Executive Summary / Key Takeaways

• Pivotal Clinical Advancement: Brainstorm Cell Therapeutics (BCLI) is advancing its proprietary autologous cell therapy, NurOwn, for Amyotrophic Lateral Sclerosis (ALS) with an FDA-cleared Phase 3b trial, ENDURANCE. This trial design benefits from a Special Protocol Assessment (SPA), significantly derisking the regulatory pathway.
• Compelling Early Data & Patient Advocacy: New survival data from NurOwn's Expanded Access Program (EAP) cohort shows remarkable long-term survival (90% over 5 years, 60% over 7 years) in ALS patients, alongside breakthrough pharmacogenomic insights. A recent 309-page Citizen Petition to the FDA, driven by patient advocacy, seeks a de novo review of NurOwn's existing data, potentially offering an accelerated approval pathway.
• Critical Funding Gap: Despite operational readiness, BCLI faces a substantial funding challenge, requiring an estimated $20 million to $30 million annually for the Phase 3b trial. This is exacerbated by its recent delisting from NASDAQ to the OTCQB Venture Market and a "wait-and-see" approach from investors following the Citizen Petition.
• Strategic Financial Pursuit: The company is aggressively pursuing alternative funding, including a promising $15 million non-dilutive grant and strategic partnerships, while implementing stringent cost-saving measures, including executive salary reductions.
• Long-Term Platform Potential: Beyond ALS, NurOwn is a versatile platform with encouraging preclinical results in Progressive Multiple Sclerosis (PMS), Alzheimer's Disease (AD), and an exosome program showing therapeutic effects in lung diseases, underscoring its broader neurodegenerative and inflammatory disease potential.

NurOwn: Pioneering the Regenerative Frontier in ALS

Brainstorm Cell Therapeutics (OTCQB:BCLI) is a biotechnology company dedicated to developing novel adult stem cell therapies for debilitating neurodegenerative disorders. Its core mission revolves around its proprietary NurOwn technology platform, a beacon of hope in the challenging landscape of diseases like Amyotrophic Lateral Sclerosis (ALS). The company’s journey, marked by over two decades of focused research and development, has positioned it at a pivotal juncture, aiming to bring a unique autologous cell therapy to patients with high unmet medical needs.

The biotechnology industry, particularly in neurodegenerative diseases, is characterized by high R&D costs, stringent regulatory hurdles, and intense competition. Larger pharmaceutical companies like Biogen (BIIB), Novartis (NVS), and Roche (RHHBY) command significant market share with diversified portfolios and established commercial infrastructures. These giants often benefit from robust revenue streams and extensive R&D capabilities, allowing them to absorb high operational costs and navigate complex regulatory environments. BCLI, as a pre-revenue, clinical-stage company, operates in a specialized niche, focusing its resources on its differentiated autologous cell therapy approach.

BCLI's overarching strategy is to leverage its foundational scientific strengths to develop transformative therapies. This involves a rigorous clinical development pathway, strategic manufacturing partnerships, and a platform approach to expand NurOwn's utility across multiple indications. The company's history of persistent R&D, even through significant setbacks, underscores its unwavering commitment to scientific validation and patient impact.

The Autologous Edge: NurOwn's Differentiated Technology

At the heart of Brainstorm's investment thesis lies NurOwn, a proprietary cell therapy platform that represents a significant technological differentiator. This innovative approach involves inducing a patient's own bone marrow-derived Mesenchymal Stem Cells (MSCs) to secrete high levels of neurotrophic factors (NTFs). These MSC-NTF cells are designed to modulate neuroinflammatory and neurodegenerative disease processes, promote neuronal survival, and improve neurological function.

The tangible benefits of NurOwn's autologous nature are profound. By using the patient's own cells, the therapy eliminates the risk of immune rejection and the need for immunosuppressive agents, which can cause severe side effects. The multi-step manufacturing process, from bone marrow aspiration to intrathecal administration, is designed to consistently generate cells that release critical NTFs such as glial-derived neurotrophic factor (GDNF), brain-derived neurotrophic factor (BDNF), and vascular endothelial growth factor (VEGF). These factors are crucial for neuronal growth, survival, and differentiation.

