisory Board (SAB) to provide insight and guidance on our activities in the field of immuno-oncology. The SAB is comprised of recognized leaders in cancer immunology, intra-tumoral injections and clinical development.
Listed in alphabetical order, the founding SAB members are: Ronald Levy, MD, the Robert K. and Helen K. Summy Professor and Director of the Lymphoma Program at Stanford University School of Medicine, Palo Alto, CA; Aurélien Marabelle, MD, PhD, Clinical Director, Cancer Immunotherapy Program, Gustave Roussy, Paris, France and Director, Translational Research Laboratory in Immunotherapy, INSERM, Paris, France; Ignacio Melero MD, PhD, Professor of Immunology at the Academic Hospital of Navarra, Spain and at the Center for Applied Medical Research (CIMA) of the University of Navarra, Spain; and Jon Wigginton, MD, Chair of the SAB and Senior Advisor at Cullinan Oncology, former Chief Medical Officer of MacroGenics, and former Therapeutic Area Head, Immuno-Oncology, Early Clinical Research at Bristol-Myers Squibb.
BL-5010
Our commercialized, legacy therapeutic product, BL-5010, is a customized, proprietary pen-like applicator containing a novel, acidic, aqueous solution for the non-surgical removal of skin lesions. In December 2014, we entered into an exclusive out-licensing arrangement with Perrigo Company plc, or Perrigo, for the rights to BL-5010 for over-the-counter, or OTC, indications in Europe, Australia and additional selected countries. In March 2016, Perrigo received CE Mark approval for BL-5010 as a novel OTC treatment for the non-surgical removal of warts. The commercial launch of products for treatment of this first OTC indication (warts/verrucas) commenced in Europe in the second quarter of 2016. Since then, Perrigo has invested in improving the product and during 2019 launched an improved version of the product in several European countries. In March 2020, we agreed that Perrigo could relinquish its license rights for certain countries that had been included in its territory according to the original license agreement, and was also no longer obligated to develop, obtain regulatory approval for and commercialize products for a second OTC indication. In turn, in March 2020, we agreed with our licensor of the rights to BL-5010, Innovative Pharmaceutical Concepts (IPC) Inc., or IPC, to return to IPC those license rights no longer out-licensed to Perrigo as a result of the agreement described in the preceding sentence, in consideration of the payment to us of royalties or fees on sublicense receipts.
Funding
We have funded our operations primarily through the sale of equity securities (both in public and private offerings), funding received from the Israel Innovation Authority, or IIA, payments received under outlicensing arrangements, and interest earned on investments. We expect to continue to fund our operations over the next several years through our existing cash resources, potential future milestone and royalty payments that we may receive from our existing out-licensing agreement, potential future upfront, milestone or royalty payments that we may receive from out-licensing transactions for our other therapeutic candidates, potential revenues that we may receive from the direct commercialization of our other therapeutic candidates, interest earned on our investments, and additional capital to be raised through public or private equity offerings or debt financings. As of June 30, 2022, we held \$43.2 million of cash, cash equivalents and short-term bank deposits.
Revenues
Our revenues to date have been generated primarily from milestone payments under previously existing out-licensing agreements.
We expect our revenues, if any, for the next several years to be derived primarily from future payments under out- licensing agreement and other potential collaboration arrangements, including future royalties on product sales.
Research and Development
Our research and development expenses consist primarily of salaries and related personnel expenses, fees paid to external service providers, up-front and milestone payments under our license agreements, patentrelated legal fees, costs of preclinical studies and clinical trials, drug and laboratory supplies and costs for facilities and equipment. We primarily use external service providers to manufacture our product candidates for clinical trials and for the majority of our preclinical and clinical development work. We charge all research and development expenses to operations as they are incurred. We expect our research and development expense to remain our primary expense in the near future as we continue to develop our therapeutic candidates.
