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

Okay. Welcome back to the stem cells amidites medicine track. Next up, we have Ralph Kern, who is the President and Chief Medical Officer at Brainstorm Cell Therapeutics. Ralph will be discussing stem cells for neurological applications, clinical and stem cells-based product development. Over to you, Ralph.

Hello. I'm Ralph Kern, President and Chief Medical Officer of Brainstorm Cell Therapeutics. It's a great pleasure to make a presentation today about progress we've made in our goal of developing autologous cell therapies for neurodegenerative disease. We're a publicly traded company. Here's our disclosure statement. Brainstorm has 42 employees, our headquarters are in New York in the United States, and our R&D center is based in Israel. We have made tremendous progress in terms of increasing our talent base with now 42 employees. We have also made great progress in terms of our financial posture with an increased market cap and cash and liquidity of $38 million, as of July 31 of this year. We have brought on a number of key executives from other biotech and pharmaceutical companies to prepare ourselves for next steps, and we will continue to do so over the next few months. I'd like to first talk to you a little bit about our cell therapy and what is unique about it. We use autologous cells, in other words, people's own cells as a drug delivery device. The safety and cell persistence of autologous cells are well appreciated. Because we cryopreserve an intermediate product, we essentially create an off-the-shelf product for each patient. We use a single bone marrow harvest because of the cryopreservation stuff allowing us to produce years of treatment from a single harvest. The cycle time has been shortened to 7 days from cryopreservation to injection in the clinic. And we have a very consistent and reliable product because we don't use animal protein, so there's no xeno contamination. There's no antibiotics, genetic modifications or viral vectors used in the manufacturing process. The cells are culture rescued, which results in very high cell viability and consistent performance characteristics. And in fact, cell potency is one of the release criteria. We believe we have a platform technology. We have shown consistent proof of biology from in vitro through in-vivo animal models and finally, through biomarkers in human studies. The fundamental principles are that of neuroprotection, neurotrophic support and immunomodulation, and I'll go into that in more detail. Finally, because we have consistent safety demonstrated across clinical trials for ALS and across different indications, it supports NurOwn as a technology platform in neurodegenerative disease. Our focus is laser directed towards neurodegenerative disease. As a consequence, we've developed significant expertise in these conditions. We have robust IP and we have a strong global executive presence with experienced executives who have led commercial and scientific functions at other companies. Our Phase III ALS program in -- is now fully enrolled and fully dosed and will generate top line data in November. We have a Phase II progressive MS program that is now fully enrolled, and we'll finish dosing in the fourth quarter. And we are in the process of beginning a Phase II first-in-man study in Alzheimer's disease in Europe at 2 key medical centers, and I'll go into that in more detail. Our pipeline has a deep foundation of consistent results across neurodegenerative diseases, including Parkinson's, Huntington's, autism, Peripheral Nerve Injury and optic nerve crush. We have, as I mentioned, made tremendous progress in our clinical programs in ALS and in progressive MS. We're about to start Alzheimer's disease. And we've recently also shown that exosomes derived from our cell product can have quite profound effects in an ARDS model. And given all the interest these days in ARDS in COVID, that is an intriguing business possibility for us. I want to initially talk about the acquisition and delivery of our cell therapy. The cells are harvested as in an outpatient procedure for collection of the patient's bone marrow sample. This is a short 30-minute procedure that can be done in an ambulatory clinic. We then isolate and expand the cells. These are the mesenchymal stem cell fraction that are produced from the bone marrow, and that process takes about 12 days. We then cryopreserve the intermediate product, creating an off-the-shelf product for each patient, as I mentioned, enabling treatment for up to 3 years or longer. There's -- a next step in the manufacturing process where the cells were thawed, expanded and essentially culture rescued and then differentiated into the final product. The differentiation step is important because it creates a neurally directed cell that is -- has been demonstrated to produce higher levels of neurotrophic factors. And we believe that the increased production of neurotrophic factors, modification of microRNA content of the cells are key to the performance in our preclinical and also in our clinical experience. We are then able to load the cells in a syringe transported to the site and then they're available for injection. In the case of ALS and progressive MS in Alzheimer's disease, the cells are injected by intrathecal administration. In other words, the syringe is attached to a lumbar puncture needle and inject it directly into the CSF, similar to other intrathecal therapies that are currently either in investigation or approved. As I mentioned, one of the key ingredients is the potentiation of neurotrophic factor secretion. As you can see here, GDNF, glial-derived neurotrophic