Brainstorm Cell Therapeutics Inc. (BCLI) on Q4 2021 Results - Earnings Call Transcript
Operator: Good day, ladies and gentlemen, and welcome to the BrainStorm Cell Therapeutics full-year 2021 conference call. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Michael Wood of LifeSci Advisors. Mr. Wood, you may begin.
Michael Wood: Good morning and thank you for joining the call today with BrainStorm Cell Therapeutics. 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 2022 and beyond, the 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 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 presented on today's call. The company undertakes no obligation to publicly update any forward-looking statements. Joining me on the call today will be President and CEO of BrainStorm, Chaim Lebovits; Alla Patlis, Interim Chief Financial Officer. In addition, Dr. Stacy Lindborg, Executive VP and Chief Development Officer, Dr. Ralph Kern, President and Chief Medical Officer; and Dr. David Setboun, Executive VP and Chief Operating Officer, are also on the call and will be available to answer questions during the Q&A session. With that, I'd like to turn the call over to Mr. Lebovits. Please go ahead.
Chaim Lebovits: Thanks, Michael. Thanks to all listeners for joining us to discuss our full-year 2021 financial results and provide corporate highlights. BrainStorm's number one priority continues to be pursuing the optimal path forward to provide broad access to NurOwn for patients with ALS. As we consider our strategy, we will take into account any changes in the regulatory environment that may potentially help us and are acutely aware of increased activity among advocacy groups calling for new medications that can help patients. We will be paying close attention to the upcoming FDA Advisory Committee scheduled to take place this week on March 30, at which a group of independent scientific advisors will convene to review data and testimony from key stakeholders regarding another investigational ALS drug that is currently being reviewed by the FDA. While we can't say how the FDA or its panel of outside advisors will view the data package that has been submitted on this particular drug candidate, it is very interesting and important to note that the agency accepted and granted charter review for an NDA that is based on data from a Phase II trial. This, together with a convening of the Advisory Committee, may be a sign that the FDA's approach to how to approve drugs for neurodegenerative disease such as ALS is evolving. Our most significant milestone in the fourth quarter was the peer-reviewed publication of our Phase III clinical data on NurOwn in ALS in the Journal of Muscle & Nerve. The paper reported data from the randomized placebo-controlled Phase III trial that evaluated the safety and efficacy of repeat doses of NurOwn. Although previously announced, results showed the trial did not reach statistical significance on the primary or secondary endpoints pre-specified in post hoc dialysis showed a NurOwn treatment effect across both primary and secondary efficacy outcomes and those with less advanced disease. Having a peer-reviewed publication in this prestigious journal is important for us, as it provides transparency to our full data sets and raises awareness of the potential benefits of NurOwn in the broader neurology community. We believe it may also help us in our regulatory activities. As part of our efforts to advance NurOwn, we have an ongoing initiative to present new data to the ALS and broader neurology communities as it becomes available. We had a number of scientific conference presentations in the fourth quarter of 2021 in recent weeks, delivered both by my colleagues here at BrainStorm and by the clinical investigators we work with. The first and most recent presentation I want to highlight was the late breaking oral presentation at the MDA Clinical and Scientific Conference, which took place earlier in March. At this conference, Professor Merit Cudkowicz, Chief of Neurology at Mass General Hospital and Professor of Neurology at Harvard Medical School, presented genetic analysis that evaluated how ALS and genes of single nucleotide polymorphisms has been correlated with the response to NurOwn in our Phase III study. The results of these analysis showed that in patients carrying one or two copies of the gene called UNC13, there was a statistically significant higher response rate on NurOwn versus placebo. In contrast, the response rates in the patients who are not carriers of this particular gene were similar between the two groups. These results are very interesting as they