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

Greetings, and welcome to the BrainStorm Cell Therapeutics call to provide an update on NurOwn. [Operator Instructions] As a reminder, this call is being recorded. And I would now like to introduce your host for today's call, Michael Wood of LifeSci Advisors. Mr. Wood, you may begin.

Thank you. Good morning, and thank you, everyone, for joining us. Before handing it over to the company management today for our prepared remarks, I'd like to remind listeners that this conference call will contain 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 diseases such as ALS, the sufficiency of the company's existing capital resources for continuing operations in 2023 and beyond, the safety and clinical effectiveness of the neurotechnology 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 the company's SEC filings. The company's results may differ materially from those projected on today's call, and the company undertakes no obligation to publicly update any forward-looking statements. Joining us on the call this morning will be Chaim Lebovits, President and CEO of BrainStorm; Dr. Stacy Lindborg, Co-CEO; and BrainStorm's executive VP and Chief Development Officer, Dr. Bob Dagher, is also on the call and will be available to answer your questions during the Q&A session. So, I'd now like to turn the call over to Mr. Lebovits. Please go ahead.

Thank you, Michael, and thanks to all of you who have joined us today. BrainStorm issued a press release this morning, providing a regulatory update on NurOwn. The purpose of this call today is to discuss the plans we have to work with the FDA and our strategy to seek approval for NurOwn, and to make the product available to people living with ALS. As you know, the FDA held an outcome to discuss NurOwn on September 27. Unfortunately, the committee voted that NurOwn did not demonstrate substantial evidence of effectiveness for treatment of mild to moderate ALS. While we were disappointed with the outcome, and we disagree with the panel's conclusion, it is important for us to anticipate how it's likely to influence the FDA's decision to prove NurOwn based on the evidence under review currently on our BLA, and to make decisions that are likely to lead to an approval for NurOwn for ALS with the most efficient path. We remain confident in the data supporting the value of NurOwn for ALS patients and are committed to finding a path forward. We have made the decision to withdraw the BLA for NurOwn from FDA review. This decision was coordinated with the FDA and is viewed by the Agency as a withdrawal without prejudice. We understand at this point that additional evidence including a confirmatory clinical trial are necessary, and we will do everything we can to execute on this as quickly as possible. The FDA has invited us to request a face-to-face meeting to discuss the path forward. We see this as a very positive development, and I'm pleased to say that the agency has been responsive to us and is engaged almost on a daily basis. We intend to use this meeting to discuss the next steps, including discussion of an additional clinical study. Since that outcome, our management and Board have given considerable thought to our strategic priorities. And after exploring possible options, we have reached this conclusion that the only path forward for the development of NurOwn for ALS is to conduct another trial. Therefore, we are withdrawing our BLA and appreciate the fact that this was coordinated effort with the FDA to enable it to be withdrawn without prejudice. At the same time, we're accepting FDA's invitation to have a face-to-face discussion on a Phase IIIb trial with the aim to reach an agreed upon trial design. We understand and acknowledge that our withdrawal of the BLA and requirement for another trial will be frustrating or is frustrating and disappointing for so many. What we have determined, and unfortunately, there's no alternative at this time. We recognize the need to align with the FDA, and we'll do all we can to deliver a valuable treatment option to the ALS community. I'll now turn over the call to Dr. Stacy Lindborg for additional comments.

Thank you, Chaim. Our goal is to agree with the FDA on the most direct path to approval for NurOwn. And as Chaim has outlined in the interest of patients, the best action we can take is to conduct another Phase III clinical study. We have the advantage of having generated a considerable body of data on NurOwn in ALS participants. Our clinical studies, including the completed multi-dose Phase III trial have provided valuable insight into how NurOwn is working, and what patients are most likely to receive the greatest clinical benefit. In our completed Phase III trial, we conducted a pre-specified subgroup analysis and participants with ALSFRS-R scores 35 and above at baseline. In this prespecified subgroup, an enhanced treatment effect was observed with a 19% higher response rate with NurOwn compared to the placebo on the primary endpoint. Importantly, in this subgroup, we show a clinically meaningful difference in the key secondary endpoint, the average change from baseline to week 28 on the ALSFRS-R in NurOwn treated participants compared to placebo. The difference was statistically significant with a P of 0.05. As we consider the design for the second Phase III study, we will likely focus on mild or less advanced patient population. I'll now turn it back to Chaim.

Thank you, Stacy. There's one more point I want to cover, as I know there will be questions on this, and that is, how BrainStorm plans to fund the second Phase III trial. We're engaging directly with investors to communicate the value proposition. There might be institutions that are interested. Some already expressed some interest. They want to see our alignment with the FDA, of course. And also importantly, we are pursuing various funding options, including the options for non-dilutive grants. I will now turn this over to Michael for the Q&A session.

Thanks, Chaim. The first question, why would you withdraw the BLA when the ALS community has fought for years for you, and is continuing to fight? And then as a follow-up to that is, what are you saying to those in the ALS community for lobbying the FDA for approval of the current BLA by the December PDUFA date?

