Philip Serlin - CEO David Malek - Chief Business Officer Mali Zeevi - CFO Abi Vainstein-Haras - Vice President Clinical and Medical Affairs Ella Sorani - Vice President Development Vivian Cervantes - PCG Advisory.

Analysts:.

Ladies and gentlemen, thank you for standing by. Welcome to the BioLineRx Fourth Quarter 2016 Conference Call. All participants are at present in listen-only mode. Following the management's formal presentation, instructions will be given for the question-and-answer session. [Operator Instructions] I'd now like to turn the call over to Ms.

Vivian Cervantes of PCG Advisory to read the Safe Harbor statement. Vivian, please go ahead..

Thank you, operator. Before turning the call over to management, I would like to make the following remarks concerning forward-looking statements. All statements in this conference call other than historical facts are indeed forward-looking statements.

The words anticipate, believes, estimate, expect, intend, guidance, confidence, target, project, and other similar expressions are used typically to identify such forward-looking statements.

These forward-looking statements are not guarantees of future performance and may involve and are subject to certain risks and uncertainties and other factors that may affect BioLineRx's business, financial condition and other operating results.

These include but are not limited to, the risk factors and other qualifications contained in BioLineRx's annual report on Form 20-F, quarterly reports filed in a 6-K and other reports filed by BioLineRx with the SEC to which your attention is directed.

Actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements. BioLineRx expressly disclaims any intent or obligation to update these forward-looking statements. At this time, it is now my pleasure to turn the call over to Mr. Phil Serlin, Chief Executive Officer of BioLineRx..

immuno-oncology, where we are involved in multiple studies under several significant collaborations. AML, where we are running a large Phase 2b study in consolidation AML.

And stem cell mobilization where we are running a Phase 2 study in stem cell mobilization for allogeneic transplantation, and also intend to initiate a registrational study for autologous transplantation in the second half of this year.

I will begin by reviewing our internal BL-8040 program and then will turn the call over to David Malek, who leads our business development efforts, to elaborate on our immuno-oncology collaboration and our strategic multiyear partnership with Novartis. Let's start with AML.

During the fourth quarter, BL-8040 was featured in oral and poster presentations at the ASH conference in San Diego, California. At ASH, our poster presentation reported on the final correlative results from our Phase 2a trial in relapsed and refractory AML.

In addition to the results of treatment with BL-8040 in combination with Ara-C, which showed a composite response rate of approximately 40%, double that of historical response rates using Ara-C alone.

BL-8040 monotherapy was shown to have a substantial therapeutic effect and the oral presentation at ASH reported detailed data on the mechanism of action by which BL-8040 directly induces apoptosis of AML cells.

The results continue to validate the robust bone marrow clearance apoptotic and terminal cell differentiation effects of BL-8040 in AML, including the potential elimination of minimal residual disease in the bone marrow.

We believe this strongly supports the continued accelerated development of BL-8040 in the AML space, specifically in the consolidation treatment line of AML where as mentioned we are running a large Phase 2b study. Now turning to stem cell mobilization. We recently announced interim data on our Phase 2 study for BL-8040 in stem cell mobilization.

We are very encouraged by the partial data we reported, which supports BL-8040 as a one-day dosing for rapid mobilization of substantial amounts of stem cells. A significant improvement over the current standard of care, which requires 46 daily injections of G-CSF.

Furthermore, all recipients transplanted so far have experienced a successful neutrophil engraftment. The recipients will be followed for one-year to assess acute and chronic GVHD events. As for the donors, treatment with BL-8040 was safe and well tolerated.

Assuming those safety concerns regarding graft failure, rejection after the intern safety review of the 10 donor recipient pairs participating in part one of the study, we will continue with part two of the study, which will permit enrollment of recipients with either match siblings or half the identical donors up to a total enrollment of the study of 24 donor recipient pairs.

We are looking forward to the top line results expected by the end of 2017. I will now turn the call over to David Malek. David, please go ahead..

