Clal Biotechnology Industries — Gamida Cell lists on NASDAQ

In terms of the underlying business, MediWound recently reported its Q318 results. Revenues, which are based on NexoBrid sales in the EU, were $0.9m, down 10% from the previous quarter this year ($1.0m). Notably, the Ministry of Health in Russia recently granted NexoBrid marketing authorisation. MediWound and their exclusive distribution partner in Russia plan to initiate sales in H119.

The company completed enrolment of the 175-patient US NexoBrid Phase III (DETECT) trial in June 2018 and recently announced that the last patient completed acute treatment and entered the follow-up period. The company now expects to release top-line data in January 2019, which is slightly behind its previous expectations (YE18). MediWound plans to schedule a pre-BLA meeting with the FDA to request submission of the BLA based on these acute primary, secondary and safety data and then further supplement the application with 12-month follow-up data during FDA review. If the meeting goes according to plan, the company expects to file a BLA in H219, which would imply a potential H220 approval. However, if the FDA does not permit BLA submission with only acute data, the company expects its timelines to be delayed by about three to four quarters. Moreover, enrolment is ongoing for the 160-patient Phase III study of NexoBrid, which is fully funded by the US Biomedical Advanced Research and Development Authority (BARDA), for debridement in children aged 0–17 years in the US and EU. In addition, MediWound is looking to add clinical sites in both regions. Regarding EscharEx, the company submitted the Phase III protocol to the FDA and, with consensus on the primary endpoint, expects to initiate the programme in H119.

In late September, MediWound was awarded another BARDA contract for the development of NexoBrid for sulphur mustard injuries. The agreement provides approximately $12m in funding to support R&D activities with additional funding of up to $31m for supplementary activities, pivotal animal studies, as well as the FDA BLA submission.

MediWound’s advanced discussions with a number of third parties regarding a potential strategic transaction remain ongoing. At this time, MediWound has confirmed that this short group of potential suitors has narrowed. As a reminder, the exact nature of these proposed transactions was not disclosed, but could include anything from a product out-licensing to the acquisition of all of MediWound.

On 26 October 2018, Gamida Cell announced the pricing of its IPO on NASDAQ under the symbol GMDA, having offered 6,250,000 ordinary shares at $8.00 per share, totalling ~$53m (including the underwriters’ option). Gamida Cell is also granting a 30-day underwriters’ option to purchase up to an additional 937,500 ordinary shares at the IPO price. BMO Capital Markets and RBC Capital Markets acted as joint book-running managers for the offering while Needham & Company and Oppenheimer acted as co-lead managers. Following the offering, CBl’s ownership of Gamida Cell decreased to 12% (from 18%).

Moreover, Gamida Cell will present translational data from its Phase I/II study of NiCord as a graft after myeloablative chemotherapy at the ASH Annual meeting on 1 December 2018. In total, 24 (median age 41.5 years) of 36 patients had evaluable blood samples for early monitoring of IR. Delayed IR following cord blood transplantation is associated with significant morbidity (ie increased risks of infections, relapse, development of secondary malignancies) and mortality.1, 2 IR is affected by human leukocyte antigen discrepancy between donor and host, graft versus host disease, preparative radiation/chemotherapy regimens and age-related thymic involution.3 Data from this cohort were compared to subgroups of patients with hematologic malignancies receiving non-manipulated cord blood transplantation (n=27, median age 15.4 years) and T-cell-replete, unrelated bone marrow transplantation (n=20, median age 14.3 years). Overall, 91% of the patients achieved the primary endpoint, which was defined as successful CD4+ IR (>50×106/L) within the first 100 days following NiCord transplantation. No difference in probability of early CD4+ IR was noted between the groups (p=0.76). The secondary end points were IR of CD4+, CD8+, natural killer (NK) cells, B-cells and monocytes in the first year after transplantation. The study found that IR of CD4+ (p=0.71) and CD8+ (p=0.08) T-cells were similar amongst the groups whereas IR of NK cells (p<0.001), B-cells (p=0.026), and monocytes (p<0.001) after NiCord transplantation was faster in comparison to the other groups.

