Brainstorm Cell Therapeutics Inc. (NASDAQ:BCLI) Corporate Mid-Year Update on NurOwn Program July 8, 2024 8:00 AM ET
Company Participants
Joyce Lonergan – LifeSci Advisors
Chaim Lebovits – President and Chief Executive Officer
Haro Hartounian – Executive Vice President, Chief Operating Officer
Bob Dagher – Executive Vice President, Chief Medical Officer
Conference Call Participants
Jason McCarthy – Maxim Group
David Bautz – Zachs Small Cap Research
Operator
Greetings and welcome to the Brainstorm Cell Therapeutics Mid-Year 2024 Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this call is being recorded.
And I would now like to introduce your host for today’s call, Joyce Lonergan of LifeSci Advisors. Ms. Lonergan, you may begin.
Joyce Lonergan
Thank you, Holly. Good morning, and thank you for joining us today. Before passing the call off to company management for prepared remarks, I would like to remind listeners that this conference call will contain numerous statements, descriptions, forecasts, and projections regarding Brainstorm Cell Therapeutics and its potential for future business operations and performance. Statements regarding the market potential for the treatment of neurodegenerative disorders such as ALS; the sufficiency of the company’s existing capital resources for continuing operations in 2024 and beyond; the safety and clinical efficacy of the NurOwn technology platform; clinical trials of NurOwn and related clinical development programs; and the company’s ability to develop strategic collaborations and partnerships to support their business planning efforts.
Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond Brainstorm’s control, including the risks and uncertainties described from time-to-time in its SEC filings. The company’s results may differ materially from those projected on today’s call. The company undertakes no obligation to publicly update any forward-looking statements.
Joining us on the call today will be Chaim Lebovits, President and CEO of Brainstorm; Dr. Haro Hartounian, Chief Operating Officer; Dr. Bob Dagher, Chief Medical Officer is also on the line and will be available for Q&A.
I would now like to turn the call over to Mr. Lebovits, please go ahead.
Chaim Lebovits
Thank you, Joyce. Thank you to all of you who have joined us this morning. I would like to update you on a number of positive recent developments for Brainstorm and our NurOwn Development Program.
Our priority is to initiate the Phase 3b trial in ALS. On June 24, we had a face-to-face Type C meeting with the FDA to discuss the chemistry, manufacturing, and controls aspects of the Phase 3 trial. I am pleased to say that this was a constructive meeting and that we are now aligned with the agency on resolving previously outstanding CMC questions raised. The FDA continues to be supportive and we are grateful for their input and advice.
As you may know, CMC is always part of an FDA review process. However, it requires special consideration for any cell therapy product, including NurOwn. These products have additional complexities, and in the manufacturing process, it’s important that the FDA is involved at various steps during the regulatory process, including prior to initiating a trial. This in-person Type C meeting follows the SPA agreement granted by the FDA, which we announced in April. The SPA outlines important details of the planned Phase 3b trial, including its overall objectives, design, endpoints, statistical analysis, and other supportive clinical trial documents. Assuming the trial meets expectations, the agreement ensures that the data will be accepted by the FDA as a central part of a BLA for NurOwn.
We have recently signed a contract with a leading Clinical Research Organization or CRO to support the initiation and execution of the Phase 3b trial. This CRO is internationally recognized for its expertise in ALS and in managing complex clinical trials, including in the field of cell therapy. They will provide us with a comprehensive and full range of services to fully execute on all aspects of the trial with the highest quality and speed. They’ve already lined up a number of clinical sites for the study and are working on all project plans, systems, and contacts in order to proceed with dozing our first patient, hopefully before the end of the year.
We also announced last week that we entered into a transaction with a single institutional investor for the sale of common stock and warrants, raising gross proceeds of $4 million. We are mindful of our balance sheet and want to make sure the company is funded appropriately. This amount will not, of course, be sufficient to fund the entire Phase 2b study, but it’s expected to take us through important near-term milestones. We continue to explore other financing options, including non-dilutive grants, as we have done in the past.
The other important recent development was our appointment of Dr. Haro Hartounian as our Chief Operating Officer. Haro brings a distinguished track record with over 32-years of experience in the biopharmaceutical industry with a particular focus on cell and gene therapy. Haro has been successful at achieving goals at large biopharmaceutical companies, contract development and manufacturing organizations, as well as startup biotechnology companies. His career highlights include founding a biocentric, a state-of-the-art cell and gene therapy CDMO facility, and he led that company through a successful acquisition in 2022.
