Brainstorm Cell Therapeutics Inc. (BCLI) Earnings Call Transcript & Summary

Hi. This is Allena Baker with Raymond James speaking. This is the Brainstorm Cell Therapeutics presentation at the Raymond James 2020 Virtual Health and Human Innovation Conference. We have Chaim Lebovits, CEO; and Ralph Kern, President and Chief Medical Officer, on the line, who will be presenting a corporate overview. We will be taking questions at the end of the presentation through the Q&A livestream. Chaim, can I turn it over to you?

Thank you very much. Good morning. Brainstorm now marks almost a decade since the initiation of our first open-label Phase I trial for ALS. I moved to present to you today when we are about to approach the finalization of our Phase III trial, which we all hope would be the pivotal trial that will result with an FDA approval for NurOwn as a meaningful treatment for ALS patients. As we speak, our wonderful outstanding CMC team are now manufacturing the NurOwn products to provide treatment -- to complete the third treatment of the last few patients on the Phase III trial. We'll soon be announcing that the last patient was treated. Therefore, this is indeed a very exciting moment for Brainstorm and for the ALS community. I want to briefly share with you a few comments to outline my high-level thoughts. I will elaborate our view about NurOwn in the CNS space in general before I bring the conversation back specifically to ALS and will hand it over to Dr. Ralph Kern for the rest of the presentation. We'll both be available for a short Q&A session following this. CNS has been described as the next oncology. Therefore, there is a significant unmet need amongst the hosts of devastating diseases, and we expect there will be advances in the next decade as we observed in oncology. The pharma biotech industry has delivered many powerful CNS drugs over the past decades, chipping away at patients' needs. In doing so, pipelines have focused more in the past on small molecules and increasingly over time on large molecules, which deliver great precision of on-target hits and producing less toxicity and fewer adverse events. And Ralph, I think, the slide deck are up. Historically, the industry has been guided by the principle, as all things considered equal, following efficacy and, of course, safety profile of the medicine, patients would always prefer an oral medicine. Yet pharmaceutical receptivity has declined, and it is hoped that translating new biology into precision targeted therapies may change that. I believe we have the opportunity for a new paradigm to find effective solutions for the growing unmet need in neurodegenerative disease. So what's different about NurOwn? Why is NurOwn a good investment? NurOwn offers a unique truly novel and innovative approach to drug development through cutting-edge technology based on seeking to target neuroinflammation and neurodegeneration by inducing a broad array of neurotrophic factor and immunomolecular expression. We have early evidence in clinical trials that NurOwn produces robust changes in CSF marker tied to inflammation and neurodegeneration. We can connect these markers to clinically relevant endpoints in ALS, which we hope to soon confirm in our rigorously designed Phase III trial. We believe that the same markers are relevant and play an important role in many other neurodegenerative diseases, which Ralph will outline. Given the shared mechanisms of disease, we are hopeful that success with NurOwn in ALS increase the likelihood of clinical success to address unmet need in other diseases. I want to return briefly to the bigger pharma industry context and contrast this with NurOwn's clinical development plan across diseases. Across the industry, attrition in pipelines often occurs because of concerns around patient safety as each new molecular entity is tested across new indications. Instead of a pipeline of drugs across a diverse set of modalities and target diseases, at Brainstorm, we have a pipeline of indications leveraging the same technology. This means with each trial we complete and each new indication, we'll be increasing our knowledge and expand the robust safety data set around NurOwn safety, one that will have many new scientific and practical questions to address as we explore our future indications, one that we'll announce very soon. And we'll be growing our knowledge around this technology across many diseases. This advantage over traditional drug development is something we will leverage and will be an important value driver for NurOwn in the way forward. It is time for a new paradigm. We believe NurOwn has that potential. And with that, I would like to hand this over to Ralph to do the detailed presentation for that.

