By John Vandermosten, CFA
READ THE FULL BLRX RESEARCH REPORT
BioLineRx Ltd. (NASDAQ:BLRX) continues its commercialization transition activities for Aphexda as responsibilities for marketing shift from BioLine’s internal team to Ayrmid’s subsidiary Gamida Cell. Gamida cell is commercializing Omisirge, a cell therapy for treating blood cancers in patients who need a stem cell transplant. There is substantial overlap between prospects at the target hospitals and centers for Omisirge and Aphexda, providing a natural synergy between the two assets. Now that a couple months have passed since the announcement of the arrangement, management is updating shareholders with a letter from the CEO.
Chief executive Phil Serlin reiterated the details of the arrangement with Ayrmid and Gloria Biosciences in a letter to shareholders, noting where each is advancing the interests of motixafortide. Ayrmid has the right to develop and commercialize Aphexda in all indications, excluding solid tumor indications and in all territories outside of Asia. Gloria holds the rights to develop and commercialize motixafortide in Asia in all indications. Gloria will first commercialize and gain additional approvals for Aphexda in the region and also conduct clinical trials in pancreatic ductal adenocarcinoma. Both Ayrmid and Gloria have paid and will pay upfronts, milestones and royalties on sales.
With the transfer of commercialization activities to Gamida Cell in its final stages and Gloria advancing motixafortide interests in Asia, BioLineRx is looking forward to its next iteration as a research and development company. With an FDA approved asset under its belt, management offers its expertise in development to advance another asset through the process. The company is seeking to buy a preclinical and a clinical asset with the funds received from its partnerships and apply its development expertise to obtain a new approved product. BioLineRx is considering oncology or rare disease candidates and reports that it is actively working on this and is reviewing many promising opportunities.
With the capital raised from the recent deals and the equity financing combined with a substantially reduced cost structure, BioLine anticipates having sufficient cash to support activities until 2H:26. This forecast does not include any contributions from sales royalties or commercial milestones.
ADS Ratio Change
In mid-January, BioLineRx announced a change in the ratio of American Depositary Shares (ADS) to ordinary shares. Prior to the announcement, each ADS represented 15 underlying shares; after January 30, 2025, each ADS will represent 600 underlying shares. Total ADSs outstanding following the change will be 3,558,503. The ADS will continue to trade on the Nasdaq Capital Market while the underlying shares will continue to trade on the Tel Aviv Stock Exchange.
Registered Direct Offering
On January 6th, 2025, BioLineRx announced a $10 million registered direct offering. Adjusted for the subsequent ADS ratio change, 1.25 million new ADS were issued at $8.00 per ADS. Each ADS has a warrant attached with an $8.00 exercise price and a five-year life. H.C. Wainwright is the exclusive placement agent. Proceeds from the raise will be used for research and development activities, the expansion of the pipeline of potential drug candidates, and working capital and general corporate purposes.
Background on Commercialization Agreement with Ayrmid Pharma
On November 21st, BioLineRx announced an exclusive license agreement with Ayrmid Pharma Ltd., the parent company of Gamida Cell, where Ayrmid will assume commercialization rights for Aphexda in stem cell mobilization. The deal provides a $10 million upfront payment, commercial milestones for sales and additional regulatory approvals totaling $87 million and royalties ranging from 18% to 23%. Ayrmid gains rights in all geographies excluding Asia[1] in all indications excluding solid tumor indications.[2] Along with the Ayrmid agreement, BioLineRx raised an additional $9 million equity investment with Highbridge Capital that will be used to reduce debt.[3]
Ayrmid’s subsidiary, Gamida Cell, will execute the commercialization effort. Gamida Cell is now marketing Omisirge, a nicotinamide modified allogeneic hematopoietic progenitor cell therapy derived from cord blood. The product is indicated for use in patients with hematologic malignancies who are planned for umbilical cord blood transplantation following myeloablative conditioning to reduce the time to neutrophil recovery and the incidence of infection. BioLineRx is taking advantage of the substantial overlap between the target market for Aphexda and Omisirge. BioLineRx will separate its US commercialization subsidiary and transfer a part of the team to Gamida Cell to continue its activities. The transition of the Aphexda commercialization activities from BioLineRx to Gamida Cell is expected to be complete in early 2025.
We see the integration into the Gamida Cell sales team as a beneficial change as the group will now have more products to offer as well as a broader reach, thereby increasing the efficiency of the marketing effort. There is merit in layering on a new product to an existing sales team which has developed relationships and established territories. Additionally, the incremental cost of adding one new product to the mix is minimal. BioLineRx has noted that while it has cost about $25 million to sustain the sales team to support Aphexda inside of BioLineRx, there is only a $3 to $5 million incremental cost anticipated to market Aphexda using the Gamida Cell sales force.
Motixafortide Trials
Since December of 2023, BioLineRx partners have been dosing patients in multiple trials in pancreatic ductal adenocarcinoma (PDAC). Columbia University is one of the sponsors examining motixafortide treatment in combination with a checkpoint inhibitor and first line chemotherapies in PDAC. Success has prompted Gloria to expand its efforts toward a Phase IIb randomized first line PDAC trial in China combining motixafortide with Gloria’s PD-1 inhibitor zimberelimab along with standard of care chemotherapy. This second trial is expected to begin in 2025.
SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR.
DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives quarterly payments totaling a maximum fee of up to $40,000 annually for these services provided to or regarding the issuer. Full Disclaimer HERE.
________________________
[1] Rights to motixafortide have already been granted to Gloria Biosciences in Asia.
[2] BioLineRx will retain rights to solid tumor indications for motixafortide.
[3] Highbridge Capital is also an investor in Gamida Cell.
