Brainstorm Cell Therapeutics Inc. (BCLI) on Q1 2021 Results - Earnings Call Transcript

Operator: Greetings. Welcome to BrainStorm Cell Therapeutics’ First Quarter 2021 Earnings Call. At this time, all participants will be in a listen-only mode. A brief question-and-answer session will follow the formal presentation. Please note this conference is being recorded. At this time, I’ll now turn the conference over to Michael Wood of LifeSci Advisors. Mr. Wood, you may begin. Michael Wood: Good morning and thank you everyone for joining us. Before we begin the opening remarks, I’d like to remind listeners that this conference call contains numerous statements, descriptions, forecasts, and projections regarding BrainStorm Cell Therapeutics and its potential future business operations and performance, statements regarding the market potential for the treatment of neurodegenerative diseases such as ALS and MS, the sufficiency of the Company’s existing capital resources for continuing operations in 2021 and beyond, safety and clinical effectiveness 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 the business planning efforts. Chaim Lebovits: Thank you, Mike. Thanks for listening and for joining us to discuss our first quarter financial results and corporate highlights. On the call today, we will be discussing the current status of our ALS program, the very exciting recently announced top line data from our Phase 2 progressive MS trial, our strategic plans for these programs as well as our quarterly financial results. Starting with our ALS program, I’d first like to say that we remain confident in the strength of our data, the potential of NurOwn as a treatment for ALS, and its broad potential as a technology platform in neurodegenerative disease. In parallel to regulatory interactions, we have been in active consultation with various experts, including principal investigators, the ALS physicians, statisticians, regulatory advisors, as well as the patient advocacy groups in the United States, as well as other in jurisdictions. Dr. Stacy Lindborg, our VP and Head of Global Clinical Research, will provide insight into how we are going about these interactions and getting feedback in our program. However, I want to stress that we plan to take all feedback into consideration as we assess the most efficient way to enable ALS patients’ access in NurOwn, including a potential BLA submission and our other regulatory and business options. We are diligently working to define NurOwn’s path forward and are gaining scientific support. We can assure you, this is a top priority for us and we intend to update the patient and investor communities as quickly as possible, but we must let additional developments play out before providing a more comprehensive update. Dr. Stacy Lindborg: Thanks, Chaim. As Chaim just previewed a few minutes ago, we remain confident in the potential of NurOwn in ALS and are currently consulting with a wide range of people, including principal investigators, ALS experts, statisticians, regulatory advisors and patient advocacy groups. These discussions have provided important feedback, which has been very positive. They’ve also allowed us to gain new insights from our data as well as a lot of support and encouragement from the groups that we’ve discussed our clinical trial data with. We now have a very mature draft of our manuscripts of the study prepared and we expect to submit for publication shortly. Throughout the writing process, we’ve had an excellent partnership with the study principal investigators who are all authors. Timely publication of the manuscript will be important, as it will allow us to share our data with and collect additional feedback from the broader ALS community. Dr. Ralph Kern: Thank you, Stacy. As Chaim mentioned, we recently announced positive top line data from our open label Phase 2 trial in progressive MS. We pursued this trial based on the growing confidence in our proprietary cellular technology platform. The well-defined unmet need in progressive MS and our belief that repeated intrathecal administration of NurOwn has the potential to simultaneously address neuroinflammation and neurodegeneration and improve functional outcomes in progressive MS patients. The clinical trial was conducted at four leading MS centers of excellence in the United States and enrolled 20 progressive MS patients who had stable disease. In other words, they had not relapsed or required rescue medications within the six months prior to study enrollment. Participants in this trial received three repeated intrathecal administrations of NurOwn, each given two months apart, and were followed for 28 weeks after their first treatment. This was a Phase 2 clinical trial, and the primary objective was to assess the safety and tolerability of treatment. Importantly, we included multiple secondary endpoints designed to evaluate the preliminary efficacy of NurOwn in progressive MS. These included several