Brainstorm Cell Therapeutics Inc.
Q2 2018 Earnings Call Transcript

Published: 23 Jul 2018

[Operator:]

Good day and welcome to the BrainStorm Cell Therapeutics' Second 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]. Please go ahead.

[Unidentified Company Representative:]

Thank you, operator, and good morning everyone and thank you for participating in today's second 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 Officer and Chief Operating Officer. A press release with the company's second quarter 2018 financial results became available this morning, Monday, July 23, and can be found on the Investors page of the company's Web site. 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, July 23, 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 Web site at www.brainstorm-cell.com. As the operator mentioned, all participants are currently in a listen-only mode and there will be a brief question-and-answer 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:]

Thanks, Paul. Good morning and good afternoon dear shareholders. I’ll start off by saying that this is so far one of the best quarters for BrainStorm ever both financially and scientifically. Our NurOwn Phase 3 ALS trial enrollment is proceeding well and we now have access to over $25 million in cash. This includes the remaining CIRM non-dilutive grant for our Phase 3. This is a good opportunity to express our gratitude to CIRM. We are happy to say that we have a wonderful collaborative experience with them and we’re working on possibly submitting additional grants’ requests. This cash position will allow us not to only fully fund our Phase 3 trial but will also allow BrainStorm to initiate additional indications and even additional complementary products. As you know, we are very proud with our R&D team and they have been developing very impressive capabilities with cutting edge products that very few are able to do. We already assigned research and development collaborations with leading scientific centers and leading experts to conduct both human and preclinical trials for these additional indications and new products. We plan to announce additional details in the next few weeks. The Dana-Farber NurOwn manufacturing site should be fully operational in October. We have a full team there for the last two months. The DSMB meeting will convene in about a month towards end of August. We proudly also welcome our new senior employees; Joe Petroziello from Juno, Dr. Susan Ward from Pfizer. As you can see, we are successfully building our team in the U.S. In the last few years, we hired four executives in the U.S.; Dr. Kern, Mary Kay Turner, and now Joe and Susan. In addition, we have strengthened our Board with appointments of Tony Polverino from Kite and Arturo Araya from Novartis. You will also recall that we lately established a new Scientific Advisory Board with the leading neuroscientist in the field. We look forward to completing enrollment on the ALS Phase 3 and to development of additional indications and products and to bring to much needed hope to those people with ALS and other neurodegenerative diseases. We thank you for your ongoing support. And I will hand this over to Eyal Rubin, our CFO, to give a short financial update. Eyal?

[Eyal Rubin:]

Thank you, Chaim. Research and development expenses, net for the three months ended June 30, 2018 were $1.5 million compared to $400,000, net for the three months ended June 30, 2017. Excluding the funds received in the form of grants from the Israel Innovation Authorities and CIRM, R&D expenses were $3.3 million in the second quarter of 2018 compared with $900,000 in the second quarter of 2017. The increases as Chaim mentioned, year-over-year was primarily due to expenses in connection with our ongoing Phase 3 clinical trial. G&A expenses for the three months ended June 30 were $1.6 million compared with $0.6 million in the three months ended June 30, 2017. The increase is primarily due to an increase in payroll cost and stock-based compensation. As Chaim mentioned, we strengthened and expanded our executive team, an increase in PR and consultants and other costs. Net loss for the three months ended June 30, 2018 was $3.1 million or which represents $0.16 loss per share as compared with $1 million or $0.006 [ph] per share for the three months ended June 30, 2017. Cash, cash equivalents, and cash commitments which includes the final installment under the 2017 Israel Innovation Authorities grant amounted to approximately $18.2 million compared with $7.7 million as of the end of the second quarter of 2017. As Chaim mentioned, the total available funding which includes cash on hand, the remaining non-dilutive CIRM and the Israel Innovation Authority grants amounted to over 25 million, which will allow us not to only fund the ongoing Phase 3 but also introduce new indication on products. For further details on our finances, please refer to the Form 10-Q that we filed this morning with the SEC.

[Chaim Lebovits:]

Thank you very much, Eyal. With this, we’ll open it for a few questions and answers. Dr. Ralph Kern will be with us also on this session. Operator?

[Operator:]

Thank you. [Operator Instructions]. We’ll go ahead and take our first question from Caroline Palomeque with Maxim Group.

