VBL Therapeutics Announces Second Quarter 2020 Financial Results and Provides Corporate Update

VBL Therapeutics (Nasdaq: VBLT) today announced financial results for the second quarter ended June 30, 2020, and provided a corporate update.

“We have made excellent progress advancing our lead candidate VB-111 during 2020,” said Dror Harats, M.D., Chief Executive Officer of VBL Therapeutics. “The first interim analysis in our OVAL Phase 3 pivotal study in ovarian cancer demonstrated the potential benefit of VB-111 over standard-of-care in a randomized-controlled study, and the recent positive second interim analysis indicates that the trial continues to be on the right track. OVAL has shown strong recruitment despite the COVID-19 pandemic. Also, when the Company blindly reviews response rate data in all trial participants, that is in the treatment and control groups combined, we are very encouraged by the high response rate of over 50% of the total evaluable patients, which has been maintained. The investigator sponsored studies of VB-111 in GBM and colorectal cancer are headed for initiation. Our MOSPD2 programs are gaining momentum, with pre-IND application for our lead candidate VB-601 for inflammation, and recent scientific presentations in NASH and colitis at DDW, in rheumatoid arthritis at EULAR 2020 and in oncology at the AACR meeting.”

Second Quarter and Recent Key Corporate Highlights:

VB-111

●	Efficacy data from first interim analysis in the OVAL were reported in March and presented at the ASCO20 Annual Meeting, showing 58% or higher objective response rate.
	o	OVAL independent DSMC reviewed unblinded data and determined that the study has met the interim pre-specified criterion of an absolute percentage advantage of 10% or higher in CA-125 response in the VB-111 treated arm compared to control. The DSMC recommended that the study proceed without modification.
	o	Overall response rate in the first 60 randomized evaluable patients was 53%. Assuming a balanced randomization, it can be deduced that the response rate in the treatment arm (VB-111 in addition to weekly paclitaxel) was 58% or higher.
	o	In patients with post-treatment fever, the response was 69%. Fever is frequently observed after VB-111 treatment.
●	Successful second pre-planned interim analysis, with a positive DSMC review of OS data, the primary endpoint of the OVAL Phase 3 potential registration study, was completed on August 11.
	o	Independent DSMC reviewed unblinded data of the first 100 patients with follow-up of at least 3 months and determined that the study should proceed without modification.
●	Two investigator sponsored VB-111 Phase 2 studies, in rGBM, at Dana Farber Cancer Center and other leading neuro-oncology centers, and in metastatic colorectal cancer by the NCI, are on track for initiation.

MOSPD2

●	Pre-IND application for VBL’s VB-601 mAb for immune-inflammatory indications was submitted to the FDA in June. The application is currently under review by the agency.
●	Announced new data implicating the potential of its anti-MOSPD2 antibodies for treatment of nonalcoholic steatohepatitis (NASH) and colitis at DDW 2020.
	o	Treatment with anti-MOSPD2 antibodies was shown to decrease inflammation and fibrosis in a NASH model and significantly reduce disease activity in a colitis model. VBL’s study was rated in the top 10% of all abstracts in this category and was selected as Poster of Distinction.
●	Presented new data at the European League Against Rheumatism (EULAR) implicating the potential of proprietary anti-MOSPD2 antibodies for treatment of rheumatoid arthritis (RA).
	o	Treatment with anti-MOSPD2 antibodies significantly inhibited arthritis progression in the collagen-induced arthritis model (p<0.005). The treatment reduced >50% of disease severity and blocked further disease progression.
	o	Anti-MOSPD2 demonstrated higher activity than anti-TNFa in the advanced phase of the disease.
●	Published a new manuscript demonstrating the potential of MOSPD2 antibodies in multiple sclerosis (MS). The results add to a growing body of data demonstrated activity of VBL’s antibodies in models of chronic inflammatory disease.
●	Presented new data demonstrating the potential of anti-MOSPD2 immune-mediated targeting of solid tumors at the Annual American Association for Cancer Research (AACR) Virtual Annual Meeting II.
	o	MOSPD2 bi-specific antibody candidates induced T-cell activation and significantly extended the survival of animals carrying established metastatic cervical and breast cancer.
	o	The data presented demonstrated that the bi-specific antibody candidates mediated killing of tumor cells by CD8 T-cells in a dose-dependent manner and induced T-cell activation in-vivo.

VB-201

●	The world-leading European animal health company partner, that is evaluating VB-201 for veterinary applications, advised that the program met a pre-determined milestone. This triggered an undisclosed cash payment to VBL.

Corporate:

●	Raised $18.1 million of gross proceeds in two registered direct offerings
●	Awarded a non-dilutive grant of up to 3.175 million New Israeli Shekels (NIS; approximately $0.9 million) by the Israel Innovation Authority (IIA).

Quarter Ended June 30, 2020 Financial Results:

●	Cash Position: At June 30, 2020, VBL had cash, cash equivalents, short-term bank deposits and restricted bank deposit totaling $41.3 million and working capital of $36.1 million. VBL expects that its cash and cash equivalents and short-term bank deposits will be sufficient to fund operating expenses and capital expenditure requirements into the third quarter of 2022.
●	Revenue: Revenues for the second quarter, 2020 were $158 thousand, compared to $138 thousand for the comparable period in 2019.
●	Research and Development Expenses: Research and Development expenses, net, were approximately $4.9 million for the second quarter, compared to approximately $3.7 million in the comparable period of 2019.
●	General and Administrative Expenses: General and administrative expenses for the second quarter were $1.1 million, compared to $1.2 million for the same period of 2019.
●	Comprehensive Loss: VBL reported a net loss for three-month period ended June 30, 2020 of $5.8 million, or ($0.14) per diluted share, compared to a net loss of $4.7 million, or ($0.13) per diluted share, in the same period of 2019.