well-validated clinical endpoints of disability and function, cerebrospinal fluid and serum biomarker analyses, and a validated patient reported outcome to confirm improvements in walking function. To ensure a robust analysis of our data, we set pre-specified response criteria for clinical improvements in key clinical efficacy endpoints, using benchmarks that are well accepted by the MS scientific community. Additionally, we were careful to enroll a patient population that was very similar to other progressive MS studies in terms of demographics, disability and functional measures, which allowed for further comparisons. This allowed us to make meaningful comparisons to a 48-patient matched clinical cohorts from the Comprehensive Longitudinal Investigations in MS cohort that are followed at the Brigham & Women’s Hospital, also known as the CLIMB Study. The key findings from our progressive MS study were as follows. First of all, the trial met its primary endpoint, as NurOwn was demonstrated to be safe and well tolerated in progressive MS patients. Procedure-related adverse events observed in the study were similar to our experience in ALS. Dr. Preetam Shah: Thank you, Ralph. It is my pleasure now to walk you through our first quarter 2021 financial performance. Research and development expenses net for the three months ended March 31, 2021, were $4.34 million, compared to $5.95 million net for the three months ended March 31, 2020. This decrease of $1.61 million year-over-year was primarily due to decrease in expenses related to our Phase 3 and Phase 2 clinical trials and a decrease in expenses in connection with stock-based compensation materials, travel, rent and other activities. The decrease in expenses was partially offset by an increase in costs related to payroll, patents, preclinical R&D activities and consultants, and a decrease in proceeds received in connection with the treatment of patients under the hospital exemption, regulatory pathway, and a decrease in grants participation by the Israel Innovation Authority or IIA. Operator: Thank you. We’ll now be conducting question-and-answer session. Thank you. Our first question comes from the line of David Bautz with Zacks Small Cap Research. Please proceed with your question. David Bautz: Hey. Good morning, everybody. Chaim Lebovits: Good morning. David Bautz: For the ALS data that we’re going to be seeing in the publication, will that include any data from the expanded access program or hospital exemption programs? Chaim Lebovits: No, that would not be included, David. David Bautz: Okay. And looking at the MS results, Dr. Kern, I’m curious if you could talk about which of those data that you’re most excited about? Dr. Ralph Kern: Yes. David, good morning. I think, we’re most excited about the overall consistency of the functional improvements. There have been MS studies in the past that have shown inconsistent changes across different endpoints. What really struck us was that we saw improvements across all functional measures. And these include walking, as measured by the time, 25-foot walk, the 9-hole peg test measuring upper extremity function; vision, it’s a test called the Low Contrast Letter Acuity. David Bautz: Okay. And, lastly, in regards to the next trial for MS, I know, you probably can’t go into details. But, typically late-stage MS trials or at least one year in length. And I’m just curious how you’re thinking about dosing. Since you’re just doing three doses right now, would you want to increase the number of doses with those patients if the trial does go for at least a year? Dr. Ralph Kern: Yes. It’s a very good question. I think it’s premature for us to give more detail, because we’re still in discussion with some of the experts that are giving us valuable feedback. I think, the direction that you’re going in is directionally correct in the sense that a longer study will be needed. And also additional doses, but how many and what the integral will be is something that we’re still discussing internally and also with experts. So, thanks for the question. David Bautz: Okay. Thank you very much. Chaim Lebovits: Thank you, David. Operator, we have a Q&A that investors sent in earlier with us. Michael Wood, if you can read the Qs and we’ll give the answers. And then, we’ll go back to the line. Yes. Michael Wood: Thank you, Chaim. There are a number of pre-submitted questions. So, I’ll start with this one. First of all, what are your plans for ALS going forward? Do you intend to conduct another trial? Chaim Lebovits: Thank you very much. Our ultimate goal remains to secure approval for NurOwn in ALS. And we remain confident in the effectiveness and safety of NurOwn. Our current priority is to publish the full Phase 3 data in a peer reviewed journal as we are also meeting with ALS experts and key opinion leaders who are not part of the trial and do not have firsthand experience with NurOwn to share the data and receive their feedback. We are