[Caroline Palomeque:]

Hi. Good morning, everyone. Thanks for taking the questions. So my first question is just about the Phase 3 trial. I’m wondering if you can just expand a little bit on the endpoints and just sort of what powering assumptions you are looking into and also whether you are going to stratify the rate of decline of the patients from the running period? Can you just talk a little bit about that?

[Chaim Lebovits:]

Thank you. Dr. Kern, please.

[Ralph Kern:]

Hi, Caroline. Thank you for the questions. The power analysis – power assumptions for Phase 3 are that we have a 90% power to show responder outcome in a 200-patient study with 1-to-1 randomization. The stratification is based on what we’ve learned from the Phase 2 trial which was that those progressing in the running period by a point or more per month, generally have a more favorable response to treatment. So we’ve selected that criteria as an inclusion criteria for the Phase 3 trial. So we expect that based on the use of multiple dosing, based on the enriched population that we learned from Phase 2 that we should be able to achieve the 90% power to show the outcome in Phase 3.

[Caroline Palomeque:]

Thanks. That’s really helpful. And then just a quick follow up. With data coming out at the end of next year or early 2020, just wondering if there are any pre-commercial efforts that are going on now or any partnerships that you’re looking into, just wondering about that?

[Chaim Lebovits:]

Thank you very much for the follow-up question, Caroline, but we can’t comment at this stage.

[Caroline Palomeque:]

Okay. Thanks for taking my questions.

[Operator:]

[Operator Instructions]. We’ll take our next question from David Bautz with Zacks Investment Research.

[David Bautz:]

Hi. Good morning, everyone. Now that you’ve got a second manufacturing facility for NurOwn, what impact do you think will there be if any on patient enrollment? And also are you thinking about increasing the number of sites for the study?

[Chaim Lebovits:]

Thank you. No, we are not thinking to increase the number of sites for the study. We are seeing a better rate of enrollment than we thought, we had envisioned more screening failures and we have far less screening failures and therefore the additional site is timely. And we hope also that the additional sites will allow us to bring up another indication as well.

[David Bautz:]

Okay. And as far as additional indications, do you have a number in mind about how many you could bring forward?

[Chaim Lebovits:]

Yes, we have in mind but we’re not yet ready to announce. As I said in my opening statements, we will be announcing in the next few weeks.

[David Bautz:]

Okay. Thanks for taking the questions.

[Chaim Lebovits:]

Thank you very much.

[Operator:]

[Operator Instructions]. There are currently no questions at this time. I would now like to hand it back over to management for any additional or closing remarks.

[Chaim Lebovits:]

Operator, I think there is an additional question. Operator, do you want to check for additional questions?

[Operator:]

[Operator Instructions]. We’ll take a question from Caroline Palomeque with Maxim Group.

[Caroline Palomeque:]

Hi, again. Just wondering about if the phase – actually if you can talk a little bit more about the other assets in your pipeline or if you plan to expand NurOwn into other indications?

[Chaim Lebovits:]

Hi, Caroline, we do plan to advance NurOwn into other indications. We also plan to bring up new products. But as I said, we’ll be announcing that in the next few weeks. We want to announce it when it’s finalized, and we’re gathering the team of the KOLs that will be the principal investigators in the right centers and in conversation with the FDA. So once all of that is finalized, we’ll be announcing what the next indication will be, where it would be, how many patients, et cetera.

[Caroline Palomeque:]

Okay, that’s helpful. Thanks.

[Operator:]

We’ll take our next question from Kevin O’Neil [ph].

[Unidentified Analyst:]

Thank you for taking my question. I was a few minutes late, so I apologize. Do you have a percentage number of how many people have so far enrolled in or have received injections for the Phase 3 trial? Thank you.

[Chaim Lebovits:]

We already said in the past we’ll be announcing detailed patient enrollment together with the DSMB results which is going to be in a few weeks towards end of August.

[Unidentified Analyst:]

Thank you.

[Chaim Lebovits:]

You’re very welcome.

[Operator:]

We currently have no questions in the queue at this time.

[Chaim Lebovits:]

Okay. Thank you very much to everyone for being here and thank you for continued support, and looking forward to speak to you again very soon with additional updates.

[Operator:]

That does conclude today’s conference. Thank you for your participation. You may now disconnect.