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BioLineRx Ltd.
Foreign Filer Report • Aug 6, 2020
6692_rns_2020-08-06_060c6108-db7c-448f-9a00-0b9bd525918f.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 2020
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 6, 2020, the Registrant issued a press release announcing its financial results for the three and six months ended June 30, 2020. The Registrant is also publishing its unaudited interim consolidated financial statements, as well as its operating and financial review, as of June 30, 2020 and for the three and six months then ended. Attached hereto are the following exhibits:
Exhibit 1: Registrant's press release dated August 6, 2020;
Exhibit 2: Registrant's condensed consolidated interim financial statements as of June 30, 2020 and for the three and six months then ended; and
Exhibit 3 - Registrant's operating and financial review as of June 30, 2020 and for the three and six months then ended.
This Form 6-K, the text under the heading "Financial Results for the Second Quarter Ended June 30, 2020" 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 6, 2020
For Immediate Release
BioLineRx Reports Second Quarter 2020 Financial Results and Provides Corporate Update
- On track to report three significant data readouts in next few months -
- Completes successful financings, raising gross proceeds of \$13.4 million; sufficient to reach multiple important milestones -
- Management to hold conference call today, August 6, at 10:00 am EDT -
TEL AVIV, Israel, August 6, 2020 -- BioLineRx Ltd. (NASDAQ: BLRX) (TASE: BLRX), a late clinical-stage biopharmaceutical company focused on oncology, today reports its financial results for the quarter ended June 30, 2020 and provides a corporate update.
Highlights and achievements during the second quarter 2020 and subsequent period:
- Continued to advance clinical programs, with three key data readouts in pancreatic cancer, stem cell mobilization and AML expected between now and year-end;
- Announced publication in the peer-reviewed journal Nature Medicine of previously disclosed biomarker and clinical data from the COMBAT/KEYNOTE-202 trial in pancreatic cancer, showing encouraging clinical activity, as well as proof-of-mechanism;
- Strengthened balance sheet with \$13.4 million in gross proceeds from two registered direct offerings.
"We continue to eagerly await important survival data from the triple combination arm of our COMBAT/KEYNOTE-202 clinical trial of motixafortide in combination with KEYTRUDA and chemotherapy in metastatic pancreatic cancer," stated Philip Serlin, Chief Executive Officer of BioLineRx. "The compelling data on 22 patients that we reported in December give us conviction that this combination has the potential to be a real breakthrough in one of the most difficult to treat cancers. As this is an event-driven trial, we are obviously very pleased that there are still patients on study, although we now anticipate a modest delay of a few months in announcing the data from our original expectation.
"Turning to stem cell mobilization, this continues to be our most efficient path to registration. Given a significantly lower patient dropout rate than we had anticipated in our Phase 3 GENESIS trial, we now plan to conduct an interim analysis in the second half of this year. If the primary endpoint is met, we plan to immediately announce cessation of recruitment, without the need to enroll the full planned sample size. In order to maintain study blinding for all study endpoints, including those related to engraftment for a period of 100 days subsequent to transplantation, we expect to announce top-line results in the first half of 2021. At the same time, our Phase 2b BLAST consolidation study in AML is progressing, and we anticipate results from a planned interim analysis in the second half of this year.
"As we indicated last quarter, development of our second clinical candidate, AGI-134, has been impacted by COVID-19, as enrollment in the Phase 1/2a trial has been temporarily suspended. We have, however, recently begun activities to restart study recruitment and we expect data from that study in the second half of next year.
"The COVID-19 pandemic has caused significant disruptions in drug development timelines across the industry. We are pleased that we expect to report on three important and potentially valuecreating data readouts by the end of the year, and with the additional \$13.4 million that we raised during the second quarter, we have the resources to reach these important milestones. We believe the broad clinical utility of motixafortide across a wide range of cancer indications that we have observed in data generated to date highlight its potential as a promising new treatment option, and we look forward to reporting these data as they become available," concluded Mr. Serlin.
Upcoming Expected 2020 and 2021 Milestones
- Overall results, including progression free survival (PFS) and overall survival (OS) data, from the COMBAT/KEYNOTE-202 Phase 2a triple combination study in the second half of this year;
- Newly planned interim analysis of the Phase 3 GENESIS registrational study in stem cell mobilization in the second half of this year. If the primary endpoint is reached, recruitment would be stopped immediately (and announced); topline data are expected in the first half of 2021;
- Interim analysis from the BLAST Phase 2b AML consolidation study during the second half of 2020, unchanged from prior guidance;
- Initial results from Part 2 of Phase 1/2a trial of AGI-134 in the second half of 2021.
Financial Results for the Second Quarter Ended June 30, 2020
Research and development expenses for the three months ended June 30, 2020 were \$4.6 million, a decrease of \$0.7 million, or 12.5%, compared to \$5.3 million for the three months ended June 30, 2019. The decrease resulted primarily from lower expenses associated with the AGI-134 study, as well as a decrease in payroll and related expenses due to a Company-wide salary reduction related to the COVID-19 pandemic carried out in the second quarter of 2020. Research and development expenses for the six months ended June 30, 2020 were \$10.1 million, an increase of \$0.4 million, or 3.8%, compared to \$9.7 million for the six months ended June 30, 2019. The increase resulted primarily from higher expenses associated with the motixafortide COMBAT and GENESIS clinical trials, offset by a decrease in expenses associated with the AGI-134 study.
Sales and marketing expenses for the three months ended June 30, 2020 were \$0.2 million, similar to the comparable period in 2019. Sales and marketing expenses for the six months ended June 30, 2020 were \$0.4 million, a decrease of \$0.1 million, or 25.9%, compared to \$0.5 million for the six months ended June 30, 2019. The decrease resulted primarily from a decrease in payroll and related expenses related to a decrease in share-based compensation from the 2019 period.
General and administrative expenses for the three months ended June 30, 2020 were \$0.7 million, a decrease of \$0.2 million, or 21.6% compared to \$0.9 million for the three months ended June 30, 2019. The decrease resulted primarily from a decrease in payroll and related expenses due to a Company-wide salary reduction related to the COVID-19 pandemic carried out in the second quarter of 2020, as well as a decrease in professional fees. General and administrative expenses for the six months ended June 30, 2020 were \$2.0 million, an increase of \$0.1 million, or 5.7%, compared to \$1.9 million for the six months ended June 30, 2019. The increase resulted primarily from an increase in share-based compensation.
The Company's operating loss for the three months ended June 30, 2020 amounted to \$5.6 million, compared to an operating loss of \$6.5 million for the three months ended June 30, 2019. The Company's operating loss for the six months ended June 30, 2020 was \$12.4 million, compared to \$12.1 million for the comparable period in 2019.
Non-operating income (expenses) for the three and six months ended June 30, 2020 and for the three and six months ended June 30, 2019 primarily relate to fair-value adjustments of warrant liabilities on the Company's balance sheet, offset by warrant offering expenses.
Net financial expenses for the three months ended June 30, 2020 amounted to \$0.4 million compared to net financial expenses of \$0.3 million for the three months ended June 30, 2019. Net financial expenses for both periods primarily relate to interest paid on loans, offset by investment income earned on bank deposits. Net financial expenses for the six months ended June 30, 2020 amounted to \$0.6 million compared to net financial expenses of \$0.5 million for the six months ended June 30, 2019. Net financial expenses for both periods primarily relate to interest paid on loans, offset by investment income earned on bank deposits.
