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

Greetings, and welcome to the Brainstorm Cell Therapeutics First Quarter 2022 Conference Call. [Operator Instructions] As a reminder, this call is being recorded. And I would now like to introduce your host for today's conference, Tom Galassi of LifeSci Advisors. Mr. Galassi, you may begin. .

Good morning, and thank you for joining us. Before we begin the opening remarks, we would like to remind listeners that this conference call contains numerous statements, descriptions, forecasts and projections regarding Brainstorm Cell Therapeutics and its potential future operations and performance, statements regarding the market potential for the treatment of neurodegenerative disorders, 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 for 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 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 Chaim Lebovits, CEO of Brainstorm; and Alla Patlis, Interim Chief Financial Officer. In addition, Dr. Stacy Lindborg, Executive Vice President and Chief Development Officer; Dr. Ralph Kern, President and Chief Medical Officer; and Dr. David Setboun, Executive Vice President and Chief Operating Officer, are also on the call and will be available to answer your questions during the Q&A session. Now I'd like to turn the call over to Mr. Lebovits. Please go ahead.

Thanks, Tom. Thank you to all listening or joining us to discuss our first quarter financial results and corporate highlights. Given that we provided a detailed update on our clinical programs during our year-end call only about 6 weeks ago, I'll keep my prepared remarks brief today. As is our usual practice, we'll follow up our prepared remarks addressing questions we received from investors in advance as well as taking live questions from those of you listening on the call today. I want to emphasize that Brainstorm's highest priority is pursuing the optimal path forward to provide broad access to NurOwn for patients with ALS. Our continued efforts towards this goal are moving forward and have been advanced in many ways, including ongoing interactions with ALS experts, world-renowned statisticians and leaders from the clinical and patient communities. As I previously stated, valuable feedback and insights gained from these interactions are critical and are guiding the specific steps we will take to move NurOwn forward. Our dedicated team has continuously received expert feedback on the NurOwn clinical data set since our Phase III trial initial top line readout. However, the insights provided to us throughout the first quarter have been particularly insightful given that we have published our full results near the end of 2021. The availability of the Phase III publication enabled us to provide the ALS expert community with a full and transparent view of our randomized placebo-controlled Phase III trial data that has been validated through the rigorous peer review process. As a reminder, although the Phase III trial did not meet statistically significant or primary or secondary endpoints, prespecified and post hoc analysis showed NurOwn delivering robust clinical benefit to ALS patients with less advanced disease. These clinical findings are further supported by biomarker data showing significant NurOwn-driven changes across important ALS disease pathways, such as those related to neuroprotection and neuroinflammation. Since the publication of our paper, we have had the opportunity to present data from our Phase III trial at 3 scientific conferences, including the MDA Annual Meeting and American Academy of Neurology. And we will deliver an additional biomarker presentation coming up at the first ALS Drug Development Summit later this month. We have been highly encouraged by the feedback received to date, which we are incorporating into our business and regulatory strategy as we move forward. Given the sensitive and confidential nature of our ongoing communications with the regulatory authorities, we are not in a position today to disclose the specifics of these interactions. I'll stress, however, that we continue to make tangible progress behind the scenes, and I look forward to when we can share a comprehensive update. We appreciate the urgency of the needs facing the ALS community, and I ensure you all that our entire team is working diligently through a coordinated effort to address these needs as expeditiously as possible. In parallel with our efforts to advance NurOwn down its optimal path forward, we also continue to prepare for anticipated growth by adding talented and dedicated individuals to our leadership team. Just this past week, we announced the appointment of Dr. Netta Blondheim-Shraga as VP of Research and Development; and Antal Pearl-Lendner to the newly created position of Chief Legal Counsel. We are thrilled to welcome both Antal and Netta to Brainstorm and expect their complementary skill sets and experience working within this industry leaders such as GE Capital and Teva Pharmaceuticals, respectively, to be supportive and help to drive our continued progress. Turning to our pipeline. We continue to make progress developing our proprietary exosome-based platform and technology, which has applications in multiple disease areas. Dr. Kim Thacker, our Senior Vice President of Medical Affairs and Clinical Innovation, presented new preclinical data from this program at the International Society of Cell & Gene Therapy Conference earlier this month in San Francisco. These data look upon prior preclinical produce that demonstrated the superior efficacy of NurOwn-derived exosomes in a model of acute lung injury when compared with exosomes that had been produced from naïve mesenchymal. With the new data presented at ISCT, we gained important insights into the biologic mechanisms underlying the superior efficacy of NurOwn-derived exosomes, which appears to be linked to their anti-inflammatory effects on macrophage populations. We look forward to discussing our exosome program further during an upcoming presentation at the ISEV 2022 Annual Meeting, which is taking place in Lyon, France on May 26. I will now turn the call over to Alla Patlis, who will review our financials. Alla?