The following table identifies our current major research and development projects:
| Project | Status | Expected Near Term Milestones |
|---|---|---|
| motixafortide | 1. Phase 3 registration study in autologous stem cell mobilization (GENESIS) completed; top-line results announced May 2021 showed highly statistically significant evidence across all primary and secondary endpoints favoring motixafortide in combination with G-CSF (p<0.0001). In addition, the combination was found to be safe and well tolerated. Pharmaco-economic studies showed positive results regarding the cost-effectiveness of using motixafortide versus both G-CSF alone and plerixafor in combination with G-CSF. Pre-NDA meeting with FDA in December 2021 resulted in FDA agreeing that our GENESIS study is sufficient to support an NDA submission. |
1. NDA submission within next 4-6 weeks |
| 2. Phase 2 investigator-initiated study in first-line metastatic PDAC patients |
2. Data from the study is anticipated in the second half of 2022* |
|
| 3. Phase 1b study in patients with ARDS secondary to COVID-19 and other respiratory viral infections |
3. Results of the preliminary analysis are expected in the second half of 2022* |
|
| 4. Phase 2b randomized clinical trial in first-line metastatic PDAC patients under collaboration with GenFleet |
4. Study initiation expected in 2023 |
|
| AGI-134 | Phase 1/2a study, ongoing | Initial proof-of-mechanism of action and efficacy results expected in second half of 2022 |
*These studies are investigator-initiated studies; therefore, the timelines are ultimately controlled by the independent investigators and are subject to change.
We expect that a large percentage of our research and development expense in the future will be incurred in support of our current and future preclinical and clinical development projects. Due to the inherently unpredictable nature of preclinical and clinical development processes, we are unable to estimate with any certainty the costs we will incur in the continued development of the therapeutic candidates in our pipeline for potential commercialization. Clinical development timelines, the probability of success and development costs can differ materially from expectations. We expect to continue to test our product candidates in preclinical studies for toxicology, safety and efficacy, and to conduct additional clinical trials for each product candidate. If we are not able to enter into an out-licensing arrangement with respect to any therapeutic candidate prior to the commencement of later stage clinical trials, we may fund the trials for the therapeutic candidate ourselves.
While we are currently focused on advancing each of our product development projects, our future research and development expenses will depend on the clinical success of each therapeutic candidate, as well as ongoing assessments of each therapeutic candidate's commercial potential. In addition, we cannot forecast with any degree of certainty which therapeutic candidates may be subject to future out-licensing arrangements, when such out-licensing arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.
As we obtain results from clinical trials, we may elect to discontinue or delay clinical trials for certain therapeutic candidates or projects in order to focus our resources on more promising therapeutic candidates or projects. Completion of clinical trials by us or our licensees may take several years or more, but the length of time generally varies according to the type, complexity, novelty and intended use of a therapeutic candidate.
The cost of clinical trials may vary significantly over the life of a project as a result of differences arising during clinical development, including, among others:
- the number of sites included in the clinical trials;
- the length of time required to enroll suitable patients;
- the number of patients that participate in the clinical trials;
- the duration of patient follow-up;
- whether the patients require hospitalization or can be treated on an out-patient basis;
- the development stage of the therapeutic candidate; and
- the efficacy and safety profile of the therapeutic candidate.
We expect our research and development expenses to remain our most significant cost as we continue the advancement of our clinical trials and preclinical product development projects and place significant emphasis on in-licensing new product candidates. The lengthy process of completing clinical trials and seeking regulatory approval for our product candidates requires expenditure of substantial resources. Any failure or delay in completing clinical trials, or in obtaining regulatory approvals, could cause a delay in generating product revenue and cause our research and development expenses to increase and, in turn, have a material adverse effect on our operations. Due to the factors set forth above, we are not able to estimate with any certainty when we would recognize any net cash inflows from our projects.
Sales and Marketing Expenses
Sales and marketing expenses consist primarily of compensation for employees in business development and marketing functions. Other significant sales and marketing costs include costs for marketing and communication materials, pre-commercialization activities, professional fees for outside market research and consulting, legal services related to partnering transactions and travel costs.
