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/A filed on March 26, 2024 (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 include statements regarding management's expectations, beliefs and intentions regarding, among other things, the potential
benefits of APHEXDA®, the plans and objectives of management for future operations and expectations and commercial potential of APHEXDA, as well as its potential investigational uses. 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 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:
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the clinical development, commercialization and market acceptance of our therapeutic candidates, including the degree and pace
of market uptake of APHEXDA for the mobilization of hematopoietic stem cells for autologous transplantation in multiple myeloma patients;
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the initiation, timing, progress and results of our preclinical studies, clinical trials and other therapeutic candidate
development efforts;
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our ability to advance our therapeutic candidates into clinical trials or to successfully complete our preclinical studies or
clinical trials;
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whether the clinical trial results for APHEXDA will be predictive of real-world results;
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our receipt of regulatory approvals for our therapeutic candidates, and the timing of other regulatory filings and approvals;
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whether access to APHEXDA is achieved in a commercially viable manner and whether APHEXDA receives adequate reimbursement from
third-party payors;
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our ability to establish, manage, and maintain corporate collaborations, as well as the ability of our collaborators to
execute on their development and commercialization plans;
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our ability to integrate new therapeutic candidates and new personnel, as well as new collaborations;
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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;
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the implementation of our business model and strategic plans for our business and therapeutic candidates;
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the scope of protection that 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;
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estimates of our expenses, future revenues, capital requirements and our need for and ability to access sufficient additional
financing, including any unexpected costs or delays in the ongoing commercialization of APHEXDA;
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risks related to changes in healthcare laws, rules and regulations in the United States or elsewhere;
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competitive companies, technologies and our industry;
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our ability to maintain the listing of our American Depositary Shares, or ADSs, on The Nasdaq Capital Market;
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statements as to the impact of the political and security situation in Israel on our business, including the impact of
Israel’s war with Hamas and other militant groups, which may exacerbate the magnitude of the factors discussed above; and
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those factors referred to in “Risk Factors” in our most recent Annual Report on Form 20-F.
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Overview
General
We are a biopharmaceutical company pursuing life-changing therapies in oncology and rare diseases. Our first approved product is
APHEXDA (motixafortide), a novel peptide for the treatment of stem-cell mobilization and solid tumors which, on September 8, 2023, was approved by the FDA for use in combination with filgrastim (G-CSF) to mobilize hematopoietic stem cells to the
peripheral blood for collection and subsequent autologous transplantation in patients with multiple myeloma. In October 2023, we out-licensed the rights to motixafortide for all indications in substantially all of Asia, and in November 2024, we
out-licensed the global rights (other than in Asia) to motixafortide for all indications, other than solid tumors. As a result of the November 2024 transaction, we intend to terminate our independent commercialization activities in the United
States and refocus our operations on development activities in Israel in the fields of oncology (including solid tumors) and rare diseases, at a significantly reduced annual cash burn rate.
We seek to develop a pipeline of promising therapeutic candidates that exhibit distinct advantages over currently available therapies
or address unmet medical needs. Our resources are focused on advancing our therapeutic candidates through development and toward commercialization. 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. Our strategy includes commercializing our therapeutic candidates by way of out-licensing arrangements with biotechnology and pharmaceutical
companies and evaluating, on a case-by-case basis, the commercialization of our therapeutic candidates independently.
We use “APHEXDA” when referring to our FDA approved drug, and “motixafortide” when referring to our development of APHEXDA for
additional indications.
FDA Approval and U.S. Launch of APHEXDA
In September 2023, the FDA approved motixafortide in combination with G-CSF to mobilize hematopoietic stem cells to the peripheral
blood for collection and subsequent autologous transplantation in patients with multiple myeloma. Following this approval, we commenced commercialization of motixafortide in the U.S. independently, as planned, in order to accelerate its
availability to patients and to maximize the value of this innovative therapeutic candidate.
The FDA approval of APHEXDA is based on results from the 2-part, Phase 3 GENESIS trial, a randomized, double-blind, placebo-controlled
study evaluating the safety and efficacy of APHEXDA plus G-CSF compared to placebo plus G-CSF, for the mobilization of hematopoietic stem cells for autologous transplantation in multiple myeloma patients. Top-line results announced in 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.
During 2023, we completed the build-out of the infrastructure for commercial operations in the U.S. designed to support the
commercialization of APHEXDA. In addition, we completed the onboarding of customer-facing personnel on our sales, medical affairs, and national account teams, which have engaged with transplant centers, physicians and payers. Patient-focused
support has also been critical to our launch efforts with the creation of BioLineRx Connect, our internal patient support program, as well as the establishment of relationships with patient advocacy groups.
Our focus has been on the top 80 centers that perform 85% of the autologous stem cell transplantations, or ASCTs, in multiple myeloma
in order to build the foundations for commercial expansion. Among this defined population, we have been granted formulary status for APHEXDA at hospitals representing approximately 40% of the total annual U.S. multiple myeloma transplant procedures
at these centers as of September 30, 2024, and expect this number to grow as additional formulary reviews are scheduled. In addition, we have received inclusion of APHEXDA in the National Comprehensive Cancer Network (NCCN) guidelines for
Hematopoietic Cell Transplantation. Importantly, we have achieved positive coverage decisions by payers representing over 95% of all covered lives in the U.S. and received a Healthcare Common Procedure Coding System (HCPCS) J-Code to facilitate
Medicare reimbursement for APHEXDA to transplant centers treating Medicare beneficiaries.
Out-Licensing of Motixafortide in Asia
In October 2023, we closed on a License Agreement, or the Gloria License Agreement, with Hong Seng Technology Limited, or HST, and
Guangzhou Gloria Biosciences Co., Ltd., or Gloria, and/or with HST, the Gloria Licensee, pursuant to which we granted HST an exclusive, royalty-bearing, sublicensable license with respect to the intellectual property rights and know-how associated
with motixafortide in order to develop and commercialize motixafortide in Asia (other than Israel and certain other countries), or the Gloria Territory, and to engage and authorize Gloria to perform services under the Gloria License Agreement in
the Gloria Territory.
Pursuant to the terms of the Gloria License Agreement, the Gloria Licensee made a $15 million upfront payment upon the closing of the
transaction. We are entitled to up to $49 million based on the achievement of certain development and regulatory milestones in China and Japan, and up to $197 million in sales milestones based on defined sales targets of motixafortide in the Gloria
Territory. Additionally, we are eligible to receive tiered, double-digit royalties (ranging from 10-20%), on aggregate net sales of motixafortide in the Gloria Territory payable on a country-by-country basis until the longer of (i) fifteen years
from the date of the first sale of motixafortide by Gloria Licensee, (ii) the last to expire valid claim of any licensed patents with respect to motixafortide in such country and (iii) the expiration of motixafortide’s orphan drug status in such
country. The royalties payable by Gloria Licensee to us are to be reduced by 50% following the end of the initial royalty term and are also to be reduced upon the occurrence of certain events, including, on a country-by-country basis, the entry of
a generic product in such country.
