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

Greetings and welcome to the Brainstorm Cell Therapeutics Full Year 2021 Conference Call. [Operator Instructions] 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.

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 disorders, such as ALS and MS, 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 its 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 projected 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.

Thanks, Michael. Thanks to all listeners for joining us to discuss our full year 2021 financial results and provide corporate highlights. BrainStorm's #1 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 the 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 advisers 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 advisers 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 priority review for an NDA that is based on data from a Phase II trial. This, together with the convening of the advisory committee, may be a sign that the FDA's approach to how it approves 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 ALS in the journal Muscle and 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, prespecified and post-hoc analysis 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 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 and 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 a late-breaking oral presentation at the MDA Clinical & 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 analyses that evaluated how ALS link genes in single-nucleotide polymorphisms has been correlated with the response to NurOwn in our Phase III data study. The results of these analyses showed that patients carrying 1 or 2 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 2 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 a 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 2 presentations, I'll highlight today are related to biomarker data from the ALS Phase III data and took place at International Symposium on ALS/MND and the 2021 Northeast ALS Consortium. This presentation was delivered by 2 of our principal investigators, Dr. Robert Brown from UMass Medical School and Dr. James Berry of Mass General Hospital multidisciplinary ALS clinic. Collectively, this data show significant NurOwn-driven changes across a range of CSF biomarkers and suggest that the product's 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 the NurOwn's mechanism is linked to its impact on ALS disease progression. Alongside our pursue of the optimal path forward for NurOwn and ALS, we also continue to make progress in establishing our manufacturing preparedness. We had previously entered into the partnership with Catalent to provide GMP (sic) [ cGMP ] clinical supply of NurOwn in anticipation of the product's potential of regulatory approval. We announced in December that the technology transfer at Catalent facility has been finalized, a very important step in this process. The manufacturing of cellular therapy 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, an analysis 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 NurOwn trial and who met specific eligibility criteria had the opportunity to receive 3 doses of NurOwn. Under the amended EAP protocol, these eligible participants will receive up to 3 additional doses and so have the opportunity to receive as many as 9 doses of NurOwn in total: 3 during the Phase III trial, 3 under the original EAP protocol and 3 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 IP update. I want to mentioned in February, we were granted a new patent in Brazil that covers NurOwn manufacturing process, a key element of Brainstorm's overall strategy is to establish a broad intellectual property portfolio to protect our proprietary technologies and products. Adding this Brazilian patent to our existing portfolio of U.S., 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 financials. Alla?

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.

Thank you, Alla. Michael Wood from LifeSci will now read questions we have received from investors.

Thank you, Chaim. And 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?

Yes. Thank you, Michael. I'll take this one. We've had a very productive year and have been good stewards of the talent 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 2 days before a scheduled FDA advisory committee that will be discussing another product for ALS 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 on the efficacy and safety of NurOwn. They have made public statements calling for access to NurOwn 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 and Nerve, a respective 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 decisions 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 patient access. Thank you.

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?

Yes. Thank you. Ralph, would you take this one?

Of course. 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 heads 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 paper suggests that a single-nucleotide polymorphism in this gene 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 of symptom onset and more frequent bulbar onset, high instances 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 a C risk allele of this gene responded to lithium carbonate compared to those who received placebo. This analysis led us to prespecify 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 A/C genotype were almost 9x more likely to respond to neuron 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.

Thank you, Ralph. Next question. 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?

Stacy?

Sure. So while our early efforts focused on clinical outcomes from Phase III, this question notes that we've continued to broaden the focus of NurOwn defectiveness 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 neuroinflammation and neurodegeneration while increasing markers of neuroprotection. And furthermore, the changes in biomarkers absorbed with NurOwn which are not observed with placebo can even help explain with great accuracy the clinical response that we observed in our Phase II trial using prespecified 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 prespecified genetic analyses of our NurOwn Phase III trial, which suggested and suggest 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 4 clinical trials in ALS, including double-blind and controlled Phase II and Phase III clinical trials. So if I think about this question, so why are these presentations important? Well, these prespecified biomarker and genetic data add additional layers of credibility and scientific rigor to our findings related to the functional clinical endpoints that we've published from these trials.

