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

Greetings, and welcome to the Brainstorm Cell Therapeutics First Quarter 2025 Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's call, Joyce Lonergan of LifeSci Advisors. Joyce, you may begin.

Thank you, Holly. Good morning, and thank you for joining us today. Before passing the call 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. Statements regarding the market potential for the treatment of neurodegenerative disorders, such as ALS, the sufficiency 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 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 us on the call today will be Chaim Lebovits, President and Chief Executive Officer of Brainstorm; Dr. Hartounian, Executive Vice President and Chief Operating Officer; Dr. Bob Dagher, Executive Vice President and Chief Medical Officer; and Dr. Netta Blondheim-Shraga, Senior Vice President of Research and Development. I would now like to turn the call over to Mr. Lebovits. Please go ahead.

Thank you, Joyce. Good morning or good afternoon, everyone. Thank you for joining us today. We appreciate your continued interest and support in Brainstorm. We published our Q1 2025 earnings release after the market closed last Thursday, and then colleagues and I are pleased to provide a corporate update today. Our unwavering primary focus remains the execution of the clinical development plan for NurOwn and the initiation of our pivotal Phase IIIb trial designed to confirm its therapeutic benefit for individuals in the early stages of ALS. Hopefully, you will have seen the press release we released this morning announcing that U.S. FDA has cleared us to initiate the trial. This follows the amendments we submitted to our investigational new drug application, which included comprehensive technical transfer documentation, robust quality assurance and stringent quality control processes. This regulatory clearance marks a significant milestone, bringing us closer to commencing patient enrollment. As previously disclosed, the trial design has been carefully agreed upon with the FDA under a Special Protocol Assessment or SPA. This SPA is a crucial element as we believe it substantially derisks the regulatory pathway for NurOwn. It provides confirmation that the trial's endpoints and our statistical analysis plan are deemed appropriate for the FDA to potentially support approval contingent upon the trial meeting its prespecified expectations. We also announced previously that in the face-to-face Type C meeting, we had achieved alignment with the FDA on CMC, a particularly vital aspect for an advanced cell therapy like NurOwn. Our CMC team is always advancing this development and continues to work as regulatory guidance directs. To provide further detail on our operational readiness for the upcoming trial, I'd like to turn the call over to our Chief Operating Officer, Dr. Hartounian. Haro?

Thank you, Chaim. As previously discussed, we plan to initiate our initial manufacturing for the Phase IIIb trial at the Tel Aviv Sourasky Medical Center. To scale up our manufacturing capabilities, we will then proceed with a technology transfer to Pluri, which will provide additional clean room facilities. We have signed Letter of Intent with Pluri and anticipate moving forward to a definitive contract soon. Furthermore, the team and I have secured a leading U.S. clinical site that has successfully passed FDA inspection. We are in the process of finalizing an LOI, and we'll be announcing the details of this important site shortly. We are all very excited about the progress and remain hopeful that we can begin treating patients soon. Back to you, Chaim.

Thank you, Haro, for that important update on our manufacturing and site selection progress. Currently, we are actively engaged in negotiations for the clinical trial agreements with approximately 15 leading clinical centers across the United States, each poised to serve as a site for our Phase IIIb trial. The strong interest we are getting from numerous renowned ALS clinicians and researchers underscores their conviction in the potential of NurOwn. We will make announcements regarding these agreements as they are finalized. As noted in our earnings press release, the details of the trial, which we are calling ENDURANCE, have now been posted on clinicaltrials.gov. On this website, you will see the study plan, including primary and secondary endpoints as well as a list of clinical sites that we expect will participate. Publication of these details is important for transparency and allows the medical community and mainly ALS patients who are interested in participating as well as caregivers to review the structure of the study. We fully recognize the urgency felt by patients and clinicians for innovative therapeutic options in ALS. Our commitment is absolute in executing this trial with the highest level of scientific rigor. With a limited treatment options currently available for ALS patients, we firmly believe that NurOwn is successful in the study and subsequently approved, holds the promise of becoming a significant and valuable treatment. In parallel with our dedicated NurOwn development efforts, our scientific team remains actively engaged with the academic community and our industry peers sharing the latest data and insights. Last week, we participated in the annual ALS Drug Development Summit in Boston, a crucial gathering that brought together over 200 scientific leaders to address the most pressing challenges in the therapeutic development for this devastating disease. The discussions at this year's meeting were centered on critical areas, such as target validation, the effective utilization of biomarkers and the optimization of clinical trial design. I want to take a moment to speak about our incredible team at Brainstorm. Despite facing significant financial constraints, a reality for many small biotech companies in the current environment, their dedication and tireless efforts are truly remarkable. We heard a very powerful message at the ALS Summit from Wendy, a courageous individual living with ALS who eloquently referred to every ALS patient as a warrior. At Brainstorm, we see it as part of our mission to join the ranks of these warriors, working every single day to advance preparations for the clinical trial. We are succeeding in making substantial progress with the limited financial resources we currently have, thanks in large to the outstanding support of our dedicated partners. This positions us to move forward with significant agility once we secure a strategic funding deal, which remains our key priority. We understand that members of the investment community and the ALS community are eager to know precisely when the first patient will be enrolled. Please note that our focus remains squarely on diligently completing the necessary steps, including securing adequate funding as we are working to advance various funding opportunities that include potential strategic investments and non-dilutive grants. We are simultaneously proceeding on many fronts to be able to initiate the trial as swiftly as responsibly as possible. We are deeply committed to this endeavor, and we will continue to provide updates as they become available. I'll now turn the call over to Dr. Bob Dagher, Brainstorm's Chief Medical Officer who will give a brief summary of his presentation at the ALS Summit last week. Bob?