Thank you, Chaim. It is my pleasure now to discuss our financial results for the first quarter ended March 31, 2022. Brainstorm's cash, cash equivalents and short-term bank deposits were approximately $18.4 million as of March 31, 2022. This compares with approximately $22.1 million on December 31, 2021. Our research and development expenditures met in the first quarter of 2022 were $2.6 million compared with $4.3 million for the comparable period in 2021. General and administrative expenses for the first quarter were $2.8 million compared with $2.6 million in the comparable period of 2021. Net loss for the first quarter was $5.4 million or $0.15 per share as compared to a net loss of $6.7 million or $0.19 per share for the comparable period in 2021. Back to you, Chaim.

Thank you, Alla. Wonderful job. Tom Galassi from LifeSci will now read the questions we have received from investors. Tom?

[Operator Instructions] Our first question asked if you could provide an update on the regulatory status of NurOwn in ALS.

Stacy, do you want to take it?

Sure. As Chaim mentioned in his prepared comments, we continue to leverage expert feedback as we work collaboratively with regulators to enable NurOwn's advancement. Our aim is to seek the most expeditious path forward to enable patient access and at this time -- at the same time create value for our stakeholders.

Thank you.

Okay. For our second question we have, what are you gaining from recent presentations at scientific conferences?

Yes, I'll ask Ralph to do that. I'm just sharing with the shareholders and the other people listening again, that I think it's the first time in a long time since corona that we're doing the call in the same room in our offices in Boston and Burlington. And Ralph, here take it.

Thanks, Chaim. As we mentioned, we continue to broaden our understanding of NurOwn's mechanism of action in ALS and in progressive MS while at the same time providing key scientific insights into the enhanced immunomodulation and neuroprotection of our platform technology. These really important scientific insights that we will share over the next few months will support a few activities, first of all, regulatory activities. Secondly, they'll definitely increase scientific credibility with the broad scientific community. And finally, they'll provide support for both internal and external discussions related to strategic partnerships.

Thank you.

Our next question asks, can you provide an update on your progressive MS program?

Yes, that's first, Ralph.

Thank you. As we mentioned, we've completed additional analyses of the Phase II study, and we plan to share these insights at the upcoming CMSC Meeting in June in D.C., and at the ECTRIMS Meeting in the fall, which will be in the Netherlands. These scientific presentations will support continued development of NurOwn in progressive MS, in our view. We've also received valuable feedback from MS scientific experts and regulators over the last 2 months. And once the Phase II study is published in a peer review journal, we'll provide a further update.

Thank you, Ralph.

Okay. And the last pre-submitted question asks, can you provide an update on your ALS expanded access program?

Yes, sure. Thank you, Tom. We continue to provide additional EAP treatments through the intermediate-sized EAP protocol that the FDA has approved. We continue to actively collect clinical and biomarker data from this program and hope to provide further updates as they become available. I wish the best success to all the patients getting treatment this week. Genie, I would like you to please open the call for questions from people on the call.

[Operator Instructions] Your first question is coming from David Bautz of Zacks Small-Cap Research.

Well, I know you can't go into the details. I'm just curious if you've had any further meetings with the FDA? Or if you guys do decide to go down the path of filing a BLA, would you plan on having additional meetings with the FDA before you do that?

I'll answer on the second part of the question and there are different ways how you can talk to regulators. There are official meetings. And if there's sometimes important programs to the agency, they have ways to talk to us. So we keep on saying that we have an ongoing conversation with regulatory, and that's true. It continues to be true. That's as far as I can go this morning, David. I know we discussed it also offline and also with other investors. Everyone wants to know where we are. We'll share it as soon as we can. We are doing the best for shareholders, not yet sharing where we are. But everything is on course, to your question, yes.

