Brainstorm Cell Therapeutics Inc.
Q1 2018 Earnings Call Transcript

Published: 14 May 2018

[Operator:]

Good day and welcome to the BrainStorm Cell Therapeutics' First Quarter 2018 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Paul Errant [ph]. Managing Director, Live 5 [ph] Advisors. Please go ahead sir.

[Unidentified Company Representative:]

Thank you, Abby, and good morning everyone and thank you for participating in today's first quarter 2018 financial results conference call for BrainStorm Cell Therapeutics. Leading the call today will be CEO, Chaim Lebovits; Eyal Rubin, Chief Financial Officer; and Dr. Ralph Kern, Chief Medical and Chief Operating Officer. A press release with the Company's – first quarter 2018 financial results became available this morning, Monday, May 14, and can be found on the Investors page of the company's website. Before we begin, I'd like to remind everyone that various remarks about future expectations, plans, and prospects constitute forward-looking statements for the purposes of the Safe Harbor Provisions under the Private Securities Litigation Reform Act of 1995. BrainStorm cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated. Any forward-looking statements made on this conference call speak only as of today's date, Monday, May 14, 2018, and the company does not intend to update any of these forward-looking statements to reflect events or circumstances that occur after today's date. As a reminder, this conference call is being recorded and it will be available for audio replay on the Company's website at www.brainstorm-cell.com. As the operator mentioned, all participants are currently in a listen-only mode and there will be brief Q&A session following today's prepared remarks. With that, I'd now like to turn the call over to CEO of BrainStorm Cell Therapeutics, Chaim Lebovits. Please go ahead sir.

[Chaim Lebovits:]

Thank you, Paul. Good morning. We’ll run through first shortly the slide deck we provided and those following our webcast can follow that. So on slide number three perhaps to the forward-looking statement slide. So our mission is BrainStorm is committed to bring CNS cellular regenerative medicines to the market to improve the lives of patients with neuro-degenerative diseases. Disruptive Autologous Cell Technology Platform, Advanced Pipeline of Cellular Medicines in neuro-degenerative diseases and manufacturing and commercializaton of capabilities here are the bullet points of what we are focused on. Next slide, moving to just high unmet needs across neuro-degenerative disorders and you can see the US patients for ALS 20,000 and for some other diseases we are looking at, as well Parkinson’s, Progressive, Alzheimer’s, Huntington’s, and Autism. Next slide please. Again, this is neuro-degenerative disease, US economic burden is growing and we’ll hear the details on the slides, something that investors are familiar with, so I won’t waste your time with that. This tool our basic product, NurOwn Autologous Cell product characteristics and the left hand side of slide shows that its quite simplified the patients gets bone marrow aspiration, we purify isolating expand their cells and preserve them with kind of cells [ph] And then some days before injection date we just deep freeze it or hold the cells, expand it, differentiate it, turn this range to 125 million cells to the center wherever the patient is and he gets his injections and just equally, very simple, even though its an autologous treatment, I think this is progressing and we can get another treatment. Try preserving this old means that you need only one single bone marrow aspiration for years of treatments. Of course, in our time we only had two treatments for the time being. Next slide please. As just mentioned, before ALS is most advanced indication, but we have preclinical results published with Huntington’s disease, Parkinson’s, Multiple Sclerosis and Autism. We - from the past now I can reiterate that again we will be solely be announcing additional indications and additional similar products. NurOwn has orphan drug designation both in the US and EU and fast track designation in the United States. And I will hand this over now to Mr. Eyal Rubin, our CFO to give you the highlights of the Q1 performance.

[Eyal Rubin:]

Thank you, Chaim. On slide number nine, P&L for the first quarter of 2018, research development was 977, which is inline where we had in the first quarter of 2017, but excluding the grant that we got from both CIRM these are Innovation Authority’s we are talking actually about $3.2 million of R&D expenses compared with only 941,000. This is obviously due to the Phase 3 clinical trial running in the US and the R&D efforts on additional indications as Chaim mentioned. Slipping to the next slide, turning to slide number 10, G&A obviously in connection with the Phase 3 trials, so you can see a slight increase from about 830 – 830,00 to $1.3 million, again in connection with the efforts around the Phase 3. Slipping to slide number 11, the net loss was $0.12 per share compared with $0.10 per share for the same period, the competitive period. Again, that's a slight increase in our loss compared and taking into account we are beeping [ph] to the Phase 3 compared with the first quarter of 2017, which we didn't have all of those expenses. Slipping to slide number 12, a balance sheet forecast that we had as of March 31, was about $5.6 million, as of April 30 we had $7.6 million which is inline with what we had as of December 31, again it came from $2 million deduction from CIRM and other grants that we got. With this, I am going to hand it over to Dr. Kern, to slide number 13.