Thank you, Phil, and good morning everyone. We are very excited as BioLineRx having just added Agalimmune to our cancer immunotherapy programs, in addition to our existing collaboration with some of the global leaders in the immuno-oncology space.

As Phil mentioned, I will begin by discussing our immuno-oncology collaborations with Merck, Genentech, and MD Anderson, that are based on our BL-8040 platform technology.

BL-8040 in a best-in-class CXCR4 antagonist, which is being evaluated for its potential to improve the benefit of immunotherapy in cancer types that are currently resistant to such treatment.

BL-8040 has been shown in several clinical and preclinical studies to be a very robust mobilizer of immune cells and to be effective at inducing direct tumor cell death.

Recent findings also suggest that CXCR4 antagonist, such as BL-8040 may be effective in improving the infiltration of immune cells, including T cells, into the tumor microenvironment.

Therefore, when combined with PD1 antagonists such as Merck's KEYTRUDA or PDL1 antagonists such as Genentech's Atezolizumab, which enabled the activation of anti-tumor immune T cells. BL-8040 has the potential to enable activated T cells to better reach tumor cells in the fight against cancer. Our collaboration activity build on this.

As we facilitate exploration of drug combinations that we believe could significantly increase the value and probabilities of success. And of note, our collaboration agreements relating to BL-8040 have no exclusivity which means that we fully retain our commercialization flexibility regarding the compound.

Let me now provide you with an update on our immuno-oncology collaboration starting with our partnership with Merck.

In January, we made our first foray into the immuno-oncology field as we announced the collaboration agreement with Merck to conduct a Phase 2a trial of BL-8040 in combination with Merck's anti-PD1 immunotherapy KEYTRUDA in the difficult to treat pancreatic cancer population.

Advancing the program, in June, we announced the regulatory submission to conduct this Phase 2a trial named the COMBAT study. And as anticipated, we initiated the trial in the third quarter. To date, the program is tracking to expectations with enrollment ongoing.

The Phase 2a study which centers in the U.S., Israel, and additional countries, is an open-label, multi-center, single-arm trial designed to evaluate the safety and tolerability of the combination of BL-8040 and KEYTRUDA, as well as multiple pharmacodynamic parameters, including the ability to improve infiltration of T cells into the tumor and their reactivity in up to 30 subjects with metastatic pancreatic adenocarcinoma.

Following of the heels [ph] of the COMBAT study, we initiated a Phase 2b collaboration study using BL-8040 with KEYTRUDA in pancreatic cancer with MD Anderson cancer center. The open-label, single-center, single-arm Phase 2b study will focus on the mechanisms of action by which both drugs may synergize.

In addition to assessing clinical response, the study will include multiple assessments to evaluate the biological anti-tumor effect induced by the combination. Building on our Merck and MD Anderson collaborations, we are also extremely excited with our Genentech immunotherapy collaborations, which we announced in September.

It is a robust program with several Phase 1b study, investigating BL-8040 in combination with Atezolizumab, Genentech's anti-PDL1 cancer immunotherapy in multiple cancer indications. Under the agreement, Genentech would sponsor and conduct several Phase 1b trial in multiple solid cancer indications.

The first group of studies including pancreatic cancer, gastric cancer, and non-small cell lung cancer, and there is potential for Genentech to add up to three more indications under the collaboration for other solid and liquid tumors. In addition, we will sponsor and conduct a Phase 1b study in maintenance AML patients under the collaboration.

The studies are planned as open-label, multi-center, single-arm trial designed to evaluate the safety and efficacy of the combination of BL-8040 in the Atezolizumab. Upon completion of the study both parties will have the option to expand the collaboration to include a pivotal registration study.

To conclude, our BL-8040 clinical development program is extremely robust, which has a multiple short-term goal and have quite a number of milestones coming up in the next 12 to 18 months, which still will come back to at the end of the prepared remarks. Let me now shift gears and elaborate on our multiyear collaboration with Novartis.