Okay. Now regarding exosomes, I'm curious what potential other indications you could look at for that platform outside of, say, acute lung injury, which you've already shown data for -- preclinical data for, I should say?

This is a wonderful question. Again, I can't share too much, but I will share with you that we just shared -- that we just appointed a new VP R&D. And she has a lot of expertise in that exactly to drive from the scientific good indication -- to drive to, okay, where is this going? What are the diseases? Who are the right partners? That's what she has done in Teva with huge consortiums, bringing things from academic through to company development. So of course, we are not academic, but our R&D team is more academic-driven and it's going to be more business-focused and also to try to figure out with who to partner and what different indications. It's a very good question. So we're looking at the whole broad possibilities. And she is very professional with a team, and she may bring more people to assist her to exactly be able to outline the company to move very fast in the right direction. So while we are already focused in lung disease in different ways, this will be an add-on this year. Exosomes is becoming very, very hot in our industry, as you know.

The next question is coming from Michelle Lorenz of Voices for ALS.

I have 4 questions, 2 about biomarkers and 2 about patient-reported outcomes. The first biomarker question relates to your CSF biomarkers. At the recent AdCom, CDER's Dr. Billy Dunn talked about the importance of neurofilament light trending in the right direction. And earlier last year -- or at the end of last year, Dr. Brown said, that NFL in the NurOwn trial was trending. I think his quote was eye-popping. So I'm curious if you can comment on which of the CSF biomarkers you found the most compelling. And did you see a larger magnitude difference in the higher ALSFRS-R scores just as you did in the clinical trial data with -- that was published in Muscle & Nerve?

Thank you so much. So the answer for that is that we are not claiming a single biomarker support only. We don't think ALS -- none of our scientists or neurologists think that ALS will be driven only by a single biomarker. We do know, and as you mentioned, that Dr. Billy Dunn and AdCom for Amylyx has mentioned that he would like to see the NFL going in the right direction as an additional credibility to ALSFRS-R results. We can say that we have that. And not only with NFL, we have many biomarkers supporting our ALSFRS-R score story that we are claiming -- that shows that our trial -- that our treatment and the vision. We did lay out part of the biomarker story in our manuscript but there's still so much to share, and we are working on an additional manuscript that will lay out actually a lot of what you were asking in more detail.

But you may not be able to answer the second one then. I noticed that Dr. [ Sakovich ] presented at the MND talking about UNC13A and about -- I think the data was about 65% of the people with the A, C allele met the primary endpoint, and that was roughly about 5x p-value. So given that UNC13A SNP is a mis-splicing error, do you hypothesize that NurOwn may show efficacy on the other genes that have mis-splicing errors that were identified in Aaron Gitler's paper in Nature?

Yes. So you're asking a very good question and Dr. [ Sakovich ] did share whatever was able to be shared at the time. It doesn't mean that we have -- that we say that only A versus C works. It is far more complex, as you know. I think -- first of all, really kudos to you. You really follow all our presentations, very good, and a lot of detail. I'm happy to see that. And our scientists are very excited that we are paving the way, first, in biomarkers. Someone following many ALS trials, I know that you know, we're the first with the largest biomarker data set to bring forward in an ALS trial and now, thank God, all other trials are now understanding that biomarkers has to be part of trial collection. And even though it's another CSF tap again and again, which we rather not do to patients, but patients are very happy that they know that whatever is happening in the trial, they are really, really giving a lot of support for science going forward on the pending ALS letter. And I think our data set of biomarkers brings that in the generics. We just -- and it's just on the surface. And so we are opening the door there. We are showing very interesting data, as you mentioned. And we can, of course, include that in our biomarker paper. We'll have the generic section, but it's only the beginning. I think our biomarker data will be far more helpful at this moment than the generic data. But the generic data is very supportive of what we are seeing, definitely.