[Ralph Kern:]

Thanks, Eyal and good morning and good afternoon everyone. I'm just going to quickly go over the slide just to tell you where we are in our clinical development plan for NurOwn and ALS. We're now in our fourth study. This ALS is been in the - we've been in the clinic in ALS for seven years, prior to that we've been developing NurOwn as a preclinical agent for 10 years. We are now in Phase 3. We're doing a 200 patient randomized study in the US and can I just have the next slide please. So just to show you the sites for the ALS Phase 3 study, three of the sites on the east and central part of the country are where participants in the Phase 2 study, we've added three sites in California, namely CPMC and San Francisco Cedar, Sinai in Los Angeles and UC Irvine also in Los Angeles. Next slide please. Now this is to go over the study design with you, essentially there are important inclusion and exclusion criteria. One of the key learning’s from Phase 2 was to look at the rapid progress or sub-group which is half of all ALS patients, that becomes an inclusion criteria in Phase 3. We have specific age criteria and also functional criteria for inclusion. Participants are randomized, undergo a bone marrow aspirate and that randomized in the 1 to 1 fashion to neuron or placebo and treatments are given at 0, 8 and 16 weeks for a total of three transplants. And then the outcomes are evaluated from over seven months after the first transplant with the total duration of the study being 11.5 months for each participant. Next slide please. Thank you. Just to tell you where we are at this point, that we're making very, very good progress. We're inline with where we thought we would be. There are all six sites that are up and running and randomized – randomizing patients. Some participants have already received their third dose. We expect to be on track roughly with our enrollment criteria and estimates and ultimately we hope to have topline data at the end of ’19, beginning at 2020. And at this point, I’ll hand it back to Chaim.

[Chaim Lebovits:]

Okay. I think there is no slides to talk to the recent additions to the board of BrainStorm that’s most previously announced, also on the press release of today we – and also – and the BrainStorm Scientific [ph] Advisory Board, which I think is a wonderful Advisory Board. And I can finish off by saying that, we had a very good reception for our presentations at American Academy of Neurology. There are hundreds of neurologist in the room with many of the leading key opinion leaders in the field participating in both presentation, one by Dr. Kern is also [indiscernible] and very well receptive and of the five lines [ph] of the American Academy of Neurology conference, we had our first face to face type different advisory board meeting, this was very helpful. We got strong feedback from our study design and other end points. Having said that, I don't want to further delay this, I want to open this for questions and answers, that we are riding thus again and that’s the reason why we decided to have this call, even though our financials does not may explicit [ph] but its an opportunity to let investors that want to chat with us and ask some questions for either trial or anything else related to BrainStorm. We are happy to do that. So we want to give some time for them to avail around 15 minutes to cover all those who want to ask questions. Operator, please open the lines for questions and answers.

[Operator:]

Thank you. [Operator Instructions] And we will take our first question from Jason McCarthy with Maxim Group. Please go ahead.

[Jason McCarthy:]

Hi, guys. A couple of questions. First on the on the clinical side, Dr. Kern you had mentioned that you know, as we saw in the Phase 2 study there was a difference between patients that were rapidly progressing versus those that were slowly progressing, with a focus on rapid progressors in the inclusion criteria, can you give us a sense of how many points decline in ALSFR-S score represent that inclusion criteria for the Phase 3. And really what the expectation is for NurOwn to alter that rate of decline to gain approval?

[Ralph Kern:]

Great. So thanks Jason for the question. I think there were two questions there. One is you know, what was the definition or criteria for rapid progressors, essentially it's in a large group of ALS patients - the average rate of decline is about a point per month and we have required that there be at least one point per month decline, which would mean the upper - the upper half of the ALS population. In terms of what we think we can accomplish, I mean, obviously we'd love to see our data today, but we'd have to wait. But you know, what we do know is that in prior simulations when one looks at the group of rapid progressors, the study power is much greater and that - and that one can do the study in a shorter period of time or study a smaller group. We're trying to show one point, two, five point per month improvements, which means that some, perhaps not all of the study participants will have potentially an improvement in function. So this is what we're shooting for. This is what we think we can accomplish with a study design, and I think I'll stop there.

