Greetings, and welcome to the BrainStorm Cell Therapeutics first quarter 2022 conference call. At this time, participants are in a listen-only mode. As a reminder, this call is being recorded. 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 for 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 six weeks ago, I'll keep my prepared remarks brief today. As is our usual practice, we'll follow up our prepared remarks by 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 dataset since our phase III trial's 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 had been validated through the rigorous peer review process. As a reminder, although the phase III trial did not reach statistical significance on primary or secondary endpoints, pre-specified and post-hoc analysis showed NurOwn delivering robust clinical benefits to ALS patients with less advanced disease.
These clinical findings are further supported by biomarker data showing significant neuron-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 three scientific conferences, including the MND Annual Meeting and the American Academy of Neurology. We will deliver an additional biomarker presentation coming up at the first ALS Drug Development Summit later this month. We've 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 assure 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 GA Capital and Teva Pharmaceuticals respectively, to be supportive and help to drive our continued progress. Similar 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 for Cell & Gene Therapy conference earlier this month in San Francisco.
This data built upon prior preclinical studies that demonstrated the superior efficacy of neuron-derived exosomes in a model of acute lung injury when compared with exosomes that had been produced from naive mesenchymal cells. With the new data presented at ISCT, we gained important insights into the biological mechanisms underlying the superior efficacy of neuron-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 ISCT 2022 annual meeting, which is taking place in Lyon, France, on May twenty-sixth. 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 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 net 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 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?
Thanks, Chaim. Our first question asks if you could provide an update on the regulatory status of NurOwn in ALS.
Stacy, do you wanna take it?
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 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?
Yeah, I'll ask Ralph to do that. I'm just sharing with the shareholders and other people listening in 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. 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. 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?
Yeah, that's for Ralph.
Thank you. As we mentioned, we've completed additional analyses of the phase two 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 and progressive MS in our view, but we've also received valuable feedback from MS scientific experts and regulators over the last two months. Once the phase two study is published in a peer review journal, we'll provide a further update.
Thank you, Ralph.
Okay, the last pre-submitted question asks, can you provide an update on your ALS expanded access program?
Yeah, 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 these weeks. Jeannie, I would like you to please open the call for questions from people on the call.
No problem at all. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on a speakerphone to provide optimum sound quality. Please hold while we poll for questions. Okay, your first question is coming from David Bautz of Zacks Small-Cap Research. David, over to you.
Hey, good morning, everybody. While 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, you know, there are different ways how you can talk to regulators. There are official meetings and if there are sometimes important programs to the agency, they have ways to talk to us. We keep on saying that we have an ongoing conversation with regulators, 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 of not yet sharing where we are. Everything is on course, to your question, yes.
Okay.
Thank you.
Thanks. 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 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 a 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 a huge consortium ,, bringing things from academic through to company development. Of course, we are not academic, but our R&D team is more academic driven and it's gonna be more business focused. Also to try to figure out with who to partner and what different indications. It's a very good question.
We're looking at the whole broad possibilities, and she's very professional with the team, and she may bring on more people to assist her to exactly be able to outline the company to move very fast in the right direction. While we are already focused in lung disease in different ways, this will be an add-on. Yeah, exosomes is becoming very, very hot in our industry, as you know.
Yep. All right. Sounds good. Thanks for taking the questions this morning.
Sure.
Thank you.
Jeannie, next one.
Your next question is coming from Michelle Lorenz of Voice of ALS. Over to you.
Good morning, everybody. I have four questions.
Wow.
Two about biomarkers and two about patient-reported outcomes. The first biomarker question relates to your CSF biomarkers. At the recent ADCOM, Dr. Billy Dunn talked about the importance of neurofilament light trending in the right direction. 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. I'm curious if you can comment on which of the CSF biomarkers you found the most compelling. Did you see a larger magnitude difference in the higher ALSFRS-R scores, just as you did in the clinical trial data that was published in Muscle & Nerve?
Thank you so much. 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 on the outcome for Amylyx has mentioned that he would like to see 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 treatment is efficient.
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.
You may not be able to answer the second one then. I noticed that, Dr. Setboun presented at the MND talking about UNC13A and about I think the data was about 65% of the people with the AC allele, met the primary endpoint, and that was, roughly about five times p-value. Given that UNC13A SNP is a missplicing error, do you hypothesize that NurOwn may show efficacy on the other genes that have missplicing errors that were identified in Aaron Gitler's paper, in Nature?
Yeah. You're asking a very good question, and Dr. Sutkovich 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. Our scientists are very excited that we are paving the way first in biomarkers. As 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. Now, thank God, all other trials are now understanding that biomarkers have to be part of trial collection.
Even though you know it's another CSF tap again and again, it's which we would 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 understanding ALS better. I think our data set of biomarkers brings that into the genetics. It's just on the surface. We are opening the door there. We're showing very interesting data, as you mentioned. We can of course include that in our biomarker paper. It will have the genetic section, but it's only the beginning. I think our biomarker data will be far more helpful at this moment than the genetic data. The genetic data is very supportive of what we're saying. Definitely.