factor, BDNF, brain-derived neurotrophic factor, VEGF or vascular endothelial growth factor or -- and hepatocyte growth factor HGF are increased 5x to 10x in vitro. And these are -- this is data from 28 ALS patients. We see similar results in MSCs derived from patients who have MS. And one of the other mechanisms of action, of course, is immunomodulation. You can see here that from our open-label Phase I and IIa trial, that there is an increase in T regulatory cells as measured by CD4, CD25 positivity. When we look in vitro, we can show that the FoxP3 and CD24 cells are expanded. And this is consistent with what we've seen in our open-label studies. We've recently also made important observations that we shared publicly about the ability of ourselves to expand B regulatory cells and IL-10 secretion from B regulatory cells, which essentially creates an immune modulatory network that can reduce cytokines and reduce damage. Essentially, we believe that our cell product acts along 3 major axes. The first is to reduce neuronal degeneration through neuroprotection. We have shown this in our Phase II randomized controlled trial in ALS, where we've shown a reduction in Caspase-3 in the CSF after a single treatment. This was reduced by up to 60%. And the reduction in -- of Caspase-3 in the CSF was higher in responders compared to nonresponders. The second axis is that of diminishing astrocyte dysfunction and loss of neurotrophic support. We believe that the enhanced delivery of neurotrophic factors replaces a deficient neurotrophic function that is lost in many neurodegenerative diseases, including ALS, Alzheimer's and Progressive MS. Finally and probably easiest to demonstrate is the direct effect on neuroinflammation, microglial activation. We've shown consistent reductions in the CSF of MCP-1, SDF-1 and chitotriosidase. And these are all important drivers of disease progression and also correlate with disease progression in various clinical scenarios. I'm going to go through our program in ALS now for a moment. We believe that ALS is a indication that is much need of new treatments. There are 2 approved therapies in the United States. Currently, there are 450,000 people worldwide with ALS. In the U.S., there are about 30,000, probably an underestimate and 6,000 new cases per year. And there really is a need for treatments that significantly slow the rate of disease progression or stabilize the disease. Currently, the life expectancy of ALS is 3 to 5 years after diagnosis, with a median survival of about 30 months. We've been working on this for about 10 years with initial open-label Phase I and IIa trials that were used to determine dose and route of administration. We have a proof-of-concept Phase II trial that was published last year in the Journal of Neurology, involving 48 patients who were randomized 3:1 to NurOwn or to placebo, and we were able to publish that in neurology and show that the treatment was safe, well tolerated, showed preliminary signs of efficacy in terms of stabilization of disease and most importantly, showed biomarker correlation with the clinical outcomes. We have now fully enrolled and fully dosed a 200-patient 1:1 randomized Phase III trial, and we expect to have top line data at the end of November. ALS is a challenging disease, but fortunately, there are good measures. There's a functional scale called the ALS Functional Rating Scale, which involves 4 domains: respiratory; bullbar; fine motor; and gross motor function. We have looked at this in great detail in terms of what is expected. There is about 1 point per month decline out of a scale of 48, suggesting that there's a fairly predictable rate of decline. There are patients who do not progress in ALS. And by stratifying Phase II and selecting progressing patients in Phase III, we have optimized our chances to show a clinical result. In Phase II, we looked at the rate of disease progression before and after treatment, and we followed patients up to 24 weeks. In our Phase III trial, we're looking at the change in rate of disease progression at 28 weeks. And this is well aligned with the FDA guidance for a 6- to 12-month duration of placebo-controlled trials. Our Phase II trial design has a randomization event with a 3-month run-in period. We then randomized patients to either treatment or placebo. Everyone had the same procedures. We tested for masking, and we were able to show that the blinded allocation was preserved. We measured outcomes on a monthly basis. We measured CSF before and after treatment. The main findings of the study were that the treatment was safe and well tolerated. There were no deaths or treatment-related serious adverse events. There were no dropouts related to serious adverse events. And the most common adverse events were transient and mild to moderate severity related to procedure or administration of the treatment. We did prespecify in the study that we would look at those who had a defined rate of progression of more than 2 points per month in the run-in period. This was based on earlier observations in the open-label study and allowed us to stratify the treatment results based on the rate of progression in the run-in period. Obviously, we looked at the standard ALS outcome measures, including ALS functional rating scale, slope score and slope change and also slow vital capacity. What we're able to show for the first time, we believe, was a significant reduction in the rate of progression. On the left side, you can see that the y-axis is the change in rate of decline before and after treatment, a positive score means that the rate of decline has been decreased. Blue is treated, red is placebo. That's in the