[Jason McCarthy:]

Sure. Just I guess a follow up to that, so since you're including both rapid progressor and that would represent the upper half of the population. Is there a chance to stratify your data where you might hit a really - P-value on the upper half in rapid progressors and maybe not, I mean, lesser or slower progressors and gain approval off of that?

[Ralph Kern:]

Right. Well, I think that all we can say at the end of the study is we can comment on the group that was included, which is the rapid progressors – and progressing by at least a point per month and as far as one extrapolating from that group to the larger population that would be a discussion that we would have with the regulatory agencies, it would be review decision.

[Jason McCarthy:]

Understood. And then just one kind of housekeeping question on the cash balance. Can you give us a better sense of what remains on the CIRM grant that’s funding the study and what the milestones for getting the next awards are in terms of enrolling?

[Eyal Rubin:]

So as Kern answered, its only about $8 million or minus $10 [ph] with additional $9 million of CIRM and we met the first three milestones and we have another few milestones and the next one would be patient population treated [indiscernible] patients. But we won’t go into the details of because we don’t see an issue with meeting the marathons.

[Jason McCarthy:]

Okay. Great. Thanks you, Eyal.

[Eyal Rubin:]

Thank you. Next question please.

[Operator:]

And your next question is from David Bautz with Zacks Investment Research. Please go ahead.

[David Bautz:]

Good morning, everyone. I was wondering if you could tell us how many patients have received their second and/or third dose in the study and if there's been any issues with getting the cells out of cold storage and ready for injection?

[Ralph Kern:]

So the last question, no issues getting out of storage ready for injections. We had no issues with delivering any one of the product and we don't really just pose exact numbers on a given day with this - because the blinded trial we don't follow too closely the exact numbers. We do know the patients who have treatments were updated by our CRO and in the last month or two month if I remember that over 30 patients were enrolled, probably up to 40 to 50 patients, and my estimate, I don't have the exact number for you.

[David Bautz:]

Okay. That's fine. And as far as the sites are they enrolling roughly the same number as you see more patients enrolling at some place and others?

[Ralph Kern:]

Good question. So all the sites are up and rolling and running and as you can recall in the beginning we had only two sites and then we had a third, fourth or fifth. The main reason for that is the CMC operational being able to serve the sites. So that’s the bottleneck as you know in cell therapy trial. But I think its running more or less as we're hoping, at the beginning we had less sites, now its also up and running and also kind of enrolling the validations.

[David Bautz:]

All right, great. Thanks for taking the questions.

[Ralph Kern:]

Thank you very much. Next question please.

[Operator:]

Our next question comes from Daniel Gryfe with Precise Capital Management. Please go ahead.

[Daniel Gryfe:]

Good morning. Based on what you’ve said, can you progress, there is actually an article yesterday that I was wondering if you could comment on regarding the patient Mark Harrison, who is in Irvine, California, said that the part of the plus family [ph] over there and he see great improvements just from the first trial, first dose of drug, are there more success stories like this that you are aware of already. And if so does that impact on the fast forwarding with the product rollout?

[Chaim Lebovits:]

Hi, Daniel. Thanks for following us. And as you can imagine, I cannot comment regarding any patient. I don know the patients in the trial and we don't know any patient, even though they say they are in the trial or treated on [indiscernible] we cannot in any way comprise the trial. So I'm happy that you are following us very closely and you’re following the news and you getting all alerts and hope that you continue to invest in BrainStorm.

[Daniel Gryfe:]

All right. Thank you.

[Chaim Lebovits:]

Any other question? Okay, I guess, she is off. Next question please.

[Operator:]

Our next question comes from John Rice with Wells Fargo. Please go ahead.

[John Rice:]

Thank you. It seems to me - I have two questions. There was one particular day in this past month where you had 695,000 shares and it seem to have lot of institutional size blocks. In fact, the volume is probably equal to all the daily volume of the proceeding - of this month or the April month or the March month I should say. So I'm curious – I just stumble here. Can you in anyway disclose if there is any news if you are interested with this, as to what stimulated that amount of trading which was so much higher and disproportionate to the daily volume? And the second question is, are there – there seems to be news articles about the amount of people trying to get into these trials and yet you haven't just reached the full amount of 200 people. Can you explain maybe why there is a disconnect between the amount of people wanting to be in the trials and the time it takes to enroll to get up to 200 people?