To that end, I'm also a believer that the patient-reported outcomes are compelling. And as you know, sadly, the COVID halted the collection of breathing data in the Phase III trial. But it appears from the people in EAP, both the last EAP, that some people were having significant improvements in FCC. Some -- one person obviously stopped using a trilogy and it's been 2 years. I checked with his family. They still aren't using the trilogy 2 years since his last dose. So I'm curious, is NurOwn upregulating the epidermal growth factor? Or is there another biomarker that you believe might be responsible for targeting the phrenic nerve that innervates with the diaphragm?

Michelle, I wish all the investors would know what you know in detail, but you know that I can't comment on this EAP open program. Well, you follow everything. Nice. Yeah. I can't really comment on this.

Then the only -- the last question...

I can say -- your know what, I will say that we're very happy that we're able to provide, of course, the EAP. That's, of course, a given. Everyone knows that. We have done -- that's not trivial all the companies to do. We're a small market and biotech company, investing a lot of our money and resources to provide to these few patients at least more and more treatments. We're very happy that the FDA is supporting this program in a very strong way. And then yes, we see what you see, Michelle. We see the same things, of course. You're not seeing wrong things, but we just can't comment on it.

Okay. Then the last quick question is, again, in EAP, a lot of people have reported that their fasciculations have stopped immediately after getting their neuron injection. That's obviously nowhere reflected in the ALSFRS-R. How is Brainstorm capturing this data to provide it to the FDA in support of how a patient feels and functions?

Again, Michelle, it's a very, very good question. The whole industry is discussing about the endpoint, about the score. Of course, the score is something that we have to hold up. And the results that the scores show are also, I think, very impressive with our trial. Outside of that, you asked me a good question, and there's a lot of answers, but non-final answers that we can really share here. I think the industry is going to come up with answers because you're bringing up very important points. The score does not, of course, cover every improvement. We know that. It's well written in literature. I'm sure you know that as well. And we are talking to many people, including editors, authors of the ALSFRS-R score, and they want to know our data and they're looking at those things. And then maybe they will share some of their thoughts very soon here, maybe. But it's not for us to really edit the score. It's for us to bring forward our data and share it as we can with the whole community to help everyone understand better how to measure ALS. But these are all very good questions. Even though you're taking up our time -- quite a lot of time, very happy to answer these very professional questions. Thank you.

Your next question is coming from Daniel Walker of Ness Industries.

NurOwn has a very broad mechanism of action in terms of its impact on multiple critical biomarkers. It seems like a lot of other therapies, mechanism of action are much more narrow or end up targeting a subgroup. Maybe can Dr. Kern just comment on advantages of NurOwn's mechanism of action relative to other therapies in development, both past and present? And I do have a few other questions.

Yes. Daniel, we'll let Dr. Kern answer your questions. I spoke too much this morning. Dr. Kern.

Yes, Daniel, thanks for that question. I think there's a couple of answers that would help shed some light on the point that you're raising. The first is that there's not a single neuroprotective factor that has been shown to be effective. And in fact, there's good reason for that because there are different targets that the neuroprotective factors reach. And in the preclinical models, there's pretty good evidence that targeting a single neuroprotective factor isn't as good as targeting multiples. So they have something called synergy, so they work together. So that's kind of the first cut that I would offer. The second is that offering neuroprotection without managing the inflammation in the disease is probably not going to be effective. And there also is some evidence to suggest that combining treatments that address both neuroprotection, in other words, allowing the tissue to recover from the disease while, at the same time, reducing inflammation, are more likely to be effective. So we think that there's good scientific rationale for this. And then finally, the treatment technology platform that we're providing is a way of packaging both of those treatments into a single delivery mechanism. So we think that we have a unique way of providing effective treatments across multiple pathways. And I think as Chaim mentioned earlier, our biomarker data supports that scientific perspective.

Thank you, Ralph.

And NurOwn has shown a highly significant burden of proof in terms of ALSFRS, biomarkers, UNC13A and, most importantly, patient-reported outcome. Maybe can Dr. Lindborg just provide some comments about how this compares to other ALS therapies in development, both past and present?