receiving invaluable insight and positive feedback from these world-renowned ALS experts. There is widespread agreement among experts we have spoken with that the data support advancing NurOwn as a treatment for ALS. So, to sum this up, it’s not a question if, it’s a question when now. Next question, please Mike? Michael Wood: Will you be submitting a drug approval submission for NurOwn in ALS in Health Canada or the EU? And as a follow-up to that, are you considering bypassing the FDA and getting approvals for NurOwn in other territories? Chaim Lebovits: Well, we’re not considering to bypass. We are considering other geographies while we’re still assessing our exact strategy with the FDA. Next? Michael Wood: The next question, can you comment on the public statements that the FDA released about NurOwn. The statement was somewhat unusual. Chaim Lebovits: Stacy? Dr. Stacy Lindborg: Yes. It was unusual for the FDA to issue such a statement. And the FDA did not reach out to us prior to issuing the statement, but did prioritize a call with us quickly following this issuance. And what we learned is that they were not operating out of concern based on actions of BrainStorm. And I guess, to kind of round it back, as FDA indicated in their preliminary assessments, while not recommended by them, we’re not precluded from submitting a BLA. Chaim Lebovits: Thank you very much. Mike? Michael Wood: Next question, does BrainStorm intend to submit a BLA to the FDA following Phase 3 NurOwn? If not, was granted FDA approval without very exceptional clinical data. What is the downside of submitting a BLA at this point? ChaimLebovits: Stacy, will you take this one, please? Dr. Stacy Lindborg: Sure. As a company, BrainStorm is continuing to weigh the option of a BLA submission. Our current priorities, as we stated, are publishing the Phase 3 data in a peer-reviewed journal and meeting with ALS experts and key opinion leaders. It’s important and we’re prioritizing people that are outside of the clinical trial ecosystem to share our data with and to receive feedback. Our goal is to secure an approval for NurOwn as a treatment for ALS. And if after consulting with key opinion leaders and after the data is published, if we determine that the most rapid way to achieve this goal is to submit a BLA following our Phase 3 data, we will pursue this path. In other words, there may not be a downside to submitting a BLA at this time. And that’s exactly what we’re working to determine. ChaimLebovits: Next question, please, Mike? Michael Wood: Can you talk about the revenue generating opportunity for NurOwn in the international ALS marketplace? Chaim Lebovits: David, do you want to take this one? Dr. David Setboun: Sure. So, there is a lot of patients in ALS outside of U.S. and this is critical unmet need in the U.S. and beyond. So, there is a very strong international business opportunity. As a reminder, I mean, outside of the U.S., the ALS worldwide is higher than 400,000 patients? Chaim Lebovits: Thank you. Next question, please. Michael Wood: The next question is regarding the patient advocacy group IMALS. IMALS is calling for a congressional hearing on the ALS. How are you working with them, and what is your strategy here? Chaim Lebovits: Thank you. So, we’re fully engaged working with ALS advocacy. I mean, it’s including IMALS. IMALS did advise us on this meeting. There is a growing awareness of the critical unmet needs in ALS and limited treatment options. We’re certainly open to discussing practical options across a range of stakeholders, including government. Next question, please. Michael Wood: Next question relates to hospital exemption. This investor said they have heard that there are patients being treated in Israel on open label. How many patients, what were the results, and why doesn’t the Company share them with the public? And is this facility still open for treatment? Chaim Lebovits: Very good question. Thank you. And this will probably answer part of what David asked before. Stacy, you want to take this one? Dr. Stacy Lindborg: Sure. At the present time, we don’t have additional outcomes to share from this trial, and it’s really for a couple of reasons. First, COVID-19 travel restrictions have severely limited this program and the ability to continue to collect the longitudinal data in the program. And second, the question references that this is an open label study. While data can be accessed during the conduct of the state of the study, many of the established clinical endpoints in ALS are subjective in nature. And thus, it’s an industry practice to not discuss ongoing trials to avoid bringing bias into the trial. And referencing back to the question that David asked at the beginning about this study, our publication from our Phase 3 study will be a readout of -- in a publication of that trial and therefore won’t contain additional data from other studies. Michael Wood: The next question is regarding the exosome platform. Does