General and Administrative Expenses
General and administrative expenses consist primarily of compensation for employees in executive and operational functions, including accounting, finance, legal, investor relations, information technology and human resources. Other significant general and administration costs include facilities costs, professional fees for outside accounting and legal services, travel costs, insurance premiums and depreciation.
Non-Operating Expense and Income
Non-operating expense and income includes fair-value adjustments of liabilities on account of the warrants issued in equity financings we carried out in February 2019, May 2020 and June 2020. These fair-value adjustments are highly influenced by our share price at each period end (revaluation date). Non-operating expense and income also includes issuance expenses of the ATM sales agreements between us and H.C. Wainwright & Co., LLC, or HCW, entered into in September 2020 and September 2021, and the pro-rata share of issuance expenses from the placements related to the warrants. Sales-based royalties and other revenue from the license agreement with Perrigo have also been included as part of non-operating income, as the out-licensed product is not an integral part of our strategy and the amounts are not material.
Financial Expense and Income
Financial expense and income consist of interest earned on our cash, cash equivalents and short-term bank deposits; interest expense related to our loan from Kreos Capital; bank fees and other transactional costs. In addition, it may also include gains/losses on foreign exchange hedging transactions, which we carry out from time to time to protect against a portion of our NIS-denominated expenses (primarily compensation) in relation to the dollar.
Critical Accounting Policies and Estimates
We describe our significant accounting policies more fully in Note 2 to our consolidated financial statements for the year ended December 31, 2021. We believe that the accounting policies below are critical for one to fully understand and evaluate our financial condition and results of operations.
The discussion and analysis of our financial condition and results of operations is based on our financial statements, which we prepare in accordance with IFRS. The preparation of these financial statements requires us to make estimates using assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate such estimates, including those described in greater detail below. We base our estimates on historical experience and on various assumptions that we believe are reasonable under the circumstances, the results of which impact the carrying value of our assets and liabilities that are not readily apparent from other sources. Actual results will differ from these estimates and such differences may be significant.
Results of Operations
Revenues
We did not record any revenues during each of the three-month and six-month periods ended June 30, 2022 and 2021.
Cost of revenues
We did not record any cost of revenues during each of the three-month and six-month periods ended June 30, 2022 and 2021.
Operating Results Comparison between Periods
Research and development expenses
| Three months ended June 30, | Six months ended June 30, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2022 | Increase (decrease) | 2021 | 2022 | Increase (decrease) | |
| (in thousands of U.S. dollars) | ||||||
| Research and development expenses, net | 5,139 | 5,395 | 256 | 9,417 | 9,830 | 413 |
Comparison of three-month periods ending June 30, 2022 and 2021
Research and development expenses for the three months ended June 30, 2022 were \$5.4 million, an increase of \$0.3 million, or 5.0%, compared to \$5.1 million for the three months ended June 30, 2021. The increase resulted primarily from an increase in expenses associated with the AGI-134 study, offset by lower expenses associated with the completed motixafortide GENESIS trial, as well as lower expenses related to NDA supporting activities related to motixafortide.
Comparison of six-month periods ending June 30, 2022 and 2021
Research and development expenses for the six months ended June 30, 2022 were \$9.8 million, an increase of \$0.4 million, or 4.4%, compared to \$9.4 million for the six months ended June 30, 2021. The reason for the increase is similar to the aforementioned increase in the three-month period.
Sales and marketing expenses
| Three months ended June 30, | Six months ended June 30, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2022 | Increase (decrease) | 2021 | 2022 | Increase (decrease) | |
| (in thousands of U.S. dollars) | ||||||
| Sales and marketing expenses | 330 | 1,158 | 828 | 484 | 1,795 | 1,311 |
Comparison of three-month periods ending June 30, 2022 and 2021
Sales and marketing expenses for the three months ended June 30, 2022 were \$1.2 million, an increase of \$0.8 million, or 250.9% compared to \$0.3 million for the three months ended June 30, 2021. The increase resulted primarily from initiation of pre-commercialization activities related to motixafortide, as well as an increase in market research.