Yes. So, thank you very much, Michael, for filtering those questions. We got many questions, people either anticipating their call or just wanting to hear the answers. So, we filtered the main important questions. Thank you for that, Michael. We're grateful to the ALS community for their support, of course, and for people living today with ALS. This is a very difficult decision for us, one that is informed ultimately with our end goal to make NurOwn commercially available to ALS patients. We unfortunately see no alternative path at this time. We continue to stand behind the data and believe in NurOwn as a viable therapy for ALS. We move forward and filed over protest, requested an ADCOM because of the urgency and unmet need in ALS. The outcome of the ADCOM and the subsequent discussions with FDA has made it clear that an additional trial is the only path forward, and that it's most likely to result in an FDA approval.

Next question. What does it mean that you withdrew the BLA without prejudice?

Michael, I'll take that. It means that rather than waiting for the PDUFA date for a final FDA decision on NurOwn, we're acting on the feedback from FDA and the ADCOM to voluntarily remove the BLA from active review. And our goal is to increase the speed to which NurOwn can be made commercially available, by generating new data and addressing items identified before proceeding with the BLA for FDA review. As Chaim shared, our decision to withdraw the application is viewed by the FDA as being without prejudice to refiling. In other words, it allows the application to be resubmitted at a later date, after we've addressed the deficiencies and brought the new data to the submission.

Next question. Will you be providing access to the Expanded Access Program while completing the next Phase IIIb trial?

Yes. We understand the importance of access to investigational products through EAP and will support this, if possible, financially. For now, our top priority will be funding and executing the Phase IIIb trial. We will pursue funding for an EAP after the Phase IIIb trial.

And final question. Why have you not unblinded the completed Phase III trial at this point? And why did it take you so long to unblind the study?

So the withdrawal of the NurOwn BLA enables BrainStorm to provide the treatment assignments to those who participated in the placebo-controlled portion of our Phase III clinical program. Information regarding randomization will be provided to the principal investigators at each of the clinical sites, who will provide information directly to participants and their families. And HIPAA and confidentiality laws prohibit making private medical information public. We do want to comment. We are thankful for all of the clinical trial participants and their loved ones for their sacrifice to be part of the trial and to move forward ALS science. And we deeply hope that this information will offer some peace of mind or at least closure to those living with ALS, who contributed to the trial in immeasurable ways.

Thank you, Michael. Holly, you want to open the call for some questions?

[Operator Instructions] Your first question is coming from David Bautz at Zacks Research.

Thanks for the update. I don't know if I missed this or not, but how quickly is this meeting with the FDA going to take place? How soon will you be able to do that?

A very good question. The truth is they are offering us to ask for an expedited meeting, but we do have to prepare a draft of the trial design to submit. So, we will, of course, use the wonderful committee we already set up months ago as we even anticipated an approval. We knew we'd have to do a Phase IV confirmatory trial. So, we're going to have a meeting again. And as soon as we can have that draft forward, we'll send it. We haven't even heard from FDA more or less what they're looking to see in such a trial. So, I think it will be easy, but it's hard for me to say a date today.

Okay. I don't know how many -- how much detail you can get into with what you hope to do with the design that you hope to get for a Phase III study, but maybe if you could just outline a range of patients? And then maybe what you're looking at for the primary outcome in this study?

Yes, David, that's premature to say today, because as you can hear in our message, we want to align with the FDA, how this is going to be done. They want to align with us, which is a very good thing, maybe even a spot. So that's why I want to be careful before throwing out the design.

Okay. No, I understand. So maybe you can comment on, will this study only be taking place in the U.S.? Or will you be looking to maybe do something outside the U.S.? And then do you think most of the PIs that you had in the Phase III study, in the previous Phase III study will work with you in this next study?

So, I can say that many of the PIs are urging us to do this additional trial. And I believe that all PIs would be more than happy to work with us going forward. We have a wonderful relationship with all the centers. We may choose some centers over others for geographical reasons. We were getting arguments that Central America and other places don't have a site. So, we'll see how where we end up. But yes, the leading PIs are totally behind us, and they're pushing us to go forward. And they feel that, as you heard outcome from some of the PIs, but also the others, of course, they strongly feel that this is working for a piece of subset of patients, and they don't want to see this not going forward.

Okay. But -- so you plan on the study taking place in the U.S.?

Yes. So, for that, of course, we will focus on the U.S., but the European sites are interested to be part of another trial as well. And so, we will discuss with them once we have the design. We will first have to align on the design with our PIs, of course. And also, our PIs will also align with other ALS organizations in the States, just like the NurOwn Scientific Committee. We work with them very closely. They are already speaking to us and with the FDA. And we made -- have a conversation with NCALS. We already spoke to them quite a few times, and you may have seen before the ADCOM, they to want to see another trial for NurOwn, like many other doctors want to.

Okay. And then lastly, as far as funding the trial, do groups like I AM ALS and other patient advocacy groups, do they have funds available to support trials like the one you're going to be doing?

