Brainstorm Cell Therapeutics Inc.
Q4 2020 Earnings Call Transcript

Published: 4 Feb 2021

[Operator:]

Greetings and welcome to the BrainStorm Cell Therapeutics’ Fiscal Year-End 2020 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to introduce your host, Mr. Michael Wood of LifeSci Advisors. Mr. Wood, you may begin.

[Michael Wood:]

Thank you, and good morning, everyone. Thank you for joining the BrainStorm Cell Therapeutics call. Before we begin the opening remarks, we'd like to remind listeners that this conference call contains 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 and MS, sufficiency of the Company’s existing capital resources for continuing operations in 2021 and beyond, the final date regarding the tolerability and full potential 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 business planning efforts.

[Chaim Lebovits:]

Thank you, Michael. Welcome to BrainStorm’s fourth quarter and year end 2020 earnings call. Thank you everyone for joining us. On the call today, I want to discuss our plans for the year ahead. The past year was a challenging year for all of us as we navigated through the COVID-19 global pandemic. Our commitment as a company is to make NurOwn available to patients with ALS as well as to patients with other neurodegenerative disease, through our progressive MS and Alzheimer's diseases trial. I'm incredibly proud of our employees, the business partners and clinical investigators for their commitment and collaboration. We're working together to advance our clinical programs. I would also like to acknowledge our patients and caregivers who showed great dedication to our clinical trial despite the pandemic. 2020 was truly a year of great learnings and community building. Our number one priority right now is to seek a path forward for potential regulatory approval of NurOwn in ALS. We have met with the FDA and have put forward a compelling set of data. The FDA is now reviewing the data we shared. We are waiting for their feedback. You will appreciate that this is a sensitive period that we are in and we need to let conversations play out between BrainStorm and the FDA before we can report detailed plans. I will say that the FDA has been very collaborative and willing to review and discuss the Phase 3 data with us. We will try to respond to the questions from investor while respecting the FDA and the process. Therefore, at this time, we cannot speculate on the timing of that feedback or the likely outcome of the ongoing FDA discussions.

[Ralph Kern:]

Thank you, Chaim, and good morning everyone. I want to express my deep appreciation to ALS patients and their families, to all the investigators and their teams who conducted the highest quality clinical trials through the COVID pandemic bringing us to this important moment.

[Stacy Lindborg:]

Thanks Ralph and good morning. The recently completed phase III trial on ALS was our company's first pivotal trial. This was a big step for our company and while- and through it, we've generated a rich set of data from a well-run and high quality trial. The evidence generated from clinical endpoints as well as a robust biomarker data has allowed us to engage in meaningful discussions with FDA and as we've carried out all of our pre-specified analyses, and have worked to address new questions from the FDA. We've been able to demonstrate a consistent and meaningful treatment effect. My own view of the data, as a drug developer of 25 years and as a statistician is that the evidence clearly suggests that NurOwn is effective in ALS. I'm proud of what we'll be able to deliver to the ALS community, in light of the new insights into this disease through this trial and it is my earnest hope that we can provide hope and improve the lives of ALS patients with NurOwn. I'll turn it back to you Chaim.

[Chaim Lebovits:]

Thank you, Stacy. Aside from NurOwn development in ALS, we have many exciting elements in our business plan that we are progressing in parallel. We're focused on areas of high unmet medical needs where we believe our focused scientific approach has the potential to have meaningful clinical benefit. We have made excellent progress in our NurOwn clinical program and progress MS despite some delays the clinical trial enrollment due to COVID-19 healthcare restrictions. We completed all dosing in our study participants this past December. As a reminder, the trial is looking for a relationship between spinal fluid biomarkers specific brain and spinal cord MRI measures and observed functional improvements in progressive MS patients. We anticipated top line data by the end of the first quarter of 2021 and look forward to sharing our findings with you once they can be communicated. We're in the process of initiating a new clinical program focused on the development of NurOwn as a potential treatment for Alzheimer's disease. While many Alzheimer’s therapies are focused on a single target, such as the well-known targets of -- tau or beta amyloid. NurOwn has the capability to simultaneously target multiple relevant biological pathways to bring a comprehensive approach to this complex and multifactorial disease.