The Company's net loss for the three months ended June 30, 2020 amounted to \$6.8 million, compared with a net loss of \$5.5 million for the comparable period in 2019. The Company's net loss for the six months ended June 30, 2020 amounted to \$13.4 million, compared with a net loss of \$11.6 million for the comparable period in 2019.
The Company held \$27.3 million in cash, cash equivalents and short-term bank deposits as of June 30, 2020.
Net cash used in operating activities was \$12.3 million for the six months ended June 30, 2020, compared with net cash used in operating activities of \$11.1 million for the six months ended June 30, 2019. The \$1.2 million increase in net cash used in operating activities during the six-month period in 2020 was primarily the result of changes in operating asset and liability items in two periods, i.e., an increase in prepaid expenses and other receivables in 2020 versus a decrease in 2019, as well as a larger decrease in accounts payable and accruals in 2020 versus 2019.
Net cash provided by investing activities was \$0.6 million for the six months ended June 30, 2020, compared to net cash used in investing activities of \$3.1 for the six months ended June 30, 2019. The changes in cash flows from investing activities relate primarily to investments in, and maturities of, short-term bank deposits.
Net cash provided by financing activities was \$12.0 for the six months ended June 30, 2020, compared to net cash provided by financing activities of \$15.7 million for the six months ended June 30, 2019. The cash flows in 2020 primarily reflect the May and June financings, and the net proceeds from the ATM facility, offset by repayments of the loan from Kreos Capital. The cash flows in 2019 primarily reflect the underwritten public offering completed in February 2019, as well as net proceeds from the ATM facility.
Conference Call and Webcast Information
BioLineRx will hold a conference call today, August 6, 2020 at 10:00 a.m. EDT. To access the conference call, please dial +1-888-668-9141 from the US or +972-3-918-0610 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 8, 2020; please dial +1-888-782-4291 from the US or +972-3-925-5921 internationally.
(Tables follow)
About BioLineRx
BioLineRx Ltd. (NASDAQ/TASE: BLRX) is a late clinical-stage biopharmaceutical company focused on oncology. The Company's business model is to in-license novel compounds, develop them through clinical stages, and then partner with pharmaceutical companies for further clinical development and/or commercialization.
The Company's lead program, motixafortide (BL-8040), is a cancer therapy platform currently being evaluated in a Phase 2a study for the treatment of pancreatic cancer in combination with KEYTRUDA® and chemotherapy under a collaboration agreement with MSD. Motixafortide is also being evaluated in a Phase 2b study in consolidation AML and a Phase 3 study in stem cell mobilization for autologous bone-marrow transplantation.
BioLineRx is 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. BioLineRx industry updates are also regularly updated on Facebook, Twitter, and LinkedIn.
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 "may," "expects," "anticipates," "believes," and "intends," and describe opinions about future events. These forward-looking statements involve known and unknown risks and uncertainties 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. Some of these risks are: changes in relationships with collaborators; the impact of competitive products and technological changes; risks relating to the development of new products; and the ability to implement technological improvements. 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 12, 2020. 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 +1-212-915-2564 [email protected]
BioLineRx Ltd. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
| December 31, | June 30, 2020 |
|
|---|---|---|
| 2019 | ||
| in USD thousands | ||
| Assets | ||
| CURRENT ASSETS | ||
| Cash and cash equivalents | 5,297 | 5,523 |
| Short-term bank deposits | 22,192 | 21,779 |
| Prepaid expenses | 108 | 426 |
| Other receivables | 613 | 441 |
| Total current assets | 28,210 | 28,169 |
| NON-CURRENT ASSETS | ||
| Property and equipment, net | 1,816 | 1,580 |
| Right-of-use assets, net | 1,650 | 1,490 |
| Intangible assets, net | 21,891 | 21,750 |
| Total non-current assets | 25,357 | 24,820 |
| Total assets | 53,567 | 52,989 |
| Liabilities and equity | ||
| CURRENT LIABILITIES | ||
| Current maturities of long-term loans | 2,692 | 2,867 |
| Accounts payable and accruals: | ||
| Trade | 7,794 | 7,396 |
| Other | 1,280 | 1,260 |
| Lease liabilities | 202 | 200 |
| Total current liabilities | 11,968 | 11,723 |
| NON-CURRENT LIABILITIES | ||
| Warrants | 658 | 6,077 |
| Long-term loans, net of current maturities | 5,799 | 4,329 |
| Lease liabilities | 1,762 | 1,630 |
| Total non-current liabilities | 8,219 | 12,036 |
| COMMITMENTS AND CONTINGENT LIABILITIES | ||
| Total liabilities | 20,187 | 23,759 |
| EQUITY | ||
| Ordinary shares | 4,692 | 8,281 |
| Share premium | 265,938 | 271,107 |
| Capital reserve | 12,132 | 12,639 |
| Other comprehensive loss | (1,416) | (1,416) |
| Accumulated deficit | (247,966) | (261,381) |
| Total equity | 33,380 | 29,230 |
| Total liabilities and equity | 53,567 | 52,989 |
BioLineRx Ltd.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
| Three months ended June 30, | Six months ended June 30, | ||||
|---|---|---|---|---|---|
| 2019 | 2020 | 2019 | 2020 | ||
| in USD thousands | in USD thousands | ||||
| RESEARCH AND DEVELOPMENT EXPENSES | (5,302) | (4,640) | (9,694) | (10,062) | |
| SALES AND MARKETING EXPENSES | (226) | (182) | (482) | (357) | |
| GENERAL AND ADMINISTRATIVE EXPENSES | (949) | (744) | (1,879) | (1,987) | |
| OPERATING LOSS | (6,477) | (5,566) | (12,055) | (12,406) | |
| NON-OPERATING INCOME (EXPENSES), NET | 1,261 | (843) | 921 | (374) | |
| FINANCIAL INCOME | 171 | 35 | 381 | 175 | |
| FINANCIAL EXPENSES | (440) | (396) | (887) | (810) | |
| NET LOSS AND COMPREHENSIVE LOSS | (5,485) | (6,770) | (11,640) | (13,415) | |
| in USD | in USD | ||||
| LOSS PER ORDINARY SHARE - BASIC AND DILUTED | (0.04) | (0.03) | (0.08) | (0.07) | |
| WEIGHTED AVERAGE NUMBER OF SHARES USED IN CALCULATION OF LOSS PER | |||||
| ORDINARY SHARE | 145,461,598 | 220,317,889 | 139,270,178 | 198,277,447 | |
| 7 |
BioLineRx Ltd. CONDENSED INTERIM STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
| Other | ||||||
|---|---|---|---|---|---|---|
| Ordinary | Share | Capital | Comprehensive | Accumulated | ||
| shares | premium | reserve | loss | deficit | Total | |
| in USD thousands | ||||||
| BALANCE AT JANUARY 1, 2019 | 3,110 | 250,192 | 11,955 | (1,416) | (222,520) | 41,321 |
| CHANGES FOR SIX MONTHS ENDED JUNE 30, | ||||||
| 2019: | ||||||
| Issuance of share capital, net | 890 | 10,437 | - | - | - | 11,327 |
