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Business Update
Anticipating News on How NurOwn® Will be Advanced Forward in ALS
BrainStorm Cell Therapeutics, Inc. (NASDAQ:BCLI) is developing NurOwn as a treatment for patients with amyotrophic lateral sclerosis (ALS). The company recently published results from the Phase 3 trial of NurOwn in Muscle and Nerve that showed while the trial did not reach statistical significance on the primary or secondary endpoints, there were a number of positive effects in less advanced patients (Cudkowicz et al., 2022). The regulatory fate for NurOwn has been uncertain since the Phase 3 trial results were announced as the company consulted with physicians, patients, and advocacy groups to get a better understanding of the best path forward. Now that the Phase 3 results have been published, the company has continued to gain valuable feedback from leading ALS experts and is continuing to work with regulatory authorities towards the goal of enabling the broadest access possible to NurOwn. We continue to await word from the company on how it intends to advance NurOwn.
Presentation on NurOwn-Derived Exosomes
On May 4, 2022, BrainStorm announced a poster presentation at the International Society of Cell & Gene Therapy (ISCT) 2022 Meeting. The poster, titled "MSC-NTF derived small extracellular vesicles display superior macrophage immunomodulation compared with vesicles derived from naïve MSCs", followed up on previous results showing that NurOwn-derived exosomes (Exo MSC-NTF) were superior to exosomes produced from naïve MSCs (Exo MSC) when evaluated in a preclinical model of acute lung injury.
The studies described in the poster were undertaken to better understand the mechanisms for the superior efficacy of Exo MSC-NTF compared to Exo MSC. Researchers examined inflammatory factors secreted by both M1 (pro-inflammatory) and M2 (anti-inflammatory) polarized macrophages. The results showed:
• Exo MSC-NTF inhibited the expression and secretion of pro-inflammatory cytokines by M1 macrophages better than Exo MSC. This was shown through a statistically significant 6.4- and 3.3-fold reduction in the secretion and transcription, respectively, of the pro-inflammatory cytokine MCP-1 following Exo MSC-NTF treatment while more modest reductions were noted following Exo-MSC treatment.
• Treatment of M1 macrophages with Exo MSC-NTF also led to a greater reduction in the transcription of the pro-inflammatory cytokine IL-6 when compared to treatment with Exo MSC.
• Exo MSC-NTF treatment resulted in a statistically significant 3.5- and 5.4-fold increase in the secretion and transcription, respectively, of the anti-inflammatory cytokine IL-10, while Exo MSC treatment only led to a 2.6- and 3.4-fold increase, respectively.
These data point to Exo MSC-NTF having an anti-inflammatory effect through modulation of macrophage cytokine production. While BrainStorm is fully committed to advancing its cellular therapy pipeline in ALS and MS, these data point to the potential for pipeline expansion with the exosome platform.
New Hires to Executive Team
On May 12, 2022, BrainStorm announced two senior management appointments. Netta Blondheim-Shraga, PhD was appointed as VP, Research & Development and Antal Pearl-Lendner was appointed to the newly created position of Chief Legal Counsel.
Dr. Blondheim-Shraga will direct the R&D team and be responsible for advancing the company's pipeline. Prior to joining BrainStorm, Dr. Blondheim-Shraga was Project Leader on the Academic Affairs Team at Teva Pharmaceuticals in which she managed a portfolio of diverse scientific collaborations. Before that, she was Study Director and Senior Scientist at CrownBio. Dr. Blondheim-Shraga received her PhD from the Faculty of Medicine, Bar-Ilan University.
Ms. Pearl-Lendner is a bilingual attorney with experience in both legal and business development capacities. Prior to joining BrainStorm, she spent eight years at Mizrahi-Tefahot Bank in Israel with responsibilities including bank-wide complex projects, negotiating large scale international contracts, and providing ongoing advice regarding the international activities of the bank. Before that, she worked at GE Capital in business development, strategy, & analytics. Ms. Pearl-Lendner received an MBA from the MIT Sloan School of Management and an LLB from Tel Aviv University.
Financial Update
On May 16, 2022, BrainStorm announced financial results for the first quarter of 2022. As anticipated, the company did not report any revenues during the first quarter of 2022. Net R&D expenses for the first quarter of 2022 were $2.6 million, compared to $4.3 million during the first quarter of 2021. The decrease was primarily due to lower clinical trial costs. Excluding participation from the Israeli Innovation Authority (IIA) and other grants, R&D expenses were $2.6 million in the first quarter of 2022 compared to $4.8 million in the first quarter of 2021. G&A expenses for the first quarter of 2022 were $2.9 million compared to $2.6 million for the first quarter of 2021. The increase was primarily due to increased stock-based compensation, consultants, rent, and other costs.
The company exited the first quarter of 2022 with approximately $18.4 million in cash, cash equivalents, and short-term deposits. As of May 10, 2022, BrainStorm had approximately 36.5 million common shares outstanding and, when factoring in stock options and warrants, a fully diluted share count of approximately 39.8 million.
Conclusion
It continues to be a "wait and see" situation as far as how BrainStorm plans to advance NurOwn. The PDUFA date for AMX0035, which is being developed by Amylyx Pharmaceuticals as a treatment for ALS, is June 29, 2022. This will be a very important decision for the ALS community, and perhaps for BrainStorm as the company hopes to get a better understanding of the current regulatory environment. As we await word on the future of NurOwn, we have not made any changes to our model and our valuation remains at $14 per share.
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