[Chaim Lebovits:]

Yes, many questions. You said its really far more than two. But let me try to summarize this. The previous caller also asked about one of the articles, and you asking about the beating stock, it may be related, but I cannot comment on this and the FDA guidelines does not allow us to comment on any news out there or anything that patients are telling about their stories, number one. Now, you were talking about situational blocks, yeah, we didn’t know, we’re probably seeing by the end of the next quarter reports. But I can tell you we’re on an ongoing basis every month, at least one or two weeks without enrols doing non-deal [ph] road show and presenting. So there may be some citizens or retail who weren’t buyers we believe we have seen that lately, we are trying to get our sales a bit healthy, long professional share holder base. And we're getting there. We see some report obviously, maybe it's a combination of seeing this together with levelling [ph] to our presentations, I don’t know, it’s speculating and I can’t speculate. Your question about the patient enrollment, you know it is going to be a personal cell therapy, yes, we will enrol all 200 patients the same day. We have probably thousands patients who wanted to be part of the trial. But we have adjunct [ph] and we are enrolling based on the three month running period, which are designed cold [indiscernible] that's why I didn't go into the detail now and [indiscernible] and even then its based on the manufacturing capabilities of this one manufacturing event and therefore we saw full year for enrollment of the 200 patients. I want to remind that patients get not only a single role - of the previous trial, but its [indiscernible] so the manufacturing tend to really – an addition to the placebo treatment, we have to produce 400 neurons treatment for the trial, which we are capable of doing, but of course its – it can’t be done in a single day, like a molecular and just handling out [indiscernible] still not the same. I hope it clarifies your question.

[John Rice:]

Chaim, thank you for taking my question. I appreciate it.

[Chaim Lebovits:]

Very well. Next question please.

[Operator:]

Our next question comes from Jason Kolbert with H.C. Wainwright. Please go ahead.

[Jason Kolbert:]

Hi. Good morning, everybody. A question for Dr. Kern. I just would like to discuss a little bit primary versus secondary endpoints, I noticed the SVC will not be a primary endpoint. Can you discuss kind of why that is and the variability associated with that? Thank you.

[Chaim Lebovits:]

Yeah, that was for Dr. Kern I believe, right?

[Jason Kolbert:]

Correct.

[Ralph Kern:]

Hi, Jason. How are you doing? So yeah, no we are measuring SVC or slow vital capacity as a secondary endpoint, it's important but it's performance in ALS trials is inferior to the overall ALSFRS score, at the ALS functional rating scale score, open terms of its relevance to the patient and also its performance, so SVC is there, it's just not in first place.

[Jason Kolbert:]

Okay, terrific. Thank you so much.

[Chaim Lebovits:]

Next question please.

[Operator:]

Our next question comes from John Michael, who is a private investor. Please go ahead.

[John Michael:]

Thank you for taking my call. I was just wondering, on your last conference that you attended and Chaim I believe in San Francisco you mentioned something about a couple of patents speaking with you. And then also on the earlier conference calls last year article exemption seem to be a fairly big buzzword I don’t seem to hear too much that anymore? Thank you very much.

[Chaim Lebovits:]

Thank you for asking. I can say again, we'll have serious partnering kind of conversation with more than one serious party. But as you can imagine these conversations are not an overnight and then other hand not every proposal we are easily taking. So I have nothing terrific to really comment on the period of move at the moment, but yes we are speaking to serious potential partners. Read the article exempt. And we do write whole lot in the press release of today that we are happy on the way it's progressing with the regulatory system and that was very carefully worded - based on legal counsel and I can’t comment more than that to the moment. Similarly you follow those very closely. So I believe that you will see immediately when we announce it. Thank you for the question. Next question please.

[Operator:]

We have no additional questions at this time. So I would like to turn the conference back to Chaim Lebovits for any closing or additional remarks.

[Chaim Lebovits:]

In closing my remarks, I just want to thank everyone for coming on the line and being with us and listening to us and to supporting us and we hope to see your continued support and we hope to be able to bring you more positive numbers than every call we hold with you. Thank you very, very much. Of course, we want to thank all the patients that participate in the trial, I probably will have not have too many patients for this call, but we are really grateful about them, we’d never been able to proceed as remind you 50% of the patient from that treatment are still the - decided to take this process which is many travelling into the centers, and the bone marrow aspiration and the lumbar puncture’s et cetera, so really appreciate their assistance and their families assistance. So thanks to everyone. Thank you very much.

[Operator:]

Ladies and gentlemen, this concludes today's call. And we thank you very for your participation. You may now disconnect.