| Employee stock options exercised | 1 | 27 | (27) | - | - | 1 |
| Employee stock options forfeited and expired | - | 866 | (866) | - | - | - |
| Share-based compensation | - | - | 773 | - | - | 773 |
| Comprehensive loss for the period | - | - | - | - | (11,640) | (11,640) |
| BALANCE AT JUNE 30, 2019 | 4,001 | 261,522 | 11,835 | (1,416) | (234,160) | 41,782 |
| Other | ||||||
|---|---|---|---|---|---|---|
| Ordinary shares |
Share premium |
Capital reserve |
Comprehensive loss |
Accumulated deficit |
Total | |
| in USD thousands | ||||||
| BALANCE AT JANUARY 1, 2020 | 4,692 | 265,938 | 12,132 | (1,416) | (247,966) | 33,380 |
| CHANGES FOR SIX MONTHS ENDED JUNE 30, 2020: |
||||||
| Issuance of share capital, net | 3,581 | 4,754 | - | - | - | 8,335 |
| Employee stock options exercised | 8 | 224 | (224) | - | - | 8 |
| Employee stock options forfeited and expired | - | 191 | (191) | - | - | - |
| Share-based compensation | - | - | 922 | - | - | 922 |
| Comprehensive loss for the period | - | - | - | - | (13,415) | (13,415) |
| BALANCE AT JUNE 30, 2020 | 8,281 | 271,107 | 12,639 | (1,416) | (261,381) | 29,230 |
| 8 |
BioLineRx Ltd. CONDENSED INTERIM STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
| Other | ||||||
|---|---|---|---|---|---|---|
| Ordinary | Share | Capital | Comprehensive | Accumulated | ||
| shares | premium | reserve | loss | deficit | Total | |
| in USD thousands | ||||||
| BALANCE AT APRIL 1, 2019 | 3,928 | 259,860 | 12,191 | (1,416) | (228,675) | 45,888 |
| CHANGES FOR THREE MONTHS ENDED JUNE 30, | ||||||
| 2019: | ||||||
| Issuance of share capital, net | 73 | 817 | - | - | - | 890 |
| Employee stock options exercised | - | 9 | (9) | - | - | - |
| Employee stock options forfeited and expired | - | 836 | (836) | - | - | - |
| Share-based compensation | - | - | 489 | - | - | 489 |
| Comprehensive loss for the period | - | - | - | - | (5,485) | (5,485) |
| BALANCE AT JUNE 30, 2019 | 4,001 | 261,522 | 11,835 | (1,416) | (234,160) | 41,782 |
| Other | ||||||
|---|---|---|---|---|---|---|
| Ordinary shares |
Share premium |
Capital reserve |
Comprehensive loss |
Accumulated deficit |
Total | |
| in USD thousands | ||||||
| BALANCE AT APRIL 1, 2020 | 4,907 | 267,140 | 12,488 | (1,416) | (254,611) | 28,508 |
| CHANGES FOR THREE MONTHS ENDED JUNE 30, 2020: |
||||||
| Issuance of share capital, net | 3,373 | 3,859 | - | - | - | 7,232 |
| Employee stock options exercised | 1 | 20 | (20) | - | - | 1 |
| Employee stock options forfeited and expired | - | 88 | (88) | - | - | - |
| Share-based compensation | - | - | 259 | - | - | 259 |
| Comprehensive loss for the period | - | - | - | - | (6,770) | (6,770) |
| BALANCE AT JUNE 30, 2020 | 8,281 | 271,107 | 12,639 | (1,416) | (261,381) | 29,230 |
| 9 |
BioLineRx Ltd. CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENTS (UNAUDITED)
| Six months ended June 30, | |||
|---|---|---|---|
| 2019 | 2020 | ||
| in USD thousands | |||
| CASH FLOWS - OPERATING ACTIVITIES | |||
| Comprehensive loss for the period | (11,640) | (13,415) | |
| Adjustments required to reflect net cash used in operating activities (see appendix below) | 573 | 1,112 | |
| Net cash used in operating activities | (11,067) | (12,303) | |
| CASH FLOWS - INVESTING ACTIVITIES | |||
| Investments in short-term deposits | (27,510) | (23,751) | |
| Maturities of short-term deposits | 24,441 | 24,335 | |
| Purchase of property and equipment | (53) | (1) | |
| Net cash provided by (used in) investing activities | (3,122) | 583 | |
| CASH FLOWS - FINANCING ACTIVITIES | |||
| Issuance of share capital and warrants, net of issuance costs | 15,879 | 13,411 | |
| Employee stock options exercised | 1 | 8 | |
| Repayments of loans | (47) | (1,331) | |
| Repayments of lease liabilities | (110) | (121) | |
| Net cash provided by financing activities | 15,723 | 11,967 | |
| INCREASE IN CASH AND CASH EQUIVALENTS | 1,534 | 247 | |
| CASH AND CASH EQUIVALENTS - BEGINNINGOF PERIOD | 3,404 | 5,297 | |
| EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS | 34 | (21) | |
| CASH AND CASH EQUIVALENTS - END OF PERIOD | 4,972 | 5,523 |
BioLineRx Ltd. APPENDIX TO CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENTS (UNAUDITED)
| Six months ended June 30, | |||
|---|---|---|---|
| 2019 | 2020 | ||
| in USD thousands | |||
| Adjustments required to reflect net cash used in operating activities: | |||
| Income and expenses not involving cash flows: | |||
| Depreciation and amortization | 439 | 533 | |
| Long-term prepaid expenses | (4) | - | |
| Exchange differences on cash and cash equivalents | (34) | 21 | |
| Fair value adjustments of warrants | (1,354) | (250) | |
| Share-based compensation | 773 | 922 | |
| Warrant issuance costs | 417 | 593 | |
| Interest and exchange differences on short-term deposits | (440) | (171) | |
| Interest on loans | 292 | 36 | |
| Exchange differences on lease liability | - | (8) | |
| 89 | 1,676 | ||
| Changes in operating asset and liability items: | |||
| Decrease (increase) in prepaid expenses and other receivables | 848 | (146) | |
| Decrease in accounts payable and accruals | (364) | (418) | |
| 484 | (564) | ||
| 573 | 1,112 | ||
| Supplemental information on interest received in cash | 442 | 300 | |
| Supplemental information on interest paid in cash | 477 | 534 |
Exhibit 2
BioLineRx Ltd. CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) AS OF JUNE 30, 2020
BioLineRx Ltd. CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) AS OF JUNE 30, 2020
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 - 10 |
BioLineRx Ltd.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(UNAUDITED)
| December 31, | June 30, 2020 |
|
|---|---|---|
| 2019 | ||
| in USD thousands | ||
| Assets | ||
| CURRENT ASSETS | ||
| Cash and cash equivalents | 5,297 | 5,523 |
| Short-term bank deposits | 22,192 | 21,779 |
| Prepaid expenses | 108 | 426 |
| Other receivables | 613 | 441 |
| Total current assets | 28,210 | 28,169 |
| NON-CURRENT ASSETS | ||
| Property and equipment, net | 1,816 | 1,580 |
| Right-of-use assets, net | 1,650 | 1,490 |
| Intangible assets, net | 21,891 | 21,750 |
| Total non-current assets | 25,357 | 24,820 |
| Total assets | 53,567 | 52,989 |
| Liabilities and equity | ||
| CURRENT LIABILITIES | ||
| Current maturities of long-term loans | 2,692 | 2,867 |
| Accounts payable and accruals: | ||
| Trade | 7,794 | 7,396 |
| Other | 1,280 | 1,260 |
| Lease liabilities | 202 | 200 |
| Total current liabilities | 11,968 | 11,723 |
| NON-CURRENT LIABILITIES | ||
| Warrants | 658 | 6,077 |
| Long-term loans, net of current maturities | 5,799 | 4,329 |
| Lease liabilities | 1,762 | 1,630 |
| Total non-current liabilities | 8,219 | 12,036 |
| COMMITMENTS AND CONTINGENT LIABILITIES | ||
| Total liabilities | 20,187 | 23,759 |
| EQUITY Ordinary shares |
||
| Share premium | 4,692 | 8,281 |