I just wanted to briefly go over our pipeline, tell you where we are. I think Chaim mentioned that we're completing our ALS Phase III trial. We were fortunate to begin a progressive MS Phase II trial, which is going quite well right now after COVID. We have a very strong preclinical pipeline across neurodegenerative diseases, and we hope to make further announcements soon. I wanted to take a minute to talk a little bit about the NurOwn technology and leave you with 3 important points. First of all, the technology is fast, it's reproducible, and it's easily administered. Now the technology is based on using mesenchymal stromal cells that are harvested only once. They're isolated from the patient's bone marrow. The cells are expanded ex vivo, and they're cryopreserved. And the cryopreserved cells are then thawed, expanded in a second stage into the final product, which are called MSC-NTF cells. They're mesenchymal stem cells that secrete high levels of neurotrophic factors. Now the cells are then reintroduced back as a treatment by injection into the cerebrospinal fluid by lumbar puncture. The important practical consideration is that a single draw of bone marrow cells essentially creates an off-the-shelf product for that individual, and it allows for repeated injections into the cerebrospinal fluid from a single manufacturing process. We're making great progress in ALS. It's been 10 years. And as Chaim mentioned, the Phase III top line data is expected in the fourth quarter of this year. The learnings along the way have been used to improve the clinical trial design at each stage. And we're very fortunate that the publications have been very widely read. In fact, our neurology publication of Phase II is in the top 5% of all publications read by that journal. So we believe that people are watching closely, and we're very proud of the progress that's been made. And it's been a long journey, but it's coming to an important inflection point very soon. The Phase II study design and participant disposition is very important. First of all, it was a study that was very carefully designed with the experts at Mass General, UMass and Mayo Clinic. We have a 3-month run-in period, CSF before and after the treatment, single treatment. And we had very strong retention of patients in the trial. So 45 of 48 patients completed all study assessments, which is really remarkable for an ALS trial. The outcomes were equally remarkable. First of all, as being a Phase II study, the primary outcome was safety. We met the primary outcome. We showed that the treatment was safe and well tolerated. And most importantly, we got a glimmer of what can be expected in terms of efficacy. We demonstrated in the Phase II trial that a measure of function, known as the ALS Functional Rating Scale, showed a change in the rate of decline after treatment. In other words, there was an improvement in the rate of decline. And that's what you can see on the left side of the screen. When we look at the proportion of individuals who achieve a more than 1.5 point per month improvement in the rate of decline, we see on the right side that a significant number of individuals achieve this outcome all the way out to 24 weeks with most in the 8- to 12-week range. So again, this was very encouraging and led us to ask another question, which was, is there a subgroup of patients who particularly demonstrate this outcome? Because of what we learned in the early open-label studies, we already had an indication that rapid progressors might have a different outcome, and we prespecified this in our Phase II trial. And the next slide is to show you that we were very encouraged that in rapid progressors, in other words, those that are declining by at least 0.7 points per month in function, that we saw that there was a much greater and more durable change in the rate of decline after treatment. And this is the group that we are studying in our Phase III. It's very important to note that this was a single treatment, and our Phase III trial is repeated dosing. The encouraging data that we saw in the clinical outcomes really needs corroboration. And the best corroboration is through biomarkers. And we've made a lot of efforts over the years, and even now in our Phase III trial, we're greatly advancing our biomarker efforts. And we looked at 3 types of biomarkers. We looked at biomarkers of cargo delivery. In other words, what are the important molecules that ourselves make and deliver as a cargo within the nervous system to treat the disease. The second type of biomarker are those that reflect the action of the treatment, in other words, pharmacodynamic markers. And the third are markers of neuronal injury. So we're able to show that there was a significant delivery of VEGF, HGF and LIF. These are important molecules that we know the cells make in greater amounts than their cell of origin. We saw no increase in those who received placebo. When we look at the pharmacodynamic markers, in other words, the action of the cells within the nervous system, we saw that MCP-1, which is a marker of inflammation, was reduced by 40% after treatment. Again, very significant and very important observation, suggesting that we've had essentially proof of concept in our Phase II trial. We then designed a Phase III study, which is now ongoing and coming to an end. The most important components of this is the 3-month run-in period, selection of rapid progressors, equal allocation to active treatment, so NurOwn or placebo, 3 treatments. And then outcomes, which are, again, reflecting what we think is important to ALS patients, function, survival and then, of course, biomarkers, which we are very focused on. So we're very, very happy with the progress that we've made in the Phase III trial. We're looking forward to the outcome. I think this is a paradigm shift using a combined analysis of clinical outcomes and biomarkers. I want to shift gears for a moment and then leave time for questions. I want to initially talk about the unmet need in progressive MS. It is at least 10 or 20x greater in terms of number and no less important in terms of economic burden. Currently, there are some new treatments for progressive MS, but essentially, there's a huge biologic unmet need. And I'm just going to touch on that for a moment and then give you an update on the study. Just to show you that similar to what we saw in ALS and in other neurodegenerative disease, inflammation is a very important marker. This is to show you that in the brain of patients with progressive MS and also in animal models, we see that MCP-1 is an important driver of disease progression on the left side. And in the animal model, when you knock out MCP-1 production by astrocytes, you can significantly reduce experimental allergic encephalomyelitis, which is the animal model for MS. In our own hands, we tested NurOwn in the progressive MS model. And we basically saw that there was a significant effect on function and survival and that the cells performed better than these undifferentiated cells of origin. So again, showing that our technology platform plays out very well. Just to give you an update on our progressive MS trial, we were granted the IND in December 2018. It involves repeated intrathecal dosing of NurOwn every 2 months, 3 doses similar to our ALS treatment paradigm. We have validated clinical endpoints and biomarkers. We're studying this in 5 clinical trial sites in the U.S. I'm happy to say that as of today, 4 of the 5 clinical trial sites are actively enrolling patients, and they got through COVID with a few delays, but they managed to get back up on track. Now the first subjects were enrolled in March 2019. We had a DSMB safety review late last year. The trial is continuing without any protocol modifications. And as we said earlier, once we have the first 10 patients fully treated and followed up, we're going to be looking at the data. So again, a little delay because of COVID, but we're back on track. I want to hand back to Chaim now to then close the session and open up for questions. Thank you very much, and sorry about the delay.