In his new role, Dr. Hartounian will oversee all operational aspects of Brainstorm, including CMC and commercialization. We’re honored to have him join the company at this moment, and he will have the opportunity to say a few introductory words on the call today.
In summary, we are excited to move forward with our much anticipated Phase 3b trial. Our preparation has been thorough. We believe that these necessary steps I’ve described will ensure that the trial is conducted to the highest scientific and regulatory standards. As always, we are deeply committed to the ALS patient community and will continue to work closely with patients, clinicians, and advocacy groups to bring this much needed therapy to those in need.
I’ll now turn over the call to Dr. Hartounian for additional comments, Haro?
Haro Hartounian
Thank you, Chaim. I’m honored to join Brainstorm at this important time for the company. I see norm as a potential groundbreaking new treatment and I share a commitment with Chaim, Dr. Dagher, and other members of the team, who help patients with ALS and other new degenerative diseases. I bring a considerable amount of relevant experience to Brainstorm, spanning CNS, and specifically, cell and gene therapy product and process development and manufacturing.
At my prior companies, I have led process development, manufacturing, and operations teams. I have also managed R&D and established successful corporate partnerships. I played a leadership role in guiding the progression of two FDA approved products from bench to market. Throughout my career, I have been driven by the goals of advancing medical science, as well as creating value for various stakeholders. I’m impressed by the high standards of technical excellence and brainstorm. I look forward to working closely with our talented team to execute the Phase 3 trial and prepare the company for success.
I will turn the call back to Mr. Chaim Lebovits.
Chaim Lebovits
Thank you, Haro. We’ll now open the calls for the questions. Joyce?
Question-and-Answer Session
A – Joyce Lonergan
Yes. The first question is, why was the 10-Q call delayed?
Chaim Lebovits
Thank you. We strategically postponed the call to provide a more comprehensive update on our financing and the upcoming Phase 3b trial for NurOwn for ALS. We wanted to ensure we had the latest developments to share with investors. Next question, please.
Joyce Lonergan
Thank you. When will the Phase 3b trial for NurOwn for ALS begin?
Chaim Lebovits
Bob, do you want to take this?
Bob Dagher
Yes. Thank you, Chaim and thank you for the question. We are excited to announce that we are moving forward with these trial initiation in the next few months. The successful FDA SPA agreement that was granted in April and the in-person meeting with the FDA, the Type C meeting that we had last week of June, have been instrumental in aligning us on the trial design and the CMC requirements. These strong foundations will translate now to an agreed upon trial design and efficacy endpoints, and combined with a more robust product, now we’ll have a potential BLA filing down the line.
Chaim Lebovits
Thank you. Joyce?
Joyce Lonergan
Next question is, can you elaborate on the current stage of the trial preparation?
Chaim Lebovits
That goes to you too, Bob.
Bob Dagher
Sure, yes, happy to take that as well. We’re currently finalizing the details with our new CRO to enroll the trial sites. Simultaneously, we will be signing with a commercial manufacturer, while conducting the technology transfer to the manufacturing sites. Previously, we were awaiting the Type C meeting to proceed with manufacturing activities and finalize the agreement.
Joyce Lonergan
Next question is, how will the recent fundraising impact the trial timeline?
Chaim Lebovits
Thank you, Joyce. I’ll take that one. As you may be aware, that we announced last week that we raised the $4 million in gross proceeds through the sale of common stock and warrants. We acknowledge, as previously said, that we’ll need to further raise funds to finance the 200 patients double blinded trial. While this financing is a significant step forward, the current market cap may not fully reflect the potential of a Phase 3b ready company in the market. Therefore, we strategically raised enough funds to initiate the trial and achieve key milestones, while we continue to explore additional funding options, including non-dilutive grants, as we have successfully done in the past.
Our strong belief is that initiating the trial and achieving positive results will lead to a reevaluation of our company’s value, allowing for future financing opportunities on more favorable terms. Thank you.
Joyce Lonergan
The next question is, you mentioned the importance of shareholder value. Can you elaborate on your strategy to avoid a reverse stock split in the future?