Thank you, Chaim. Hi everyone. As part of my presentation last week, I provided a detailed overview of the design of our planned Phase IIIb trial and explained the significant changes we made versus our prior Phase III trial in order to increase the probability of success. As we have previously disclosed, the new trial will be conducted in 2 parts. Part A is a 24-week double-blind period which will be followed by Part B, a 24-week open-label extension designed to evaluate long-term effects on survival and biomarkers. We have set the entry criteria to enroll the patients who have early-stage ALS, in another words those who have less advanced level of functional decline. The primary endpoint will be the change from baseline to meet 24, so at the end of Part A, in the ALSFRS-R total score, which is now considered the gold standard in the recent registrational trials. The results from Part A at 24 weeks, if they meet our expectations, should be sufficient to support a new BLA. This is covered specifically in our SPA agreement with the FDA. In this Phase IIIb trial, we eliminated the 3-month run-in period from the previous study and also shortened the streaming period from 20 weeks to now 9 weeks to minimize changes between screening and baseline. I will now turn the call over to my colleague, Dr. Blondheim-Shraga to discuss the ALS biomarkers analysis. Netta?

Thank you, Bob. My presentation at the ALS Summit focused on biomarkers in ALS and specifically how the experiments we have conducted with biomarkers support the potential multimodal mechanism of action of NurOwn. There is currently no established universal marker for ALS as it is a complex disease that may require combinations of biomarkers for accurate assessment. We hypothesized that NurOwn exert its biological effects across multiple pathways. Analysis of CSF samples from patients who participated in the prior Phase IIIb -- sorry Phase IIIa study provided us with valuable insight into how NurOwn may be exerting its effect. CSF samples were collected at 7 time points from all participants in the study and analysis of these samples showed significant changes in biomarkers that are relevant to ALS pathology. Treatment with NurOwn was associated with a reduction in neuroinflammatory and neurodegenerative biomarkers and with increase in anti-inflammatory and neuroprotective biomarkers. At the ALS Summit, we presented the results from 3 sets of preclinical experiments to investigate the immunomodulation, neuroprotectant and neurogenerative properties of NurOwn. The first of these was an in vitro experimental model of immune activated peripheral blood mononuclear cells, or PBMCs, that were co-cultured with NurOwn cells. We demonstrated that NurOwn inhibits the secretion of pro-inflammatory cytokine and decrease the proliferation of certain types of T cells, CD4 cells and CD8 cells that are involved in the inflammatory process. The second was an in vitro hypoxia model that examined the effect of NurOwn on a motor neuron cell line that had been subjected to hypoxic stress in a low oxygen environment and resulted in about 1 in 3 cells dying. We showed here that when these cells were co-cultured with condition media collected from NurOwn cell cultures, viability was restored to 96.5% of normoxic conditions or 96.5% of normal providing evidence of a neuroprotective effect. Finally, we studied an experimental neurite outgrowth model in which human neuroblastoma cells were co-cultured in a no-contact Transwell system with neuron cells. We showed that NurOwn enhanced growth of neurites, supporting a neuro-regenerative role for NurOwn. As disclosed previously, we reviewed the clinical utility of neurofilament light or NfL as a biomarker of disease progression and treatment monitoring in ALS. Ten patients who completed the prior Phase III trial enrolled in an open-label expanded access program that spanned to 28-week period. We showed that early treatment with NurOwn resulted in greater reductions in NfL levels. Among the 6 participants who received NurOwn in both Phase III and the EAP, a continual group level reduction in NfL was observed. In contrast, for the 4 patients who received placebo in the Phase III, the group median NfL change was higher at the end of the study, indicating worsening neurodegeneration. After these patients switched to NurOwn in the EAP, the majority showed stabilization in NfL levels. As these results were from a very small group, we view them as hypothesis generating and will continue to explore long-term effects of treatment in our upcoming Phase IIIb study. At the conference, we also shared results from a genetic sub-study conducted during our Phase III study. We have examined the underlying genetics of ALS and how it may determine the clinical response to NurOwn. We are particularly interested in a gene called UNC13A, which has been widely studied in ALS. Patients who were enrolled in the prior Phase III trial had the option to participate in a genetic sub-study in 124 consented. We showed in these patients that the UNC13A, the UNC13A genotype appeared to influence the response to NurOwn therapy. Patients who are heterozygous carriers of a risk allele had a statistically significant response rate to NurOwn treatment compared with placebo, supporting further investigation of the UNC13A and other genetic factors and their correlation to treatment effect of NurOwn in our next trial. I will now turn the call back to Chaim for closing comments.