On 31 October 2018, Anchiano Therapeutics (31% owned by CBI) announced that it filed a draft submission statement to the SEC for a potential US IPO of American Depositary Shares (ADS) representing ordinary shares. However, the number and dollar amount of proposed ADSs have not been disclosed. As a reminder, Anchiano is traded on the TASE under the symbol ANCN. The US IPO is expected in the coming months pending market conditions. Moreover, the company appointed industry veterans Stephen Hoffman MD, PhD, and Robert Connelly to its Board of Directors, with Dr Hoffman serving as chairperson, and David Kerstein MD as the new CMO. Anchiano is also preparing to initiate its first pivotal trial for its lead asset, inodiftagene vixteplasmid, in patients with non-muscle invasive bladder cancer (NMIBC).

On 3 October 2018, Biokine (27% owned by CBI) agreed to sell BioLineRx an additional 20% stake in BL-8040, its lead asset. Under the terms of the agreement, BioLineRx will pay Biokine an upfront payment of $10m in cash, plus an additional $5m in restricted shares of BioLineRx. Biokine is also entitled to receive up to $5m in future milestone payments. Following this transaction, BioLineRx will own 80% (previously 60%) of BL-8040. As a reminder, BL-8040 (previously BKT-140) is a cyclic CXC-chemokine receptor-4 (CXCR4) antagonist in development in solid tumour and haematological indications. Interestingly, this transaction was strategically placed ahead of the release of top-line results from its Phase IIa trial in combination with Keytruda (Pembrolizumab, Merck). We do not include this indication in our valuation of Biokine.

Later in October, BioLineRx presented top-line data from its open label Phase IIa COMBAT/KEYNOTE-202 study in metastatic pancreatic adenocarcinoma (PDAC) in combination with Keytruda at the European Society for Medical Oncology (ESMO) annual meeting that took place in Munich, Germany. Patients were initially administered subcutaneous (SC) injections of BL-8040 (1.25mg/kg) daily on days one through five during the first week of treatment. Combination therapy subsequently followed monotherapy treatment and consisted of repeated three-week cycles of Keytruda (200mg) via intravenous infusion on day one of each cycle plus BL-8040 (1.25mg/kg, SC) three times a week on non-consecutive days. In total, 29 of the 37 (mean age 63.8 years) enrolled patients were evaluable (ie received at least one dose of combination and have a post baseline CT). Combination therapy was found to be safe and tolerable whereas common adverse events included injection site reaction and musculoskeletal and connective tissue pain. Out of the 29 evaluable patients, one experienced a partial response demonstrating ~40% reduction in tumour burden, nine patients experienced stable disease, and 10 demonstrated disease control. Median overall survival (OS) in all patients (n=37) was 3.3 months with a six-month survival rate of 34.4%. What is more, in patients who received the drug combination as second-line treatment (n=17), median OS was 7.5 months with a six-month survival rate of 51.5%. It is important to note that the sample size here is relatively small. Additionally, median OS reported is somewhat in line with current therapies for metastatic PDAC (Exhibit 1).

Neon Therapeutics (4% owned by CBI) presented interim results from the ongoing NT-001 trial at the ESMO annual meeting in October. As a reminder, NT-001 is a single-arm Phase Ib trial investigating the safety and immunogenicity of NEO-PV-01, a personalised cancer vaccine, in combination with Bristol-Myers Squibb’s Opdivo (nivolumab), a PD-1 immune checkpoint inhibitor, for the treatment of metastatic melanoma, smoking-related NSCLC and bladder cancer.

As a reminder, patients will be administered Opdivo at a dose of 240mg by intravenous infusion over 30 minutes every two weeks for 12 weeks. Regardless of disease status, all patients will receive NEO-PV-01 + adjuvant administered subcutaneously in up to four sites (extremity or flanks) while continuing with Opdivo treatment, again for 12 weeks, after which Opdivo therapy will continue until disease progression.