| Capital reserve | 265,938 12,132 |
271,107 12,639 |
| Other comprehensive loss | (1,416) | (1,416) |
| Accumulated deficit | (247,966) | (261,381) |
| Total equity | 33,380 | 29,230 |
| Total liabilities and equity | 53,567 | 52,989 |
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, | |||
|---|---|---|---|---|
| 2019 | 2020 | 2019 | 2020 | |
| in USD thousands | in USD thousands | |||
| RESEARCH AND DEVELOPMENT EXPENSES | (5,302) | (4,640) | (9,694) | (10,062) |
| SALES AND MARKETING EXPENSES | (226) | (182) | (482) | (357) |
| GENERAL AND ADMINISTRATIVE EXPENSES | (949) | (744) | (1,879) | (1,987) |
| OPERATING LOSS | (6,477) | (5,566) | (12,055) | (12,406) |
| NON-OPERATING INCOME (EXPENSES), NET | 1,261 | (843) | 921 | (374) |
| FINANCIAL INCOME | 171 | 35 | 381 | 175 |
| FINANCIAL EXPENSES | (440) | (396) | (887) | (810) |
| NET LOSS AND COMPREHENSIVE LOSS | (5,485) | (6,770) | (11,640) | (13,415) |
| in USD | in USD | |||
| LOSS PER ORDINARY SHARE - BASIC AND DILUTED | (0.04) | (0.03) | (0.08) | (0.07) |
| WEIGHTED AVERAGE NUMBER OF SHARES USED IN CALCULATION OF LOSS PER ORDINARY SHARE |
145,461,598 | 220,317,889 | 139,270,178 | 198,277,447 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
BioLineRx Ltd. CONDENSED INTERIM STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
| Other | ||||||
|---|---|---|---|---|---|---|
| Ordinary | Share | Capital | Comprehensive | Accumulated | ||
| shares | premium | reserve | loss | deficit | Total | |
| in USD thousands | ||||||
| BALANCE AT JANUARY 1, 2019 | 3,110 | 250,192 | 11,955 | (1,416) | (222,520) | 41,321 |
| CHANGES FOR SIX MONTHS ENDED JUNE 30, | ||||||
| 2019: | ||||||
| Issuance of share capital, net | 890 | 10,437 | - | - | - | 11,327 |
| Employee stock options exercised | 1 | 27 | (27) | - | - | 1 |
| Employee stock options forfeited and expired | - | 866 | (866) | - | - | - |
| Share-based compensation | - | - | 773 | - | - | 773 |
| Comprehensive loss for the period | - | - | - | - | (11,640) | (11,640) |
| BALANCE AT JUNE 30, 2019 | 4,001 | 261,522 | 11,835 | (1,416) | (234,160) | 41,782 |
| Other | ||||||
|---|---|---|---|---|---|---|
| Ordinary | Share | Capital | Comprehensive | Accumulated | ||
| shares | premium | reserve | loss | deficit | Total | |
| in USD thousands | ||||||
| BALANCE AT JANUARY 1, 2020 | 4,692 | 265,938 | 12,132 | (1,416) | (247,966) | 33,380 |
| CHANGES FOR SIX MONTHS ENDED JUNE 30, | ||||||
| 2020: | ||||||
| Issuance of share capital, net | 3,581 | 4,754 | - | - | - | 8,335 |
| Employee stock options exercised | 8 | 224 | (224) | - | - | 8 |
| Employee stock options forfeited and expired | - | 191 | (191) | - | - | - |
| Share-based compensation | - | - | 922 | - | - | 922 |
| Comprehensive loss for the period | - | - | - | - | (13,415) | (13,415) |
| BALANCE AT JUNE 30, 2020 | 8,281 | 271,107 | 12,639 | (1,416) | (261,381) | 29,230 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
BioLineRx Ltd. CONDENSED INTERIM STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
| Other | ||||||
|---|---|---|---|---|---|---|
| Ordinary | Share | Capital | Comprehensive | Accumulated | ||
| shares | premium | reserve | loss | deficit | Total | |
| in USD thousands | ||||||
| BALANCE AT APRIL 1, 2019 | 3,928 | 259,860 | 12,191 | (1,416) | (228,675) | 45,888 |
| CHANGES FOR THREE MONTHS ENDED JUNE 30, | ||||||
| 2019: | ||||||
| Issuance of share capital, net | 73 | 817 | - | - | - | 890 |
| Employee stock options exercised | - | 9 | (9) | - | - | - |
| Employee stock options forfeited and expired | - | 836 | (836) | - | - | - |
| Share-based compensation | - | - | 489 | - | - | 489 |
| Comprehensive loss for the period | - | - | - | - | (5,485) | (5,485) |
| BALANCE AT JUNE 30, 2019 | 4,001 | 261,522 | 11,835 | (1,416) | (234,160) | 41,782 |
| Other | ||||||
|---|---|---|---|---|---|---|
| Ordinary | Share | Capital | Comprehensive | Accumulated | ||
| shares | premium | reserve | loss | deficit | Total | |
| in USD thousands | ||||||
| BALANCE AT APRIL 1, 2020 | 4,907 | 267,140 | 12,488 | (1,416) | (254,611) | 28,508 |
| CHANGES FOR THREE MONTHS ENDED JUNE 30, | ||||||
| 2020: | ||||||
| Issuance of share capital, net | 3,373 | 3,859 | - | - | - | 7,232 |
| Employee stock options exercised | 1 | 20 | (20) | - | - | 1 |
| Employee stock options forfeited and expired | - | 88 | (88) | - | - | - |
| Share-based compensation | - | - | 259 | - | - | 259 |
| Comprehensive loss for the period | - | - | - | - | (6,770) | (6,770) |
| BALANCE AT JUNE 30, 2020 | 8,281 | 271,107 | 12,639 | (1,416) | (261,381) | 29,230 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
BioLineRx Ltd. CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENTS (UNAUDITED)
| Six months ended June 30, | ||
|---|---|---|
| 2019 | 2020 | |
| in USD thousands | ||
| CASH FLOWS - OPERATING ACTIVITIES | ||
| Comprehensive loss for the period | (11,640) | (13,415) |
| Adjustments required to reflect net cash used in operating activities (see appendix below) | 573 | 1,112 |
| Net cash used in operating activities | (11,067) | (12,303) |
| CASH FLOWS - INVESTING ACTIVITIES | ||
| Investments in short-term deposits | (27,510) | (23,751) |
| Maturities of short-term deposits | 24,441 | 24,335 |
| Purchase of property and equipment | (53) | (1) |
| Net cash provided by (used in) investing activities | (3,122) | 583 |
| CASH FLOWS - FINANCING ACTIVITIES | ||
| Issuance of share capital and warrants, net of issuance costs | 15,879 | 13,411 |
| Employee stock options exercised | 1 | 8 |
| Repayments of loans | (47) | (1,331) |
| Repayments of lease liabilities | (110) | (121) |
| Net cash provided by financing activities | 15,723 | 11,967 |
| INCREASE IN CASH AND CASH EQUIVALENTS | 1,534 | 247 |
| CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 3,404 | 5,297 |
| EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS | 34 | (21) |
| CASH AND CASH EQUIVALENTS - END OF PERIOD | 4,972 | 5,523 |
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, 2019 2020 in USD thousands Adjustments required to reflect net cash used in operating activities: Income and expenses not involving cash flows: Depreciation and amortization 439 533 Long-term prepaid expenses (4) - Exchange differences on cash and cash equivalents (34) 21 Fair value adjustments of warrants (1,354) (250) Share-based compensation 773 922 Warrant issuance costs 417 593 Interest and exchange differences on short-term deposits (440) (171) Interest on loans 292 36 Exchange differences on lease liability - (8) 89 1,676 Changes in operating asset and liability items: Decrease (increase) in prepaid expenses and other receivables 848 (146) Decrease in accounts payable and accruals (364) (418) 484 (564) 573 1,112 Supplemental information on interest received in cash 442 300 Supplemental information on interest paid in cash 477 534
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.