total group. In the group of rapid progressors, in other words, editing out non-progressing patients. You can see that the changes are more pronounced. They extend out to 12 weeks after a single dose and that this was a very strong indicator that there was a slowing in the rate of disease progression. When we looked at a responder analysis of defined as a more than 1.5 point per month improvement in the ALS functional rating scale slope. We saw, again, on the left in the total group, a number of individuals whose disease slowed or stabilized. And when we looked at the rapid progressive group, we saw a much larger signal, which gave us great encouragement to move to a Phase III trial. But before we did that, we wanted to look at biological verification of treatment response, and we looked at a number of biomarkers. As I mentioned earlier, this is a cell delivery therapy, and we wanted to show that the cargo was being delivered. We looked at VEGF, HGF and leukemia inhibitory factor in the CSF and found quite substantial increases in the top row post-treatment. You can see in the lower panel that there was no effect of placebo on these biomarkers. The second question we asked after the interrogation of cargo delivery was, could we impact pharmacodynamic markers? The answer was yes. We're able to decrease MCP-1 in the CSF post-treatment. You can see on the right, the decrease was about 40% with no effect of placebo. We saw similar effects on SDF-1, a 22% reduction. And as I mentioned, up to a 60% reduction in Caspase-3 in the CSF. We then asked a question about whether the cargo delivery correlated with the degree of immunomodulation. And the answer to that was yes. On the right side, in the top panel, you can see that after treatment, there was the correlation between the MCP-1 levels post-treatment on the X-axis and VEGF delivery post-treatment on the y-axis, suggesting that the ability of the cells to deliver cargo correlated with their ability to modulate the immune system. On the bottom panel, we asked the question about whether there was a correlation between the pharmacodynamic effect on immunomodulation and improvement scores. As I showed you earlier, there was a slowing of disease progression, positive scores suggest slowing of disease progression. You can see in the bottom panel, again, for the first time that there's a very nice correlation between MCP-1 levels post-treatment and improvement score, suggesting that the pharmacodynamic effect of immunomodulation translates into a clinical benefit. We're very excited about this. And obviously, this led us to plan and conduct the Phase III trial. This trial also has a randomization event after a 3-month run-in period. We evaluate the rate of decline in the run-in period, and we've selected for individuals who have a rate of progression of 1 point per month or more. This will produce a much more homogeneous population, allow us to have a better chance of showing a treatment effect. The difference between Phase III and Phase II was that Phase II was a single dose, single treatment, intrathecally administered. Phase III is a repeat dosing. And obviously, we believe that we have a much better chance of showing a treatment effect with repeat dosing. Furthermore, we are measuring CSF at 7 time points, we will have a very robust CSF collection and paired biomarkers to look at confirmation of the biological effect in all 3 dimensions that I talked earlier about neuroprotection, neurotrophic support and immunomodulation. The study uses a responder analysis in the rate of decline of the ALSFRS-R of greater than 1.25 points per month. We also look at score change and other derivatives of the ALSFRS-R safety, slow vital capacity, tracheostomy-free survival, and as I mentioned, very important biomarker analyses. This is just to give you an idea of how we think about the data. On the top panel on the left, you can see this is a patient from Phase II that was declining pretreatment. After treatment, you can see a stabilization of disease. And if you look at #1, on the right side, you can see that this person had a difference in post-treatment versus pretreatment slope of 1.48, which would classify them as a responder because the threshold is 1.25. On the bottom panel on the left, you can see that essentially, the disease continues unrelentlessly progressing. And that person, obviously, would not be a responder. We have a very elaborate a sensitivity analysis looking at various covariants that will help us shape the understanding of our results, including treatment allocation, baseline ALSFRS-R, duration site of onset, riluzole use and pre-treatment slope. And our analysis plan is very advanced and essentially ready for the top line data in the next quarter. We are very privileged to work with the City of Hope and Dana-Farber in manufacturing. University of Massachusetts, Mass General, Mayo Clinic, UC Irvine, Cedars- Sinai and Sutter Health as our clinical sites. We also appreciate the funding we received from the California Institute of Regenerative Medicine in the form of a $16 million grant to continue -- to conduct this Phase III trial. I'd like to just briefly go over our progress in MS and Alzheimer's disease. As you know, that there's a similar unmet need in progressive MS. Once disease enters a progressive phase, there really are no treatments that change the relentless decline. Certainly, there's a biological unmet need with compartmentalized inflammation, slowly expanding lesions in the brain. And even the most promising therapies at this time are unable to produce improvement in the level of function. We have designed open-label study with a matched historical control