treating the patient cells with NurOwn can enhance the ability of the exosomes to fight disease, or is it the quality of the message that exosomes are carrying that provides the needed support for NurOwn to slow down a disease progression? Chaim Lebovits: Thank you. Ralph? Dr. Ralph Kern: Sure. It’s our belief that similar to NurOwn, the potential therapeutic benefits of exosomes is mediated through the delivery of biological molecules that reduce inflammation, provide tissue support and promote repair. So, to answer this question directly is the quality of the message or cargo that exosomes are carrying that determine the outcome. Exosomes also provide a practical option that allows for easier formulation, logistics and may have better tissue delivery. In other ways, they’re also potentially less immunogenic supporting what we believe is a very high potential off the shelf allogeneic cell source treatment option. Chaim Lebovits: Thank you very much. Next question? David Bautz: What are the plans to partner NurOwn in ALS? Are you currently speaking with partners or acquisitive for NurOwn? Chaim Lebovits: Thank you. David? Dr. David Setboun: We are open to collaborate and in fact we’re in continual discussion with various partners for all the different programs in our portfolio. So, for NurOwn in ALS indication as well as progressive MS. We are as well speaking with partners interested in our exosome platform, and ARDS indications. We are actively engaged in discussion, but for confidentiality reasons, we cannot provide details at this point. Chaim Lebovits: Thank you. David Bautz: And we have remaining question. This is on the Alzheimer’s program. And clinical trial for Alzheimer’s disease, could NurOwn potentially help or improve a person’s condition with Alzheimer’s? Chaim Lebovits: David? Dr. David Setboun: We’re in the process of finalizing regulatory discussion regarding the Alzheimer clinical trial. The rationale for NurOwn in Alzheimer’s disease is strong, given the evidence that neuroinflammation that’s basically neurotrophic support system in Alzheimer’s disease are deficient. And that specific target delivered by NurOwn, including several neurotrophic factors and micro RNA molecules are known to have a beneficial effect in Alzheimer’s for clinical models. Chaim Lebovits: Thank you very much. Ralph, do you want to elaborate a little bit on this? Dr. Ralph Kern: Yes. I can just say that there’s a tremendous interest in using cellular therapy to modify the environment of Alzheimer’s disease, which includes obviously inflammation. And I think our recent findings in MS, the cognitive changes in our MS -- progressive MS may be an important indicator that Alzheimer’s is very good next indication. So, that’s what I’d like to add today. Chaim Lebovits: Thank you very much, Ralph. Rob, you can now reopen for a few more questions from the audience. Operator: Thank you. The next question is from line of Neal with Maxim Group. Jason McCarthy: I think it’s Jason McCarthy. Chaim Lebovits: Jason, good morning. Jason McCarthy: So, a couple of questions. First, on ALS, and I think this question is geared towards Stacy. So, I’m kind of calling on your experience at Biogen. How do you think about the upcoming PDUFA for Aducanumab in Alzheimer’s? It’s completely unrelated, obviously, to what you’re doing in ALS here. But the unmet need, there’s a parallel there. I mean, FDA may look at a drug like that as it might have missed in its trial, but it did something good and it’s safe. And Alzheimer’s needs something. And can you look at NurOwn in ALS in a similar -- through a similar lens where it’s definitely doing something to the good for these patients? It may have missed its primary in the Phase 3 trial, but there’s something there. And would regulators maybe look at it kind of like there -- it seems like they’re looking at Aducanumab? Chaim Lebovits: That was a good and tricky question. But Stacy, I’ll let you do that. Jason McCarthy: I’m not going to hold you Chaim there. I was just curious a how do you exactly think about how you position NurOwn now? Chaim Lebovits: Totally understood. Sure. Dr. Stacy Lindborg: Yes. And I guess, what I would say is there are a lot of -- there is similarities, like you’re pointing out and there are also a lot of things that are quite different, including we’re going to a different centre of the FDA, and obviously very different diseases. But I think what you’re describing really is at the heart of what every biotech or pharmaceutical company is seeking in their research. We’re here to produce meaningful medicines for patients. And trials sometimes result with primary endpoint that is missed. And the job that we have been working to do and really even information we’ve already shared in the public domain, is precisely we have been working to understand what have we learned and what can we conclude about NurOwn. And, we believe we’ve gained key insights. Therefore, we reached