The Gloria License Agreement includes various development obligations for the Gloria Licensee pursuant to an agreed-upon development
plan, including the execution of a registrational study in stem-cell mobilization and the execution of a randomized Phase 2b study in first-line pancreatic adenocarcinoma.
In addition, in October 2023, we closed on a private placement with HST and Gloria. For additional information, see “Liquidity and
Capital Resources” below.
Out-License of Motixafortide to Ayrmid Pharma Ltd.
On November 20, 2024, we entered into a license agreement, or the Ayrmid License Agreement, with Ayrmid Pharma Ltd., or the Ayrmid
Licensee, pursuant to which we granted the Ayrmid Licensee an exclusive, transferable, royalty-bearing, sublicensable license with respect to the intellectual property rights and know-how associated with motixafortide, in order to commercialize
motixafortide across all indications, except solid tumor indications, in all territories other than Asia, or collectively, the Ayrmid Territory.
Pursuant to the terms of the Ayrmid License Agreement, the Ayrmid Licensee is required to pay a non-refundable $10 million upfront
payment within ten days of the effectiveness of the Ayrmid License Agreement. We are also entitled to up to $87 million of certain commercial and sales milestones based on defined sales targets of motixafortide in the Ayrmid Territory.
Additionally, we are eligible to receive tiered double-digit royalties (ranging from 18-23%) on aggregate net sales of motixafortide on a country-by-country basis until the longer of (i) fifteen years from the date of the first sale of
motixafortide by the Ayrmid Licensee in such country, (ii) the last to expire of any licensed patents with respect to motixafortide in such country, (iii) the expiration of regulatory exclusivity in such country and (iv) the expiration of
motixafortide’s orphan drug status, if any, in such country, it being noted that such royalties may be subject to reduction in certain specific circumstances.
In connection with the Ayrmid License Agreement, we and the Ayrmid Licensee also entered into a manufacturing and supply agreement, or
the Supply Agreement, according to which we will supply motixafortide to the Ayrmid Licensee during the term, on a cost-plus basis, for both commercial and development supply. Furthermore, the Supply Agreement provides the Ayrmid Licensee with
“step-in rights” with respect to the manufacture and supply of motixafortide upon the occurrence of certain trigger events. In addition, we and the Ayrmid Licensee entered into a transition services agreement pursuant to which we will provide the
Ayrmid Licensee with certain services related to the development and commercialization of motixafortide within the Ayrmid Territory during a defined transition period, on a cost basis.
The Ayrmid License Agreement will continue on a country-by-country basis in the Ayrmid Territory until the expiration of the royalty
term or earlier termination thereof. The Ayrmid License Agreement may also be terminated by either party in the case of a material breach or bankruptcy.
Following this transaction, we plan to undertake certain cost-cutting and workforce reduction measures to reduce our cash burn,
including the full shut down of our U.S. commercial operations. These measures are expected to reduce our annual cash burn, effective January 1, 2025, by approximately 70%.
We paid a banking fee of $2 million in connection with the Ayrmid License Agreement.
Registered Direct Offering
On November 20, 2024, we also entered into a securities purchase agreement, or the Purchase Agreement, with certain funds associated
with Highbridge Capital Management LLC, or the Investors, providing for the issuance and sale, in a registered direct offering, or the Offering, of 16,471,449 ADSs (or pre-funded warrants to purchase ADSs in lieu of ADSs, or the Pre-Funded
Warrants). Each ADS and Pre-Funded Warrant were sold together with a number of warrants equal to 50% of the aggregate number of ADSs and Pre-Funded Warrants sold in the Offering, or in total warrants to purchase up to an aggregate of 8,235,724
ADSs, or the Ordinary Warrants and together with the Pre-Funded Warrants, the Warrants, at a combined purchase price of $0.5464 per ADS and accompanying Ordinary Warrant and $0.5463 per Pre-Funded Warrant and accompanying Ordinary Warrant.
Aggregate gross proceeds from the Offering (without taking into account any proceeds from any future exercises of Warrants) were $9.0 million. The Offering closed on November 21, 2024.
The Pre-Funded Warrants are immediately exercisable at an exercise price of $0.0001 per ADS, subject to adjustment as set forth
therein, and do not expire until exercised in full. The Ordinary Warrants have an exercise price of $0.5900 per ADS, subject to adjustment as set forth therein, are immediately exercisable, and will have a 4-year term from the issuance date. The
Pre-Funded Warrants and, if at the time of exercise there is no effective registration statement registering the ADSs underlying the Ordinary Warrants, the Ordinary Warrants, may be exercised on a cashless basis.
A holder of the Warrants does not have the right to exercise any portion of its Pre-Funded Warrants and Ordinary Warrants if the
holder (together with such holder’s affiliates, and any persons acting as a group together with such holder or any of such holder’s affiliates or any other persons whose beneficial ownership of ADSs or ordinary shares would be aggregated with the
holder’s or any of the holder’s affiliates), would beneficially own ordinary shares (including ordinary shares represented by ADSs) in excess of 4.9% of the number of the ordinary shares outstanding immediately after giving effect to such exercise.
The Purchase Agreement also provides for certain restrictions regarding the exercise of warrants where their exercise would cause the
beneficial ownership percentage of the Company to exceed 4.9%; certain lockup, standstill and voting rights restrictions; and a right to participate in certain future financings.
Our Product Pipeline
The table below summarizes key information about our products and our clinical programs:
Motixafortide
Motixafortide, is a novel, short peptide that functions as a high-affinity antagonist for CXCR4, for the treatment of stem cell
mobilization and solid tumors. CXCR4 is expressed by normal hematopoietic cells and overexpressed in various human cancers where its expression correlates with disease severity. CXCR4 is a chemokine receptor that mediates the homing and retention
of hematopoietic stem cells, or HSCs, in the bone marrow, and also mediates tumor progression, angiogenesis (growth of new blood vessels in the tumor), metastasis (spread of tumor to other organs) and survival. Before “motixafortide” was approved
by the World Health Organization, or WHO, in 2019 as an International Nonproprietary Name, this therapeutic candidate was known as “BL-8040.” In October 2021, we received WHO approval of the United States Adopted Name, or USAN, “motixafortide.” The
FDA-approved trade or brand name of motixafortide is APHEXDA.