Comparison of six-month periods ending June 30, 2022 and 2021
Sales and marketing expenses for the six months ended June 30, 2022 were \$1.8 million, an increase of \$1.3 million, or 270.9% compared to \$0.5 million for the six months ended June 30, 2021. The reason for the increase is similar to the aforementioned increase in the three-month period.
General and administrative expenses
| Three months ended June 30, | Six months ended June 30, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2022 | Increase (decrease) | 2021 | 2022 | Increase (decrease) | |
| (in thousands of U.S. dollars) | ||||||
| General and administrative expenses | 1,044 | 1,049 | 5 | 2,061 | 2,056 | (5) |
Comparison of three-month periods ending June 30, 2022 and 2021
General and administrative expenses for the three months ended June 30, 2022 were \$1.0 million, similar to the comparable period in 2021.
Comparison of six-month periods ending June 30, 2022 and 2021
General and administrative expenses for the six months ended June 30, 2022 were \$2.1 million, similar to the comparable period in 2021.
Non-operating income (expenses), net
| Three months ended June 30, | Six months ended June 30, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2022 | Increase (decrease) | 2021 | 2022 | Increase (decrease) | |
| (in thousands of U.S. dollars) | ||||||
| Non-operating income (expenses), net | (217) | 458 | 675 | (4,778) | 1,726 | 6,504 |
Comparison of three-month periods ending June 30, 2022 and 2021
We recognized net non-operating income of \$0.5 million for the three months ended June 30, 2022, compared to net non-operating expenses of \$0.2 million for the three months ended June 30, 2021. Net operating income (expenses) for both periods primarily relate to fair-value adjustments of warrant liabilities on our balance sheet.
Comparison of six-month periods ending June 30, 2022 and 2021
We recognized net non-operating income of \$1.7 million for the six months ended June 30, 2022, compared to net non-operating expenses of \$4.8 million for the six months ended June 30, 2021. Net operating income (expenses) for both periods primarily relate to fair-value adjustments of warrant liabilities on our balance sheet.
Financial income (expenses), net
| Three months ended June 30, | Six months ended June 30, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2022 | Increase (decrease) | 2021 | 2022 | Increase (decrease) | |
| (in thousands of U.S. dollars) | ||||||
| Financial income | 130 | 80 | (50) | 247 | 147 | (100) |
| Financial expenses | (242) | (379) | (137) | (541) | (565) | (24) |
| Net financial income (expenses) | (112) | (299) | (187) | (294) | (418) | (124) |
Comparison of three-month periods ending June 30, 2022 and 2021
We recognized net financial expenses of \$0.3 million for the three months ended June 30, 2022, compared to net financial expenses of \$0.1 million for the three months ended June 30, 2021. Net financial expenses for the 2022 period primarily relate to interest paid on loan and losses recorded on foreign currency (primarily NIS) cash balances due to the strengthening of the US dollar during the period, offset by investment income earned on our bank deposits. Net financial expenses for the 2021 period primarily relate to interest paid on loan, offset by investment income earned on our bank deposits.
Comparison of six-month periods ending June 30, 2022 and 2021
We recognized net financial expenses of \$0.4 million for the six months ended June 30, 2022, compared to net financial expenses of \$0.3 million for the six months ended June 30, 2021. The composition of the expenses is similar to the aforementioned composition detailed in the three-month period.
Liquidity and Capital Resources
Since our inception, we have funded our operations primarily through public and private offerings of our equity securities, payments received under our strategic licensing and collaboration arrangements, interest earned on investments and funding from the IIA. As of June 30, 2022, we held \$43.2 million of cash, cash equivalents and short-term bank deposits. We have invested substantially all of our available cash funds in short-term bank deposits.
In September 2021, we entered into an "at-the-market" offering agreement, or ATM, with H.C. Wainwright, or HCW, pursuant to which we may offer and sell, at our option, up to \$25.0 million of our ADSs through an at-the-market equity program under which HCW agreed to act as sales agent. This agreement replaced a substantially identical ATM program that we previously had with HCW. As of August 15, 2022, we have sold 606,102 of our ADSs for total gross proceeds of approximately \$1.4 million under the ATM.
