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

Good day, greetings, and welcome to the BrainStorm Cell Therapeutics Shareholder Conference Call. [Operator Instructions] As a reminder, this call is being recorded. And I would now like to introduce your host for today's call, Joyce Lonergan of LifeSci Advisors. Ms. Lonergan, you may begin.

Thank you, Ali. Good morning, and thank you for joining us. Before passing it off to company management for prepared remarks, I would 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. These include statements regarding the market potential for the treatment of neurodegenerative disorders such as ALS, the efficiency of the company's existing capital resources for continuing operations in 2025 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 their business planning efforts. Forward-looking statements are subject to numerous risks and uncertainties, many of which 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. Speaking with us on the call today will be Chaim Lebovits, President and CEO of BrainStorm; Dr. Hartoun Hartounian, EVP and Chief Operating Officer; and Dr. Bob Dagher, Chief Medical Officer are also on the line and will be available for Q&A. I would now like to turn the call over to Mr. Lebovits. Please go ahead.

Thank you, Joyce. Happy Hanukkah. Good morning to everyone joining us today. I'm pleased to welcome you to the BrainStorm's end of year and 2025 preview conference call. Earlier this morning, we released a CEO letter detailing our achievements over the past year and our vision for the future. However, I felt it was equally important to host this call today to personally share these highlights and provide you, our valued shareholders, with the opportunity to ask questions and gain further insights within the scope of what I'm able to share at this time. 2024 has been a year of remarkable milestones, progress and perseverance for BrainStorm Cell Therapeutics. It is my honor to share with you the significant advancement we have made and provide insight into how we plan to build on these achievements in 2025. Our mission to deliver groundbreaking therapies for neurodegenerative diseases has guided every step. And this year has brought us closer to turning that vision into reality. Let me begin by highlighting the achievements that defined 2024. One of our most important accomplishments this year was securing a Special Protocol Assessment, an SPA, with the U.S. FDA for our planned Phase IIIb clinical trial of NurOwn in ALS. This agreement ensures that our trial design and analysis plan meet the rigorous standards required for regulatory approval, significantly derisking the regulatory aspects of our clinical development program. The SPA is a testament to the strength of our science, our clinical strategy and our ability to engage effectively with regulators. In addition to the SPA, we also achieved alignment with the FDA on our CMC plan. This is a particularly important step for cell therapy products such as NurOwn. It lays out the foundation for a high-quality, consistent manufacturing process, an essential component of any successful therapy. Together, these milestones reflect our dedication to precision, quality and collaboration in our work with the FDA. And on that note, I'd like to take a moment to express our appreciation to the dedicated efforts of those in the Center of Biologics Evaluation and Research known as CBER and particularly those in the Office of Therapeutic Products, OTP for their assistance during the past year towards advancing this program. We are deeply grateful for their valuable input and support throughout this process and remain committed to working closely with the FDA to ensure our clinical program meets the requirements for success. On the operational front, we have strengthened our capabilities to ensure readiness for the Phase IIIb trial. Our partnership with Pluri adds a robust layer to our manufacturing ecosystem, complementing our leased clean room facilities at the Ichilov manufacturing center in Israel. And this dual facility approach not only ensures a fast start-up for the Phase IIIb trial but also allows for scalability as we onboard an additional U.S.