group. We recently have done a number of analyses in our historical group, which is done in collaboration with Brigham & Women's Hospital. We've shown that the rate of improvement that we're looking for is only present in about 6% of progressive MS patients. There are MRI indicators of that, and we'll be looking at that very carefully in our study. We're doing repeated CSF collections, repeated treatments and a 12-week follow-up after the last treatment. The advantage in MS is that we're going straight to repeat dosing. Unlike ALS, where we went -- we started with a single dose. The same route of administration is being used. In other words, intrathecal treatment. We have extensive validated biomarkers for MS, including quantitative MRI and CSF, serum biomarkers as well as validated functional outcomes such as timed 25-foot walk, 9-hole peg test and single-digit modality test, which will give us a very good indication of the treatment action and will allow us to plan a subsequent placebo-controlled trial. I'm happy to say that we are also extending our reach and looking at a new indication in Alzheimer's disease. Alzheimer's is growing very quickly across the globe because of the aging population, because of comorbidities that are driving Alzheimer's disease. And there's been a lot of scientific advancement in Alzheimer's disease in terms of biomarkers, which are allowing us to introduce a biomarker-focused clinical trial now. For ALS and Progressive MS, we've been very careful about selecting clinical criteria and using biomarker outcomes in Alzheimer's. We're shifting gears a bit where we're using very careful clinical criteria for the inclusion. However, we're also adding biomarker inclusion criteria, and I'll show you in a minute that makes a big difference. This is an example of the interaction of MCP-1 with Alzheimer's specific biomarkers on the left. You can -- as I mentioned earlier, we reduced MCP-1 by 40% and in our ALS trial. You can see on the left side, when you add the tertiles of MCP-1 levels in the CSF, you can see the annual rate of decline of the mini-mental status score goes down considerably based on the amount of inflammation and shows that Alzheimer's biomarkers alone do not drive the disease process, but amyloid and tau in combination with inflammation does so quite considerably. On the right side, you can see that the MCP-1 in the CSF also correlates with the rate of MMSE decline as an annual score. So we believe that the same principles hold true for ALS, progressive MS and Alzheimer's disease, which allows us to take a very biomarker-focused approach to evaluating your own in these diseases. This is an example of the microRNA that we've shown to be increased in ourselves on their top right. On the bottom right, you can see that this has increased in the CSF post-treatment in ALS patients and that the increase is greater in responders compared to nonresponders. In Alzheimer's disease, there is a dysregulation of miR-132. It correlates with the rate of cognitive decline on the bottom left. And this is a very important suggestion that the mechanism of action of NurOwn will play out in an important way in Alzheimer's disease as we believe it has in ALS. And with that, we have also looked at using a much more sophisticated enrollment criteria. On the right side, you can see that in the red that patients with Alzheimer's disease who are positive for tau and amyloid have a much more predictable and progressive rate of cognitive decline per year. And we're using the red group as our inclusion criteria. You can see that the blue Alzheimer's patients on the top without biomarker positivity, have either non-progression or very slow rates of progression. We believe that using an oncology approach in neurology where we biomarker select the patients will increase our odds of showing a positive result, even in a well-focused Phase II clinical trial. The rationale, therefore, is, as described and the strong safety profile of 10 years in ALS, obviously goes a long way to advancing this program in Europe. I just want to give a call out to a couple of centers we're working with Professor Philip Scheltens and Bruno Dubois at Amsterdam University Medical Center and in Paris, respectively. We believe that our collaboration with these centers will greatly advance our probability of completing the study on time, successfully and with very high-quality data, and will allow us to make a decision about a subsequent Phase III randomized trial. Study design is something that you're familiar with now. Obviously, we're using the run-in period to collect the specimen, create the product. We then do not have a randomization event because this is an open-label study. We're looking at collecting CSF at 3 occasions after treatment. The clinical assessments are quite detailed, and I won't go into all of those except to say that selecting memory impairment with Alzheimer's biomarkers greatly increases the homogeneity of the group and increases our probability of success. We will be looking at neurotrophic, neurodegenerative and neuroinflammatory biomarkers in Alzheimer's disease. There are -- there is evidence that the abnormalities and blood vessels also drive disease, and we'll be looking at that along with markers of synaptic function, which probably is the substrate for cognitive decline in Alzheimer's disease. With that, I thank you for your attention. Please follow us. We will have a very busy fall with the top line data in our ALS program. And we do hope to provide updates on all our preclinical activities as well as new information about our progressive MS and Alzheimer's programs. Thank you for your attention today.