Inhibition of CXCR4 by motixafortide leads to the mobilization of HSCs from the bone marrow to the peripheral blood, enabling their
collection for subsequent autologous or allogeneic transplantation in cancer patients. Clinical data has demonstrated the ability of motixafortide to mobilize higher numbers of long-term engrafting HSCs (CD34+CD38-CD45RA-CD90+CD49f+) as compared to
G-CSF.
Motixafortide also mobilizes cancer cells from the bone marrow, detaching them from their survival signals and sensitizing them to
chemotherapy. In addition, motixafortide has demonstrated a direct anti-cancer effect by inducing apoptosis (cell death) and inhibiting proliferation in various cancer cell models (multiple myeloma, non-Hodgkin’s lymphoma, leukemia, non-small-cell
lung carcinoma, neuroblastoma and melanoma).
In the field of immuno-oncology, motixafortide mediates infiltration of T-cells while reducing immune regulatory cells in the tumor
microenvironment, or TME. In clinical studies, the combination of motixafortide with immune checkpoint inhibitors, such as anti PD-1, has shown T-cell activation and a reduction in tumor cell numbers.
The following is a summary of our motixafortide principal development activities.
Stem cell mobilization
Multiple Myeloma
In September 2023, the FDA approved motixafortide in combination with G-CSF to mobilize hematopoietic stem cells to the peripheral
blood for collection and subsequent autologous transplantation in patients with multiple myeloma.
In November 2023, we initiated pivotal bridging study preparation activities with Gloria, our Asia partner, to support potential
approval and commercialization of motixafortide in stem-cell mobilization in China. In February 2024, an IND was filed with the Center for Drug Evaluation of the National Medical Products Administration in China, which was approved in May 2024.
This study in China is planned to commence in the first half of 2025, with data approximately 18 months later.
Sickle Cell Disease
In March 2023, we entered into a clinical collaboration with Washington University School of Medicine in St. Louis to advance a Phase
1 clinical trial in which motixafortide is being evaluated as a monotherapy and in combination with natalizumab (VLA-4 inhibitor), as novel regimens to mobilize CD34+ hematopoietic stem cells (HSC) for gene therapies in SCD. The proof-of-concept
investigator-initiated study enrolled five adults with a diagnosis of SCD who are receiving automated red blood cell exchanges via apheresis. In June 2024, the study was amended to increase enrollment from five to 10 adults. The trial’s primary
objective is to assess the safety and tolerability of motixafortide alone and in combination with natalizumab in SCD patients, defined by dose-limiting toxicities. Secondary objectives include determining the number of CD34+ hematopoietic stem and
progenitor cells (HSPCs) mobilized via leukapheresis; and determining the pharmacokinetics of CD34+ HSPCs mobilization to peripheral blood in response to motixafortide alone and motixafortide plus natalizumab in SCD patients. The study began
enrolling in 2023, with first patient dosed in December 2023, and is ongoing (timelines, as well as other study related decisions, are ultimately controlled by the independent investigator-sponsor and are, therefore, subject to change). Initial
data from this study was released in November 2024, with five patients completing mobilization and apheresis with motixafortide alone, and four of five with motixafortide in combination with natalizumab. Motixafortide alone, and in combination with
natalizumab, were safe and well-tolerated in the trial. Common adverse events (AEs) were transient and included Grade 1-2 injection site (pruritis, tingling/pain) and systemic reactions (pruritis, hives). No Grade 4 AEs or vaso-occlusive events
occurred. Motixafortide alone, and in combination with natalizumab, resulted in robust CD34+ HSC mobilization to peripheral blood (PB). Motixafortide alone mobilized a
median of 198 CD34+ cells/μl (range 77-690) to PB with median 3.49x10 CD34+ cells/kg as part of a single blood volume collection, projecting the collection of 13.9x106 HSCs in a normal, single-day four blood volume apheresis collection session.
Motixafortide in combination with natalizumab mobilized a median of 231 CD34+ cells/μl (range 117-408), with median 4.64x10 CD34+ cells/kg collected as part of a single blood volume collection, projecting the collection of 18.6x106 CD34+ HSCs in
a single day four blood volume apheresis collection session. Final data from this study is expected in the first half of 2025.
In May 2024, we entered into a clinical collaboration with St. Jude Children’s Research Hospital, Inc. to conduct a multi-center Phase
1 clinical trial to evaluate motixafortide for the mobilization of CD34+ hematopoietic stem cells (HSCs) used in the development of gene therapies for patients with SCD. The Phase 1 clinical trial is an open-label, multi-center study evaluating the
safety, tolerability, and feasibility of single-agent motixafortide (CXCR4 inhibitor) for the mobilization and collection of CD34+ HSCs in 12 patients (aged 18 and older) with SCD. The trial’s primary objective is to assess the safety and
tolerability of motixafortide in SCD patients, as determined by the incidence of adverse events. Secondary objectives include understanding CD34+ kinetics after motixafortide administration in patients with SCD and determining the number of CD34+
HSCs collected via leukapheresis. The study is designed in two parts: Part A (N=6) will evaluate single dose motixafortide mobilization followed by one apheresis session; Part B (N=6) will evaluate daily motixafortide administration over a two-day
mobilization and apheresis regimen. Additional objectives include phenotype and cell function characterization, as well as assessment of the gene modifying potential and senescence of CD34+ cells. First patient dosing is expected in the fourth
quarter of 2024, with data anticipated in 2025 (timelines, as well as other study related decisions, are ultimately controlled by the independent investigator-sponsor and are, therefore, subject to change).
Going forward, these two studies will continue under the Ayrmid License Agreement.
Pancreatic Cancer
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 mechanism of action and safety of motixafortide in combination with
KEYTRUDA® (pembrolizumab), MSD’s anti-PD-1 therapy, in 37 patients with metastatic PDAC. The study was an open-label, multicenter, single-arm trial designed to evaluate the mechanism of action, safety and tolerability, and clinical
response of the combination of these therapies. The mechanistic evaluation consisted of 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 the recruiting of 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 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 first-line PDAC. This investigator-initiated Phase 2, single-arm study (CheMo4METPANC), led by Columbia University and supported equally by BioLineRx and Regeneron, initially
enrolled 11 PDAC patients in a pilot phase. In September 2023, we reported data from the pilot phase of the study. As of July 2023, of those 11 patients, seven patients (64%) experienced a partial response (PR), of which six (55%) are now confirmed
PRs, with one patient experiencing resolution of the hepatic (liver) metastatic lesion. Three patients (27%) experienced stable disease, resulting in a disease control rate of 91%. These findings compare favorably to historic partial response and
disease control rates of 23% and 48%, respectively, reported with the chemotherapy combination of gemcitabine and nab-paclitaxel. Additionally, analysis of paired pre- and on-treatment biopsy samples demonstrated an increase in CD8+ T-cell density
in tumors from all 11 patients treated (P = 0.007).