Chaim Lebovits
Sure. Thank you very much. Absolutely, creating long-term shareholder value is a core focus for Brainstorm. The recent financing provided us with the resources to initiate the NurOwn Phase 3b trial and achieve key milestones such as signing on the trial centers, finalizing the manufacturing agreement. We believe that meeting these important milestones will significantly add value to the company by demonstrating our progress towards commercialization. We’re also exploring additional funding options, including the non-dilutive grants to potentially fully finance the trial.
We believe that positive data from the trial should significantly enhance our company’s value, opening up opportunities for future financing on more favorable terms. This, in turn, would mitigate the need for a reverse tax split and ensure long-term shareholder values.
Joyce Lonergan
Thank you. The next question is what’s the significance of having a commercial manufacturing site on board before filing a BLA?
Chaim Lebovits
Thank you. Haro, would you take that?
Haro Hartounian
Yes, thank you so much for the question. Securing commercial manufacturing partner early offers several advantages. Number one, BLA filing readiness. By having a commercial manufacturing site up and running, you can be prepared to file a BLA much faster if the trial results are positive. The FDA will need to inspect the manufacturing facility as part of the BLA approval process and having a qualified site on board, streamlines this process significantly. Number two, reduce time to market. If the trial is successful and the BLA is approved, a pre-established manufacturing capability allows us to launch the product quicker, bringing NurOwn patients sooner.
Joyce Lonergan
Thank you. The final written question is, with the very positive biomarker data from Phase 3 and the early access program, why have you not refiled the BLA that was pulled without prejudice? Will you be refiling it?
Chaim Lebovits
Thank you for the question about the BLA filing for NurOwn. It’s an opportunity to respond to many asking us about this. After unblinding our Phase 3 trial and the data readout, we recognized that the data from the Phase 3 trial and the early access program, while promising, had limitations. On the other hand, we were aware of the FDA’s flexibility guidance for ALS and the recent approvals for other ALS treatments with limited data. Additionally, we saw first-hand, and we continue to see first-hand, the urgent need for treatment as expressed by patients and ALS advocates.
Given these factors, we filed the BLA for NurOwn, while also committing to a Phase 4 confirmatory trial. However, after the advisory committee meeting and very careful consideration in consultation with many of the key opinion leaders and advocates, who were very supportive of our decision to file the BLA, we concluded that appealing or refiling with the same data would not result in a near-term approval. We understand and recognize the need for a comprehensive dataset that aligns with evolving expectations for ALS treatment approvals.
Therefore, we made a strategic decision to conduct an additional Phase 3b trial. This new trial aims to gather more robust data to definitively demonstrate NurOwn’s effectiveness for ALS patients. The FDA’s engagement with NurOwn development has become increasingly productive. This is demonstrated by their actions, such as the expedited SPA agreement for the new trial design and our recent productive in-person CMC meeting. These ongoing interactions demonstrate the FDA’s commitment to finding a treatment for ALS, and we are confident this new trial, if successful, will provide the data needed for a future BLA submission aligned with their requirements.
While this additional trial means a longer timeline for potential approval, it aligns with the FDA’s evolving expectations and ultimately offers the most promising and fastest path forward in our opinion. This will lead to a stronger BLA filing and a faster path to bringing NurOwn to market for newly diagnosed and future ALS patients. We are transparent about the challenges and remain committed to developing NurOwn as a potential treatment for this devastating disease.
Thank you. Holly, I would now ask you to allow if participants want to ask some questions. We’ll take two or three questions. Holly, please.
Operator
Certainly. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Your first question for today is from Jason McCarthy with Maxim Group.
Jason McCarthy
Hi, Chaim. Thanks for taking the questions. Glad you brought up that biomarker question. At the end there is kind of a segue to my own. And maybe Dr. Hartounian can help out with this question. During the ADCOM, something came up or there were comments on the levels of neurotrophic factors that were being secreted by the NurOwn cells. Did that come up during your meeting with the FDA in terms of any required potency for the cells? And also, Dr. Hartounian, if you can comment on the rationale that cell therapy is far more complex than just neurotrophic factors being secreted? They’re important, but there’s a lot of other things that are happening that could be driving some of the positive aspects of NurOwn that we’ve seen in prior trials.
Chaim Lebovits
Thank you, Jason. Haro, please.
Haro Hartounian
I tend to agree with you that cell therapy is a very complex, and manufacturing specifically requires lots of challenges that we have to address. I think our manufacturing process is well defined. Our goal is to make sure that we have a facility that can manufacture our product, has commercial capabilities, and have done this before. As far as your question about biomarkers, I think it’s — I would ask Dr. Dagher to address that question.