It's okay, Ralph. That happens to the best. Operator, do you want to open for some questions, please?

Sure. You're able to submit questions through the livestream. I thought I have a couple that have come through. Once approved and available to patients, how often do you expect ALS patients to be treated with NurOwn?

Yes. So it's a very good question. There are many therapies that have been tested for 6 or 12 or 18 months in clinical trials. And obviously, they're being used in perpetuity. We think that as long as patients are obtaining benefit, as long as the treatment is safe and well tolerated, we think that the treatments will continue. And obviously, like any biologic treatment, there is the discretion of the treater in terms of dosing interval and other patient characteristics. And sometimes people take treatment holidays, and we know that that's part of any biologic therapy. So I think that's the way we're looking at it, with an open mind. And obviously, we would collect data after approval to help us understand. And we also hope that biomarkers may help shape those decisions. So a very good question. Thank you for asking.

Great. The next question is, after your successful SME application with EMA, the natural step will be to apply for PRIME pathway. Are you looking at submitting an application for PRIME soon? What is the status on that?

Yes. We're looking at all pathways, and we are discussing with the EMA what should be our next steps.

Okay. Next question, given other ALS treatments, will the FDA be motivated to approve a new product in the case of limited efficacy?

Well, we can't talk to the FDA. That's a question for the FDA. We believe that if our results will replicate -- we have shown in Phase II trial, that we will be approved. Next question, please.

Okay. Next question. is the company still planning to present at the Israeli HE data? How many patients have been treated under the program?

What we said in the past that as we're getting closer to the readout of our trial, we will be able to share that information. But we have 13 patients treated under the program. And some of them, those that are not Israeli patients couldn't get finalized treatments because of COVID.

