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

Greetings and welcome to the BrainStorm Cell Therapeutics conference call. [Operator Instructions] It is now my pleasure to introduce your host, Michael Wood. Thank you. Michael, you may begin.

Thank you, operator, and good morning, everyone. Thank you for joining the BrainStorm Cell Therapeutics call this morning. Before we begin the prepared remarks, I'd like to remind listeners that this conference call contains numerous statements, descriptions, forecasts and projections regarding BrainStorm 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 continued operations in 2020 and beyond; the safety and clinical effectiveness of the NurOwn technology platform; the company's clinical trials of NurOwn and related clinical development programs; and its ability to develop strategic collaborations and partnerships to support the 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 the company's SEC filings. The results may differ materially from those projected on today's call. The company undertakes no obligation to publicly update any forward-looking statements. Joining me on the call this morning will be Chaim Lebovits, President and CEO of BrainStorm; Dr. Ralph Kern, President and Chief Medical Officer; Dr. Stacy Lindborg, Executive VP and Head of Global Clinical Research. And in addition, Dr. Merit Cudkowicz from Mass General Hospital and Dr. Tony Windebank of Mayo Clinic, both principal investigators of the NurOwn Phase III trial, will be on the call. They'll both be available to answer your questions during the Q&A session. I'd now like to turn the call over to Mr. Lebovits. Chaim, please go ahead.

Thank you, Michael. Good morning. Welcome to our webcast regarding BrainStorm Phase III ALS clinical trial readout. First, let me start by thanking all the patients who participated in this trial. It's only because of their support and commitment to the development of a novel cell therapy to combat ALS that we have been able to complete this trial. We also want to recognize their families and caregivers who supported patients and -- on their journey with us. I want to thank the principal investigators and the clinical staff from the 6 clinical trial sites, each with great ALS expertise and -- that very professionally conducted this study. We also want to extend our appreciation to our sponsors, the California Institute for Regenerative Medicine, the ALS Association and I AM ALS. Finally, we want to recognize and thank all the dedicated BrainStorm employees, whose tireless dedication made this clinical trial possible. And before I turn this over to Ralph to talk more about the results, I do want to just sum this up in a simple sentence. We didn't hit the home run we wanted we were hoping to deliver but -- and that's very important. We do feel all of us in BrainStorm reviewing the data and the PI's initial feedback after reviewing the data that this clearly has a pathway, probably more than one pathway, for an approval without doing an additional trial. We don't see ourselves doing a placebo-based trial before an approval on this treatment. But we're going to have discussions with the agency. I will not be able to share too much of those discussions ongoing because the discussions until now are informal discussions. But it leads us to believe that the agency is also very open to discuss pathways for a possible approval. Definitely, we will have to sit down and show them all the results and come up with a clear narrative with the support from the ALS community, meaning the key opinion leaders in the industry, our own principal investigators and the wonderful review team at CBER. So I want to hand it over to Dr. Kern to give you a more detailed update, even though probably most of you have read the press release, but to give some more explanation. We're going to keep very short comments this morning. After Ralph, we'll have with us and we're fortunate to have with us Dr. Merit Cudkowicz and Dr. Tony Windebank, who's going to give their short comments, too. We all feel obligated, mainly to the patients but also we, as a company, to all of our investors to give you a little bit of the strategy, what we can. We would love to give more of the strategy, but still, we have to be in more. So we'll keep it very short. Ralph will be a few minutes and Merit and Tony, and then we'll allow questions up until about 9:00, where the doctors will have to leave. Thank you. And Dr. Kern, please, the floor is yours.