Well, I can't speak to specific organizations, but there are organizations that have funding, it'll be up to them if they want to fund. We will probably reapply to CIRM who was the big funder of our Phase III trial close to $17 million. And I think it would be interested to get our application. So, we'll see who else we will be asking for .

[Operator Instructions] Your next question is coming from Daniel Walker.

I guess, Chaim, any updates on the team, I guess, what's the kind of general feeling of the team? And do you anticipate most of the team staying on-board for this next sort of phase as you move forward? Or do you anticipate some changes with any key personnel?

Well, we'll definitely have to reorganize going forward based on funding. And of course, we have to focus on those people that will most strongly be able to support the trial -- in the current trial. But yes, the whole team is with us unanimously to go forward to another trial, strong support from everyone. And they are all saying that we're willing to go through whatever is needed to have the road -- or the trial going forward. We have full support from everyone on the team that you know.

That's great. And then, I guess, just short-term, near-term as far as funding, obviously, you're going to look to these organizations to get some grants or funding to move forward with this additional Phase III. But I guess, near-term, how are you thinking about that as a company? You obviously have to meet with these organizations before getting commitments? How are you thinking about that in terms of the existing resources?

Yes. As you may know, there are many institutions that are quite interested to support trials that are aligned with FDA, or trials similar to that. So, I think we are very focused to approach those institutions. I think also general investors are seeing an alignment with FDA will understand that the risk is lower going forward. On the other hand, there are already some investors that came forward that they will want to assist us, and in turn until we have a design and we go forward. Just have to see how the market reacts to our announcement today and to the additional announcements we will have over the course of the next few weeks.

And just lastly, I guess in hindsight, many investors believe that there was alignment or I guess you had remarked to such at various times that there was some alignment with the FDA. Obviously, the ADCOM outcome was what it was. In terms of looking back at this, obviously, it's early, it's only been 3 weeks, but what would you say is the one, sort of, key takeaway from all these? I know, this has been quite a long time. This has been something you've been working on for some time and ultimately decided to do this and move forward in this way. Any learning's from this now, looking back? I know, again, it's only been 3 weeks?

No, it's not a question of 3 weeks. There's an easy way to say, well, can't trust the process and just give up that's easy way. We strongly believe in our product, and FDA reached out to us, they want us to do other trial. And we are going to take this very seriously, and we're going to give it all we can. We also efficient -- unfortunately, we can't deliver today. We tried. We did everything we can to deliver it today. Ultimately, many thought that another trial is needed, and we offer them. It's easy to say no. I hear that in your voice. You asked me how do we have the strength. But we have a wonderful team, TI supporting us, and the FDA asking for another trial. So, we're not in a position to go into other inside stories within FDA. I don't think it's the right thing for the company to do.

That's great. I appreciate all the answers.

Holly? We'll take one more question, please. Yes.

Your final question is coming from Richard Robbins.

I have a 2-part question. First part is, Mr. Chairman, you have been the Chief Architect and the manager of the FDA debacle, where 17 experts voted against you. One of the participants was even laughing at the data or at least chuckling at the data. My question to you, sir, is that given that you were the manager of this, how can you have not resigned or why has the board not fired you?

So, I cannot speak on behalf of the Board. You can ask them questions directed to them. But no one in the Board is asking anything like that. As I said, we brought forward a trial that in the first place and the statistical results were not as we were hoping to be, it wasn't black and white. The Agency's position was that it's not enough. We went out of our way after listening to so many scientists in the field, both those who are involved in the trial and those outside, all felt the flexibility for NurOwn has called the guidelines of FDA should be applied here. I think we did a wonderful outstanding job, it was something in the outcome, I don't know if you've listen that.

I did.

Okay. And I think whoever listened to that, here's what our case was. Now, whoever listened to the second part will get their own conclusions. I'm not here to blame and complain about Agency. We want to work with the Agency for the next trial.

No, my question, sir, was…

Your questions about me, you think that you don't have any trust in me, if you're an investor, I get that. I'm very happy that the major shareholders of the company are asking me to stay on. And I'm going to do that as long as needed.

How come you have not resigned?

As I told you, the major shareholders want me to stay on.

Conference call after conference call, I keep hearing that you have confidence in the data, yet 17 experts from the FDA, and by the way, the FDA holds all the cards, you hold none, did not agree with your data. And in fact, one of the participants was even chuckling at the data. Why do you keep saying you have confidence in the data when the FDA doesn't?

Well, I think I gave the answer and just to go on in circles it make no sense. And if Stacy wants to say something I'll allow her to say something.

I think some of the backing and the importance for us as we evaluate the data is really relying on the experts that we put around us. So world-renowned neurologist, statisticians who are looking at our data, looking very objectively, are independent from us and are giving us counsel and talking very openly and publicly about our data. So that is a very important part of our own evaluation as we take every step.

Just as a final comment, Stacy, I think you should become Chairman and CEO, and I think Chaim should find something else to do. I say this respectfully. Have a good day.

We have reached the end of the question-and-answer session, and I will now turn the call back to Chaim for closing remarks.

Thank you very much, everyone, for listening today and for your wonderful questions, and have a wonderful day. Thank you very much.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.