Based on the preliminary data from this pilot phase, the planned single-arm study was amended to a significantly larger, randomized
multi-center study, with a new planned total of 108 patients. The amended Phase 2b study is evaluating the combination of motixafortide, PD-1 inhibitor cemiplimab, and standard of care chemotherapies gemcitabine and nab-paclitaxel, versus
gemcitabine and nab-paclitaxel alone. The trial's primary endpoint is progression free survival and a pre-specified interim futility analysis will be conducted when 40% of progression free survival events are observed, which is expected in 2026.
Secondary objectives include safety, response rate, disease control rate, duration of clinical benefit and overall survival. In February 2024, the first patient was dosed, with full enrollment projected for 2027.
We are also advancing plans in collaboration with Gloria, our Asia partner, for a Phase 2b randomized study assessing motixafortide in
combination with the PD-1 inhibitor zimberelimab and standard-of-care chemotherapy as first-line treatment in patients with metastatic pancreatic cancer. IND submission and protocol finalization is planned for the first half of 2025, with study
initiation in 2025.
Other Studies
In addition to the above, from time to time a number of Company-sponsored and investigator-initiated studies may be conducted in a
variety of indications, to support the interest of the scientific and medical communities in exploring additional uses for motixafortide in solid tumors. These studies serve to potentially further elucidate the mechanism of action for
motixafortide, generate data about motixafortide’s potential use in other indications, and inform the life-cycle management process of motixafortide in solid tumors. The results of studies such as these are presented from time to time at relevant
professional conferences.
Orphan Drug Designations
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). Orphan Drug Designation is granted
to therapeutics intended to treat rare diseases or conditions that affect not more than 200,000 people in the United States (or diseases or conditions that affect more than 200,000 people but where there is no reasonable expectation that the
product development cost will be recovered from product sales in the United States). If an Orphan Drug-Designated product subsequently receives FDA approval for the disease or condition for which it was designated, the product is entitled to a
seven-year marketing exclusivity period, which means that the FDA may not approve any other applications to market the same drug for the same indication, except in very limited circumstances (such as a showing of clinical superiority to the product
with orphan exclusivity by means of greater effectiveness, greater safety or providing a major contribution to patient care or in instances of drug supply issues), for seven years. In addition, Orphan Drug Designation enables sponsors to apply for
certain federal grants and tax credits for clinical trials and provides an exemption from the Prescription Drug User Fee so long, as the sponsor’s annual revenue is below $50,000,000.
In January 2020, the European Medicines Agency (“EMA”) granted an Orphan Drug Designation to motixafortide for the treatment of
pancreatic cancer. In addition, in December 2023, the EMA granted Orphan Drug Designation to motixafortide for treatment of patients undergoing hematopoietic stem cell transplantation. The EMA grants orphan medicinal product designation to
investigational drugs intended to treat, prevent or diagnose a life-threatening or chronically debilitating disease affecting fewer than five in 10,000 people in the EU and for which no satisfactory treatment is available or, if such treatment
exists, the medicine must be of significant benefit to those affected by the condition. Orphan medicinal product designation provides regulatory and financial incentives for companies to develop and market therapies, including ten years of market
exclusivity, protocol assistance, fee reductions and EU-funded research.
In addition, in October 2024 we received a Notice of Allowance from the U.S. Patent and Trademark Office for a patent, titled,
“COMPOSITION OF BL-8040,” which covers the composition of motixafortide. This patent strengthens our intellectual property estate and extends our patent protection on motixafortide in the United States through December 2041.
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. It offers an alternative to painful, invasive and expensive removal treatments including cryotherapy, laser treatment and surgery. Since the treatment is non-invasive, it poses minimal
infection risk and eliminates the need for anesthesia, antiseptic precautions and bandaging. The pre-filled device controls and standardizes the volume of solution applied to a lesion, ensuring accurate administration directly on the lesion and
preventing both accidental exposure of the healthy surrounding tissue and unintentional dripping. It has an ergonomic design, making it easy to handle, and has been designed with a childproof cap. BL-5010 is applied topically on a skin lesion in a
treatment lasting a few minutes with the pen-like applicator and causes the lesion to gradually dry out and fall off within one to four weeks.
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.
War in Israel
In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on
civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel. These attacks resulted in
extensive deaths, injuries and kidnapping of civilians and soldiers. Following the attack, Israel’s security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued
rocket and terror attacks. In addition, since the commencement of these events, there have been continued hostilities along Israel’s northern border with Lebanon (with the Hezbollah terror organization), which have escalated into a military
campaign against Hezbollah, and maritime and air attacks from the Houthi movement in Yemen. It is possible that other terrorist organizations, including Palestinian military organizations in the West Bank as well as other hostile countries will
join the hostilities. In addition, Iran launched two direct attacks on Israel in April and October 2024, involving hundreds of drones and ballistic missiles and has threatened to continue to attack Israel and is widely believed to be developing
nuclear weapons. Iran is also believed to have a strong influence among extremist groups in the region, such as Hamas in Gaza, Hezbollah in Lebanon, the Houthi movement in Yemen and various rebel militia groups in Syria and Iraq. Such clashes may
escalate in the future into a greater regional conflict. We cannot currently predict the intensity or duration of Israel’s war on all fronts, nor can we predict how this war will ultimately affect our business and operations or Israel’s economy in
general.
Funding
We have funded our operations primarily through the sale of equity securities (both in public and private offerings), payments
received under our strategic licensing and collaboration arrangements, funding received from the Israel Innovation Authority, or IIA, 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 agreements, primarily royalties from the commercialization of APHEXDA by Ayrmid, potential future upfront,
milestone or royalty payments that we may receive from Gloria and any other out-licensing transaction, interest earned on our investments, and additional capital to be raised through public or private equity offerings or debt financings. As of
September 30, 2024, we had $29.2 million of cash, cash equivalents and short-term bank deposits.
Revenues
Our revenues to date have been generated primarily from upfront and milestone payments under out-licensing agreements and since the
fourth quarter of 2023, revenues from product sales of APHEXDA.
We expect our revenues, if any, for the next several years to be derived primarily from future royalties on product sales, primarily
royalties paid by Ayrmid from the commercialization of APHEXDA in stem cell mobilization in the U.S. and milestone payments from the license agreements with Ayrmid and Gloria.