the conclusion which we’ve shared repeatedly, even today, that we believe strongly in the efficacy of NurOwn. So, back to the similarities, I think that much like Biogen had to do, we have been forced with the results of this trial and the need to look very objectively and transparently at our data to share that data also very transparently, with regulators and with ALS experts, advocacy groups, to seek input that is removed from the company. And then to put for this stuff that really serves the patient community and our investors as best we can. So, it’s a very interesting connection and analogy. And I think we’re doing exactly the same thing in terms of trying to make the best next steps and put forward what we believe is the most objective and compelling evidence that speaks to NurOwn. Jason McCarthy: Okay. So then, how do you think about cell therapy just from its pure complexity? We published this -- I’m sure you saw news of that. They did this, a few Phase 3 trials just on the primary but the way you think about how complex cell therapies are, there’s a lot of things happening that might not be captured by one snapshot of an endpoint. So, how do you think about NurOwn going forward into progressive MS into your 2b? Do you start to look at other things like MRI, white matter, free water or brain swelling and kind of tying that to inflammation and inflammatory biomarkers, versus the typical traditional MS like trials on maybe relapse and remitting occurrences? Chaim Lebovits : Very good question. Ralph, I’ll let you take this. Dr. Ralph Kern: Yes. Thanks, Jason. I’ll try to be very brief. I think MS is a different disease in the sense that the outcome measures have a longer history and in some ways are more stable and easy to measure. Having said that, we believe very strongly that we can evaluate the cerebral spinal fluid as the source to biomarkers, and rather than look for new biomarkers, we believe on building upon our strength and what we’ve learned in the past. In other words, we’re seeing very consistent biomarker changes in preclinical, in ALS, in humans, and now in progressive MS, that speaks to the mechanism of action. And as we have a very well-defined cellular product, similar to the CAR-T worlds, we believe that the technology is very predictable that the fingerprint or the biomarker changes related to the cells can be measured very accurately. And that’s really the strength of our conviction that the technology platform can be tested very reliably in a progressive MS, and we believe in Alzheimer’s as well. So, we’re very confident in our technology and what we can measure and how we can draw legitimate conclusions from what we’re doing. Jason McCarthy: So, last question for Chaim. So, are you planning to position BrainStorm in Alzheimer’s disease strategically? Meaning, you have the Aducanumab, PDUFA is coming up. The Alzheimer’s meeting over the summer, everybody’s expected Alzheimer’s to suddenly be extremely busy. You do have your program. We didn’t hear too much about today, but maybe kind of walk us through what you’re thinking for Alzheimer’s and positioning BrainStorm in that same? A - Chaim Lebovits: Well, very good question. So, we have a lot to figure out in these few months, as you know. Our priorities are like this: The first thing is that were submitting very soon our peer reviewed manuscript -- our manuscript from peer reviewed publication. And of course, we got to figure out what’s our next step for ALS, we’re getting close to that. And then, we have to figure out what our next step from MS is going to be probably in another trial with ourselves or with other partners. We’ve got to figure that out also. The Alzheimer’s, we were thinking maybe to lay off, but we have some very interesting biomarker data from the ALS and MS trials, which gives us strong support. We should continue for cognitive matters, which you will see part of our -- one of our publications was going to probably have a separate publication on the biomarker data for ALS only. So, we are deciding now in the next quarter how to proceed with Alzheimer’s. We had a conversation with the regulatory in the Europe and we’ll see how that goes. We’ll announce once we have something to announce finally. Jason McCarthy: Great. Thank you all for taking the questions. Chaim Lebovits : Sure. Thank you very much. Operator any more questions? We have time for one or two more. Operator: Thank you. At this time, I will hand the floor back to management for any additional remarks. Chaim Lebovits: Thank you very much. And again, I want to thank everyone for being with us on this call this morning. And keep up with the faith we all have that this is going to come to an approval one day. Thank you very much. Operator: Thank you to everyone joining us today. This will conclude today’s conference. Thank you for your participation. You may now disconnect your lines at this time.
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