2013 is shaping up to be an interesting year for drug development company BiolineRX Ltd. (Nasdaq: BLRX); TASE:BLRX). The company procured new products during 2012, and consolidated its dual-listing status, and even raised capital on Nasdaq.
2013 will be marked with results of clinical trials on several new and veteran drugs under development. One of the most important results will be published in mid-March, when the company will announce the interim results of the Phase IIb clinical trial for its leading product, BL-1020, for the treatment of schizophrenia. The results will be based on a study of 235 patients.
Last week, BiolineRX raised $8 million from OrbiMed Advisors LLC, which bought ADR's, which track the company's share on the TASE at a ratio of 1:10, on Wall Street at $3 per ADR, a 24 percent discount on the closing price the day before. Sources inform "Globes" that BiolineRX and Orbimed were in talks for months, and had even discussed a bigger investment, which was dropped because it would dilute the holdings of BiolineRX's current shareholders. Orbimed, through Orbimed Israel, manages more than $200 million for investment in Israeli life sciences companies alone.
Israeli capital market sources complained about the discount offered to investment institutions in the offering, as well as the previous offering to US investors only, with no corresponding offer to Israeli investors. Regardless, the investment was a strong signal for BiolineRX, as Orbimed invested in the company just before the publication of the interim results for BL-1020, on the assumption that the company's value will rise afterwards. Orbimed also apparently believes in the company's pipeline, business model, and management.
Bioline's share price 9.3 percent on the TASE today to NIS 1.63, after rising 1 percent on Nasdaq to $3.92 on Friday, giving a market cap of $84 million.
It is important to adjust expectations about the clinical trial's results," BiolineRX CEO Dr. Kinneret Savitzky told "Globes". "We won't see them and we cannot announce them. An independent committee will see them and advise us whether it is worthwhile to continue, and if so, how many more patients we should recruit. The fewer patients the better, because that means that the difference between the test group and the control was clearly demonstrated in the first 235 patients. If they demand 1,000 new patients, there is probably no point in continuing."
BiolineRX is ready for a scenario to recruit an additional 200-250 patients for the study, in which case final results will probably be ready by the end of the year. "We believe that good interim results could be the basis for speeding up talks with potential partners for developing the drug," says Savitzky.
The uniqueness of BL-1020 is that improves cognition in schizophrenia (such as memory and calculation), and not just the psychosis. A Phase III clinical trial on a similar product by Eli Lilly & Co. (NYSE: LLY) recently failed. "The mechanism of that drug is completely different from ours," calms Savitzky.
"Globes": What if the trial fails?
Savitzky: "We believe in the product, otherwise we would not conduct such a large study on our own. But precisely because of this question, we founded BiolineRX as a company with a range of products in different fields. In this industry, it is too risky to rely on just one product."
BiolineRX's second most important product is BL-1040 to support cardiac tissue after a heart attack. Ikaria Inc., which acquired the drug's development rights, is conducting the clinical trial, which will be probably be the last trial before commercialization. "It is hard to recruit patients for a study of this kind, which is why it is being held in 90 centers," says Savitzky. "It isn't cheap, and Ikaria is going full speed ahead."
Upgrading BiolineRX's US standing
To fill the pipeline, in the past year BiolineRX acquired two products in the advanced development stage. The first product is a blood cancer treatment bought from Clal Biotechnology Industries Ltd. (TASE: CBI) unit Biokine Therapeutics Ltd. The drug BL-8040 (formerly BKT-140) for the treatment of acute myeloid leukemia (AML) and other types of hematological cancer, acts by vacuuming the tumor cells from their location to improve the effect of chemotherapy. A clinical trial is scheduled to begin in mid-2013 and be completed in 2014, with interim results due later this year.
The second product is for hepatitis. "We will begin the first human clinical trial soon. We opted for a fairly large trial, which could be the basis for acquiring the product," says Savitzky.
Hepatitis was a hot field in 2012, with the biggest acquisition in the sector amounting to $11 billion. Two other products failed, and two more are waiting their fate. "This is a very dynamic field, and there's a feeling that the market will soon decide on the components of the cocktail. It doesn't matter what's in it; we can complete that later, because while other drugs act directly on the virus, we're targeting the patient's cells, disrupting the virus's ability to exploit them."
BiolineRX also has a product for the treatment of skin lesions, BL-5010, which has already been approved for marketing, but potential partners want another study. "This product can be commercialized quickly, because it mostly relies on the private market and not on insurance indemnification," says Savitzky.
Two other products ready for clinical trials are BL-7040 for the treatment of inflammatory bowel disease and BL-7010, which aims to treat celiac disease by absorbing gluten.
As for BiolineRX's financial standing, CFO Philip Serlin says that the company had $26 million in cash at the end of September 2012, and that it burned $15-18 million a year, a rate which will continue over the coming years. 40 percent of the company's shares are traded as ADRs on Nasdaq. Ayer Capital Management LP, a US fund that specializes in the life sciences owns 6 percent, and Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) owns 4.4 percent after investing in Orbimed. "Teva has a director on the board, and we are unaware of any plans to sell the shares," says Savitzky.
Do you want a permanent strategic partner in the company?
"That is one of many options, but there is nothing specific right now." ___