We are very pleased to note that in 2016 we in-licensed three promising programs under our partnership with Novartis, thus building the foundation for immunology and fibrosis franchise. Specifically, in August, we announced the in-licensing of our first project for liver fibrosis treatment, and in particular non-alcoholic steatohepatitis or NASH.

The drug candidate BL-1210 offers a novel mechanism for controlling liver fibrosis through modulation of the immune system. In this preclinical project, BioLineRx will address unique drug target that will modulate the immune system to ultimately reduce the liver fibrogenesis and therefore reduce liver scarring.

By limiting the fibrosis process this way, the goal is to potentially control the disease progression. And we announced our second liver fibrosis project in September 2016 through the in-licensing of a novel treatment for various liver failure conditions, such as end-stage liver disease and NASH.

This treatment BL-1220 is an orally administered, novel composition of sodium alginate. Preclinical studies obtained in animal models of liver impairment suggest that BL-1220 has strong hepato-protective effects. Collectively, the data demonstrate that BL-1220 can restore liver function.

The technology could be directed toward a rapid regeneration of normal liver function in both acute and chronic conditions of liver injury. And our third project under the Novartis alliance is a novel, anti-inflammatory treatment for Dry Eye Syndrome. This project BL-1230 is a potent and selective cannabinoid receptor type 2 or CB2R agonist.

The involvement of CB2R in immune modulation is well established and preclinical studies in three ocular inflammatory models have demonstrated that BL-1230 eye drops have significant anti-inflammatory activity, which attenuates the pathology and improves histological outcomes.

In addition, we intend to explore the potential use of this compound in systemic inflammatory conditions. We continue to jointly screen and evaluate promising preclinical and clinical therapeutic candidate with Novartis.

We continue to expect several more to enter our pipeline in 2017, and we look forward to additional announcements in the months ahead. Let me now turn the call back to Phil..

Thank you, David. We are focused to deliver on our corporate objectives. As we turn to 2017, we draw your attention to the following upcoming corporate milestones over the next 12 to 18 months.

We expect partial results from the immuno-oncology Phase 2a study for pancreatic cancer for BL-8040 in combination with Merck's KEYTRUDA by the second half of 2017 with top line results in the second half of 2018. We also expect completion of our stem cell mobilization Phase 2 study for allogeneic transplantation by year end 2017.

Next, we expect to initiate a Phase 3 registration study in stem cell mobilization for autologous transplantation in the second half of this year.

Further, we plan to initiate a number of Phase 1b immuno-oncology studies for BL-8040 in combination with Genentech's Atezo in multiple solid tumor indications, as well as in AML during the second half of 2017 with partial results in the second half of 2018.

We plan to initiate a first-in-man clinical study with AGI-134, our new innovative immuno-oncology asset obtained as part of the Agalimmune acquisition during the first half of 2018.

Lastly, we continue to screen and review innovative projects under our Novartis strategic collaboration, as well as outside of the collaboration as well as outside of the collaboration both for our own pipeline as well as for our joint venture in China and we anticipate continued in-licensing of value add novel compounds.

Before turning the call over to the financial discussion, I would like to spend a minute or two updating you on BL-7010, our product for the treatment of celiac disease and gluten sensitivity.

Over the last two years, we put enormous efforts into examining alternative development and commercialization pathways for BL-7010 in addition to the celiac disease pathway, including as a food supplement to potentially address the market for gluten sensitivity.

Just to recall, in the U.S., BL-7010 for celiac would be fully regulated as a drug and the development pathway through the NDA is very long at this point estimated to be another seven to eight years at least.

At the same time, we continue to evaluate the pathway for celiac disease in Europe, which is shorter perhaps for approval purposes, but it's very similar to the U.S for marketing purposes.