For further details on VBL’s financials, please refer to Form 6-k filed with the SEC.

Conference Call:

Thursday, August 13 @ 8:30amET

From the US:		877-407-9208
International:		201-493-6784
Israel local Number:		1-809-406-247
Conference ID:		13707066
Webcast:		https://edge.media-server.com/mmc/p/y7tts2sv

About VBL

Vascular Biogenics Ltd., operating as VBL Therapeutics, is a clinical stage biopharmaceutical company focused on the discovery, development and commercialization of first-in-class treatments for areas of unmet need in cancer and immune/inflammatory indications.

Forward Looking Statements

This press release contains forward-looking statements. All statements other than statements of historical fact are forward-looking statements, which are often indicated by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “goal,” “intend,” “look forward to,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions. These forward-looking statements may include, but are not limited to, statements regarding our programs, including VB-111, VB-600, including their clinical development, therapeutic potential, the impact of the COVID-19 pandemic on VBL's business, operations, clinical trials, supply chain, strategy, goals and anticipated timelines and clinical results. These forward-looking statements are not promises or guarantees and involve substantial risks and uncertainties. Among the factors that could cause actual results to differ materially from those described or projected herein include market and other conditions, uncertainties associated generally with research and development, clinical trials and related regulatory reviews and approvals, the risk that historical clinical trial results may not be predictive of future trial results, that our financial resources do not last for as long as anticipated, and that we may not realize the expected benefits of our intellectual property protection. In particular, the DSMC recommendation that the OVAL trial proceed is not assurance that the trial will meet its primary endpoint of overall survival once completed. A further list and description of these risks, uncertainties and other risks can be found in our regulatory filings with the U.S. Securities and Exchange Commission, including in our annual report on Form 20-F for the year ended December 31, 2019, and subsequent filings with the SEC. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. VBL Therapeutics undertakes no obligation to update or revise the information contained in this press release, whether as a result of new information, future events or circumstances or otherwise, except as required by law.

INVESTOR CONTACT:

Michael RiceLifeSci Advisors(646) 597-6979

VASCULAR BIOGENICS LTD.

CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION(UNAUDITED)

		June 30, 2020				December 31, 2019
		U.S. dollars in thousands
Assets
CURRENT ASSETS:
Cash and cash equivalents		$	16,702			$	9,436
Short-term bank deposits			24,045				27,100
Short-term restricted bank deposits			153				-
Trade Receivables			118				-
Other current assets			1,703				1,242
TOTAL CURRENT ASSETS			42,721				37,778
NON-CURRENT ASSETS:
Restricted bank deposits			358				506
Property and equipment, net			6,455				6,949
Right-of-use assets			2,840				3,088
Long-term prepaid expenses			300				300
TOTAL NON-CURRENT ASSETS			9,953				10,843
TOTAL ASSETS		$	52,674			$	48,621
Liabilities and equity
CURRENT LIABILITIES-
Accounts payable and accruals:
Trade		$	2,241			$	3,330
Other			3,247				4,238
Deferred revenue			533				386
Lease liabilities			641				774
TOTAL CURRENT LIABILITIES			6,662				8,728
NON-CURRENT LIABILITIES-
Severance pay obligations, net			163				163
Deferred revenue			1,283				1,723
Other non-current liability			82				-
Lease liabilities			1,946				2,167
TOTAL NON-CURRENT LIABILITIES			3,474				4,053
TOTAL LIABILITIES			10,136				12,781
SHAREHOLDERS’ EQUITY:
Ordinary shares, NIS 0.01 par value; Authorized as of June 30, 2020 andDecember 31, 2019, 70,000,000 shares; issued and ‎outstanding as of June30, 2020 and December 31, 2019, 47,896,736 and 35,882,928 shares,respectively			108				73
Accumulated other comprehensive income			(8	)			(8	)
Additional paid in capital			251,331				235,974
Warrants			10,401				7,904
Accumulated deficit			(219,294	)			(208,103	)
TOTAL SHAREHOLDERS’ EQUITY			42,538				35,840
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	52,674			$	48,621

The accompanying notes are an integral part of the financial statements.

VASCULAR BIOGENICS LTD.

CONDENSED INTERIM STATEMENTS OF COMPREHENSIVE LOSS(UNAUDITED)

		Three Months Ended June 30,								Six Months Ended June 30,
		2020				2019				2020				2019
		U.S. dollars in thousands
REVENUES		$	158			$	138			$	524			$	357
COST OF REVENUES			(60	)			(50	)			(113	)			(88	)
GROSS PROFIT			98				88				411				269
RESEARCH AND DEVELOPMENT EXPENSES, net		$	4,865			$	3,729			$	9,616			$	7,037
GENERAL AND ADMINISTRATIVE EXPENSES			1,074				1,181				2,242				2,437
OPERATING LOSS			5,841				4,822				11,447				9,205
FINANCIAL INCOME			(37	)			(223	)			(329	)			(499	)
FINANCIAL EXPENSES			34				91				73				166
FINANCIAL INCOME, net			(3	)			(132	)			(256	)			(333	)
COMPREHENSIVE LOSS		$	5,838			$	4,690			$	11,191			$	8,872

LOSS PER ORDINARY SHARE		U.S. dollars
Basic and diluted		$	0.14			$	0.13			$	0.28			$	0.25

		Number of shares
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING-
Basic and diluted			42,674,526				35,881,128				39,354,355				35,881,128

The accompanying notes are an integral part of the condensed financial statements.