Cost of Revenues
Our cost of revenues to date have consisted of sub-license payments to the licensors in respect of upfront and milestone payments
associated with out-licensing agreements and more recently, costs associated with the manufacture of APHEXDA and royalty payments to the licensor with respect to direct product sales of APHEXDA. Prior to receiving FDA approval for APHEXDA in
September 2023, we expensed all manufacturing and material costs as research and development expenses.
We expect our cost of revenues, if any, for the next several years to be derived primarily from sub-license payments to the licensors
in respect of out-licensing agreements and other potential collaboration arrangements, including future royalties on product sales from such out-licensing agreements.
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 therapeutic 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 expenses to remain one of our primary expenses in the near future as we continue to develop motixafortide.
The following table identifies our current major research and development projects:
|
Project
|
Status
|
Expected Near Term Milestones
|
|
motixafortide
|
1.
|
FDA approval received on September 8, 2023 for stem-cell mobilization in multiple myeloma patients.
|
1.
|
Out-licensed to Ayrmid in November 2024; five-year long-term follow-up of GENESIS patients ongoing
|
|
2.
|
Reported data from single-arm pilot phase of the investigator-initiated Phase 2 combination trial in first-line PDAC. Of 11
patients with metastatic pancreatic cancer enrolled, 7 patients (64%) experienced partial response (PR), of which 6 (55%) were confirmed PRs with one patient experiencing resolution of the hepatic (liver) metastatic lesion. 3 patients (27%)
experienced stable disease, resulting in a disease control rate of 91%. Based on these encouraging results, study was substantially revised to a multi-institution, randomized Phase 2b trial of 108 patients
|
2.
|
First patient dosed in February 2024. Interim
data expected in 2026 and full enrollment projected for 2027*
|
|
3.
|
Phase 1 study for gene therapies in SCD (with Washington
University School of Medicine in St. Louis)**
|
3.
|
First patient dosed in December 2023 and initial
data from the study released in November 2024. Final data expected in the first half of 2025*
|
|
4.
|
Phase 1 study for gene therapies in SCD (with St. Jude Children’s Research Hospital, Inc.)**
|
4.
|
First patient dosing is expected in the fourth
quarter of 2024, with data anticipated in 2025*
|
|
5.
|
IND approved in China for initiation of pivotal bridging study in SCM under license agreement with Gloria
|
5.
|
Initiation of the study is planned in the first half
of 2025, with data approximately 18 months later
|
|
6.
|
Phase 2b randomized study in first-line PDAC in China under license agreement with Gloria
|
6.
|
IND submission and protocol finalization planned for 2025 and study initiation in 2025
|
| * |
These studies are investigator-initiated studies; therefore, the timelines are ultimately controlled by the independent investigators and are subject to change.
|
| ** |
Study to be continued under the Ayrmid License.
|
We expect that a large percentage of our research and development expenses 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 motixafortide in our pipeline for commercialization. Clinical development timelines, the probability of success and development costs can differ materially from expectations. We expect to continue to test motixafortide and any other
therapeutic candidates in preclinical studies for toxicology, safety and efficacy, and to conduct additional clinical trials for each such 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.
Our future research and development expenses will depend on the clinical success of motixafortide in solid tumor indications and on
other potential therapeutic candidates, 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, and are eligible to participate, in the clinical trials;
|
|
|
•
|
the duration of patient follow-up;
|
|
|
|
|
|
|
•
|
whether the patients require hospitalization or can be treated on an outpatient basis;
|
|
|
•
|
the development stage of the therapeutic candidate; and
|
|
|
•
|
the efficacy and safety profile of the therapeutic candidate.
|
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 commercialization, marketing and business development
functions. Other significant costs include marketing and communication materials, market access activities, professional fees for outside market research and consulting, and legal services related to compliance and to potential business development
transactions.
We expect our sales and marketing expenses to be reduced significantly following the License Agreement with Ayrmid.
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, September 2022 and April 2024. 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 an
“at-the-market” offering agreement, or ATM Agreement, between us and H.C. Wainwright & Co., LLC, or HCW, entered into in September 2021, and the pro-rata share of issuance expenses from the placements related to the warrants. Sales-based
royalties 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 loans from BlackRock EMEA Venture and Growth Lending (previously Kreos Capital VII Aggregator SCSP), or BlackRock; 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, 2023. We believe that the accounting policies below are critical for one to fully understand and evaluate our financial condition and results of operations.
Our consolidated financial statements are prepared in conformity with International Financial Reporting Standards, or IFRS, as issued
by the International Accounting Standards Board, or IASB. In preparing our consolidated financial statements, we make judgements, estimates and assumptions about the application of our accounting policies which affect the reported amounts of
assets, liabilities, revenue and expenses. Our critical accounting judgements and sources of estimation uncertainty are described in Note 4 to the consolidated financial statements included in our Annual Report.
Results of Operations
Comparison of the three-month and nine-month periods ended September 30, 2024 to the three-month and nine-month
periods ended September 30, 2023
Revenues
| |
|
Three months ended September 30,
|
|
|
Nine months ended September 30,
|
|
| |
|
2023
|
|
|
2024
|
|
|
Increase (decrease)
|
|
|
2023
|
|
|
2024
|
|
|
Increase (decrease)
|
|
| |
|
(in thousands of U.S. dollars)
|
|
|
License revenues
|
|
|
-
|
|
|
|
3,221
|
|
|
|
3,221
|
|
|
|
-
|
|
|
|
12,702
|
|
|
|
12,702
|
|
|
Product sales, net
|
|
|
-
|
|
|
|
1,722
|
|
|
|
1,722
|
|
|
|
-
|
|
|
|
4,489
|
|
|
|
4,489
|
|
|
Total revenues
|
|
|
-
|
|
|
|
4,943
|
|
|
|
4,943
|
|
|
|
-
|
|
|
|
17,191
|
|
|
|
17,191
|
|
Comparison of three-month periods ended September 30, 2024 and 2023
Revenues for the three-month period ended September 30, 2024 were $4.9 million. We did not record any revenues during the three-month
period ended September 30, 2023. The revenues in 2024 primarily reflect a portion of the up-front payment received by us under the Gloria License Agreement which amounted to $3.2 million, as well as $1.7 million of net revenues from product sales
of APHEXDA in the U.S.
Comparison of nine-month periods ended September 30, 2024 and 2023
Revenues for the nine-month period ended September 30, 2024 were $17.2 million. We did not record any revenues during the nine-month
period ended September 30, 2023. The revenues in 2024 primarily reflect a portion of the up-front payment received by us under the Gloria License Agreement and a milestone payment achieved under the Gloria License Agreement, which collectively
amounted to $12.7 million, as well as $4.5 million of net revenues from product sales of APHEXDA in the U.S.