Thank you for the question, Daniel. I don't think it's appropriate to comment relative to other therapies, but I will echo the comments that you're providing, what is very exciting about our data, which we have in the public domain. As we understand, the participants that were enrolled in the trial, and we are accounting for floor effects in the -- from the study, we see very clinically meaningful events that are measured through the traditional scale of ALSFRS-R. We then also, as Dr. Kern just walked through, have seen some incredibly exciting results, large magnitudes and across a diverse set of biomarkers and our biomarker data. And really, as would have been, I guess, hoped for, based on literature, we're also seeing participants that have -- that carry the risk allele UNC13A having a differentiated response to treatment, almost an odds ratio of 9x the response with the AC genotype. So we really see across a collection of measures, which I think is one of the most important factors of really understanding what we believe about a product. And I think it paints some -- it paints a very important picture for what we believe about NurOwn. And the last comment I would make is really intermingling these endpoints. So we have the ability, and we published this in our Muscle & Nerve paper to understand do the biomarkers help explain the clinical response that we see with ALSFRS-R. And in fact, as we published, they do with very high predictive nature. So I think that counter to maybe comparing to other therapies really what we're very excited about is the consistency of measures and really how everything, ultimately, if we saw clinical response, we couldn't explain through biomarkers or vice versa, we would certainly be scratching our heads a little bit more, but what we actually see is, in fact, a very strong tie that really gives a very strong explanation for the effects observed.

Thank you, Stacy.

And can Dr. Setboun based on his past experiences, maybe just provide some insights into how he has seen companies in similar late-stage development think about outside partnerships and collaborations? And then maybe, Chaim, for you, how is Brainstorm thinking about this particular issue and topic?

Daniel, thank you very much. I spoke too much this morning, and I'm very happy you're allowing my colleagues to speak, and I'll let David take this question. Thank you. Here, David.

Thank you for the question. You're right. There is not so many companies that are very active in the cell and gene. And as you mentioned, exosome as well -- it's very interesting and attractive technology for partnering. And as you said, we are -- again, there is very few that have this level of development in Phase III, which have the potential to really bring treatment to patients. So to your point, the 3 elements, the cell and gene interest, the exosome and the fact that there is a large set of data and a unique set of biomarker makes our company and our data interesting and attractive to other partners. So it has always been part of our strategy. It's always been in discussion with potential partners, and we take that into account for the future.

And Chaim, I don't know if you could comment about how Brainstorm is thinking about it.

I can only agree with David. I think he hit it.

And just lastly, given the amount of time that has now lapsed and ever increasingly growing in patients amongst ALS patients and patient advocates, some might question the motivations of Brainstorm and the team. Just curious if anyone on the Brainstorm team or anyone from their family has ever personally been impacted by ALS. And if so, would they be willing to share a little and how that experience has affected their outlook and perspective on ALS and the urgency?

That's a very personal question. More than one of the senior management do have family members that had ALS. I can tell you that. So yes, the urgency is very high. I think that's what I would share. I don't think my colleague want me to talk to it.

Your next question is coming from [ Chris Nazarvi ]. He's a private investor.

Just based upon the successful data from the Phase II progressive MS trial, I just -- I guess my question is, is Brainstorm in preparation for a Phase III trial upon, I guess, the publication of the Phase II data? And if so, are you able to give a time line on that?

Thank you very much, [ Chris ]. I'll allow Ralph to answer your question.

[ Chris ], thanks for the question. As I mentioned earlier, we are awaiting publication in a peer-reviewed journal. I think that the peer review is the important next step, a pivot step for us to make internal decisions. And once that happens, we'll discuss it. We obviously are -- we've stated that our first priority is to advance NurOwn in ALS, and we continue to be fully focused on that. But we do have a lot of support from the scientific community in our MS project. We also plan to have very extensive scientific meetings in June throughout the summer and then in the fall with the MS scientific community. Brainstorm is part of the International Progressive MS Alliance, and the conversations are really quite rich. And these will help us make a decision. But again, until we get to the point where the Phase II study is published, we won't be able to make any further public statements. Thanks for the question.

Okay. We appear to have no more questions in the queue. So I will hand back to Chaim for closing remarks.

Yes. Thank you so much, Genie, for handling this call, and thank you, everyone, for listening again. And I'll see you soon and whenever the next Q is going to be. I'm sure this time it's not going to be in 6 weeks from now. It's going to be a longer stretch technically and legally. Thank you very, very much.

Thank you, ladies and gentlemen. This does conclude today's conference call. You may now disconnect your phone lines, and have a wonderful day. Thank you for your participation.