Thank you, Netta. For the details on Brainstorm's financials for the quarter ended March 31, 2025, I would refer you to the press release we issued on Thursday and also to our 10-Q filed with the SEC. We're now ready for the Q&A. Joyce?

Yes. Thank you, Chaim. We have 4 written questions. The first one, can you start the trial without proper funding?

Thank you. That's a very good question. While our financials over the past 1.5 years have reflected a very challenging environment, we have nonetheless been able to make significant strides in preparing for the trial, including technology transfer, FDA regulatory submissions, site selections and CRO engagements. However, initiating and successfully executing a clinical trial of this nature demands a robust and sustainable cash flow. Therefore, while we have diligently progressed to this point with relatively limited resources, securing proper funding is an essential to commence the trial. As communicated in our recent press release, we are actively pursuing multiple funding avenues to ensure the timely commencement of the trial. These efforts are in various stages, encompassing a promising $15 million nondilutive grant currently will be under review alongside ongoing negotiations for our strategic partnerships. We are focusing our strategic partnerships. Our priority is to secure the necessary capital through such partnerships to confidently initiate and complete this critical study.

Thank you, Chaim. We have a second question. We see you call the trial ENDURANCE. What's the meaning of that?

Thank you for that. The name ENDURANCE was carefully chosen to deeply resonate with ALS community. It stands as a tribute to the remarkable strength, tenacity and unwavering spirit demonstrated by individuals living with ALS and their families. For Brainstorm, ENDURANCE also underscores our steadfast commitment to persevere in our scientific endeavors and generate the robust data required for regulatory approval of NurOwn. We believe that this trial embodies the collective resilience of patients and our determined mission to deliver a potentially meaningful therapeutic option for ALS.

The third question is, will the company also be producing in the U.S.?

Thank you, Haro, you want to take that?

Sure. Thank you so much for the question. Absolutely, expanding our manufacturing footprint for the United States is a key strategic objective for us. We're pleased to share that we'll be announcing a Letter of Intent in the coming days with a U.S.-based facility that has a proven track record, having already successfully passed FDA inspection for the production of other products. This signifies an important step in our plans for future commercialization and supply chain security.

So question four is, can you update on any advances in the exosome program? Or are you not proceeding with that at this time?

Thank you, Netta, please take that one.

Sure. Thank you for this question. We are highly encouraged by the progress of our exosome program as the field of exosome-based therapeutics continues to show strong potential in the treatment of respiratory and inflammatory diseases. Our proprietary, allogeneic exosome platform has yielded promising preclinical data, demonstrating both therapeutic and preventative effects in models of lung disease. To support these findings, we are preparing a manuscript, detailing the efficacy of our exosomes in a preclinical model of COPD, which would join our existing publication about the efficacy of exosomes in a model of ARDS. Together, these works outline the wide potential of our allogeneic exosome technology, which is derived from NurOwn cells. Briefly, our new findings demonstrate that early treatment with exosomes significantly reduces lung inflammation in response to bleomycin as a chemotherapy agent with known lung toxicity and significantly reduce lung fibrosis 2 weeks later compared to untreated controls. In light of these exciting results, we are actively pursuing strategic partnerships to advance the exosome program towards clinical development. In parallel, we are expanding our global intellectual property portfolio and anticipate announcing the issuance of additional patents that will further strengthen the protection of our innovations.