Cost of revenues
| |
|
Three months ended September 30,
|
|
|
Nine months ended September 30,
|
|
| |
|
2023
|
|
|
2024
|
|
|
Increase (decrease)
|
|
|
2023
|
|
|
2024
|
|
|
Increase (decrease)
|
|
| |
|
(in thousands of U.S. dollars)
|
|
|
Amortization of intangible asset
|
|
|
-
|
|
|
|
427
|
|
|
|
427
|
|
|
|
-
|
|
|
|
1,555
|
|
|
|
1,555
|
|
|
Direct costs related to license revenues
|
|
|
-
|
|
|
|
142
|
|
|
|
142
|
|
|
|
-
|
|
|
|
530
|
|
|
|
530
|
|
|
License fees and royalties payable to licensor
|
|
|
-
|
|
|
|
170
|
|
|
|
170
|
|
|
|
-
|
|
|
|
853
|
|
|
|
853
|
|
|
Cost of product sales
|
|
|
-
|
|
|
|
83
|
|
|
|
83
|
|
|
|
-
|
|
|
|
236
|
|
|
|
236
|
|
|
Total cost of revenues
|
|
|
-
|
|
|
|
822
|
|
|
|
822
|
|
|
|
-
|
|
|
|
3,174
|
|
|
|
3,174
|
|
Comparison of three-month periods ended September 30, 2024 and 2023
Cost of revenues for the three-month period ended September 30, 2024 was $0.8 million. We did not record any cost of revenues during
the three-month period ended September 30, 2023. The cost of revenues in 2024 primarily reflects the amortization of intangible assets, royalties on net product sales of APHEXDA in the U.S. and cost of goods sold on product sales.
Comparison of nine-month periods ended September 30, 2024 and 2023
Cost of revenues for the nine-month period ended September 30, 2024 was $3.2 million. We did not record any cost of revenues during
the nine-month period ended September 30, 2023. The cost of revenues in 2024 primarily reflects the amortization of an intangible asset, sub-license fees on a milestone payment received under the Gloria License Agreement, royalties on net product
sales of APHEXDA in the U.S. and cost of goods sold on product sales.
Research and development expenses
| |
|
Three months ended September 30,
|
|
|
Nine months ended September 30,
|
|
| |
|
2023
|
|
|
2024
|
|
|
Increase (decrease)
|
|
|
2023
|
|
|
2024
|
|
|
Increase (decrease)
|
|
| |
|
(in thousands of U.S. dollars)
|
|
|
Research and development expenses
|
|
|
2,727
|
|
|
|
2,565
|
|
|
|
(162
|
)
|
|
|
9,417
|
|
|
|
7,284
|
|
|
|
(2,133
|
)
|
Comparison of three-month periods ended September 30, 2024 and 2023
Research and development expenses for the three months ended September 30, 2024 were $2.6 million, a decrease of $0.1 million, or
5.9%, compared to $2.7 million for the three months ended September 30, 2023. The decrease resulted primarily from lower expenses related to the termination of the development of AGI-134 and a decrease in payroll and share-based compensation.
Comparison of nine-month periods ended September 30, 2024 and 2023
Research and development expenses for the nine months ended September 30, 2024 were $7.3 million, a decrease of $2.1 million, or
22.6%, compared to $9.4 million for the nine months ended September 30, 2023. The decrease resulted primarily from lower expenses related to New Drug Application-supporting activities related to motixafortide, the termination of the development of
AGI-134 and a decrease in payroll and share-based compensation.
Sales and marketing expenses
| |
|
Three months ended September 30,
|
|
|
Nine months ended September 30,
|
|
| |
|
2023
|
|
|
2024
|
|
|
Increase (decrease)
|
|
|
2023
|
|
|
2024
|
|
|
Increase (decrease)
|
|
| |
|
(in thousands of U.S. dollars)
|
|
|
Sales and marketing expenses
|
|
|
8,131
|
|
|
|
5,553
|
|
|
|
(2,578
|
)
|
|
|
17,609
|
|
|
|
18,310
|
|
|
|
701
|
|
Comparison of three-month periods ended September 30, 2024 and 2023
Sales and marketing expenses for the three months ended September 30, 2024 were $5.5 million, a decrease of $2.6 million, or 31.7%,
compared to $8.1 million for the three months ended September 30, 2023. The decrease resulted primarily from lower expenses of commercialization activities related to motixafortide. The higher expenses in the corresponding period of 2023 reflect
the ramp-up of pre-commercialization activities related to motixafortide.
Comparison of nine-month periods ended September 30, 2024 and 2023
Sales and marketing expenses for the nine months ended September 30, 2024 were $18.3 million, an increase of $0.7 million, or 4.0%,
compared to $17.6 million for the nine months ended September 30, 2023. The increase resulted primarily from the ramp-up in headcount costs associated with fully hired field teams.
General and administrative expenses
| |
|
Three months ended September 30,
|
|
|
Nine months ended September 30,
|
|
| |
|
2023
|
|
|
2024
|
|
|
Increase (decrease)
|
|
|
2023
|
|
|
2024
|
|
|
Increase (decrease)
|
|
| |
|
(in thousands of U.S. dollars)
|
|
|
General and administrative expenses
|
|
|
1,499
|
|
|
|
1,390
|
|
|
|
(109
|
)
|
|
|
4,102
|
|
|
|
4,405
|
|
|
|
303
|
|
Comparison of three-month periods ended September 30, 2024 and 2023
General and administrative expenses for the three months ended September 30, 2024 were $1.4 million, a decrease of $ 0.1 million, or
7.3%, compared to $1.5 million for the three months ended September 30, 2023. The decrease resulted primarily from small decreases in a number of G&A expenses.
Comparison of nine-month periods ended September 30, 2024 and 2023
General and administrative expenses for the nine months ended September 30, 2024 were $4.4 million, an increase of $0.3 million, or
7.4%, compared to $4.1 million for the nine months ended September 30, 2023. The increase resulted primarily from an increase in legal and certain other expenses.
Non-operating income (expenses), net
| |
|
Three months ended September 30,
|
|
|
Nine months ended September 30,
|
|
| |
|
2023
|
|
|
2024
|
|
|
Increase (decrease)
|
|
|
2023
|
|
|
2024
|
|
|
Increase (decrease)
|
|
| |
|
(in thousands of U.S. dollars)
|
|
|
Non-operating income (expenses), net
|
|
|
(3,141
|
)
|
|
|
756
|
|
|
|
3,897
|
|
|
|
(13,790
|
)
|
|
|
13,053
|
|
|
|
26,843
|
|
Comparison of three-month and nine-months periods ended September 30, 2024 and 2023
Non-operating income for the three and nine
months ended September 30, 2024 primarily relates to non-cash fair-value adjustments of warrant liabilities on our balance sheet, as a result of changes in our
share price, offset by warrant offering expenses. Non-operating expenses for the three and nine months ended September 30, 2023 primarily relate to non-cash
fair-value adjustments of warrant liabilities on our balance sheet.