In February 2007, BioLineRx listed its ordinary shares on the Tel Aviv Stock Exchange ("TASE") and they have been traded on the TASE since that time. Since July 2011, BioLineRx's American Depositary Shares ("ADSs") have also been traded on the NASDAQ Capital Market.
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 immunooncology.
Although it has generated revenues from out-licensing transactions in the past, the Company has incurred accumulated losses in the amount of \$261 million through June 30, 2020, and cannot determine with reasonable certainty when and if it will have sustainable profits. Management believes that the Company's current cash and other resources will be sufficient to fund its projected cash requirements through the end of 2021. 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. Management regularly evaluates various financing alternatives, including funding its clinical development activities via out-licensing or collaborations, and fundraising in the public or private equity markets. However, there is no certainty about the Company's ability to obtain such funding.
b. Approval of financial statements
The condensed consolidated interim financial statements of the Company as of June 30, 2020, and for the six months then ended, were approved by the Board of Directors on August 5, 2020, and signed on its behalf by the Chairman of the Board, the Chief Executive Officer and the Chief Financial Officer.
NOTE 2 – BASIS OF PREPARATION
The Company's condensed consolidated interim financial statements as of June 30, 2020 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 statement 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, 2019 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, 2020 are not necessarily indicative of the results that may be expected for the entire fiscal year or for any other interim period.
BioLineRx Ltd. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
NOTE 2 – BASIS OF PREPARATION (cont.)
In the process of preparing the interim financial statements, management makes 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. These inputs also consider, among other things, the implications of COVID-19 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. The COVID-19 virus has spread to many countries throughout the world, including to the United States, Europe and Israel, where we currently have our therapeutic candidates manufactured and conduct our clinical trials. At present, we are experiencing some recruitment delays from the deepening and extended impact of COVID-19 on our clinical trials; however, at present, we do not believe these delays will significantly impact our clinical development plans. Future developments related to COVID-19 are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, as well as its overall economic impact, and more specifically its effects on the financial markets. All estimates made by the Company related to the impact of COVID-19 in its financial statements may change in future periods. Actual results could differ from those estimates.
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, 2019 and for the year then ended.
NOTE 4 – AT-THE-MARKET ("ATM") SALES AGREEMENT WITH BTIG
In October 2017, the Company entered into an at-the-market ("ATM") sales agreement with BTIG, LLC ("BTIG"), pursuant to which the Company was entitled, at its sole discretion, offer and sell through BTIG, acting as sales agent, ADSs having an aggregate offering price of up to \$30.0 million throughout the period during which the ATM facility remains in effect. The Company agreed to pay BTIG a commission of 3.0% of the gross proceeds from the sale of ADSs under the facility.
During the six-month period ended June 30, 2020, the Company issued a total of 676,750 ADSs for total net proceeds of \$1.4 million under the ATM facility. From the effective date of the agreement through June 30, 2020, an aggregate of 2,923,552 ADSs were sold under the facility for total gross proceeds of approximately \$13.0 million. In April 2020, the Company filed a prospectus supplement reducing the available balance under the facility to approximately \$8.5 million. In May 2020, in connection with the registered direct offering (see Note 5), the Company terminated the prospectus supplement and, accordingly, no sales may be made under the facility at the present time.
BioLineRx Ltd. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
NOTE 5 – FINANCINGS
a. In May 2020, the Company completed a registered direct offering of 5,142,859 ADSs at a price of \$1.75 per ADS. In a concurrent private placement, the Company issued to investors in the offering unregistered warrants to purchase 5,142,859 ADSs. The warrants are exercisable immediately, expire two and half years from the date of issuance and have an exercise price of \$2.25 per ADS. In addition, the Company granted to the placement agent's designees, as part of the placement fee, warrants to purchase 257,143 ADSs. These warrants are exercisable immediately, expire two and half years from the date of issuance and have an exercise price of \$2.1875 per ADS. The offering raised a total of \$9.0 million, with net proceeds of \$8.1 million, after deducting fees and expenses.
The warrants issued have been classified as a non-current financial liability due to a net settlement provision. This liability was initially recognized at its fair value on the date the contract was entered into and is subsequently accounted for at fair value at each balance sheet date. The fair value changes are charged to non-operating income and expense in the statement of comprehensive loss.
The fair value of the warrants is computed using the Black-Scholes option pricing model. The fair value of the warrants upon issuance was computed based on the then current price of an ADS, a risk-free interest rate of 0.20% and an average standard deviation of 80.2%.
b. In June 2020, the Company completed a registered direct offering of 2,510,286 ADSs at a price of \$1.75 per ADS. In a concurrent private placement, the Company issued to investors in the offering unregistered warrants to purchase 2,510,286 ADSs. The warrants are exercisable immediately, expire two and half years from the date of issuance and have an exercise price of \$2.25 per ADS. In addition, the Company granted to the placement agent's designees, as part of the placement fee, warrants to purchase 125,514 ADSs. These warrants are exercisable immediately, expire two and half years from the date of issuance and have an exercise price of \$2.1875 per ADS. The offering raised a total of \$4.4 million, with net proceeds of \$3.9 million, after deducting fees and expenses.