[Preetam Shah:]

Thank you, Chaim and good morning everyone. It is my pleasure now to walk you through our 2020 financial results. Research and Development expenses net for the year ended December 31 2020 were $22.3 million compared to $17.2 million net for the year ended December 31, 2019. Included in these amounts are R&D grants from the Israel Innovation Authority or IIA and California Institute of Regenerative Medicine or CERM, as well as proceeds received from the Israeli Hospital exemption pathway which are recorded as an offset to the expense. This increase of approximately $5.1 million in research and development expense net year-over-year was primarily due to increase of approximately $2.1 million in expenses in connection with materials, consultants, depreciation, payroll and stock based compensation expenses and other activities, a decrease of $1.5 million in proceeds received in connection with treatment of patients under the hospital exemption regulatory pathway, a decrease of approximately $2.6 million in participation of IIA and CERM in 2020 under various awarded grants and a decrease of approximately $269,000 for costs related to travel, patents and other costs.

[Chaim Lebovits:]

Thank you very much Preetam. Michael Wood from LifeSci will now read questions we have received from investors. I will direct the questions. Michael?

[A - Michael Wood:]

[Chaim Lebovits:]

So as noted at the start of the meeting, I cannot speculate on whether or not NurOwn will be approved over the conditions of that potential future approval. I can say that our investigators have reviewed the data believe that the use should not be restricted. Next question please.

[Michael Wood:]

Thank you. The next question is about the subgroup, which had clinically meaningful results of the phase III trial. Does the quantity of the subgroup participants and the positive results good enough for conditional approval or will it take an additional trial focused on this subgroup of newly diagnosed patients and what is the FDA stance now after your meetings with them? Is there a green light to submit for approval and how long will such approval take considering the fast track status?

[Chaim Lebovits:]

Stacy?

[Stacy Lindborg:]

Yes. We have presented new analyses to the FDA which evaluates the consistency of the effects observed in this pre-specified subgroup of patients with baseline scores greater than 35. The analyses which we hope to present at a -- event shortly demonstrate consistency of a clinically meaningful effect across a much larger set of patients from the trial, and as we've stated we're in active dialogue with FDA around the regulatory -- and I cannot comment or speculate further around the conditions of the approval.

[Chaim Lebovits:]

Sure. Thank you, Mike?

[Michael Wood:]

The -- requirements for the phase III, as stated on clinicaltrials.gov was an ALSFRS-R score of 25 and above and yet when the data were presented for the first time, there was a high percentage of patients that were under 25 at baseline and can you explain why this is? In the phase III press release you stated, this clinical trial included more severely affected ALS population compared to other recent ALS clinical studies?

[Chaim Lebovits:]

Thank you, Ralph?

[Ralph Kern:]

Sure. Thank you. So, as we mentioned earlier the entry criteria in the study as listed on clinicaltrials.gov, as you referenced was about 25 at screening and not at baseline, and I should point out that the screening was 20 weeks before baseline. So, patients were randomized -- met the inclusion criteria as designed, so it's correct to say that BCT002 or phase III trial included a broader set of patients as measured by the baseline ALSFRS-R score, compared to for example studies in the proact database where 97% of patients are over 25 at baseline.

[Chaim Lebovits:]

Thank you, Mike?

[Michael Wood:]

Next question. Do you have an explanation for the high placebo rate that was seen in phase III and do you think the running period of the trial was an issue with patients reporting at what they thought they needed to get into the trial?

[Chaim Lebovits:]

Stacy please?

[Stacy Lindborg:]

Yes, we have reviewed patient level data closely, and we do not believe that the running period created an issue related to patients on seeking to get into the trial. In terms of the placebo effect, it really could come from a combination of factors including the randomization of patients with more advanced disease, and ultimately, we're not at liberty to provide any more details around that at this time.

[Chaim Lebovits:]

Thank you, Mike?

[Michael Wood:]

Can you discuss the biomarkers in the phase III trial? And can you correlate the responders in the biomarker data? And then in your opinion which biomarkers were the most important?

[Chaim Lebovits:]

Thank you, Ralph, it is for you.

[Ralph Kern:]

Yes, thank you. This is an area that we're very proud of. As you know, that our phase III trial was unique and that we collected seven serial samples of CSF biomarkers for each patient and this data set will provide critically needed data for the ALS community and to support the mechanism of action of NurOwn. Our main finding is that we observed consistent, highly robust and statistically significant CSF biomarker changes, particularly in biomarkers related to neurotrophic factor delivery in other words, the cargo that the cells deliver, inflammation and neurodegeneration which ultimately is the cause of the motor neuron loss and disability in ALS. So, the changes in biomarkers appear to correlate with the clinical response and may be useful in predicting who will respond to treatment if approved, the specific biomarkers that we have focused on and continue to focus on in our analyses include VEGF also known as Vascular Endothelial Growth Factor, which is produced by a neuron, a Neurofilament light or NFL which is a marker of neuroaxonal loss or neurodegeneration. Also, phosphorylated Neurofilament heavy which is a cousin of Neurofilament light and MCP-1 which is a very important marker of inflammation. So, we think that we have a very good path forward to understand both the mechanism of action and correlate it with the treatment effects.

