10-K: Brainstorm Cell Therapeutics Faces Delisting, Pursues ALS Trial

Brainstorm Cell Therapeutics Inc. reports a net loss of $10.3 million for 2025, delisting from Nasdaq, and continues development of NurOwn for ALS despite past FDA setbacks.

Summary

• The company reported a net loss of $10.307 million for the year ended December 31, 2025, compared to $11.623 million in 2024.
• Brainstorm Cell Therapeutics Inc. was delisted from the Nasdaq Capital Market on July 18, 2025, due to non-compliance with minimum shareholder equity requirements and now trades on the OTCQB Venture Market.
• The Biologics License Application (BLA) for NurOwn for the treatment of ALS was withdrawn on November 3, 2023, after an FDA Advisory Committee voted 17-1-1 against its effectiveness for mild to moderate ALS.
• The FDA granted a Special Protocol Assessment (SPA) agreement for the design of a planned Phase 3b registrational trial for NurOwn in ALS in April 2024, and alignment on Chemistry, Manufacturing, and Controls (CMC) aspects was reached in June 2024.
• Cash and cash equivalents amounted to $29,000 at December 31, 2025, with net cash used in operating activities totaling $6.975 million for the year.
• The company raised $6.880 million from financing activities in 2025, including sales of common stock under at-the-market (ATM) programs, short-term loans, and warrant exercises.
• A material weakness in internal control over financial reporting was identified related to the initiation, review, authorization, and execution controls for short-term loans.
• The company is currently involved in a securities class action lawsuit and four consolidated derivative lawsuits filed by shareholders concerning NurOwn's FDA approval prospects and internal controls.
• Research and development expenses decreased to $4.175 million in 2025 from $4.651 million in 2024, while general and administrative expenses decreased to $5.778 million from $7.042 million over the same period.
• The company is actively engaged in research and development to evaluate the potential of NurOwn and MSC-NTF derived Exosomes in various neurodegenerative disorders, neurodegenerative eye disease, and acute respiratory distress syndrome (ARDS).

Sentiment

Score: 2

Explanation: StockSavvy.ai views this as a highly negative development. The company faces significant financial distress, regulatory setbacks, and legal challenges, with its primary drug candidate having failed to demonstrate effectiveness in a pivotal trial and its stock delisted from Nasdaq. While there's a plan for a new trial, the path forward is highly uncertain and capital-intensive.

Positives

• The FDA granted a Special Protocol Assessment (SPA) agreement for the design of a Phase 3b trial of NurOwn in ALS in April 2024, validating the clinical trial protocol and statistical analysis.
• Alignment was reached with the FDA on Chemistry, Manufacturing, and Controls (CMC) aspects for Brainstorm's Phase 3b clinical trial for NurOwn in ALS in June 2024.
• Net loss decreased to $10.307 million in 2025 from $11.623 million in 2024, and general and administrative expenses decreased by $1.264 million.
• The company has a strong and comprehensive intellectual property portfolio, including approximately 30 granted patents and pending applications, with new patents for exosome technology.
• NurOwn has been granted Fast Track designation by the FDA and Orphan Drug status by both the FDA and the European Medicines Agency (EMA) for ALS.
• Preclinical data demonstrates the potential of exosome-based technology for acute respiratory distress syndrome (ARDS), showing statistically significant improvements in multiple lung parameters.

Negatives

• The company was delisted from the Nasdaq Capital Market on July 18, 2025, due to non-compliance with minimum shareholder equity requirements and now trades on the less liquid OTCQB Venture Market.
• An FDA Advisory Committee voted overwhelmingly (17 no, 1 yes, 1 abstention) on September 27, 2023, that NurOwn did not demonstrate substantial evidence of effectiveness for mild to moderate ALS.
• The Biologics License Application (BLA) for NurOwn in ALS was withdrawn on November 3, 2023, after the FDA indicated the clinical data did not provide the threshold of substantial evidence for approval.
• The company has a history of losses since its inception and expects to incur substantial operating losses for the foreseeable future, with its independent auditor raising substantial doubt about its ability to continue as a going concern.
• Cash and cash equivalents were critically low at $29,000 as of December 31, 2025.
• A material weakness in internal control over financial reporting was identified regarding short-term loan initiation, review, authorization, and execution controls.
• The company is subject to ongoing securities class action litigation and four consolidated derivative lawsuits filed by shareholders.
• Financial expenses increased significantly to $533,000 in 2025 from $77,000 in 2024, primarily due to interest paid for loans and conversion exchange rates.
• Cash compensation for CEO Chaim Lebovits and CBO Uri Yablonka was deferred from August/September 2025 through December 31, 2025, as part of cash preservation measures.