The warrants issued have been classified as a non-current financial liability due to a net settlement provision. This liability was initially recognized at its fair value on the date the contract was entered into and is subsequently accounted for at fair value at each balance sheet date. The fair value changes are charged to non-operating income and expense in the statement of comprehensive loss.
The fair value of the warrants is computed using the Black-Scholes option pricing model. The fair value of the warrants upon issuance was computed based on the then current price of an ADS, a risk-free interest rate of 0.23% and an average standard deviation of 80.9%.
BioLineRx Ltd. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
NOTE 6 – SHAREHOLDERS' EQUITY
As of December 31, 2019 and June 30, 2020, the Company's share capital is composed of ordinary shares, as follows:
| Number of ordinary shares | |||
|---|---|---|---|
| December 31, | June 30, | ||
| 2019 | 2020 | ||
| Authorized share capital | 500,000,000 | 500,000,000 | |
| Issued and paid-up share capital | 171,269,528 | 296,508,550 | |
| In USD and NIS | |||
| December 31, | June 30, | ||
| 2019 | 2020 | ||
| Authorized share capital (in NIS) | 50,000,000 | 50,000,000 | |
| Issued and paid-up share capital (in NIS) | 17,126,953 | 29,650,855 | |
| Issued and paid-up share capital (in USD) | 4,691,734 | 8,280,633 | |
Exhibit 3
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 12, 2020 (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 forward-looking 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 forwardlooking 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"), our Report on Form 6-K filed on May 20, 2020 (the "First Quarter Report") and elsewhere in this Report on Form 6-K. 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 forwardlooking 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;
- the impact of coronavirus on our operations;
- 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; and
• statements as to the impact of the political and security situation in Israel on our business.
Risk Factors
Except as set forth below, there are no material changes to the risk factors previously disclosed in our Annual Report and our First Quarter Report.
Our business is subject to risks arising from a widespread outbreak of an illness or any other communicable disease, or any other public health crisis, such as the COVID-19 pandemic, which has impacted and could continue to impact our business.
The novel coronavirus outbreak, or COVID-19, has affected segments of the global economy and may materially affect our operations, including potentially interrupting our supply chain, clinical trial and commercialization activities. COVID-19 originated in Wuhan, China, in December 2019 and was declared a pandemic by the World Health Organization in March 2020. The virus has since spread to multiple countries, including to the United States, Europe and Israel, where we currently have our therapeutic candidates manufactured and conduct our clinical trials. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets. At present, we are experiencing some recruitment delays from the deepening and extended impact of COVID-19 on our GENESIS phase 3 study in stem-cell mobilization for our lead compound, motixafortide. However, we hope it will not significantly impact our clinical development plan for the compound, due to our decision to carry out an interim analysis on the study in the second half of this year. In addition, as previously reported, due to clinical operating issues associated with the COVID-19 pandemic, we expect a delay of approximately nine months in the phase 1/2a study we are currently conducting for AGI-134, our second lead compound. The uncertainty surrounding the severity and continued spread of the coronavirus may result in a period of prolonged business disruption. COVID-19 may continue to impact our future operations, including potential interruptions to supply chains, clinical trials, commercialization activities and regulatory reviews and approvals. COVID-19 may also affect our employees and employees and operations at suppliers that may result in delays or disruptions in supply. In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our shares. Additionally, if the COVID-19 pandemic has a significant impact on our business and financial results for an extended period of time, our liquidity and cash resources could be negatively impacted. Capital and credit markets have been disrupted by the crisis and exchanges have experienced increased volatility. As a result, access to additional financing may be challenging and is largely dependent upon evolving market conditions and other factors. We have taken precautionary measures, including, for example, a Company-wide salary reduction related to the COVID-19 pandemic carried out in the second quarter of 2020, and may take additional measures, intended to minimize the risk of COVID-19 to our employees and operations. The extent of the impact of COVID-19 on our operational and financial performance, including our ability to execute our business strategies in the expected time frame or at all, will depend on future developments, such as the duration and spread of the COVID-19 pandemic and related restrictions and implications, all of which are uncertain and cannot be predicted.
Overview
General
We are a 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 solid tumors, hematological malignancies and stem cell mobilization, and AGI-134, an immuno-oncology agent in development for solid tumors. In addition, we have an off-strategy, 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.
Main Therapeutic Candidates
The following is a description of our main programs:
• Motixafortide is a novel, short peptide that functions as a high-affinity antagonist for CXCR4, which we are developing for the treatment of solid tumors, acute myeloid leukemia, or AML, and stem-cell mobilization.
Solid tumors
- ➢ In January 2016, we entered into a 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 tumorreactive 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. As of the date of this report, there are still patients receiving treatment, and overall results, which were previously expected mid-2020, are now expected in the second half of 2020, in order to allow survival data from the study to continue to mature.
- ➢ 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 cut-off 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.
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. We continue to monitor long-term survival data for patients in the study and, in parallel, are evaluating our next clinical development steps in this indication.
➢ We are currently investigating motixafortide as a consolidation treatment together with cytarabine (the current standard of care) for AML patients who have responded to standard induction treatment and are in complete remission and, in this regard, are conducting a Phase 2b trial in Germany, in collaboration with the German Study Alliance Leukemia Group. The Phase 2b trial is a double-blind, placebo-controlled, randomized, multi-center study aimed at assessing the efficacy of motixafortide in addition to standard consolidation therapy in AML patients. Up to 194 patients were originally planned to be enrolled in the trial. We have agreed 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 have already completed treatment. We estimate the timing of such interim analysis to be in the second half of 2020. The study will be stopped in the event of futility or overwhelming superiority; otherwise, the Data Monitoring Committee, or DMC, of the study will make a recommendation regarding study continuation. If positive, these results, together with the meaningful proof-of-concept data announced in our previously conducted Phase 2a study in r/r AML, would provide strong rationale for continued development in this indication, and we plan to meet with regulators to discuss the optimal development path forward in the AML setting. If the study is not terminated due to futility or overwhelming superiority, as mentioned, the DMC will make a recommendation regarding study continuation, in which case the number of subjects will be increased by eight patients to N=202. The estimated completion date for the full study in this scenario will be in 2023 at the earliest.
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 hematopoietic stem cells, or 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 is 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 recommended that the lead-in part of the study should 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.
As the trial has progressed, the continuing and deepening effect of the COVID-19 pandemic has had an effect on recruitment. On the other hand, we have seen a significantly lower drop-out rate than we had anticipated when calculating the original trial sample size. As a result of these factors, we made a decision to perform an interim analysis on the study. This analysis will be performed on approximately 65% of the original sample size. Recruitment for the interim analysis is almost complete, and the interim analysis is expected to be performed in the second half of 2020. In the event that the primary endpoint is reached in the interim analysis, we plan to announce the immediate cessation of recruitment (without the need for recruitment of the full planned sample size) and in order to maintain study blinding for all study endpoints, including those related to engraftment for a period of 100 days subsequent to transplantation, we expect to announce top-line results in the first half of 2021.
In the event that the primary endpoint is not reached in the interim analysis, we expect recruitment will continue until the originally planned sample size is met. Recent worsening of the COVID-19 outbreak, which is unfortunately expected to continue for the foreseeable future, has had, and is expected to continue to have, an effect on recruitment. Therefore, under this scenario, we expect top-line results will be announced in the second half of 2021.