[Chaim Lebovits:]

Thank you. Mike?

[Michael Wood:]

If you've submitted the BLA for NurOwn to the FDA at this point, and if not, what is the anticipated approximate date that you intend to submit the NurOwn BLA?

[Chaim Lebovits:]

So, no, we have not yet submitted a BLA, as we have already shared on this call, we have presented our data to the FDA and are in ongoing active dialogue with them around the regulatory pathway for NurOwn and that's all we can say now. Next question please. Mike?

[Michael Wood:]

When you do submit the NurOwn BLA will it be to treat all ALS patients or only a subgroup such as those with the ALSFRS-R score of 35 or higher?

[Chaim Lebovits:]

Ralph?

[Ralph Kern:]

Thank you. So, we do expect to submit the application for all patients. And of course, this is, as I mentioned, this is subject to feedback from the FDA. And we can't comment on that. But as we stated earlier in our call our investigators believe strongly that ultimately all patients should be given access to NurOwn.

[Chaim Lebovits:]

Thank you.

[Michael Wood:]

Next question, would you please provide an update on discussions with the FDA concerning the approval process for NurOwn and ALS? Will the company be required to do any additional trials of when -- BLA be submitted? And given the priority review product by the FDA about how long do you think it will take to receive an answer from the agency?

[Chaim Lebovits:]

So, as we already shared, we have presented our data to the FDA and are in active dialogue around the regulatory path for NurOwn. We're not at liberty to provide any additional details at this time. I must say that we are thankful to the FDA, they allow us to present our data and to -- the ongoing updates as we have them. They are demonstrating through their actions that this is a priority for them too. Thank you.

[Michael Wood:]

Next question. Has the company analyzed the Phase III trial data in more depth and are there for example, any subgroups of patients in addition to those with an ALSFRS score greater than 35 that responded more closely to your expectations? And also have you learned what caused the high placebo effect? And how do you think the biomarker data strengthened the case for approval of NurOwn?

[Chaim Lebovits:]

Stacy?

[Stacy Lindborg:]

Yes, we absolutely have analyzed the data in depth and we have provided these datas to the FDA covering a breadth of topics, including insights into the treatment effect between NurOwn and placebo through additional subgroup analyses. In addition to ALS clinical experts, we've also engaged external expert statisticians as we seek to draw highly credible conclusions about the treatment effect of NurOwn from this trial. We're regularly sharing updates from the data with FDA to ensure that they have as transparent of an understanding of the data as possible and as we work with them to define the regulatory path for NurOwn. The biomarker data provides confirmation of NurOwns mechanism of action, which really is behind the treatment effect that we've consistently observed. And as important as the NurOwn biomarker response and the relationship with efficacy data is the lack of biomarker response with placebo is equally important and provides really important context as a rigorous control for this Phase III trial.

[Michael Wood:]

Next question is regarding the expanded access program. Can you please provide an update on this program? When do you plan to start dosing? Who selects the patients and how are they notified? --NurOwn -- be produced at Dana-Farber? And how many patients will you treat or do plan to treat in this program?

[Chaim Lebovits:]

Ralph?

[Ralph Kern:]

Yes, the protocol for the EAP was developed in very close partnership with the FDA to provide access to NurOwn for Phase III clinical trial participants who obviously meet specific eligibility criteria. Initially, patients less severely affected by ALS, as measured by the ALSFRS-R score will be the first to receive treatment. This approach is informed by the top line data from the Phase III clinical trial. NurOwn, for this EAP program will be produced at the Dana-Farber Cancer Institute, as this was a manufacturing site for our Phase III. And we had a great experience there. The total number of patients for the EAP will be determined by the clinical sites assessments and those patients who meet the inclusion and exclusion criteria, and have retained higher ALS function as determined by the ALSFRS-R our score. As the clinical trial sites are responsible for screening and enrollments. As we mentioned, the EAP protocol specifies three doses of NurOwn, the same dosing as the Phase III clinical trial. Finally, I might add that the EAP program was initiated the first week of January, and we expect the first patients in this program to be dosed next week.