Recent data provides compelling, quantifiable insights into NurOwn's potential. New survival data from 10 participants in the Expanded Access Program (EAP) for NurOwn in ALS showed that 10 out of 10 patients survived over 5 years, and 6 out of 10 survived over 7 years without tracheostomy or invasive respiratory support. This long-term survival, described by management as "unprecedented," stands as a powerful testament to the therapy's potential. Furthermore, pharmacogenomic data presented at the ISCT 2025 Annual Meeting highlighted the impact of the UNC13A genotype on clinical outcomes, with heterozygous ALS patients showing a statistically significant response rate to NurOwn treatment compared to placebo.

Beyond ALS, BCLI is actively engaged in R&D for NurOwn-derived exosomes. These extracellular nano-vesicles, capable of crossing the blood-brain barrier, show promising preclinical data in models of lung disease, including Acute Respiratory Distress Syndrome (ARDS) and Chronic Obstructive Pulmonary Disease (COPD). Early treatment with exosomes significantly reduced lung inflammation and fibrosis in response to bleomycin, demonstrating superior effects compared to exosomes derived from naïve MSCs. This exosome program aims to advance towards clinical development, expanding NurOwn's platform potential into respiratory and inflammatory diseases, with the added benefits of ease of storage, stability, and low immunogenicity. For investors, this technological differentiation and platform versatility represent a significant competitive moat, offering the potential for superior patient outcomes, broader market applications, and long-term growth.

The ENDURANCE Trial: A Refined Path Forward

Brainstorm's journey has been marked by significant regulatory challenges, particularly with its ALS program. After filing a Biologics License Application (BLA) for NurOwn in September 2022, the company received a Refusal to File (RTF) letter from the FDA. Despite re-filing over Protest and an Advisory Committee (ADCOM) meeting in September 2023 that voted against the therapy's effectiveness for mild to moderate ALS, the company strategically withdrew its BLA in November 2023, a decision viewed by the FDA as "without prejudice."

This setback led to a critical strategic re-evaluation and a productive dialogue with the FDA, culminating in a Special Protocol Assessment (SPA) agreement in April 2024 for a planned Phase 3b registrational trial for NurOwn in ALS. This SPA is a crucial de-risking factor, as it confirms that the trial's endpoints and statistical analysis plan are appropriate to support a future BLA, assuming the data meets expectations. In May 2025, the FDA cleared BCLI to initiate this Phase 3b trial, named ENDURANCE, following the submission of comprehensive Investigational New Drug (IND) amendments.

The ENDURANCE trial is meticulously designed to confirm therapeutic benefit in patients with early-stage ALS. It comprises a 24-week double-blind period (Part A) followed by a 24-week open-label extension (Part B) to evaluate long-term effects. The entry criteria have been refined to enroll patients with less advanced functional decline, specifically those with an ALSFRS-R total score of 45 or less, with no individual item scores of 0 or 1, and relatively stable respiratory function (Forced Vital Capacity above 65%). This refined patient population is targeted to maximize the likelihood of demonstrating clear efficacy, building on insights from previous studies. The primary endpoint is the change from baseline to week 24 in the ALSFRS-R total score, which, if positive, could be sufficient to support a new BLA.

Operational readiness for ENDURANCE is well underway. BCLI has partnered with IQVIA (IQV), a leading Clinical Research Organization (CRO), and is actively negotiating agreements with approximately 15 leading clinical centers across the United States. Manufacturing capabilities are being bolstered through partnerships with Pluri Inc. (PLUR) in Israel and Minaris Advanced Therapies in New Jersey, complementing the existing GMP-certified facility at Sourasky Hospital in Tel Aviv. The company is also planning to bring an additional U.S.-based manufacturing center online to support broader production needs, ensuring a robust supply chain for the trial and future commercialization.