Bob Dagher
Oh yes, hi, Bob here. Thanks, Haro. Thanks, Jason, for the question. So, yes, we discussed with the FDA the Type C meeting, these details including the potency and the amounts of secreted neurotrophic factors and other constituents that we basically believe the technology we have is impacting the environment, in the CSF, into the brain and spinal cord cells. In terms of release criteria, as Haro mentioned, we have a process in place now and we agreed with the FDA on the specifications needed for those criteria to release product during the clinical trial and moving into commercialization will be — we’re ready for that. I hope this answers your question.
Haro Hartounian
I can add something that’s part of the release of the product that’s looking at the identity, stability, and potency, as well as other biomarkers that we measure. So we have a solid plan in place and I think we can move forward with what Chaim said about our Phase 3b clinical trials and establish on manufacturing, commercial manufacturing. I think we will be very successful.
Jason McCarthy
Thank you. As part of the Phase 3b, will there be any inclusion or exclusion criteria for patients based on how quickly they seem to be progressing during the screening period that six to nine weeks or it was three months in prior trials. Is that going to be a part of this study as well?
Chaim Lebovits
Sure. Thank you, Bob. Do you want to answer that?
Bob Dagher
Sure. Yes, happy to do that as well. So, no Jason, there’ll be a difference from the previous Phase 3 trial where there was a period up to five months to allow for that measurement of slow speed of progression. And this Phase 3b trial, we will be shortening the screening period significantly. And for many reasons, one of them being that there will be a challenge to basically figure out exactly how to eliminate or how to position the trial for success with the most qualified patients that would respond to NurOwn.
From the data today, we understand that these — the patient’s requirement to do that will be earlier in the stage of the disease. So we wanted to make sure that we put, and we did put entry criteria to allow us to capture patients at the early stage where the disease is mild and not too far progressed. And that — in order to do that, we did not need to extend the screening period and measure the slope of progression.
Jason McCarthy
So you’ll be able to avoid, I remember in the prior trial, you had ALSFRS scores at 25. It was just, it was out of range, but it worked…
Chaim Lebovits
Jason, so Jason 100%, I wanted to allow the doctor to speak first. As you can imagine, we are now making sure that we are focusing for the subgroup that we have seen the statistical significant results in the previous trial. So we are trying to focus on that subgroup. There are different ways within the criteria on how we set that up to make sure to get the earlier patients and not end up with the more advanced patients as you mentioned. So thank you very much for your questions this morning, Jason.
Jason McCarthy
Thank you guys.
Chaim Lebovits
Holly?
Operator
Your next question is from David Bautz with Zachs Small Cap Research.
David Bautz
Hey, good morning, everyone. So I’m going to follow-up on Jason’s question there just to kind of dig a little deeper into the entry criteria, can you quantify what that is? Is it a minimum ALSFRS score? Is it a minimum time from when they were diagnosed? And then what happens to the patients that may be changed during that screening period.
Chaim Lebovits
Bob?
Bob Dagher
Yes, I’m happy to take that, thanks David for the question. So we did put out a poster with the entry criteria few months back in April. To summarize, we will be looking at patients coming in within two years of their first symptom onset with preserved respiratory functions, particularly with the slow vital capacity of about 65%. We’ll be looking to measure every item on the ALSFRS 12 item scale at screening and ensure that every item did not reach a zero or one. We want everybody to have two, three, or four. And we will shorten, as I mentioned earlier, the screening period to about eight weeks. So by the time, you know, we have one week from screening to do bone marrow aspiration and start producing NurOwn, by the time baseline comes, which is very important.
We have modeled and the simulation of this type of data using the proact large database, and we’re confident that the baseline total ALSFRS score will be higher, much higher than 25. So we’re confident that we will be capturing that exact mild to moderate early population.
David Bautz
Okay, and in the case of patients who do say change during that screening period is there — are they going to just still be included? I guess how are you going to deal with those patients?
Bob Dagher
Sure, yes. As I mentioned earlier, basically we will not impose a slope measurement, but as we know, there is heterogeneity in the disease and everybody coming in at screening, we appreciate from simulations, it’s going to be around 40 to 45 perhaps. Let’s say around 40 as a total score. The eight weeks or the two months’ time progression will allow them to drop, but far above the 25 cut off, as you asked earlier. So we feel that everybody will be in the trial, will be adequately screened, and all screened eligible patients will enter the trial and we don’t see that we will have too fast progress or that progresses many, many points in a two month period. So we’re very confident about who which population will end up starting at baseline. And yes, everybody’s screen and that bone marrow will be in the trial.