Thank you, Netta. Holly, would you open the line for 1 or 2 questions, which we'll taken before 9:00.

[Operator Instructions] Your first question today is from Jason McCarthy with Maxim Group.

If you can go back to the UNC13A discussion that you're having, have you had any communications with FDA in terms of being able to stratify by UNC13A in the upcoming Phase IIIb? Or is that association that you've showed through the EAP more of an exploratory study? Are you locked in with the spot, you don't really have a lot of wiggle room around the ALSFRS to go for UNC13A stratification as well?

Thank you very much for that question, Jason. In general, the FDA is not yet approving any biomarker as a surrogate, but I would like Bob to elaborate more on that. Bob?

Yes. Thank you. Thanks, Jason, for the question. So under the Special Protocol Assessment with the FDA, the protocol they use the word lock, but it's agreed on with all the details, including the population. It's not impossible or difficult to go and add and make changes which will require obviously discussions. However, scientifically speaking, we're very excited with the larger ALS community about these 2 genetic discoveries and UNC13A story is evolving. However, it remains exploratory and not definitive at this stage in the game with trial design innovations, et cetera, we are acutely aware of what's going on. I presented data on our UNC13A two weeks ago in New Orleans at ISCT, it was very well received in oral presentation, it was chosen for that target audience as well. So excitement is there, but not yet at the level where it arises to become a stratification. However, we're going to be obviously exploring, we do post-hoc analysis, and we'll cut the populations in however many ways we need to evaluate further the effect of NurOwn in the next study in the Phase IIIb. Thank you for your question, really appreciate that.

Got it. And another, I guess, somewhat technical question. You had talked a bit about the hypoxic stress co-culture with NurOwn cells or the NurOwn media, if I caught that right? And did you say that it restored normoxic activity? And if so, can that mechanism of action be used as part of a data package when you reef or file the BLA the next time around. Because I remember last time a lot of questions around growth factors and levels of this and levels of that came up. But is this more defining of the mechanism of action for NurOwn that would be supportive of the next BLA?

Very good question. Netta can answer the first part, and Bob can answer the second part.

Thank you. Yes, you're correct. What we saw was the media that was enriched by ourselves had a protective effect and rescue effect really on cells under hypoxic conditions, restored them back to almost 100% of normoxic condition, so 96.5%. This is a cell culture, so it's a simplistic model. It's not a human live model. It's not a clinical model, but it is supportive, I think, of -- and was included in our IND as well.

Got it. And just last question on the manufacturing. I know you're aiming to open up additional clean rooms. But currently, the Tel Aviv facility, how many therapies can it handle when produced?

Yes. It depends how many rooms we are giving. It will be a rolling enrollment, as you know, with the phases taking off the CTA. So we'll serve us for the first few months. And then we'll start with Pluri as Haro had specified before. And I believe that next year, we'll have the U.S. site also up and running. We have time for 1 more question, Holly.

Your next question is from David Bautz with Zacks Small-Cap.

Thanks for the update this morning. So Chaim, I just want to make sure I heard correctly that you guys are looking to open up -- is it 15 clinical trial sites and then for each of those sites, obviously, financing aside, what needs to occur to try to get or to get those sites up and running so that they can enroll patients? And then lastly, do you have any estimation of how many patients you can enroll, say, per month just based on manufacturing capacity?

Yes. So thank you very much for that question. So on clinicaltrials.gov, you will see a listing of the sites. It's out there, but we didn't get signed the CTA's. We'll be announcing very soon gradually after we sign CTAs. And yes, as I just mentioned, we'll start to grow side-by-side based on [ grant of ] patient population that we're going to be enrolling based on the manufacturing. So we're working on the final steps of those -- of that [ grant ]. So I can't share exact numbers now. But the plan is, as you know, the 200-patient trial was included 3 years to have everyone enrolled and everyone treated. The first part then will be deep into the second part as well. I want to remind you that the BLA would be filed if we have statistical significant results of the first part of the trial. Yes. So thank you very much. I want to thank everyone for being on the call today. We are hoping to close this at 9:00. I see it's exactly 9:00. So thank you very much, and have a wonderful day.

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