Financial Performance and Liquidity: A Tightrope Walk

Brainstorm Cell Therapeutics remains a company in its development and clinical stage, and as such, has not generated any revenues from operations since its inception through June 30, 2025. This pre-revenue status inherently leads to ongoing operating losses, a trend expected to continue in the near term. For the second quarter ended June 30, 2025, the company reported a net loss of $2.90 million, compared to a net loss of $2.54 million in the same period of 2024. The net loss per share for Q2 2025 was $0.34, based on 8.62 million weighted average shares outstanding. For the six months ended June 30, 2025, the net loss was $5.77 million, slightly lower than the $5.94 million reported in the prior year period. The accumulated deficit stood at $232.403 million as of June 30, 2025, underscoring the significant investment in R&D over the years.

Research and development expenditures, critical for advancing NurOwn, increased for the six months ended June 30, 2025, reaching $2.424 million, up from $1.883 million in the comparable 2024 period. This rise was primarily driven by a $387,000 increase in payroll and stock-based compensation expenses, and a $294,000 increase in costs related to clinical activities, suppliers, patents, and rent.

General and administrative expenses, however, saw a decrease, falling to $3.24 million for the six months ended June 30, 2025, from $3.57 million in the prior year, mainly due to lower payroll, PR activities, rent, and consultant costs, partially offset by increased stock-based compensation.

Liquidity remains a paramount concern. As of June 30, 2025, cash, cash equivalents, and restricted cash totaled $1.025 million. Net cash used in operating activities for the six months ended June 30, 2025, was $5.13 million, highlighting the ongoing cash burn. The company's ability to continue as a going concern is in substantial doubt without additional financing. Historically, funding has come from equity offerings, warrant exercises, and grants. Recent financing activities include $3.35 million in gross proceeds from at-the-market (ATM) offerings in Q2 2025 and $1.64 million from a warrant inducement agreement that closed in April 2025. The company also settled $450,000 in accounts payable through a debt-for-equity swap in Q2 2025 and has $101,000 outstanding from approximately $1.2 million in short-term loans incurred between November 2024 and March 2025.

Management anticipates needing approximately $20 million to $30 million annually to complete the Phase 3b trial. Securing this funding is currently the most critical challenge. The recent delisting from NASDAQ to the OTCQB Venture Market, effective July 18, 2025, due to non-compliance with minimum shareholder equity, could further limit liquidity and access to capital markets. The unexpected filing of a Citizen Petition with the FDA, while potentially beneficial, has created a "wait-and-see" approach among key investors, hindering immediate financing efforts. In response, BCLI is actively pursuing a promising $15 million non-dilutive grant and strategic partnerships. The company has also implemented significant cost-saving measures, including salary reductions for many employees and periods where senior leadership worked without remuneration, underscoring their commitment to advancing the trial.

Competitive Landscape: Niche Innovation vs. Big Pharma Scale

Brainstorm Cell Therapeutics occupies a unique position within the highly competitive biotechnology sector, particularly in neurodegenerative diseases. Its focus on an autologous, cell-based regenerative therapy for ALS provides a distinct competitive advantage, but it operates against a backdrop of much larger, more financially robust pharmaceutical companies.

Compared to industry giants like Biogen, Novartis, and Roche, BCLI's financial performance metrics are starkly different, reflecting its pre-revenue, R&D-intensive stage. For instance, BCLI's TTM Operating Profit Margin of -1401.53% and Net Profit Margin of -1348.41% stand in sharp contrast to Biogen's 23% and 17%, Novartis's 28% and 23%, or Roche's 22% and 13%, respectively. This highlights BCLI's significant cash burn as it invests heavily in clinical development without commercialized products. Even compared to a more development-focused biotech like Ionis Pharmaceuticals (IONS), which has a TTM Operating Profit Margin of -67% and Net Profit Margin of -64%, BCLI's financial metrics underscore its earlier stage of commercialization and higher relative R&D intensity.

BCLI's primary competitive advantage lies in its differentiated NurOwn technology, offering a personalized, regenerative approach that aims to modulate disease processes and enhance neurological function. This could lead to superior patient outcomes in specific neurodegenerative conditions, potentially giving BCLI a lead in product performance for certain applications. The "unprecedented" long-term survival data from the EAP, coupled with pharmacogenomic insights, suggests a unique therapeutic profile that larger, more generalized biologic therapies from competitors may not replicate.