Financial income (expenses), net
| |
|
Three months ended September 30,
|
|
|
Nine months ended September 30,
|
|
| |
|
2023
|
|
|
2024
|
|
|
Increase (decrease)
|
|
|
2023
|
|
|
2024
|
|
|
Increase (decrease)
|
|
| |
|
(in thousands of U.S. dollars)
|
|
|
Financial income
|
|
|
312
|
|
|
|
434
|
|
|
|
122
|
|
|
|
1,289
|
|
|
|
1,534
|
|
|
|
245
|
|
|
Financial expenses
|
|
|
(837
|
)
|
|
|
(1,625
|
)
|
|
|
(788
|
)
|
|
|
(3,101
|
)
|
|
|
(4,639
|
)
|
|
|
(1,538
|
)
|
|
Net financial income (expenses)
|
|
|
(525
|
)
|
|
|
(1,191
|
)
|
|
|
(666
|
)
|
|
|
(1,812
|
)
|
|
|
(3,105
|
)
|
|
|
(1,293
|
)
|
Comparison of three-month periods ended September 30, 2024 and 2023
Net financial expenses for the three months ended
September 30, 2024 were $1.2 million, compared to net financial expenses of $0.5 million for the three months ended September 30, 2023. Net financial expenses for both periods primarily relate to interest paid on loans,
which increased in 2024 due to the drawdown of the second tranche of the BlackRock loan in April 2024, partially offset by investment income earned on our bank deposits.
Comparison of nine-month periods ended September 30, 2024 and 2023
Net financial expenses for the nine months ended
September 30, 2024 were $3.1 million, compared to net financial expenses of $1.8 million for the nine months ended September 30, 2023. 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, proceeds from debt financings, interest earned on investments and funding from the IIA. As of September
30, 2024, we held $29.2 million of cash, cash equivalents and short-term bank deposits. We have invested substantially all our available cash funds in short-term bank deposits.
On November 20, 2024, we entered into the Purchase Agreement with the Investors, providing for the Offering, of 16,471,449 ADSs (or
Pre-Funded Warrants to purchase ADSs in lieu of ADSs). Each ADS and Pre-Funded Warrant was sold together with the Ordinary Warrants to purchase up to an aggregate of 8,235,724 ADSs. The purchase price in the Offering was $0.5464 per ADS and accompanying Ordinary Warrant and $0.5463 per Pre-Funded Warrant and accompanying Ordinary Warrant. Aggregate gross proceeds from the Offering (without taking into
account any proceeds from any future exercises of Warrants) were $9.0 million. For additional information, see “Overview—Registered Direct Offering” above.
In April 2024, we completed the issuance and sale in a registered direct offering of 7,500,000 of our ADSs and warrants to purchase up
to an aggregate of 7,500,000 ADSs, or the April 2024 Warrants, to certain institutional investors at a combined purchase price of $0.80 per ADS and accompanying April 2024 Warrant, for aggregate net proceeds of approximately $5.4 million, after
deducting the fees of the placement agent and offering expenses payable by us, and excluding any proceeds that may be received upon exercise of the April 2024 Warrants.
In addition, in October 2023, we closed on a securities purchase agreement with HST and Gloria pursuant to which we issued in a
private placement an aggregate of 6,829,137 ADSs at a price of $2.136 per ADS. Aggregate gross proceeds from the sale were approximately $14.6 million. No warrants were issued in the transaction.
In September 2022, we entered into a loan agreement, or the Loan Agreement, with BlackRock, with an aggregate principal amount of up
to $40 million comprised of three tranches of up to $10 million, $20 million and $10 million. We drew down the initial tranche of $10 million following execution of the Loan Agreement in September 2022 and we drew down the second tranche of $20
million in April 2024, following fulfilment of the requisite milestones. The third tranche was available for draw down until October 1, 2024, upon achievement of certain milestones. No draw down was made by the indicated date, and thus the third
tranche is no longer available under the facility.
In connection with the Ayrmid License Agreement, we entered into an amendment, or the Amendment, to the Loan Agreement. Pursuant to
the Amendment, (i) we will make aggregate payments of $16.5 million, as partial repayment of the loan to BlackRock and in lieu of future revenue-based payments, which will be fully cancelled, (ii) effective December 1, 2024, we will begin to pay
the remaining amounts outstanding under the loan (in principal and interest) over a three-year period ending December 1, 2027, and (iii) our minimum cash balance requirement under the Loan Agreement has been reduced to $4 million. All other terms
of the Loan Agreement remain the same. The effectiveness of the Amendment is subject to the satisfaction of certain conditions, including, but not limited to, the Company’s receipt of the upfront payment under the Ayrmid License Agreement.
In September 2021, we entered into the ATM Agreement with 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. As of the issuance date of this report, we have sold 2,109,858 of our ADSs for total gross proceeds of approximately $4.4 million under the
ATM program.
Net cash used in operating activities was $35.3 million for the nine months ended September 30, 2024, compared to net cash used in
operating activities of $27.6 million for the nine months ended September 30, 2023. The increase was primarily the result of an increase in sales and marketing expenses (primarily for commercialization) and repayment of outstanding payables from
December 2023.
Net cash provided by investing activities was $18.2
million for the nine months ended September 30, 2024, compared to net cash provided by investing activities of $21.8 million for the nine months ended September
30, 2023. 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 $21.8
million for the nine months ended September 30, 2024, compared to net cash provided by financing activities of $3.3 million for the nine months ended September
30, 2023. The cash flows in 2024 primarily reflect the net proceeds of the loan from BlackRock and the net proceeds of a registered direct offering of our ADSs in April 2024, offset by repayments of the loan from BlackRock and the repayments of
lease liabilities. The cash flows provided by financing activities in 2023 primarily reflect warrant exercises and net proceeds from the ATM facility, offset by repayments of the loan from BlackRock and the repayments of lease
liabilities.
We have incurred accumulated losses in the amount of $397 million through September 30, 2024, and we expect to continue incurring losses and negative cash flows from operations until the cash flows from our strategic partnerships reach a level to offset its ongoing development costs. In
this regard, management monitors rolling forecasts of our liquidity reserves on the basis of anticipated cash flows and seeks to maintain liquidity balances at levels that are sufficient to meet its needs. Our cash flow projections are subject to
various risks and uncertainties concerning their fulfilment, and these factors and the risk inherent in our operations, which management has concluded indicate that a material uncertainty exists, may cast significant doubt on our ability to
continue as a going concern. Similarly, our independent registered public accounting firm included a “going concern” explanatory paragraph in its report on our financial statements as of and for the year ended December 31, 2023.