Thank you, Chaim, and good morning, everyone. So as you likely saw in our press release, we did not meet statistical significance in the primary efficacy end point. We did show a numerical improvement in the treated group compared to placebo across the primary and key secondary efficacy end points. Importantly, we also confirmed through biomarkers how NurOwn impacts ALS disease pathways and how this helps us understand the clinical responses that we were able to observe. The clinical trial enrolled more severe ALS patients than we had anticipated and evaluated more severe patients than what was seen in other ALS clinical trials. One impact of a more severe patient disease group in a trial is that the disease might be less responsive to treatment, and at the same time, it may be more difficult to measure this response. In other words, we saw more variability in the measurement of ALS symptoms and function at the lower end of the functional scale. This became apparent in our analysis of efficacy as we observed a higher-than-expected placebo response in more severe patients. In spite of this difference, we did see a consistent NurOwn treatment response across different efficacy end points, such as the responder outcome and the change from baseline analysis. We observed this consistent treatment response in the entire clinical trial population and across important prespecified subgroups of patients with less severe disease at baseline. In other words, the ALS Functional Rating Scale greater than or equal to a score of 35. These internal consistencies give us much more confidence in our observations. For example, in the prespecified subgroup of ALS patients with a score greater than or equal to 35 at baseline, 35% of patients treated with NurOwn were responders compared to 15% of those who received placebo, which is very well aligned with the assumptions that were used to design the trial. Furthermore, in this subgroup, we observed a 2-point improvement in the change from baseline at week 28 in the ALS Functional Rating Scale. This difference was in the NurOwn-treated group compared to placebo, which means that across the 28-week trial, patients in the NurOwn-treated group progressed 2 points less on average than placebo-treated patients. These changes are highly clinically meaningful. We also had a very thorough evaluation of disease biomarkers in the CSF and in the plasma. The CSF biomarkers confirmed the treatment with NurOwn resulted in a statistically significant increase of the neurotrophic factors that our cells are able to deliver and also a reduction in very important neurodegenerative and neuroinflammatory biomarkers that was not seen at all in the placebo group. We're very excited about these results, and we're also looking forward to sharing more details about all of this data that we've described today at the Motor Neurone Disease Association's 31st International Symposium on ALS in a few weeks. We also asked ourselves an important question is, how do the biomarkers link to the clinical outcomes? To do this, we carried out a very complex and detailed prespecified statistical modeling to see if we could predict clinical responses with high sensitivity and specificity based on the inputs of ALS biomarkers and ALS function. This modeling effort is important because it establishes a relationship and a very important link between measures of ALS disease, ALS biomarkers and treatment outcomes. As Chaim mentioned, we're already in discussion with the FDA. We very much appreciate their dialogue and their motivation. They have expressed eagerness to review our data and have committed to prioritize a meeting with us to do so. And we're getting ready for that. So to summarize, we're very encouraged by the trial results, which we believe show evidence of a clinically meaningful treatment effect. And we note that results across key primary and secondary end points moved in the right direction, demonstrating improvement with NurOwn relative to placebo. We're fully committed to explore next steps, which could identify a potential regulatory path for approval. Thank you.

Thank you, Ralph. Appreciate that. Dr. Merit Cudkowicz, please, any comments? If you have any comments...

Merit Cudkowicz from Mass General Hospital here. I thought this was a really well-done study, and it's really an important treatment. The effects I've seen in these -- the group with the higher function is a big change. Slowing down the course by that amount is really clinically very important, especially for a fatal illness like ALS. And to be able to potentially pick out who those responders are with the big response would be a huge step forward in ALS. So I think it's really important to pursue that. As you know, everyone here, we really don't have effective treatments for this illness. And anytime we see something that might have a big impact, even if it's in the subset, is really important to follow up on. Happy to have questions later.

Thank you so much, Merit. Tony, please, Dr. Tony Windebank?

Yes. This is Tony Windebank from Mayo Clinic. First of all, join the others, and especially Chaim, in thanking the patients and their families for participation. And this is a very intense study. And most importantly, I think it was a very well-designed study. It's been a great pleasure working with the BrainStorm team who have always taken very carefully both the patients' needs, but also the investigators' constructive criticisms about how best to design the study. So I think it's been a extremely collegial and well-carried-out study. I would join with Dr. Cudkowicz in saying the importance is that there were clearly a significant group of patients, about 35%, who responded well to the treatment. And as Chaim said, this wasn't enough to make the home run of the very stringent primary end point, but it is a very promising result as we move forward to identify who those patients are and why they responded. This is a very significant step forward in finding a treatment for this very, very difficult disease. So thanks, and I'm happy to answer questions, too.

