Business Overview and Financial Performance
BrainStorm Cell Therapeutics Inc. is a leading biotechnology company focused on the development and commercialization of innovative autologous cellular therapies for the treatment of debilitating neurodegenerative disorders. The company's proprietary NurOwn technology platform leverages the unique regenerative and immunomodulatory properties of the patient's own bone marrow-derived mesenchymal stem cells (MSCs) to target the key mechanisms underlying neurodegenerative diseases.
BrainStorm Cell Therapeutics Inc. was incorporated in the State of Delaware on November 15, 2006, having previously been incorporated in the State of Washington. In October 2004, the company formed its wholly-owned subsidiary, Brainstorm Cell Therapeutics Ltd. (BCT) in Israel, which currently conducts all the research and development activities of the company. BCT holds exclusive rights to commercialize the company's NurOwn technology through a licensing agreement with Ramot, the technology transfer company of Tel Aviv University, Israel.
The company has completed several early-stage clinical trials of NurOwn in ALS patients, including two open-label Phase 1/2 trials and a Phase 2 double-blind, placebo-controlled trial. These trials demonstrated the tolerability of NurOwn and showed preliminary signs of activity. In January 2016, the results of the two completed Phase 1/2 and Phase 2 open label trials were published in JAMA Neurology.
BrainStorm faced challenges in 2022 and 2023 related to the regulatory review of its Biologics License Application (BLA) for NurOwn in ALS. After filing the BLA in September 2022, the company received a Refusal to File letter from the FDA in November 2022, indicating that the BLA was not sufficiently complete to enable a substantive review. The company requested a Type A meeting with the FDA to discuss the contents of the Refusal to File letter, which was held in January 2023. Following further discussions with the FDA, the company withdrew the BLA in November 2023 but was granted a meeting by the FDA to discuss the regulatory path forward for NurOwn in ALS.
Despite these regulatory challenges, the company has made progress in other areas, such as strengthening its intellectual property portfolio, enhancing its manufacturing capabilities, and advancing the clinical development of NurOwn in other indications like progressive multiple sclerosis (PMS).
Financials and Liquidity
Financially, BrainStorm has been primarily funded through public and private equity offerings, as well as non-dilutive grants. As of the latest reported quarter ended September 30, 2024, the company had $168,000 in cash and cash equivalents. During the nine months ended September 30, 2024, BrainStorm reported a net loss of $8.65 million, with research and development expenses of $2.93 million and general and administrative expenses of $5.58 million. The company's net loss per share for the nine-month period was $1.80.
For the most recent fiscal year 2023, BrainStorm reported no revenue, a net loss of $24.28 million, operating cash flow of -$19.32 million, and free cash flow of -$19.35 million. In the third quarter of 2024, the company reported no revenue and a net loss of $2.71 million, compared to a net loss of $1.23 million in the same quarter of the previous year. The increase in net loss was primarily due to decreases in research and development and general and administrative expenses.
BrainStorm's liquidity position as of the third quarter of 2024 showed a debt-to-equity ratio of -0.14, a current ratio of 0.05, and a quick ratio of 0.05. The company operates primarily in the United States and will require significant additional funding to continue the development and potential commercialization of NurOwn.
NurOwn for the Treatment of ALS
BrainStorm's lead product candidate, NurOwn, is an autologous cellular therapy that leverages the patient's own bone marrow-derived MSCs. These cells are isolated, expanded, and induced to secrete high levels of neurotrophic factors, which have been shown to have neuroprotective and immunomodulatory effects. The differentiated MSCs are then transplanted back into the patient, typically via intrathecal administration.
The company's Phase 3 clinical trial of NurOwn in ALS, which enrolled 189 patients, did not meet the primary endpoint of a statistically significant improvement in the rate of decline in the ALS Functional Rating Scale-Revised (ALSFRS-R) score. However, the trial did show evidence of a clinically meaningful benefit, particularly in a prespecified subgroup of patients with less advanced disease. Importantly, the trial also demonstrated that NurOwn treatment resulted in statistically significant increases in neurotrophic factors and reductions in inflammatory markers in the cerebrospinal fluid of treated patients.
Regulatory Pathway and Upcoming Milestones
Following the Phase 3 trial results, BrainStorm had extensive discussions with the U.S. Food and Drug Administration (FDA) to determine the best path forward for NurOwn in ALS. In April 2024, the company announced that it had received written agreement from the FDA under a Special Protocol Assessment (SPA) on the design of a planned Phase 3b registration trial for NurOwn in ALS.