[Chaim Lebovits:]

Wonderful, thank you. Mike?

[Michael Wood:]

Next question on switching gears relates to the program in progressive multiple sclerosis. What are your current expectations for announcing top line data from the Phase II progressive MS study? Will the trial provide data on both safety and efficacy? What are the endpoints in this study? And are the same biomarkers as you used in ALS being evaluated in this study?

[Chaim Lebovits:]

Ralph?

[Ralph Kern:]

Thank you. We expect Phase II MS top line data by the end of this quarter. The study will provide data on clinical efficacy, safety and key CSF and plasma biomarkers, including many that were evaluated in our ALS trial. But in addition, we're looking at CSF and serum biomarkers that are unique and very important in progressive MS. The key endpoints that we will be initially focusing on are obviously safety, changes from baseline and a test called the timed-25-foot-walking test. Another test of upper extremity function called the 9-hole peg test, and as I mentioned, the very important biomarker assessments and we'll look at correlations between these important clinical and biomarker assessments.

[Michael Wood:]

Thank you. And now we have a couple of questions on the Alzheimer's program. First, can you tell us if the Phase III Alzheimer's trial has begun in Europe? How many patients have been enrolled? And have you begun dosing these patients?

[Chaim Lebovits:]

Stacy?

[Stacy Lindborg:]

We're in the final steps of initiating our European Alzheimer's clinical trial. And we hope to provide more details soon. But there have been no patients dosed.

[Michael Wood:]

Next question, you posted a of Alzheimer's in 2020. But looking at your pipeline, this program is not listed even as preclinical, can you help clarify this is this because you've decided not to pursue it or for some other reason?

[Chaim Lebovits:]

Okay, so we do continue to move forward as we just -- with our clinical development program for Alzheimer's in the EU and the pipeline on our website will be updated to reflect this. And thank you for that comment. Next question, please.

[Michael Wood:]

Okay, so one final question, and this relates to the COVID-19 ARDS program. This investor wanted to congratulate you on the publication of the preclinical results for NurOwn derived exosomes to treat ARDS caused by COVID-19. And can you tell us -- provide more information tell us if you've decided to conduct a clinical trial in this indication?

[Chaim Lebovits:]

Stacy?

[Stacy Lindborg:]

Well, thanks for the kind words. We're excited about the publication as well and we are in the process of reviewing the unmet need in ARDS. In addition to other related conditions, and based on the very promising preclinical proof of biology results, we're considering the optimal business approach, including various partnerships.

[Chaim Lebovits:]

Thank you very much, Hector. Please open the lines for any additional questions.

[Operator:]

Thank you. Your first question comes from the line of David Bautz with Zacks Investment Research. Please proceed with your question.

[David Bautz:]

Hey, good morning, everybody. In regards to the MS trial, so assuming there are positive results, I'm curious if we could talk about what the next steps in that program would be. And if you foresee a possible path to going straight into a pivotal trial?

[Chaim Lebovits:]

Very good question, thank you. Ralph?

[Ralph Kern:]

Thanks, David, and good morning. Yes, that's a very good question. I think we'll be data driven, we'll have to see the totality of the evidence. In other words, the biomarker changes, how they correlate with clinical outcomes and also we'll be looking at quantitative MRI correlations. We have pulled together probably the top MS experts in the United States in our trial at -- sites and I think we'll be having conversations with them. Recently, there's been a lot of interest in cell therapy for MS and using different types of cells and different approaches realizing that the conventional treatments still leave a huge biological critical unmet need. So, I think the interest is there, I think it'll be dependent on the strength of the data and we'll be happy to discuss that with you at a later date once we have the top line data, so look forward to seeing those results.

[David Bautz:]

Okay, great. Appreciate the information and for taking the question.

[Chaim Lebovits:]

Thank you. Hector, any additional questions?

[Operator:]

Ladies and gentlemen, we have reached the end of the question and answer session and I'd like to turn the call back to Mr. Chaim Lebovits, Chief Executive Officer for closing remarks.

[Chaim Lebovits:]

Yes, so just thank you very much, not having questions -- it looks like we had a very good call and we explained everything very well. Usually, we have many additional questions. So I want to thank my team who all prepare for the call. And thank you all for your support -- for ongoing support. Thank you very much. Have a wonderful day.

[Operator:]

This concludes today's conference. Thank you for your participation.