suggest NurOwn treatment may have more of an influence on disease progression in ALS patients who possess certain high risk genes. This provides the basis for further genetic characterization and may enable the identification of biomarkers that will help us determine which patients are more likely to perform better on NurOwn. The last two presentations I'll highlight today are related to biomarker data from the ALS Phase III data and took place at the International Symposium on ALS/MND and the 2021 Northeast ALS Consortium. These presentations were delivered by two of our principal investigators, Dr. Robert Brown from UMass Medical School and Dr. James Berry of Mass General Multidisciplinary ALS Clinic. Collectively, these data show significant NurOwn-driven changes across a range of CSF biomarkers and suggests that the product biological activity across multiple disease pathways could prove important to slowing the progression of ALS. We also increased our understanding of NurOwn's mechanism of action in ALS and provide additional evidence confirming that NurOwn's mechanism is linked to its impact on ALS disease progression. Alongside our pursuit of the optimal path forward for NurOwn in ALS, we also continued to make progress in establishing our manufacturing preparedness. We have previously entered into partnership with Catalent to provide GMP clinical supply of NurOwn in anticipation of the product's potential regulatory approval. We announced in December that the technology transfer to Catalent's facility has been finalized, a very important step in this process. The manufacturing of cellular therapies such as NurOwn is complex and requires careful planning and very specific expertise. We are very pleased with the progress we have been making at Catalent, which has industry-leading capabilities in this area. Also in December, we provided an update on our expanded access program for NurOwn and announced that the FDA has asked us to submit a protocol amendment to provide additional doses for patients who are participating in the EAP under the original EAP protocol. Participants who have completed the Phase III neuron trial and who met specific eligibility criteria had the opportunity to receive three doses of NurOwn. Under the amended EAP protocol, these eligible participants will receive up to three additional doses, and so have the opportunity to receive as many as 9 doses of NurOwn in total, three during the Phase III trial, three under the original EAP protocol, and three more under the amendment. This will allow for additional data collection that will help us better understand the potential benefits of longer-term treatment. Finally, there was a recent in February where we were granted a new patent in Brazil, covers NurOwn's manufacturing process. A key element of BrainStorm's overall strategy is to establish a broad intellectual property portfolio to protect our propriety technologies and products. Adding this resilient patent to our existing portfolio of US, Canadian, European, Israeli and Japanese patents should position us well to enter into new commercial partnerships for NurOwn in South America as well and worldwide. I'll now turn over the call to Alla Patlis who will review our financial. Alla?
Alla Patlis : Thank you, Chaim. It is my pleasure now to walk you through our full-year 2021 financial results. BrainStorm's cash, cash equivalents and short-term bank deposits were approximately $22.1 million as of December 31, 2021. This compares with approximately $41.9 million on December 31, 2020. Our research and development expenditures net in the year ended December 31, 2021 were $15.3 million compared to $22..3 million for the year ended December 31, 2020. Excluding participation from IIA and other grants and proceeds received under the hospital exemption regulatory pathway, research and development expenses were $15.8 million in 2021 compared with $24.6 million in 2020. General and administrative expenses for the years 2021 and 2020, respectively, were $9.3 million and $9.4 million. Net loss for the year ended December 31, 2021 was $24.5 million or $0.68 per share as compared to a net loss of $31.8 million or $1.07 per share for the year ended December 31, 2020. Back to you, Chaim.
Chaim Lebovits : Thank you, Alla. Mike Wood from LifeSci will now read the questions we have received from investors.
A - Michael Wood: The first question is regarding the regulatory strategy for NurOwn. This investor would like to know when do you intend to file a BLA for NurOwn in ALS? And can you explain why you did not share more details on the regulatory strategy on ALS up to this point?