-based manufacturing center. This strategic alignment of resources underscores our commitment to maintaining excellence in manufacturing, while supporting global clinical operations. Turning to our research achievements. The biomarker data from our studies has been compelling and reinforces our confidence in NurOwn's treatment effect. NurOwn has demonstrated its ability to reduce levels of neurofilament light, a critical biomarker of neurodegeneration. Elevated NFL levels are closely associated with disease progression in ALS. And the reductions observed in patients treated with NurOwn suggest a meaningful impact on the neuronal damage. This is not just a scientific breakthrough. It's a measurable indicator of NurOwn's potential to alter the course of ALS. Beyond NFL, our exploratory analyses have identified correlation with other biomarkers related to inflammation and neuroprotection, highlighting the multifaceted benefits of our therapy. These findings complement clinical assessments providing further evidence of NurOwn's therapeutic promise. Our leadership team has been further strengthened this year with the addition of Dr. Hartoun Hartounian as Chief Operating Officer and the promotion of Dr. Bob Dagher, the Chief Medical Officer. Dr. Hartounian brings extensive experience and expertise in cell and gene therapy, coupled with deep operational insights that will be invaluable as we execute on our plans, and we navigate the complexities of manufacturing and commercialization. After Dagher's proven track record in developing and approving treatments, the challenging neurological and rare disease has been instrumental in advancing our clinical development plans and exploring new therapeutic areas for NurOwn. These leadership changes reflect our focus on assembling the best available talent to drive our mission forward. And I couldn't be more proud of the world-class team we have assembled at BrainStorm. 2024 has also been a year of financial fortitude. Despite the challenging financing environment in biotech, since the ADCOM, we successfully raised approximately $8 million and are actively pursuing additional funding opportunities, including nondilutive grants and strategic partnerships. Our ability to achieve so much and to operate efficiently on limited resources is a testament to the dedication of our team. Their sacrifices including salary adjustments and extended work hours have been critical in maintaining momentum and ensuring the continuity of our operations. These efforts reflect BrainStorm's unwavering commitment to financial discipline and operational excellence. Another important area of focus is our exosome platform, which represents a groundbreaking approach to addressing neurodegenerative and respiratory diseases. This platform offers customizable nano carrier-based solutions for targeted delivery, unlocking immense potential for new therapeutic applications. This year, we received a notice of allowance from the U.S. Patent and Trademark Office, further bolstering our intellectual property portfolio for exosomes. As we advance this platform towards clinical phases, we remain excited about its potential to create value for both patients and shareholders. As we move into 2025, our primary focus is the execution of the Phase IIIb trial for NurOwn. This confirmatory study targets early-stage ALS patients, building on the findings from our prior Phase III trial, which indicated that NurOwn's treatment effect is most pronounced in this group. This trial is more than a scientific endeavor. It represents a lifeline of hope for patients and families impacted by ALS. In parallel, we will continue to accelerate the development of our exosome platform, exploring strategic collaboration and advancing towards clinical phases. These initiatives underscore our dual commitment to innovation and value creation. To close, 2024 has been a very busy but productive year. The FDA approval of Ryoncil from Mesoblast in December is something to celebrate. It's the first mesenchymal stromal cell or as known MSC-based therapy, serves as a beacon of optimism for the regenerative medicine field, this first approval. This important milestone for our industry reinforces our confidence in NurOwn and highlights the FDA's commitment to making innovative treatments such as MSC cells sourced products available for patients with unmet medical needs. For our shareholders, your trust and support fuel our mission to redefine what is possible in the treatment of neurodegenerative disease. Together, we are poised to make 2025 a year of groundbreaking progress, driving meaningful advancements and reinforcing the long-term value of our company. Happy New Year. Thank you. I'll now turn it back Joyce to facilitate the Q&A session.