Developing drugs and conducting clinical trials is expensive and we will need to raise substantial additional funds to achieve our
strategic objectives. Based on our current projected cash requirements, we believe that our existing cash and investment balances and other sources of liquidity, including royalties received from Ayrmid from product sales of APHEXDA and milestone
payments from our license agreements with Ayrmid and Gloria, will be sufficient to meet our capital requirements into 2026. We expect to also continue to seek to finance our operations through other sources, including out-licensing arrangements for
the development and commercialization of our therapeutic candidates or other partnerships or joint ventures, public and private offerings of our equity securities, as well as grants from government agencies and foundations. 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, if any, under our collaboration or licensing arrangements;
|
|
|
|
|
|
|
•
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the costs of the development and expansion of our operational infrastructure;
|
|
|
•
|
the costs and timing of obtaining regulatory approval of our therapeutic candidates;
|
|
|
•
|
our success in effecting out-licensing arrangements with third parties;
|
|
|
•
|
the ability of our collaborators and licensees to achieve development milestones, marketing approval and other events or
developments under our collaboration and out-licensing 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;
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|
•
|
the costs of establishing sales and marketing capabilities or contracting with third parties to provide these capabilities for
us;
|
|
|
•
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the costs of acquiring or undertaking development and commercialization efforts for any future therapeutic candidates;
|
|
|
•
|
the magnitude of our general and administrative expenses;
|
|
|
•
|
interest and principal payments on the loan from BlackRock;
|
|
|
•
|
any cost that we may incur under current and future licensing arrangements relating to our therapeutic candidates;
|
|
|
•
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payments to the IIA; and
|
|
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•
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the impact of the military campaigns by Israel against Hamas, Hezbollah and other terrorist organizations (including the
declaration of war by Israel against Hamas), which may exacerbate the magnitude of the factors discussed above.
|
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
Share and per-share information in ADSs and ordinary shares are presented in the tables below. Each ADS represents 15 ordinary shares.
| |
|
Three months ended
September 30,
|
|
|
Nine months ended
September 30,
|
|
| |
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
| |
|
(in U.S. dollars)
|
|
|
Earnings (loss) per ADS – basic and diluted
|
|
|
(0.26
|
)
|
|
|
(0.00
|
)
|
|
|
(0.76
|
)
|
|
|
(0.08
|
)
|
|
Earnings (loss) per ordinary share – basic and diluted
|
|
|
(0.02
|
)
|
|
|
(0.00
|
)
|
|
|
(0.05
|
)
|
|
|
(0.01
|
)
|
| |
|
December 31, 2023
|
|
|
September 30,
2024
|
|
| |
|
(in number of ADSs)
|
|
|
Authorized share capital
|
|
|
166,666,667
|
|
|
|
166,666,667
|
|
| |
|
|
|
|
|
|
|
|
|
Issued and paid-up capital
|
|
|
72,439,278
|
|
|
|
79,990,613
|
|
Legal Proceedings
Securities Class Action Complaints
On January 5, 2023, a putative securities class action complaint captioned Winston Peete v. BioLineRx Ltd. and Philip A. Serlin (Case
no: Case 2:23-cv-00041 was filed in the U.S. District Court for the District of New Jersey by purported shareholder Winston Peete, naming us and our chief executive officer, Mr. Serlin, as defendants. The complaint asserted violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, claiming that the defendants made false and materially misleading statements and failed to disclose material adverse facts pertaining to our financial
position with regard to the development of motixafortide and that we would require a loan and a securities offering to commercialize motixafortide. The complaint asserted a putative class period of February 23, 2021 to September 19, 2022,
inclusive, and sought certification as a class action and an unspecified amount of damages. On July 5, 2023, plaintiffs filed an amended complaint alleging the same claims and adding the Company’s Chief Financial Officer, Mali Zeevi, as a
defendant. On September 5, 2023, defendants filed a motion to dismiss the amended complaint in its entirety, and on July 15, 2024, the court granted the order to dismiss without prejudice. The plaintiffs did not file an amended claim by the
deadline, which passed on August 14, 2024. In addition, on February 5, 2023, we received a lawsuit and motion to approve the lawsuit as a class action lawsuit pursuant to the Class Action Lawsuits Law 5766-2006, which was filed against us and Mr.
Serlin in the Tel Aviv District Court (Economic Division). The motion asserts substantially similar allegations as the U.S. action described above. The motion asserts to define the class as all shareholders who held the company's securities traded
on the TASE, on September 19, 2022 and the class period relates to the company's statements between February 23, 2021, and September 19, 2022. The total amount claimed, if the lawsuit is certified as a class action, as set forth in the motion is
approximately NIS 113.5 million (approximately $32 million). The outcome of the legal proceeding in the Tel Aviv District Court (Economic Division) is uncertain at this point, although we anticipate it will likely be dismissed following the
dismissal of the U.S. claim. Notwithstanding, we believe that it is without merit and intend to vigorously defend ourselves against such action.
Biokine Claim
On June 16, 2024, Biokine Therapeutics Ltd. (“Biokine”), filed a complaint with the District Court of Jerusalem against us. The
complaint alleges breach of contract and a purported failure to make certain payments to Biokine under our in-licensing agreement with Biokine for motixafortide. The lawsuit seeks compensatory damages in the amount of approximately $6.5 million and
a declaratory judgment in favor of Biokine. We filed a statement of defense on November 17, 2024. We believe the claim is without merit and intend to vigorously defend ourselves against such action. On November 20, 2024, we and Biokine entered
into an agreement to refer the dispute to arbitration.
Nasdaq Minimum Bid Price Requirement
On November 12, 2024, we received a letter from Nasdaq advising that we have been granted a 180-day extension to May 12, 2025, to
regain compliance with Nasdaq's minimum $1.00 bid price requirement.
As previously reported, on May 13, 2024, we announced that we received a letter from the Nasdaq indicating that, based upon the
closing bid price of our ADS for the prior 30 consecutive business days, we were not in compliance with the minimum $1.00 bid price requirement and we were given 180 days, or until November 11, 2024, to regain compliance.
If at any time before May 12, 2025, the bid price of our ADSs closes at or above $1.00 per share for a minimum of 10 consecutive
trading days, we will regain compliance with the Nasdaq Listing Rules, and the matter will be closed.