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.
- ➢ In September 2013, the FDA granted an Orphan Drug Designation to motixafortide as a therapeutic for the treatment of AML; and in January 2014, the FDA granted an Orphan Drug Designation to motixafortide as a treatment for stem cell mobilization. In January 2015, the FDA modified this Orphan Drug Designation for motixafortide for use either as a single agent or in combination with G-CSF. In February 2019, the FDA granted Orphan Drug Designation to motixafortide as a therapeutic for the treatment of pancreatic cancer. In January 2020, the European Medicines Agency, or EMA, granted Orphan Drug Designation to motixafortide for the treatment of pancreatic cancer.
- AGI-134, a clinical therapeutic candidate in-licensed by Agalimmune, is a synthetic alpha-Gal glycolipid immunotherapy in development for solid tumors. AGI-134 harnesses the body's pre-existing, 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, given both as monotherapy and in combination with an immune checkpoint inhibitor, in unresectable metastatic solid tumors. The multi-center, open-label study is currently being carried out in the UK, US 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, about four months ago the clinical trial was temporarily suspended, which we continue to expect will lead to an approximate nine-month delay. Recently we have begun activities to restart study recruitment. As a result, initial proof-of-mechanism of action and efficacy results from the second part of the study are now expected in the second half of 2021.
- 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 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 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 outlicensed to Perrigo as a result of the agreement described in the preceding sentence, in consideration of the payment to BioLineRx 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 out-licensing 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, interest earned on our investments and additional capital to be raised through public or private equity offerings or debt financings. As of June 30, 2020, we held \$27.3 million of cash, cash equivalents and short-term bank deposits.
Recent Company Developments
Motixafortide as therapy for COVID-19-induced inflammatory lung disorders, including acute respiratory distress syndrome (ARDS)
Over the last few months, we have been evaluating motixafortide as a potential therapy for COVID-19-induced inflammatory lung disorders, including ARDS. In this regard, substantial data is emerging regarding the involvement of neutrophils and macrophages in the development of COVID-19 lung symptoms, including severe complications such as ARDS; as well as the key involvement of CXCR4 as the primary mediator of those cells in the inflamed alveolar tissue of the lung. We believe that motixafortide will succeed in modulating neutrophils and macrophages via CXCR4 inhibition, thus reducing their retention in the lungs, potentially resulting in improved morbidity and mortality. We are continuing to evaluate the optimal pathway to obtain initial clinical data in the shortest time possible.
Recent financings
In May 2020, we sold to certain institutional investors an aggregate of 5,142,859 ADSs in a registered direct offering at \$1.75 per ADS, resulting in gross proceeds of approximately \$9,000,000. In addition, we issued to the investors unregistered warrants to purchase up to an aggregate of 5,142,859 ADSs in a private placement. The warrants are immediately exercisable and will expire two and one-half years from issuance at an exercise price of \$2.25 per ADS, subject to adjustment as set forth therein. We paid an aggregate of \$630,000 in placement agent fees plus certain expenses and issued unregistered placement agent warrants to purchase up to an aggregate of 257,143 ADS on substantially the same terms as the warrants except they have an exercise price of \$2.1875 per ADS.
In June 2020, we sold to certain institutional investors an aggregate of 2,510,286 ADSs in a registered direct offering at \$1.75 per ADS, resulting in gross proceeds of approximately \$4,400,000. In addition, we issued to the investors unregistered warrants to purchase up to an aggregate of 2,510,286 ADSs in a private placement. The warrants are immediately exercisable and will expire two and one-half years from issuance at an exercise price of \$2.25 per ADS, subject to adjustment as set forth therein. We paid an aggregate of \$308,000 in placement agent fees plus certain expenses and issued unregistered placement agent warrants to purchase up to an aggregate of 125,514 ADS on substantially the same terms as the warrants except they have an exercise price of \$2.1875 per ADS.
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 our current out-licensing agreement with Perrigo 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, patent-related 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 | ||
|---|---|---|---|---|
| 1. Phase 2a study for relapsed or refractory AML completed | 1. Follow-up for overall survival is ongoing; evaluation and decision regarding next clinical development steps |
|||
| 2. Phase 2b study in AML consolidation treatment line (BLAST) ongoing |
2. Interim analysis in second half of 2020 | |||
| motixafortide | 3. Phase 2a in pancreatic cancer under Merck collaboration (COMBAT/KEYNOTE-202) ongoing; preliminary results from triple combination arm announced in December 2019; recruitment completed in February 2020 |
3. Overall results, including progression-free survival and overall survival, expected in second half of 2020 |
||
| 4. Phase 3 registration study in autologous stem cell mobilization commenced (GENESIS), ongoing |
4. Interim analysis from randomized, placebo-controlled main part of study expected in second half of 2020 |
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| AGI-134 | Phase 1/2a study, ongoing | Initial proof-of-mechanism efficacy results of part 2 of study expected in second half of 2021 |
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 therapeutic candidates in preclinical studies for toxicology, safety and efficacy, and to conduct additional clinical trials for each therapeutic 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 cost of drug substance/product manufacturing, storage and shipment;
- 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 therapeutic candidates. The lengthy process of completing clinical trials and seeking regulatory approval for our therapeutic 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, 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 July 2017, February 2019, May 2020 and June 2020, as well as from debt financing we received in October 2018. These fair-value adjustments are highly influenced by our share price at each period end (revaluation date). Non-operating expense and income also includes the pro-rata share of issuance expenses from the placements related to the warrants, as well as the capital gain from realization of our investment in iPharma, a joint venture our holdings in which we sold in April 2018. 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 consists of interest earned on our cash, cash equivalents and short-term bank deposits; interest on loans, 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.
Significant 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, 2019.
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 as endorsed by the IASB. The preparation of these financial statements requires us to make estimates and 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 and judgments. We base our estimates on historical experience and on various assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Results of Operations
Revenues
We did not record any revenues during each of the three-month and six-month periods ended June 30, 2020 and 2019.
Cost of revenues
We did not record any cost of revenues during each of the three-month and six-month periods ended June 30, 2020 and 2019.
Operating Results Comparison between Periods
Revenues and cost of revenues
See discussion under "Results of Operations - Overview" above.
Research and development expenses
| Three months ended June 30, | Six months ended June 30, | ||||||
|---|---|---|---|---|---|---|---|
| 2019 2020 |
Increase (decrease) | 2019 | 2020 | Increase (decrease) | |||
| (in thousands of U.S. dollars) | |||||||
| Research and development expenses, net | 5,302 | 4,640 | (662) | 9,694 | 10,062 | 368 | |
Comparison of three-month periods ending June 30, 2020 and 2019
Research and development expenses for the three months ended June 30, 2020 were \$4.6 million, a decrease of \$0.7 million, or 12.5%, compared to \$5.3 million for the three months ended June 30, 2019. The decrease resulted primarily from lower expenses associated with the AGI-134 study, as well as a decrease in payroll and related expenses due to a Company-wide salary reduction related to the COVID-19 pandemic carried out in the second quarter of 2020.