Thank you so much, Dr. Windebank. And operator, Daryl, will open this for questions and answers.

[Operator Instructions] Our first questions come from the line of David Bautz with Zacks Investment Research.

First question, do you think that performing multiple injections had any effect on the -- when you look at the benefit versus placebo response?

David, can you repeat the question, please, about the placebo response? I didn't hear that.

Yes. So I was asking if you think that performing multiple injections had any effect on the benefit versus the placebo response?

We have wonderful doctors on the line. It won't make sense that I answer this. Merit or Tony, you want to answer this question, please?

It's a good question. I don't think we have the answer because there aren't too many studies that have had intraspinal fluid or intrathecal injections. But I don't know biologically why that would impact someone's response other than perhaps giving a little more hope. I don't know, Tony, if you have thoughts on this.

No. I agree with Dr. Cudkowicz. I think what's probably also relevant here is if you look at the biomarker responses, clearly, some of the biomarkers respond in a time manner after active injections. And none of this happens in the placebo patients. So at least from that point of view, there clearly is a response to individual injections.

David, any other questions you may have?

Yes. Did you see any patients show an increase in the ALSFRS score for any part of the trial?

The answer is yes, but we can't yet -- we're digging into the data. It's a massive amount of data. You have 200 patients times 7 treatments. But yes -- the answer is yes, but how much and what and the quantities -- and we're having a very important conference, like Ralph mentioned before, in December 12, the MND international conference, where the majority of ALS doctors worldwide will participate. And we're going to present those detailed data there. And I hope that patients and investors will be able to listen into that. But the short answer was yes. Okay. Thank you very much, David.

Our next questions come from the line of Jason Kolbert with Dawson James.

What I'd like to understand is, in prior trials, we learned that this disease waxes and wanes. And it became critically important to treat people that have active disease so that you could show the effect of NurOwn. So I'm confused because if I understand what you're saying is that the subgroup showed efficacy based on the perceived placebo rate of 15% but that the more severe patients had a 30% placebo rate, which makes no sense to me, and why this would show an effect in less severe patients versus more severe patients. I'm trying to wrap my head around that and how that makes sense. So if you could address those issues, that would be very helpful.

Thank you very much, Jason. Merit, you want to take this?

Sure. I'd say -- I don't think the illness waxes and wanes. I think there are people who have very slow courses and don't progress over a period of 6 months, and the goal was to exclude those patients, which I think we did. I do think, and we've now seen it with several drugs, that people a little earlier in the illness have -- might have a better chance of responding to treatment. We've seen that with edaravone. We've seen that with Amylyx. And I think we're seeing that here again. So that maybe it doesn't have so much to do with the progression rate but where they are, the state of their disease and how many motor neurons they kind of have left to salvage.

I agree completely with that, Merit. And no additional comments.

Is there a way that you could measure how many motor neurons are left to salvage? Or is that just directly related to the stage and how severe their disease is and not related to the rate of deterioration or progression?

Stacy?

I might defer to Tony because that's one of your expertise of the motor unit number estimates.

Sure. So thanks. Yes, there is a way to directly count the number of motor units. It has previously been used in some clinical trials, but it's cumbersome and technically difficult compared with the functional rating scale. So in the bigger picture, the most important thing for the patient and family is how is the disease affecting them in terms of their activities of daily living, which is what the functional rating scale measures. But if -- but in direct answer and moving forward, it certainly would be possible to directly measure in selected muscles how many motor neurons are surviving. And that, potentially in the future, and this is speculating, could be used as an indicator for likely treatment response.

Correlate that answer to the ALSFRS/R kind of prespecified score so that you can help me understand when you go to regulators that the pre -- and this was a prespecified subgroup? Is that correct? And that...

That's correct.

In fact, shows that, in fact, this worked in this particular subgroup of patients. And my understanding is that's going to be your argument to the regulators.