However, BCLI faces significant competitive disadvantages due to its smaller scale. This translates to higher operational costs relative to its size and a greater dependency on successful clinical trial outcomes for funding stability. Larger competitors possess extensive resources for faster product development, broader market penetration, and global distribution, areas where BCLI currently lags. While BCLI's innovation speed in autologous therapies is a strength, its financial health, characterized by negative margins and cash flow, makes it more vulnerable to funding challenges compared to the stable, diversified revenue bases of its rivals.

The broader industry trend of AI advancements in drug discovery, while potentially beneficial for accelerating research, could disproportionately favor larger competitors with greater computational resources. However, the recent FDA approval of the first mesenchymal stem cell therapy for Graft Versus Host Disease (GVHD) is a positive signal, validating the regulatory pathway for cell-based therapies and potentially easing the path for BCLI's pioneering efforts. BCLI's strategic response involves focusing on its core technological strengths, securing non-dilutive funding, and forging strategic partnerships to bridge the gap in scale and financial resources.

Outlook and Risks: Awaiting a Catalyst

Brainstorm Cell Therapeutics' immediate outlook is singularly focused on the initiation and successful execution of the Phase 3b ENDURANCE trial for NurOwn in ALS. The FDA's clearance to proceed and the Special Protocol Assessment (SPA) agreement provide a clear regulatory roadmap, significantly de-risking the clinical development pathway. Management's guidance indicates an annual funding requirement of $20 million to $30 million to see the trial to its conclusion. The company anticipates that positive results from Part A (the 24-week double-blind period) could be sufficient to support a new BLA submission.

A potential game-changer for BCLI is the ongoing FDA consideration of the 309-page Citizen Petition. A positive conclusion from the FDA, potentially inviting BCLI to re-file its BLA conditioned on a confirmatory trial, could dramatically alter the funding landscape and potentially lead to an accelerated approval pathway. This would likely enable the company to more easily raise the necessary capital for the Phase 3b trial.

However, significant risks persist. The most pressing is the funding uncertainty. The company's current cash position of $1.025 million as of June 30, 2025, is insufficient to cover the estimated annual trial costs, and the recent NASDAQ delisting has complicated access to capital. While BCLI is actively pursuing non-dilutive grants and strategic partnerships, the "wait-and-see" investor sentiment following the Citizen Petition creates near-term headwinds. Furthermore, the company has identified a material weakness in its internal controls related to short-term loan management, which, while being remediated, highlights operational risks. Macroeconomic conditions, including inflation and volatile markets, could also impact the ability to secure financing on favorable terms. Ultimately, the success of the ENDURANCE trial and the FDA's final decision on NurOwn's efficacy remain the primary determinants of BCLI's long-term viability and value creation.

Conclusion

Brainstorm Cell Therapeutics stands at a critical juncture, with its highly differentiated NurOwn platform poised for a pivotal Phase 3b trial in ALS. The company's commitment to addressing the immense unmet need in neurodegenerative diseases is evident in its persistent R&D, its unique autologous cell therapy technology, and its strategic engagement with regulatory bodies, culminating in an FDA-cleared trial design under a Special Protocol Assessment. The compelling long-term survival data from the Expanded Access Program and emerging pharmacogenomic insights underscore NurOwn's potential to offer meaningful therapeutic benefits.

Despite these scientific and clinical strengths, BCLI faces an immediate and substantial challenge in securing the necessary funding to initiate and complete the ENDURANCE trial. The recent NASDAQ delisting and investor caution surrounding the Citizen Petition have intensified this financial imperative. The company's ability to attract strategic partnerships and secure non-dilutive capital will be paramount. Should BCLI successfully bridge this funding gap and achieve positive results from the Phase 3b trial, or if the Citizen Petition leads to an accelerated regulatory pathway, the company could unlock significant value, transforming its position from a pre-revenue clinical-stage entity to a commercial-stage leader in regenerative medicine for neurodegenerative disorders. For discerning investors, BCLI represents a high-risk, high-reward opportunity, where the scientific promise of its innovative technology awaits the catalyst of sustained financial backing and clinical validation.