Chaim Lebovits: We've had a very productive year and have been good stewards of the talents and resources we have at BrainStorm. We're continuing to invest in our future, keeping our sights on the long term while delivering on the near-term priorities. To give more detail at this time, just two days before a scheduled FDA Advisory Committee that we'll be discussing another product trial of patients may turn out to be counterproductive and not business smart. We remain steadfast in our belief of NurOwn's ability to combat this terrible disease. Some of our highly regarded PIs, principal investigators, who are close to our data and have cared for participants in our trial firsthand have voiced their belief at various scientific conferences in the efficacy and safety of NurOwn. They've made public statements calling for access to NurOwn in parallel to generating additional evidence of its clinical benefits. We have done the job of allowing the evidence that supports our product to be evaluated by the scientific community, first by publishing a full and transparent analysis of our Phase III data in Muscle & Nerve, a very respected peer-reviewed journal. And as guided by the FDA, we have presented and continue to present our data and seek input from neurologists, statisticians, and advocacy organizations around the world. We are gaining very valuable and important feedback from this process. We will continue to work with the FDA to determine the best path forward for NurOwn. Our aim is to seek the fairest way to make NurOwn available as soon as possible for as many ALS patients as possible, and at the same time create value for our stakeholders. As mentioned, later this week, we'll have an opportunity to learn through an Advisory Committee how the FDA and the Advisory Committee will apply the 2019 FDA ALS guidelines document for therapy development that reiterated the need for urgency and regulatory flexibility. We believe this meeting will provide important information to BrainStorm and the community at large that may be able to further guide our decision for the best way forward. In summary, let me be clear that we do remain committed to advancing this program for ALS patients and pursuing the best and most expeditious path forward to enable patients access.
Michael Wood: Next question. You referred to the UNC13A gene in your press release about the MDA presentation. Can you please explain exactly what this gene is and what its relevance is to ALS pathogenesis?
Chaim Lebovits: Ralph, would you take this one.
Ralph Kern: The hallmark feature of neurodegenerative diseases, including ALS, is the depletion of the RNA binding protein TDP-43 from the nucleus of neurons in the brain and spinal cord. There are genetic variations called single nucleotide polymorphisms in this gene, and they're among the strongest hits associated with ALS and human genome-wide association studies. In fact, a direct link has been found between UNC13A risk allele and the deleterious effects of TDP-43. And a recent patient paper suggests that a single nucleotide polymorphism in this cheating may underline differences in treatment response. From a broad look at the literature, we know that UNC13A C allele is associated with a higher age at symptom onset and more frequent bulbar onset, high incidence of ALS and lower breathing function, shorter survival and lower scores on ALS specific cognitive tests. And we know that published data suggests that the C allele on this genetic variation contributes to the clinical heterogeneity found in ALS, including the risk of being diagnosed with ALS and having a worse prognosis with the disease. In fact, retrospective analysis from 2017 published in neurology across trials noted that there was patients with C risk allele of this gene responded to lithium carbonate compared to those who received placebo. This analysis led us to pre-specify this gene and this genetic variation in our Phase III trial. And as Chaim just mentioned, Dr. Merit Cudkowicz from Mass General presented these data at the recent MDA conference in a late breaking session just a few weeks ago. And what she shared was that NurOwn treated participants with the AC genotype were almost nine times more likely to respond to NurOwn treatment compared to placebo. And these results offer great promise for the development of future treatments for ALS in addition to accumulating evidence for the effectiveness of NurOwn. If you're interested in reviewing the presentation, you can access it on the Investors & Media section of our company website.
Michael Wood: Can you help us understand what you're gaining from all these presentations at scientific conferences regarding the biomarkers and genetic results on UNC13A? And how do you think this helps you with your regulatory path going forward?
Chaim Lebovits: Stacy?
Stacy Lindborg: While our early efforts focused on clinical outcomes from Phase III, this question notes that we've continued to broaden the focus of NurOwn's effectiveness by presenting biomarker and genetic data, both of which add to the compelling case for NurOwn. The biomarker data presented at scientific meetings and to the community shows that NurOwn decreases markers of neuro-inflammation and neuro-degeneration, while increasing markers of neuroprotection. And furthermore, the changes in biomarkers observed with NurOwn. which are not observed with placebo, can even help explain with great accuracy the clinical response that we observed in our Phase III trial using pre-specified statistical models. Ralph just referred to some of the really exciting and emerging literature and we're living in a very exciting time in terms of the ability to learn and understand insights into ALS. From a genetic perspective, what we're seeing, focusing on UNC13A, certainly is one of these dimensions. And as our analysis was informed by past literature, we felt it was important to share with the scientific community our own pre-specified genetic analyses of our NurOwn Phase III trial, which suggested and suggests that the NurOwn treatment in this trial may influence disease progression in ALS patients who possess UNC13A risk allele and provide a basis for further genetic characterization in future clinical trials. If we step back and we look more broadly at our clinical plan, we've delivered a series of four clinical trials in ALS, including double blinded and controlled Phase II and Phase III clinical trials. So, if I think about this question, so why are these presentations important, well, these pre-specified biomarker and genetic data add additional layers of credibility and scientific rigor to our findings related to the functional clinical importance that we've published from these trials.