Thank you so much, Stacy. Michael?

Next question. If AMX0035 is approved by the FDA, how do you think this will affect the market opportunity for NurOwn?

Stacy?

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 to patients.

The next question is regarding the progressive MS program. Can you please provide an update on this program?

Sure, Dr. Kern, Ralph?

Thanks for the question. So 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 3 examples, the scientific abstracts that will be shared at the upcoming CMCS meeting in May provide important information on 3 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 a 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.

Thank you, Ralph.

And regarding the Expanded Access Program, did the FDA contact BrainStorm to request the latest EAP? Or did this happen the other way around?

So yes, FDA requested us to authorize the BrainStorm expanded dosing period for the participants who have completed EAP by allowing 3 additional doses of NurOwn administered every 2 months.

As a follow-up to that question, is BrainStorm actively collecting usable data from the EAP?

Stacy?

Yes, I'm happy to confirm BrainStorm is actively collecting both clinical and biomarker information in the EAP protocol.

Thank you very much, Michael. I think that are some of the written questions we included today. And Holly, would you open for any questions from the audience, please?

[Operator Instructions] Your first question for today is coming from David Bautz.

David Bautz from Zacks, 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 could tell us a little bit about what you're hearing from people -- been able to see the full data set.

Thank you, David. Well, as you can figure out from our call 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 are 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 vast majority, very positive feedback and strong recommendations, which we can share, we don't think it will be right to share. Specifically, we're in a very sensitive week, and 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.

All right. 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?

That's a tricky one. So, yes. I understand the question is coming from because other companies did go that path. And definitely, we are 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, it always is the back story, 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, we are -- as I said, we're getting prepared for every scenario.

Okay. And then my last question is, so outside of the Expanded Access Program through the FDA, is anyone else receiving NurOwn treatment at this time?

No. There's huge activities at the Catalent side just to get them ready for a 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 Instructions] Your next question is coming from Michelle Lorenz.

I am with Voices for ALS. And I noticed a couple of weeks ago that Merit Cudkowicz talked about your iPSC cells, that you're 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.

Yes, we did. But Stacy, do you want to take this one?

Yes, I'm happy to. So 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 of 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 materials -- genetic materials that we have now and run additional preclinical experiments, which was really the basis of her 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.

Yes. Thank you, Michelle, for that opportunity to clarify that part of an interview. People misunderstood it. Any other question, Michelle?

No.

Your next question is coming from John Murphy.

I was just wondering, on 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?

Thank you very much, John. So 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, and 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 the urgency. I think that's what drives me and all 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 what I can say. But thank you for the question.

There are no further questions in queue. I would like to turn the floor back over to Mr. Lebovits for any closing comments.

Yes, Holly. Please, if you can poll for another question. I just got an e-mail that people are looking, and also I see John want to ask another one. And if we -- we want to allow him to ask another one. So he can say that we are allowing all his questions. Please, John.

I saw that [ Mr. Nes ] invested quite heavily in BrainStorm. Is there any plan for him joining the Board or joining the BrainStorm team?

Thank you for that question, but I cannot comment on behalf of Mr. [ Nes ] without getting his approval for that. You must understand that we are very appreciative, Mr. [ Nes ] being a major shareholder in BrainStorm. But thank you for that question. I'll pass it on to [ Mr. Nes ]. Holly, if you can poll for another question, I just got an e-mail that someone else is trying to get on, if you can give them information how to.

[Operator Instructions] Your next question is coming from [ Ken Hackel ]

[indiscernible] and question is more on the financial side. I see you burned 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?

Yes, very good question. So as you may well know, we have an open ATM for up to $100 million. 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 the ATM activation. On the other hand, we have enough cash for going forward at least over 1.5 years. 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. So we're financed. So there is no pressure whatsoever. Thank you for that question.

There are no further questions in queue at this time.

Okay, Holly. So thank you very, very much, and thanks for everyone participating and all the questions. And I wish that we're going to have a very good upcoming quarter and a very exciting quarter definitely to see how things evolve and look forward to talk to you and be able, hopefully, to share far more information with you in the next Q. Thank you very much.

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.