Yes. So let me comment here, please. And thank you for asking this question. And it's going to have to be your last one because many other people want to ask. But the answer is that we cannot comment today if this is going to be our direction. And yes, it was prespecified. And so we do think that we will have to explain all your questions you're asking. And these are the discussions we're already having with the FDA around this.

Okay. I know this is a tough morning for you guys. We appreciate the answers.

Well, Jason, it could have been tougher. We think that there's a pathway. But yes, it's not the home run, as we said we were hoping. And yes, we have to figure out the placebo under for 35. It's definitely a question which we will have to figure out. But thank you very much. Daryl?

Our next questions come from the line of [ John Evans ] with Raymond James.

I'm just curious, how large was the specified subgroup? Of the 189 patients included in the study, how many had an ALF score -- ALS score above 35?

Thank you. Stacy?

Yes. So there are about 30% of the patients from the overall trial that are in the subgroup that have a baseline value above 35.

Daryl?

Our next questions come from the line of [ Bill Shanti ] of Bluerock Capital.

In regards to safety, I did not see any disclosure. Were there any imbalances with the NurOwn group versus the placebo? Anything at all?

Ralph, that would probably be a good one for you to answer because you've looked at that very thoroughly.

Yes. But what did he ask? Versus placebo, sir?

Safety imbalance.

Yes. So we saw consistent safety in the Phase III with what we had seen in Phase II. In particular, providing repeated dosing had a very similar safety profile to single doses as we did in Phase II. And we saw also a somewhat lower incidence of procedural adverse events in this trial. There were certainly no lab abnormalities or any other adverse events that gave us concern. So overall, we're very happy with the safety of the trial. We believe that there's additional analyses that are needed. Certainly, we're preparing for our presentation at the Motor Neurone Disease meeting, and we'll be providing more details at that date.

Thank you. We have time for one more question. Daryl?

Our next questions come from the line of [ Craig Stevens ].

I'm just interested, when will you let the people in the trial know if they got NurOwn or the placebo? And for those who did get NurOwn and felt like they had positive results, will you be open to giving access to that?

I'll let Ralph answer the first part, and I'll give you the second.

Yes. We're -- we've had a first detailed conversation with the principal investigators yesterday, and that's an agenda item. We're planning another discussion over the next few days. We need to have an orderly approach to providing that information. So probably in the next couple of weeks, we'll be able to take some next steps there.

Yes. Your -- to your second half of the question, obviously, there's going to be a question now about the score, giving treatments and EAP. But we did have an initial discussion already with I AM ALS about this, and we'll have to have a discussion with the agency about this. We'll see. But definitely, company is open to try to give treatment from patient participants if the FDA and the doctors would support that. Well, thank you for the question. And so I want to thank -- yes, please.

Do you think -- did COVID and the last few months of the trial, did that affect the results in any way as far as like not being able to do in-person evaluations and physicals?

Yes. So we won't -- I don't want to answer a professional answer yet on that. But obviously, what we saw initially, we don't think it affected the ALSFRS scores. It did affect SVC visits, and therefore, we may not have enough data for that SVC because we did miss a lot of SVC visits. You cannot do that on the phone. But the main primary and secondary end points, we think, were not affected by COVID. Well, thank you very, very much. And I want to thank Dr. Tony Windebank and Dr. Merit Cudkowicz for being with us this 0.5 hour. And we look forward to additional discussions. We have a lot of work to do. We have to prepare for an FDA meeting and our discussions and make our best presentation why we feel that this is worthy of an approval. And a very good question's, what are we going to ask for, if only for the subgroup or also for under that. And we don't have an answer yet. We're going to discuss with our principal investigators and other doctors in the industry. We're going to wait to hear their feedback, specifically in the MND conference, which is just around the corner. And then, I think, we'll have a clear strategy. And we'll share with you once we meet the FDA, you'll get the results from that formal meeting. But our informal conversations with them are very promising because we see that the field urgency for ALS just like we do, and that's very promising to hear that. Thank you very much for being with us today. I know hundreds of you are on the call. Sorry, we couldn't get any more questions. You could e-mail to us, and our IR people will be answering you. Thank you so much.

Thank you.

Thank you.

Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.