David Bautz
Okay. Great, appreciate the extra detail there. And then lastly, I know this is hard to project, but how quickly are you anticipating the trial enrolling? Basically, do you have a bolus of patients out there who are ready to go, essentially?
Chaim Lebovits
Very good. Sorry, you can go.
Bob Dagher
Yes. I was going to ask quickly — to answer quickly that basically we are very confident of fast enrollment. We also are increasing the number of sites. We used six sites in the Phase 3 trial with the same number of patients. Now we’re going higher. We already have been in conversations with many, many sites and patients have informed us as well, they’re basically — we — of they’re waiting for the trial to start in order to get going, so we’re confident about the enrollment being high.
David Bautz
Okay, great. Thanks for taking the questions.
Chaim Lebovits
Sure, David. Thank you for being on there. Okay, one more last question, and if there’s any other questions, Holly?
Operator
Your next question is from Daniel Walker, a Private Investor.
Unidentified Analyst
Yes, good morning. Dr. Hartounian, and I was just curious, you’ve been doing cell and gene manufacturing for some time. You obviously are an expert in this field. Can you talk a little bit about what maybe differentiates NurOwn and maybe perhaps what excites you about NurOwn so much?
Haro Hartounian
Thank you, great question. I’ve been doing cell therapy manufacturing and process development for almost 20-years and what excites me about the NurOwn manufacturing is really the novel way of producing, taking the MSCs from the patient’s bone marrow and growing them. And then the next step differentiating them with a cell to cells that can produce material that can help the patients. So it’s a very novel, unique way of manufacturing. It’s novel and I believe that we have all the tools and the team that we have, we can actually have a successful manufacturing process and commercial manufacturing and launching the product.
Unidentified Analyst
Great, thank you. And then Dr. Dagher, can you just talk a little bit about post-ADCOM? I mean, obviously the Phase 3 biomarker data had not been released yet, had not been published in muscle and nerves, along with the EAP data had not been released yet? There’s also been a number of folks that have been un-blinded?
Chaim Lebovits
Daniel?
Unidentified Analyst
Yes.
Chaim Lebovits
I don’t think that’s what you’re saying. The Phase 3b biomarker trials was published in muscle and nerve?
Unidentified Analyst
Yes, correct. That’s right. And I was just curious from Dr…
Chaim Lebovits
That’s what you said?
Unidentified Analyst
Yes, correct.
Chaim Lebovits
Sure.
Unidentified Analyst
Yes. And I was just curious from Dr. Dagher, you know, how that maybe gives him further confidence, the biomarker data along with the EAP data, how that gives him further confidence about NurOwn?
Bob Dagher
Sure, thank you Daniel for the question. We have to understand that when you work with the neurodegenerative disease and the heterogeneous population like in ALS, there are a lot of paths that the biology takes and multiple factors we know are involved in the disease and the course is unique for each patient. So when you dig deeper at data and try to understand the cell therapy complex, such as NurOwn, it’s placed in this treatment paradigm. We all understand that there is a need to act early to attack the inflammatory process, as well as halt and block the neurodegeneration and NeurOnal death.
In order to do that, you have like in diseases like we understand in Alzheimer’s, particularly you have to act very early in Parkinson’s and multiple sclerosis and other diseases. We now do have data when you interrogate it deeply to give us confidence that this technology works best early in a disease course, where you get a population that started to experience the inflammatory bouts, and then some normal deaths had generated first symptoms, or the early symptoms that the patients experience. And when you capture that and try to refine as possible the entry criteria, we feel that the measurement tool that we have, which is the primary endpoint based on the ALSFRS-R, will be able to basically detect these functional changes that happen in that disease population, unlike when you reach very advanced level, below 25, let’s say. And then many of the items on the score are already too advanced to further detect any further decline. Here we will be positioned properly to hopefully give the trial that shot at success. I hope this answered your question.
Unidentified Analyst
Yes, thank you very much.
Chaim Lebovits
Okay, thank you very much. Holly, I think that bring the call to a conclusion.
Operator
There are no further questions in queue. This concludes today’s conference and you may disconnect your lines at this time. Thank you for your participation.