Michael Wood: Next question. If AMX0035 is approved by the FDA, how do you think this will affect the market opportunity for NurOwn?
Stacy Lindborg: It would not be appropriate for us to comment on the likelihood of approval of AMX0035. We believe that each therapy should be evaluated on the scientific data and evidence generated individually. Yet, as a part of the ALS community, we will celebrate all success in terms of treatments becoming available for patients.
Michael Wood: The next question is regarding the progressive MS program. Can you please provide an update on this program?
Ralph Kern: As you know, we've completed additional analyses of the Phase II study that will be shared at upcoming scientific meetings and in a peer reviewed publication. Just to give you a little color on this issue, and three examples, the scientific abstracts that will be shared at the upcoming CMSC meeting in May provide important information on three areas. One is the quantitative relationship between NurOwn treatment and CSF inflammatory biomarkers. Second is a closer examination of visual outcomes looking at individual eye responses in study participants. And finally, we did preclinical work that we'll be sharing on the interaction of NurOwn with siponimod, which is an S1P receptor modulator and a recently approved MS therapy. So as you can see, we're continuing very active dialogue with the MS scientific community and experts. We're also continuing our dialogue with regulators about the optimal path forward, and we'll be prepared to share details after publication of our Phase II data.
Michael Wood: Regarding the expanded access program, did the FDA contact BrainStorm to request the latest EAP? Or did this happen the other way around?
Chaim Lebovits: Yes, FDA requested and authorized the BrainStorm extended dosing period for the participants who have completed EAP by allowing three additional doses of NurOwn administered every two months.
Michael Wood: As a follow-up to that question, is BrainStorm actively collecting usable data from the EAP?
Stacy Lindborg: Yes, I'm happy to confirm BrainStorm is actively collecting both clinical and biomarker information under the EAP protocol.
Chaim Lebovits: I think that's some of the written questions we got today. Holly, would you open for any questions from the audience?
Operator: . Your first question for today is coming from David Bautz.
David Bautz: This is David Bautz from Zachs Small Cap Research. Chaim, I'm curious, now that the Phase III results have been published, are you receiving any additional feedback from physicians, patient advocacy groups? Maybe if you can tell us a little bit about what you're hearing from people now that they've been able to see the full dataset.
Chaim Lebovits: As you can figure out from our poll today, I know many investors want us to talk more. But it's business-wise and regulatory-wise better we talk less. We're at a time that we're working very hard for the ALS community and it's maybe not obvious exactly what we're doing. But you just mentioned part of it. We are talking to many stakeholders. And, yes, we are getting very good feedback and, in the vast majority, very positive feedback and strong recommendations which we can share. We don't think we'll be right to share. Specifically, we're in a very sensitive weekend. We know this for a month that this outcome is happening this week. And it doesn't make any sense that we talk more publicly at this time. I know you're an analyst. Tell me if I'm wrong.
David Bautz: No, I completely understand. So, since you can't talk all that much about what the FDA is doing, maybe I could ask: Are you considering going to other jurisdictions and approaching them about approving or about filing for the approval based on your results so far?
Chaim Lebovits: That's a tricky one. I understand the question is coming from because other companies did go that path. Definitely, we're considering all paths. We know what's going on. We're following everyone's path. And we're trying to understand what those interactions did to help the way forward or not. And not what it seems, obviously, always is the backstory, as you know. So we're learning that very, very diligently. And we think we know where we are. And when we'll make a move, you'll hear it. That's our decision rather than discussing upfront strategy. As I said, we're getting prepared for every scenario.
David Bautz: My last question is, so outside of the expanded access program through the FDA, is anyone else receiving NurOwn treatment at this time?
Chaim Lebovits: No. There's huge activities at Catalent site just to get them ready for success as a manufacturing center. So, a lot of activity outside of the providing just EAP patients, but only the EAP patients that are getting NurOwn for now.