Comparison of six-month periods ending June 30, 2020 and 2019
Research and development expenses for the six months ended June 30, 2020 were \$10.1 million, an increase of \$0.4 million, or 3.8%, compared to \$9.7 million for the six months ended June 30, 2019. The increase resulted primarily from higher expenses associated with the motixafortide COMBAT and GENESIS clinical trials, offset by a decrease in expenses associated with the AGI-134 study.
Sales and marketing expenses
| Three months ended June 30, | Six months ended June 30, | |||||
|---|---|---|---|---|---|---|
| Increase (decrease) 2019 2020 |
2019 2020 |
Increase (decrease) | ||||
| (in thousands of U.S. dollars) | ||||||
| Sales and marketing expenses | 226 | 182 | (44) | 482 | 357 | (125) |
Comparison of three-month periods ending June 30, 2020 and 2019
Sales and marketing expenses for the three months ended June 30, 2020 were \$0.2 million, similar to the comparable period in 2019.
Comparison of six-month periods ending June 30, 2020 and 2019
Sales and marketing expenses for the six months ended June 30, 2020 were \$0.4 million, a decrease of \$0.1 million, or 25.9%, compared to \$0.5 million for the six months ended June 30, 2019. The decrease resulted primarily from a decrease in payroll and related expenses related to a decrease in share-based compensation from the 2019 period.
| Three months ended June 30, | Six months ended June 30, | |||||
|---|---|---|---|---|---|---|
| Increase (decrease) 2019 2020 |
2019 | 2020 | Increase (decrease) | |||
| (in thousands of U.S. dollars) | ||||||
| General and administrative expenses | 949 | 744 | (205) | 1,879 | 1,987 | 108 |
Comparison of three-month periods ending June 30, 2020 and 2019
General and administrative expenses for the three months ended June 30, 2020 were \$0.7 million, a decrease of \$0.2 million, or 21.6%, compared to \$0.9 million for the three months ended June 30, 2019. The decrease resulted primarily from a decrease in payroll and related expenses due to a Company-wide salary reduction related to the COVID-19 pandemic carried out in the second quarter of 2020, as well as a decrease in professional fees.
Comparison of six-month periods ending June 30, 2020 and 2019
General and administrative expenses for the six months ended June 30, 2020 were \$2.0 million, an increase of \$0.1 million, or 5.7%, compared to \$1.9 million for the six months ended June 30, 2019. The increase resulted primarily from an increase in share-based compensation.
Non-operating income (expenses), net
| Three months ended June 30, | Six months ended June 30, | ||||||
|---|---|---|---|---|---|---|---|
| Increase (decrease) 2019 2020 |
2019 | 2020 | Increase (decrease) | ||||
| (in thousands of U.S. dollars) | |||||||
| Non-operating income (expenses), net | 1,261 | (843) | (2,104) | 921 | (374) | (1,295) |
Comparison of three-month and six-month periods ending June 30, 2020 and 2019
Non-operating income (expenses) for the three and six months ended June 30, 2020 and for the three and six months ended June 30, 2019 primarily relate to fair-value adjustments of warrant liabilities on our balance sheet, offset by warrant offering expenses.
Financial income (expenses), net
| Three months ended June 30, | Six months ended June 30, | ||||||
|---|---|---|---|---|---|---|---|
| 2019 | 2020 | Increase (decrease) | 2019 | 2020 | Increase (decrease) | ||
| (in thousands of U.S. dollars) | |||||||
| Financial income | 171 | 35 | (136) | 381 | 175 | (206) | |
| Financial expenses | (440) | (396) | 44 | (887) | (810) | 77 | |
| Net financial income (expenses) | (269) | (361) | (92) | (506) | (635) | (129) |
Comparison of three-month periods ending June 30, 2020 and 2019
We recognized net financial expenses of \$0.4 million for the three months ended June 30, 2020 compared to net financial expenses of \$0.3 million for the three months ended June 30, 2019. Net financial expenses for both periods primarily relate to interest paid on loans, offset by investment income earned on our bank deposits.
Comparison of six-month periods ending June 30, 2020 and 2019
We recognized net financial expenses of \$0.6 million for the six months ended June 30, 2020 compared to net financial expenses of \$0.5 million for the six months ended June 30, 2019. Net financial expenses for both periods primarily relate to interest paid on loans, offset by investment income earned on our bank deposits.
Liquidity and Capital Resources
Since inception, we have funded our operations primarily through public and private offerings of our equity securities, funding from the IIA, and payments received under our strategic licensing arrangements. At June 30, 2020, we held \$27.3 million in cash, cash equivalents and short-term bank deposits. We have invested substantially all our available cash funds in short-term bank deposits.
Pursuant to our ATM facility with BTIG, LLC, or BTIG, during the six months ended June 30, 2020, we sold 676,750 ADSs under the program, resulting in net proceeds to BioLine of approximately \$1.4 million (net of \$44,000 in commissions paid to BTIG). In April 2020, we filed a prospectus supplement reducing the available balance under the facility to approximately \$8.5 million. In May 2020, in connection with our registered direct offering, we terminated the prospectus supplement and, accordingly, no sales may be made under the facility at the present time.
Net cash used in operating activities was \$12.3 million for the six months ended June 30, 2020, compared with net cash used in operating activities of \$11.1 million for the six months ended June 30, 2019. The \$1.2 million increase in net cash used in operating activities during the six-month period in 2020 was primarily the result of changes in operating asset and liability items in the two periods, i.e., an increase in prepaid expenses and other receivables in 2020 versus a decrease in 2019, as well as a larger decrease in accounts payable and accruals in 2020 versus 2019.
Net cash provided by investing activities was \$0.6 million for the six months ended June 30, 2020, compared to net cash used in investing activities of \$3.1 million for the six months ended June 30, 2019. The changes in cash flows from investing activities relate primarily to investments in, and maturities of, short-term bank deposits.
Net cash provided by financing activities was \$12.0 million for the six months ended June 30, 2020, compared to net cash provided by financing activities of \$15.7 million for the six months ended June 30, 2019. The cash flows in 2020 primarily reflect the May and June financings, the net proceeds from the ATM facility and the repayments of the loan from Kreos Capital. The cash flows in 2019 primarily reflect the underwritten public offering of our ADSs in February 2019, as well as net proceeds from the ATM facility.
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 projected cash requirements until the end of 2021, we will require significant additional financing in the future to fund our operations. The extent and timing of 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 impact of COVID-19 on our operations;
- 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; and
- payments to the IIA.
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 outlicensing 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
On July 15, 2019, we implemented a change in the ratio of our ADSs to ordinary shares, from one ADS representing one ordinary share to a new ratio of one ADS representing 15 ordinary shares. Accordingly, presented below, for the convenience of the reader, is share and per-share information in ADSs, on the basis of the new ADS ratio.
| Three months ended June 30, | Six months ended June 30, | ||||||
|---|---|---|---|---|---|---|---|
| 2019 | 2020 | 2019 | 2020 | ||||
| (in U.S. dollars) | |||||||
| Loss per ADS – basic and diluted | (0.57) | (0.46) | (1.25) | (1.01) | |||
| December 31, 2019 (in number of ADSs) |
June 30, 2020 |
||||||
| Authorized share capital | 33,333,333 | 33,333,333 | |||||
| Issued and paid-up capital | 11,417,968 | 19,767,236 | |||||
| 13 |