The SPA agreement provides important validation of the trial design and endpoints, significantly de-risking the regulatory process. In June 2024, BrainStorm also announced that it had reached alignment with the FDA on the Chemistry, Manufacturing, and Controls (CMC) aspects of the Phase 3b trial, further solidifying the path forward.
BrainStorm is now preparing to initiate the Phase 3b trial of NurOwn in ALS before the end of 2024 or in the first quarter of 2025. The company has also partnered with Pluri Inc., a leading contract development and manufacturing organization, to support the production of NurOwn for the upcoming trial.
Expansion into Other Neurodegenerative Diseases
While ALS has been BrainStorm's primary focus, the company has also explored the potential of NurOwn in other neurodegenerative diseases. In 2020, the company announced a new clinical program to evaluate NurOwn as a treatment for Alzheimer's disease (AD). This program is currently in the planning stages, as the company evaluates the evolving regulatory landscape for AD therapies.
Additionally, in 2019, BrainStorm completed a successful Phase 2 clinical trial of NurOwn in progressive multiple sclerosis (PMS). The trial showed promising results, including improvements in motor function, visual function, and cognitive processing speed. The company is currently considering the best path forward to advance NurOwn in PMS.
Intellectual Property and Competitive Landscape
BrainStorm has built a robust intellectual property portfolio to protect its NurOwn technology, including 27 granted patents and 23 pending patent applications worldwide. The company's patent estate covers key aspects of the NurOwn manufacturing process, as well as the use of the therapy for the treatment of various neurodegenerative diseases.
The competitive landscape in the development of stem cell-based therapies for neurodegenerative diseases is evolving, with several companies exploring different approaches. However, BrainStorm's autologous NurOwn platform, with its unique mechanism of action and demonstrated clinical data, positions the company as a leader in this field.
Risks and Challenges
As with any biotechnology company, BrainStorm faces several risks and challenges that investors should be aware of. These include the inherent uncertainties of the drug development process, the potential for regulatory setbacks or delays, the need for substantial additional funding to complete clinical trials and commercialize NurOwn, and the competitive landscape in the neurodegenerative disease treatment space.
Furthermore, the company has faced legal challenges, including a securities class action lawsuit filed by a purported shareholder on November 1, 2023, and four derivative action complaints filed between February 2024 and April 2024 against the company, certain officers, current and former directors, and members of its scientific advisory board. While the company is defending against these lawsuits, the associated legal expenses and potential liabilities represent a significant risk factor.
Additionally, BrainStorm received a notice of non-compliance with the Nasdaq minimum bid price requirement on November 1, 2023. After implementing a 1-for-15 reverse stock split on September 30, 2024, the company regained compliance on October 29, 2024.
Human Capital Resources
BrainStorm currently employs 29 employees, with the majority of the senior management team based in the United States and the research and development center located in Israel. The company's human capital objectives include attracting, retaining, and motivating personnel through stock-based and cash-based compensation plans to support the development and commercialization of its novel cell therapy products.
Manufacturing and Technology
The NurOwn technology involves a multi-step process that includes harvesting and isolating undifferentiated stem cells from the patient's bone marrow, processing the cells at the manufacturing site, cryopreserving the MSCs to enable multiple treatments from a single bone marrow sample, and administering the differentiated MSC-NTF cells to the patient via intrathecal injection. This autologous approach avoids the introduction of unrelated donor antigens and the need for immunosuppressive agents.
BrainStorm has developed a validated cryopreservation process that allows for the long-term storage of MSCs and the creation of multiple doses of NurOwn from a single bone marrow harvest. The company has contracted with experienced manufacturing partners, such as the Connell and O'Reilly Cell Manipulation Core Facility at the Dana Farber Cancer Institute and Catalent, to produce clinical supplies of NurOwn.
Conclusion
BrainStorm Cell Therapeutics is a pioneering biotechnology company focused on the development of innovative autologous stem cell therapies for the treatment of debilitating neurodegenerative diseases. The company's lead product candidate, NurOwn, has demonstrated promising results in clinical trials for ALS and other neurodegenerative conditions, and the company is now poised to initiate a pivotal Phase 3b trial in ALS.
With the SPA agreement from the FDA, the alignment on CMC aspects, and the recent partnership with Pluri for manufacturing support, BrainStorm has made significant strides in advancing NurOwn towards potential commercialization. While the company faces various risks and challenges, including financial constraints and legal issues, its unique technology platform, strong intellectual property position, and focus on unmet medical needs in neurodegenerative diseases position it as a compelling investment opportunity for those interested in the promising field of regenerative medicine.