BioLineRx Ltd. — FY2022 Form 20-F Summary
Reporting period: Fiscal year ended December 31, 2022; annual filing, not a standalone fourth-quarter report. Financial statements are prepared under IFRS and presented in U.S. dollars. The filing was signed March 22, 2023.
Business context
BioLineRx is a pre-commercial-stage oncology biopharmaceutical company. Its lead candidate, motixafortide, was under FDA review for stem-cell mobilization in multiple myeloma patients undergoing autologous transplantation. The company also had clinical-stage candidate AGI-134 and a legacy licensed product, BL-5010. It reported no material product revenue.
Financial performance and liquidity
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $17.6 million | $19.5 million |
| Sales and marketing expense | $6.5 million | $1.0 million |
| General and administrative expense | $5.1 million | $4.3 million |
| Operating loss | $29.2 million | $24.8 million |
| Net loss | $25.0 million | $27.1 million |
| Basic and diluted loss per ordinary share | $0.03 | $0.04 |
| Cash used in operating activities | $26.2 million | $23.6 million |
Net loss improved despite a larger operating loss, principally because non-operating results swung to $5.7 million of income from $1.8 million of expense. The 2022 non-operating gain primarily reflected a non-cash fair-value reduction in warrant liabilities. Sales and marketing costs rose sharply as motixafortide pre-commercialization began; R&D costs declined as GENESIS-related and NDA-support expenses fell, partly offset by AGI-134 and payroll costs. No revenue-based margin is meaningful because revenue was zero.
At year-end, cash and cash equivalents were $10.6 million and short-term bank deposits were $40.5 million, or $51.1 million combined, down from $57.1 million in 2021. Total current assets were $52.0 million and current liabilities were $10.7 million. Total assets were $76.4 million; total liabilities were $25.5 million; equity was $50.8 million. The carrying value of Kreos borrowings was approximately $10.2 million, including current and long-term portions.
Financing cash flow was $20.4 million in 2022, including net proceeds from a September equity offering and Kreos borrowing, partly offset by loan repayments. The registered direct offering generated $15.0 million gross and $13.5 million net; the company drew the first $10 million of a Kreos facility, with approximately $9.1 million net proceeds reported in cash flows. Investing activities provided $4.0 million, mainly reflecting deposit maturities.
Material changes and developments
- Operating loss increased to $29.2 million from $24.8 million, while net loss decreased to $25.0 million from $27.1 million, largely reflecting warrant revaluation gains.
- Cash used in operations increased by $2.6 million year over year. Cash and short-term deposits declined by about $6.1 million.
- BioLineRx submitted motixafortide’s NDA in September 2022; the FDA accepted it for review in November and set a September 9, 2023 PDUFA target date. FDA review acceptance is not marketing approval.
- The company began building U.S. commercialization capabilities for motixafortide, increasing sales and marketing expense. It planned independent U.S. commercialization subject to approval.
- AGI-134’s Phase 1/2a study completed enrollment in January 2022, with results announced in December. The study met its safety and tolerability primary endpoint; efficacy observations were exploratory.
- Ordinary shares outstanding rose to 923.0 million from 715.2 million. The company also increased authorized share capital to 2.5 billion ordinary shares.
Outlook, risks and contingencies
- Management expected available cash, investments and other liquidity sources to fund projected needs into the first half of 2024, excluding potential future collaboration milestones and royalties. The auditor included a going-concern explanatory paragraph, citing recurring losses, operating cash outflows and substantial doubt; the statements contain no adjustments for the uncertainty.
- The company expects continued losses and negative operating cash flows until products achieve commercial profitability and says additional financing will be needed. Financing may be unavailable or dilutive; absent funds, programs or commercialization efforts may be delayed, reduced or stopped.
- The Kreos facility permits up to $40 million across milestone-dependent tranches; only the initial $10 million had been drawn by year-end. Interest is 9.5% annually, with additional sales-based royalties on motixafortide. The loan is secured by company assets, including intellectual property, and requires at least $10 million in cash. Default could trigger accelerated repayment and enforcement against collateral.
- Key execution risks include FDA approval and timing, clinical outcomes, reimbursement and market uptake, manufacturing supply, establishing a sales organization, reliance on licensors and collaborators, and competition. Motixafortide’s potential U.S. launch remained conditional on FDA approval.
- Two securities class actions filed in 2023 allege misleading statements concerning the company’s financial position and financing needs. The U.S. claim seeks unspecified damages; the Israeli action states a potential class claim of approximately NIS 113.5 million (about $32 million). The company considers the claims without merit and intends to defend them; outcomes are uncertain.
- Nasdaq notified the company in November 2022 that it did not meet the $1 minimum-bid-price requirement, with an initial cure deadline of May 1, 2023. The filing states there was no assurance of regaining compliance.
- The company disclosed a $3.7 million contingent IIA-related liability associated with motixafortide licensing, subject to offset rights against amounts otherwise payable to Biokine. It also reported $9.0 million of contractual obligations, including $5.9 million of purchase commitments, excluding uncertain future licensing payments.
- Additional risks include Israeli political and security conditions, foreign-exchange exposure, possible future PFIC status for U.S. tax purposes, and potential dilution from equity offerings, warrants and employee awards.
Most important facts to verify
- Current status and outcome of the motixafortide NDA, including whether approval was granted and whether the PDUFA date or launch plans changed.
- Updated cash runway, cash burn, financing raised since year-end, and progress toward commercial launch.
- Drawdowns, repayment terms, covenant compliance and collateral exposure under the Kreos loan, including any additional sales-based payments.
- Developments in the U.S. and Israeli securities lawsuits, including certification, exposure estimates and any accounting treatment.
- Nasdaq listing compliance and the share count, warrants and equity awards that could affect dilution.