Net cash used in operating activities was \$11.9 million for the six months ended June 30, 2022, compared with net cash used in operating activities of \$13.1 million for the six months ended June 30, 2021. The \$1.2 million decrease in net cash used in operating activities between the two periods was primarily the result of changes in operating asset and liability items in the two periods, i.e., smaller increase in prepaid expenses and other receivables in 2022 versus 2021, as well as increase in accounts payable and accruals in 2022 versus decrease in the 2021 period.
Net cash provided by investing activities was \$15.1 million for the six months ended June 30, 2022, compared to net cash used in investing activities of \$42.3 million for the six months ended June 30, 2021. The changes in cash flows from investing activities relate primarily to investments in, and maturities of, short-term bank deposits.
Net cash used in financing activities was \$1.6 million for the six months ended June 30, 2022, compared to net cash provided by financing activities of \$56.0 million for the six months ended June 30, 2021. The cash flows in 2022 primarily reflect the repayments of the loan from Kreos Capital. The cash flows in 2021 primarily reflect the underwritten public offering of our ADSs in January 2021, warrant exercises and net proceeds from our previous ATM facility, offset by repayments of the loan from Kreos Capital.
Developing drugs, conducting clinical trials and commercializing products is expensive and we will need to raise substantial additional funds to achieve our strategic objectives. Although we believe our existing cash and other resources will be sufficient to fund our current projected cash requirements into the first half of 2024, we will require additional financing in the future to fund our operations. Additional financing may not be available on acceptable terms, if at all. Our future capital requirements will depend on many factors, including:
- the progress and costs of our preclinical studies, clinical trials and other research and development activities;
- the scope, prioritization and number of our clinical trials and other research and development programs;
- the amount of revenues we receive under our collaboration or licensing arrangements;
- the costs of the development and expansion of our operational infrastructure;
- the costs and timing of obtaining regulatory approval of our therapeutic candidates;
- the ability of our collaborators to achieve development milestones, marketing approval and other events or developments under our collaboration agreements;
- the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights;
- the costs and timing of securing manufacturing arrangements for clinical or commercial production;
- the costs of establishing sales and marketing capabilities or contracting with third parties to provide these capabilities for us;
- the costs of acquiring or undertaking development and commercialization efforts for any future product candidates;
- the magnitude of our general and administrative expenses;
- interest and principal payments on the loan from Kreos Capital;
- any cost that we may incur under current and future licensing arrangements relating to our therapeutic candidates;
- market conditions;
- payments to the IIA; and
- the impact of the COVID-19 pandemic and the Russian invasion of Ukraine, which may exacerbate the magnitude of the factors discussed above.
Until we can generate significant continuing revenues, we expect to satisfy our future cash needs through payments received under our collaborations, debt or equity financings, or by out-licensing other product candidates. We cannot be certain that additional funding will be available to us on acceptable terms, or at all.
If funds are not available, we may be required to delay, reduce the scope of, or eliminate one or more of our research or development programs or our commercialization efforts.
Off-Balance Sheet Arrangements
Since inception, we have not entered into any transactions with unconsolidated entities whereby we have financial guarantees, subordinated retained interests, derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities, or any other obligations under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.
Share and per-share information in ADSs
Presented below, for the convenience of the reader, is share and per-share information in ADSs (each ADS represents 15 ordinary shares).
| Three months ended June 30, | Six months ended June 30, | ||||
|---|---|---|---|---|---|
| 2021 | 2022 | 2021 | 2022 | ||
| (in U.S. dollars) | |||||
| Loss per ADS – basic and diluted | (0.15) | (0.16) | (0.41) | (0.26) | |
| December 31, | June 30, | ||||
| 2021 | 2022 | ||||
| (in number of ADSs) | |||||
| Authorized share capital | 100,000,000 | 100,000,000 | |||
| Issued and paid-up capital | 47,677,067 | 47,684,052 | |||