Unfortunately, this become increasingly apparent that in light of the scientific, regulatory, and market challenges attending the development of a product for gluten sensitivity in general, as well as celiac disease in particular, the probability of commercial success for BL-7010 [technical difficulty] immuno-oncology, we’ve concluded that it would be preferable not to continue to invest in research and development efforts related to BL-7010 and to allocate our resources in management attention to projects that have a higher probability of commercial success.

In light of all this, we have notified the licensor of our decision to terminate the project. I must say that this was not an easy decision to take, but I'm sure it is the right one and that it will be beneficial for our shareholders going forward.

I’d now like to turn the call over to Mali Zeevi, our CFO, who will give a brief overview of our key financial statement items. Mali, go ahead..

Thank you, Phil. Please note that we invite you to review our annual 20-F, which contains our financial, operating and financial review and press release for additional information. I will only go over through significant items on this call, research and development expenses and cash.

Research and development expenses for 2016 were $11.2 million, a decrease of $0.3 million or 2.6%, compared to $11.5 million for 2015. The decrease results primarily from increase in spending on BL-7010, partially offset by increased spending on new projects.

And on to cash, we ended 2016 with almost $36 million in cash, cash equivalents and short-term bank deposits. Our financial results provide us with a flexibility to pursue [ph] the programs into the first half of 2019. With that, we have now concluded the formal part of our presentation. Operator, we are now opening up the call to questions..

Thank you. Ladies and gentlemen, at this time we will begin the question-and-answer session. [Operator Instructions] The first question is from Richard [indiscernible]. Please go ahead..

Hello. Thank you, Phil and other executives at BioLine. I had a question about the Agalimmune acquisition. I know that currently Novartis is set up to acquire to further license of drugs that are coming out of Israel.

Will Novartis also be in a position to select candidates from the Agalimmune pipeline or that -- is that just exclusive to Israeli products? Thank you..

Hi, thanks. Hi. Good morning and thanks for your question. On a contractual basis, the agreement and the collaboration with Novartis is limited to Israeli sourced assets.

Novartis can as well as any other company can look at and speak to us about other assets, but this Agalimmune asset AGI-134 plus the other assets that are in their pipeline are not related to the framework agreement with Novartis..

Thank you, Phil.

About how many products are in the Agalimmune pipeline currently?.

David, can you answer that question?.

Sure. Hi. Thanks for the question.

I think one of the reason we’re excited about this acquisition is obviously AGI-134 as the leading asset in the -- clinical asset that we have high hopes for, but I think the other one as you mentioned is the fact that Agalimmune has developed several additional projects all revolving around the similar mechanism of action for targeting alpha-Gal.

They’ve approximately four earlier stage projects basically all with immuno -- immunology, immunotherapy, immuno-oncology and all basically in the area or in the target of alpha-Gal, but with different moieties and different ways, people like to target that biological target which we find to be quite exciting and quite unique for this company..

Yes, sounds great. And thank you, David and Phil for taking my question..

Thanks very much..

[Operator Instructions] The next question is a follow-up from Richard [indiscernible]. Please go ahead.

Richard are you with us?.

Oh no, I already did. I’m off now. Thank you. That’s all the question I have..

Okay, great. There are no further questions at this time. Before I ask Mr. Phil Serlin to go ahead with concluding statements, I would like to remind participants that a replay of this call is scheduled to begin two hours after the conference. In the U.S., please call 1-888-782-4291. In Israel, please call 03-925-5940.

Internationally, please call 972-3-925-5940. Mr.

Serlin, would you like to make your concluding statement?.

Yes, thank you. I would like to thank all of you for joining us on today's call and for your support. We are very excited about our prospects ahead and remain on target to delivering our objectives with a focus on building a pipeline of assets that leverages our scientific reach and expertise, specifically in the oncology, immunology space.

We look forward to keeping you updated as we execute on our plans. Thank you very much..

Thank you. This concludes the BioLineRx fourth quarter 2016 conference call. Thank you for your participation. You may go ahead and disconnect..