To that end, I'm also a believer that the patient-reported outcomes are compelling. 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 FVC. One person obviously stopped using a Trilogy, and it's been two years. I checked with his family. They still aren't using the Trilogy two years since his last dose. 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 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. Wow, you follow everything. Nice. Yeah.
Okay.
I can't really comment on that. Yeah.
the last question.
We're happy. I can say, you 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 what's not trivial to other companies to do. We're a small market cap 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. 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 them.
Okay. The last quick question is.
Okay.
Again, in EAP, a lot of people have reported that their fasciculations have stopped immediately after getting their NurOwn 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. You know, the whole industry is discussing about the endpoint and about the score. Of course, the score is something that we have to hold up, and the results that the score show are also, I think, very impressive with our trial. Outside of that, you're asking a good question, and there's a lot of answers, but none final answers that we can really share here. I think the industry is gonna 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.
We are talking to many people, including editors or authors of the ALSFRS-R score, and they wanna know our data, and they're looking at those things. Then maybe they will share some of their thoughts very soon. We hear 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. These are all very good questions. Even though you're taking up our time quite a lot, I'm very happy to answer these very professional questions. Thank you.
Thank you for your time.
Sure.
Thank you.
Jeannie?
Your next question is coming from Daniel Walker of Neff Industries. Daniel, please ask your question.
Yes, good morning. 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 the advantages of NurOwn's mechanism of action relative to other therapies in development, both past and present? I do have a few other questions.
Yeah. Well, hi, Daniel. We'll let Dr. Kern answer your questions. I spoke too much this morning. Dr. Kern.
Yeah. Daniel, thanks. 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. In fact, there's good reason for that because there are different targets that the neuroprotective factors reach. In the preclinical models, there's pretty good evidence that targeting a single neuroprotective factor isn't as good as targeting multiple. They have something called synergy, so they work together. 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 gonna be effective.
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. We think that there's good scientific rationale for this. Finally, you know, the treatment technology platform that we're providing is a way of packaging both of those treatments into a single delivery mechanism. We think that we have a unique way of providing effective treatments across multiple pathways. I think as Chaim mentioned earlier, our biomarker data supports that scientific perspective.
Thank you, Ralph.
Thank you so much. NurOwn has shown a highly significant burden of proof in terms of ALSFRS-R 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. You know, 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 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 in our biomarker data.
Really, as would have been hoped for based on literature, we're also seeing participants that carry the risk allele of UNC13A having a differentiated response to treatment, almost an odds ratio of nine times the response with the AC genotype. 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 a very important picture for what we believe about NurOwn. The last comment I would make is really intermingling these endpoints.
We have the ability, and we've published this in our Muscle & Nerve paper, to understand, do the biomarkers help explain the clinical response that we see with the ALSFRS-R? In fact, as we published, they do with very high predictive nature. 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. 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.
Thank you so much. 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? Maybe, Chaim, for you, how is BrainStorm thinking about this particular issue and topic?
You know, Daniel, thank you very much. You know, 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. Go, David.
Thank you for the question. You're right, there is not so many companies that are very active in the cell and gene. As you mentioned, exosome as well, it's a very interesting and attractive technology for partners. As you said, again, there is very few that are at this level of development in phase III, which have the potential to really bring treatment to patients. To your point, these three elements, the cell and gene interest, the exosome, and the fact that there is a large set of data and a unique set of biomarkers make our company and our data interesting and attractive to other partners. It has always been part of our strategy.
We've always been in discussion with potential partners, and we take that into account for the future. Thank you.
Thank you so much. 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
Great.
Really hit it.
Just lastly, given the amount of time that has now lapsed and the ever-increasingly growing impatience among 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. Yeah, the urgency is very high. I think that that's what I would say this morning. I don't see my colleagues wanting to talk to it at this time.
Okay, great. Thank you so much, Chaim, and thank you to the Brainstorm team. I'll jump back in queue.
Thank you so much.
Thank you. Your next question is coming from Chris Mazervi. He's a private investor. Chris, please ask your question.
No, sure. Just based upon the successful data from the phase II, progressive MS trial, I guess my question is Brainstorm in preparation for a phase III trial upon, I guess, the publication of the phase II data? If so, are you able to give a timeline on that?
Thank you so much, Chris. I'll allow Ralph to answer your question.
Yeah. Hi, Chris. Thanks for the question. As I mentioned earlier, we are awaiting publication in a peer review journal. I think that the peer review is the important next step, a pivot step for us to make internal decisions. 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. 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. You know, BrainStorm is part of the International Progressive MS Alliance.
The conversations are really quite rich, and these will help us make a decision. 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.
Thank you so much.
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, Jeannie, for handling this call, and thank you everyone for listening again. I'll see you soon and whenever the next Q is gonna be. I'm sure this time it's not gonna be in six weeks from now. It's gonna 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.
Wonderful.