Thank you, Mr. Lebovits. It's Joyce again. So we have the first question is as follows. When will you start the Phase IIIb trial? Are you still planning to have the first patient in or FPI in the first quarter of 2025? Or is it delayed because of lack of financing?

Yes. Thanks. Bob, do you want to take that?

Sure, yes. Thank you for the question. Yes, we are still targeting first patient in the first quarter of 2025. We are eagerly pushing forward towards achieving that. We're currently updating the necessary modules for our active IND application. This will include the technology transfer process as well as routine updates for other modules as well. Whilst securing the necessary financing for the trial remains a priority for us, of course, it has not delayed the trial initiation timeline. As I've said, we have been pushing forward with a lot of the start-up activities. We are effectively multitasking, preparing the technical requirements for trial initiation while actively pursuing the funding sources to support the trial. Thank you.

The second question that came in is, could you provide more details about your funding plan for the Phase IIIb trial? Previously, the company mentioned pursuing nondilutive grants as part of its financing strategy. Are these grants still in play? And how are you managing funding for the trial in the meantime?

Thank you. I'll take that one. Thank you, Joyce. So thank you for the question. We are actively pursuing nondilutive funding, including various grant opportunities. While our initial grant application was successfully submitted, thanks to our team's efforts, but that specific funding agency, which I won't name, has temporarily paused its processing. As soon as the process resumes, we are prepared to provide additional information as needed and remain quite optimistic about securing this grant. Simultaneously, we are exploring the other funding avenues. We'll be happy to announce developments as they materialize. In the meantime, since the ADCOM, as I just mentioned in my comments, we have made quite significant progress raising $8 million in this atmosphere, not easy. And our CRO and vendors have been invaluable partners supporting us in advancing technical and operational readiness despite funding constraints. These collaborative efforts have enabled us to continue preparing for trial initiation. It's important to note that the trial timeline also depends on completing essential preparation, such as site activation and regulatory submissions, which Bob just mentioned, both of which are progressing very well. We are anticipating sharing further updates in the first Q of 2025. Thank you.

The third question is, what is your regulatory strategy? And how is the company ensuring alignment with the FDA to uphold the SPA agreement?

Thank you. Bob, do you want to take that?

Sure. Thank you again for that question. Our regulatory strategy, we have been discussing over and over again, emphasizes very close collaboration with FDA, and as mentioned many times, this major milestone achievement of securing SPA agreement on the Phase IIIb trial is a first of its kind that we are aware of in ALS. This -- ensuring this alignment is key for us. It forms the foundation for the Phase IIIb trial design and statistical plan and all what it takes to achieve a successful trial. Every aspect of the study has been meticulously designed with this in mind. We have partnered with world renowned CRO. We selected top tier medical centers. We're ensuring compliance with the FDA rigorous standards every step of the way. As outlined in the CEO letter, we maintain proactive communication with the FDA, provide regular updates, incorporating their feedback to address any potential concerns early. By aligning our operations with the regulatory expectations and in engaging with the ALS advocacy groups as well as leading clinicians in the ALS field, we aim to maximize the trial's chances of success. Thank you for the question.

Absolutely. The final question that came in advance is how is the company ensuring compliance with the CMC plan? And what steps are being taken to meet the FDA's manufacturing standards for the Phase IIIb trial?

Yes. Thank you, Hartoun. That's for you.

Thank you, Joyce, for the question. As Chaim mentioned in his opening remarks, ensuring compliance with the FDA-approved CMC plan is critical to guaranteeing the quality and consistency of NurOwn's manufacturing process especially for autologous therapies, as you know, where each product is uniquely manufactured with the individual patients. We are proud to collaborate closely with the FDA CMC team whose guidance has been instrumental in aligning our processes with regulatory standards. Our manufacturing framework includes a partnership with Pluri Incorporated and Ichilov manufacturing center in Israel, both of which support Phase III trial readiness and scalability. Additionally, we are onboarding a U.S.-based manufacturing center to further enhance our production capacity. By adhering to rigorous GMP standards, conducting regular audits and maintaining transparent communications with the FDA, we ensure our manufacturing processes fully meet regulatory requirements, positioning us for success in this pivotal trial.

Thank you. Ali, do you want to open for questions?

[Operator Instructions] Okay. I currently see no questions in the queue at this time.

You want to give it another moment, Ali?

[Operator Instructions] Okay. Sir, I see no questions in the queue at this time. Okay. We do have a question from Daniel Walker.

Maybe could you just talk a little bit about the Mesoblast approval? And just what the relevance is there in terms of NurOwn?

So of course, the FDA's recent approval is very exciting. It's a first MSC-based therapy. And this really marks a pivotal moment for the regenerative medicine field, I can't understate that. This milestone highlights the FDA's commitment to advancing MSC cell therapy. It was not there until now. It was probably a lot of hesitation like every new product that comes on. And I think it has inspired a lot of renewed optimism, we hear that with our calls with institutional investors that they feel that 2025 is going to be a year of optimism within the cell therapy community. And that includes BrainStorm. It reinforces the potential of MSC-based therapies and validates our approach with NurOwn. But thank you for that question.