Operator: . Your next question is coming from Michelle Lorenz.
Michelle Lorenz: I am with Voices for ALS. And I noticed a couple weeks ago that Merit Cudkowicz talked about your IPSC cells, that you were going to be doing some confirmation of UNC13A. Can you talk a little bit more about that? I didn't hear you discuss it on the call.
Chaim Lebovits: Yes, we did. But, Stacy, you want to take this one?
Stacy Lindborg: I think this was part of an interview that she participated in. And it was a discussion really around how we can leverage genetic insights and further research to help us understand the implications, our results in clinical trials, but then also to think about the future trials. And the focus was really, with the materials that we have now, how can we provide additional confirmation of the results that we're seeing in this trial, and so we can take genetic materials that we have now and run additional preclinical experiments, which was really the basis of our conversation. And so, those are plans that we are undertaking. We are certainly exploring how we maximize the resources we have and bring new additional insights to the table from our Phase III trial.
Chaim Lebovits: Thank you, Michelle, for that opportunity to clarify that part of the interview. People misunderstood it.
Operator: Your next question is coming from John Murphy .
Unidentified Participant: I was just wondering, in the last conference call, you said you were going to meet with the people from ALS. And after that meeting, you were going to immediately submit the BLA. I was wondering, did you meet with the people of ALS? And if you didn't, why not?
Chaim Lebovits: As we said, we are meeting with the many stakeholders, clinicians, and yes, we are meeting with patients of ALS as well. But as we explained again and again on this call, that there's a lot of regulatory activity ongoing now. Therefore, we are not choosing to share the exact strategy of our BLA filings. I understand the need of investors and the urgency to know what our plans are, but in the favor of the program to get better chances, to have faster access for patients, we're taking this route. And I just want to reassure everyone with ALS – it's very important for me – that we know and feel . I think that's what drives me and all of my colleagues, day in and day out. We work very hard to produce and create the best possible outcome for ALS patients. Sometimes that calls to be quiet. ALS patients, in my view, couldn't have a more driven team than this team at BrainStorm. I am very proud of this very devoted team. And I think all of you should be. That's all I can say.
Operator: There are no further questions in queue. I would like to turn the floor back over to Mr. Lebovits for any closing comments.
Chaim Lebovits: Thank, Holly. Please, if you can poll for another question. I just got an email that people are looking and also see John want to have another one. And we want to allow him to ask another one, so he can say that we are allowing all his questions. Please, John.
Operator: John, your line is live.
Unidentified Participant: I saw that Mr. Ness invested quite heavily in BrainStorm. Is there any plans for him joining the board or joining the BrainStorm team?
Chaim Lebovits: I cannot comment on behalf of Mr. Ness without getting an approval for that. You must understand that we are very appreciative Mr. Ness being a major shareholder in BrainStorm. I'll pass it on to Mr. Ness.
Operator: . Your next question is coming from Ken Hackl .
Unidentified Participant: I am at Scopus Holdings . Question is more on the financial side. I see burn through, something like 47% of the current assets in the past year. Given your plans for the current year, what are your thoughts with your capital position, your cash position going forward?
Chaim Lebovits: As you may well know, we have we have an open ATM for up to $100 million, but we didn't tap into it. And with these prices and these volumes, we are very careful. You can see over the last few years, how careful we are with ATM activation. On the other hand, we have enough cash for going forward at least over a year-and-a-half. Our burn rate is really down dramatically about 30% lower than before. The main reason because we don't have an ongoing clinical trial now. So, we do have manufacturing expenses, but no clinical trials for the moment. And so, we're finding finance that is no pressure whatsoever.
Operator: There are no further questions in queue at this time.
Chaim Lebovits: Okay, Holly. So, thank you very, very much. And thanks for everyone participating and all the questions. And I wish that we can have a very good upcoming quarter. Very exciting quarter definitely to see how things evolve and look forward to talk to you and be able to hopefully to share far more information with you in the next few.
Operator: Thank you, ladies and gentlemen. This does conclude today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.