Okay. That is actually all the questions I've received so far. So I think we can wrap it up. I don't know, Chaim, if you have any last final comments.

Thank you very much, and I thank everyone for coming on to this very interesting technical kind of presentation. We had some hardships and maybe some of the viewers, I'm getting some messages people wanting to ask questions, but it's not working really. But that seeing we're in the COVID period, at least when we say that patients couldn't get treatment in Israel because of COVID restrictions, you can see how the world has changed. But we are very, very uplifted with where we are. We're looking forward for our unblinding within a few months. And we're also looking forward for our key positions in Europe. And we'll be announcing soon the other indication, which we promised in the previous call to do. And we're very happy, which Ralph shared the information, that we are having 4 centers of MS reopened after the COVID crisis joined us, and we're now enrolling and treating also the progressive MS patients. So hopefully, that will also be more or less on time. So I wish us all success with finalizing the trial and unblinding process, and we're hoping to see good results and finally, finally bring something promising for ALS patients worldwide. We also do want to commend the NIH for this wonderful additional funding for R&D and all the others, advocacy groups working so hard on the hill. I think it's the best time for ALS ever. And hopefully, they will succeed to change the paradigm of some of the regulatory rules to allow expanded access and other capabilities for ALS patients. We as a company would have hoped to do more if only we'd have the funding of the big pharma. We're not there yet, but we're trying everything we can. And we're planning to be able to provide treatments as fast as possible based, of course, on the regulatory pathway that we will proceed with afterward unblind. So thank you very much for being with us today, everyone...

Chaim, sorry to interrupt.

Yes.

I did have a couple more questions come through if you'd like to answer them.

Yes, we'll take it.

Okay. Are you planning to partner the technology in Europe or other parts?

I didn't get the question, Allena.

Says, are you planning to partner the technology in Europe or other parts probably of the world?

Well, it's not a secret that a few months ago, David Setboun, our Chief Operating Officer, joined, and he's very focused with partnership conversations, and we will see it. It doesn't depend only on us. And even when there are partnership proposals, it depends what the deal is. And we will have to decide strategically we want to do a partnership deal before readout, after a readout. It's good problems to have, but thank you for the question.

Great. Next question, can you further explain the difference in outcomes observed in fast progressors versus slower progressors?

Yes. Since I have the privilege of having a neurologist on the line with me presenting, so Ralph, please.

Yes. So first of all, just 3 things. One is that there's no biological difference known between fast and slow progressors. It's simply a measurement. So we don't believe that this would be a distinction that would limit the use of the treatment after the trial and the interpretation. Secondly, the distinction between rapid and slow progressors is essentially rapid progressors are half the ALS population who are declining by a minimum degree per month. We believe that by editing out individuals who don't progress, we're able to increase our ability to demonstrate a treatment effect. And so the -- bearing that in mind, I think what we saw in our Phase II trial and also in the earlier open-label studies was that there was a greater effect on disease progression in rapid progressors. And we believe that it's primarily a measurement effect. And we selected that group in our Phase III simply because we wanted to edit out non-progressors. And we're looking forward to seeing the data. We've noticed that other clinical trials have also looked at rates of progression as predictors and to try to select a group of patients for a clinical trial who are more like each other. In other words, more homogeneous. So that's basically our thinking and our approach.

Okay. Next question, when do you expect MS Phase II interim results to be shared?

You mean Phase III?

Oh, it's Phase II MS.

Oh, sorry, Phase II MS. Sorry, didn't hear that. We...

All good, Ralph.

Thanks. We -- as I mentioned, we want to treat the first 10 patients and finish all their assessments so we can have the data set. So I would say later this summer, early in the fall, it's probably realistically what we're looking at.

Okay. Great. Looks like we are right at 9:30, and that completes the questions that I received. So Chaim, if you want to say anything else, you're welcome to, but we can wrap up the presentation.

No, just thank you very, very much. And thank you. Well done.

Okay. Yes, thank you.