And then maybe just a follow-up question. How involved will Pluri be with the U.S.-based manufacturing center? Or will that be done independently and by Hartoun and his team? Or how will that work?

Yes, that's totally independent but I'll let Hartoun elaborate.

Yes. Thank you for the question. Yes, as Chaim mentioned, they're going to be totally independent. Initially, we're going to manufacture a product in Israel and then tech transfer to U.S. And as I mentioned in my remarks, we are in active discussion with major players, CDMOs in U.S. for manufacturing our product in the United States.

We have a question from Richard Robbins.

When I tuned into this conference call, I thought I must have tuned into the wrong conference call because it sounded like I was hearing remarks from a successful company. This company has not been successful. In fact, we had a dismal failure. We're moving at a snail's pace in getting this Phase IIIb trial underway. Once we got the SPA, all we were hearing was that the trial is going to start third quarter -- pardon me, fourth quarter of 2024 or the expectation was. And of course, expectation gives you a lot of wiggle room legally and wiggle room is what you constantly seek because you don't need milestones. We still don't even know if we have the investigators in place, if we have their sites in place. We're not very far along when as recently as the third quarter of this year, we were planning to start by the end of this year.

Richard, I heard a few questions in addition to your speech. So thank you for the speech as well, and I will respond to the questions. And I will allow also my colleagues...

I did not pose my question yet, sir. I did not pose my question yet.

Okay.

If you want to cut me off...

No, no, no, you're asking about -- no, no, I was just trying to address the questions you did ask about.

No, I didn't ask the question. Yes, I was making a remark prior to my question. Do you want to hear my question or not?

Yes, sure.

Never mind. Have a good day, sir and keep diluting yourself that you're a successful company because you have not been.

Thank you very much. So I will answer for those other listeners to the question. So it was asked that the trial is taking longer for the prep than what he, the shareholder was expecting. And it also was quoting what we were saying that it might happen at the end of Q4. So to be exactly said, it might happen by the end of the year or Q1 2025. We said that. And that small delay is very well expected when you prepare the paperwork and many other of technicalities with site initiations. So the answer is yes, we are advanced with site initiations. And as we said, we are dealing with 15 sites versus 6 sites. I think it's not only not to a prolonged process. I really commend our team for doing wonderful work of being able to do that in a very short time. And Bob, would you like to comment on this on what the process -- maybe to educate some investors, what the process of preparing a Phase IIIb trial, 200 patients at 15 centers aligned in how are we in timing. Bob?

Yes. Thank you. Happy to add to your answer, Chaim. So we are all very eager, obviously, to start the trial as soon as possible. This is a complex protocol, number one. Number two, this calls for top expert academic clinical sites who are experts in neurology and rare disease like ALS, and that calls for basically a special approach about making sure the quality is top notch and the training materials, the contracting, the many platforms and systems. As I mentioned earlier, we are collaborating with the top clinical research organization to put together all the processes that are necessary in place to make sure this trial is a success, make sure the quality is there. And all of this takes time and effort, and we are not speeding or cutting corners, if I use that term, at the expense of making basically any full [ part ]. We are proceeding very carefully with every decision we make for start-up activities and there are many, many of them. And as was mentioned, we are not only dealing with few sites, a handful of sites, we are dealing across the geography of the U.S. We spread a much wider net to capture our participants across the United States and then that makes x, y, z. Thank you. I appreciate the question, Chaim.

Yes, I just want to add something that the gentleman ignored the fact that the company signed a major agreement with Pluri to manufacture product. We have made so much progress and in final discussions with the major CDMOs in U.S.A. to actually initiate our Phase IIIb clinical trials in the first quarter of next year. So major accomplishments in the company as far as operations are concerned.

Thank you, Hartoun for that.

As we have no further questions in the queue at this -- sorry, sir, please continue.

No, no. I just wanted to make sure that there's no further questions. Please, Ali, go forward.

Thank you, sir. As there are no further questions in the queue at this time, sir. I would like to conclude today's conference. And I advise people they may disconnect their lines at this time, and that we thank them for their participation.

Thank you very much, and Happy New Year to everyone. Thank you.