As of 31 August 3018, dosing has been initiated in 54 patients and no serious adverse events were observed. In total, 34 patients (16 melanoma, 11 NSCLC and seven bladder cancer) have completed the full vaccination course. Partial and complete responses to the treatment regimen are delineated for each indication by pre- and post-vaccination with NEO-PV-01 (Exhibit 2). However, it is difficult to decipher whether these clinical responses are either follow-on from Opdivo or related to the vaccine, which is the true value driver of the asset. There is some evidence that an immune response can be elicited with the vaccine, but it is still early stage and we look forward to assessing clinical correlative efficacy when full data are released. The company expects to report one-year follow-up results in H119.

On 31 August 2018, Vedantra Pharmaceuticals announced the completion of a $26m raise. We expect the company to utilize the funding to enter the clinic with its amphiphile technology-based vaccine against mutant KRAS for the treatment of pancreatic cancer in 2019. CBI’s stake in the company has subsequently decreased to 36% (33% fully diluted) from 62%. Accordingly, CBI booked a profit of ~NIS51m in Q318 based on the fair value of its holdings in Vedantra. Moreover, Vedantra will no longer be considered a consolidated company in the financial statements and will be presented on an equity basis.

Cadent Therapeutics (16% owned by CBI) has closed its $40m Series B financing led by Atlas Venture, Access Industries, Cowen Group and Qiming Venture Partners. The recent capital injection will be used to fund two upcoming Phase II trials in essential tremor and spinocerebellar ataxia. As a reminder, Cadent is developing CAD-1883, which is a positive allosteric modulator of calcium-sensitive potassium (SK) channels. CAD-1883 increases the sensitivity of SK channels, which play an essential role in regular neuronal firing with the intent to restore regularity and improve motor function for the potential treatment of spinocerebellar ataxia, an orphan genetic disorder characterised by cerebellum dysfunction or degeneration that causes difficulty co-ordinating movements, and essential tremor, a neurological disorder characterised by involuntary and rhythmic shaking, most commonly of the hands and forearms.

We have decreased our valuation of CBI to NIS888m or NIS5.51 per share from NIS958m or NIS5.94 per share. This change was primarily driven by the CBI’s reduced stake (from 18% to 12%) in Gamida Cell following the ~$53m IPO on the NASDAQ as well as the decrease in Biokine’s royalty rates as a result of BioLineRx’s additional 20% stake in BL-8040, its lead asset. These changes were offset by the increase in cash at the corporate level to NIS17.3m (from NIS5.6m at Q218 end) as well as the increase of the value of CBI’s holdings in Vedantra ($13.9m from $9.1m) following the Series B even though CBI’s stake in the company decreased (36% from 62%). We expect to update our valuation of MediWound further once we get more information about the discussions with potential strategic partners.

As a reminder, due to significant ownership stakes CBI consolidates the financials of several of its investments (MediWound, CureTech and the Anatomy fund) and, on this basis, it had NIS113.9m ($30.9m) in cash, cash equivalents and bank deposits as of Q318. CBI’s cash position at the corporate level (excluding consolidation) was NIS17.3m ($4.7m) at 30 September 2018.

Total consolidated revenues of NIS3.1m ($0.8m) were primarily generated through the sales of MediWound’s NexoBrid in Europe, Israel and Argentina, licensing agreements and rent for the quarter, which is down approximately 89% from the same period of the previous year (NIS28.1m in Q317). The company also reported NIS7.2m ($2.0m) from the decrease of equity interest in associates during the period. Moreover, CBI booked NIS51.0m ($13.8m) from the loss of control of subsidiaries, which is primarily attributed to the decrease in stake of Vedantra in Q318.

Substantial investment was made into the development of underlying technologies and products of CBI’s material assets, as indicated by R&D spend of NIS8.3m ($2.2m) for Q318, which is up roughly 41% from the same period in 2017 (NIS5.8m/$1.5m). For the period, general and admin costs, which include payroll and related expenses, management fees, and marketing and advertising expenses on a consolidated basis, were NIS12.0m ($3.3m).