Risks

• The delisting from Nasdaq and trading on the OTCQB Venture Market may result in reduced liquidity and negatively impact the trading price of common stock.
• The outcomes of the putative securities class action and derivative lawsuits filed by shareholders could result in substantial costs and diversion of management's attention.
• The company needs substantial additional funding to pursue business objectives and continue operations; inability to raise capital could delay, limit, reduce, or terminate research, product development, or commercialization efforts.
• A history of losses and expected future losses raise substantial doubt about the company's ability to continue as a going concern.
• Product development programs based on novel technologies are inherently risky and may not yield effective treatments or receive regulatory approval.
• NurOwn stem cell therapy, even if approved, may not be accepted in the marketplace, limiting revenue generation.
• Serious or unexpected adverse side effects identified during development could lead to abandonment or limitation of NurOwn's development.
• The company's success depends on establishing and maintaining effective strategic partnerships and collaborations, which may impose restrictions or fail to perform.
• The company has never manufactured NurOwn at commercial scale and cannot assure it can be manufactured in compliance with regulations at a viable cost or in necessary quantities.
• Reliance on technology licensed from Ramot; termination of this license could force cessation of operations.
• Technological and medical developments or improvements in conventional therapies could render current technologies obsolete.
• Substantial competition exists in developing cell therapies for ALS and other neurodegenerative diseases.
• Uncertainty exists regarding government, private health insurer, and third-party payor coverage and reimbursement for therapies.
• Exposure to fluctuations in currency exchange rates, particularly the New Israeli Shekel (NIS) and Euro, could increase operational costs.
• Political, economic, and military instability in Israel (e.g., Israel-Hamas war) may impede operations.
• Failure to implement and maintain an effective system of internal controls, including remediation of the identified material weakness, could affect financial reporting accuracy or prevent fraud.
• Inability to protect intellectual property from infringement by third parties could harm the competitive position.
• Potential product liability claims and litigation could adversely affect future earnings and financial condition.
• Scarcity of experienced professionals in cell therapy and inability to retain key personnel could hinder business growth.
• The company may expend limited resources on less profitable or less successful indications.
• Regulatory issues with novel technology could delay or prevent approval or personnel issues may hinder development.
• Subject to federal and state healthcare fraud and abuse laws, false claims laws, and health information laws, with potential for substantial penalties for non-compliance.
• Risks related to data privacy and security laws (e.g., CCPA, GDPR, NIS 2 Directive), including potential fines and reputational harm.
• Unintended consequences of health reform legislation (e.g., ACA, IRA) may adversely affect the business.
• Potential adverse effects from macroeconomic conditions, including inflation, rising interest rates, volatile markets, and tariffs.
• Delaware law could discourage a change in control or an acquisition, even if favorable to stockholders.
• No expectation of paying dividends in the foreseeable future, requiring reliance on stock appreciation for investment return.
• ACCBT holds equity participation rights and other rights that could affect the company's ability to raise funds.
• Difficulties may arise in enforcing liabilities based upon U.S. federal securities laws against the company and its non-U.S. resident directors and officers.

Future Outlook

The company's highest priority is securing regulatory approval for NurOwn in ALS, including a potential Biologics License Application (BLA) submission following the successful completion of its planned Phase 3b clinical trial. It also aims to advance NurOwn's clinical development in Progressive Multiple Sclerosis (PMS) and evaluate potential applications in Alzheimer's Disease (AD) and Huntington's Disease. Strategic expansion into exosome-based platform technology is ongoing, with preclinical data showing potential for new therapeutic applications, including Acute Respiratory Distress Syndrome (ARDS). The company expects to continue generating losses from clinical development and regulatory activities, which will result in negative cash flow from operating activities, requiring substantial additional financing in the future.

Management Comments

• "Brainstorm remains committed to the ALS Community and is actively exploring the next steps in support of NurOwn, including publication of emerging clinical data and development of a protocol for an additional clinical study."
• "The decision to withdraw the BLA was coordinated with FDA and is viewed by FDA as a withdrawal without prejudice."
• "The SPA agreement with the FDA validates the clinical trial protocol and statistical analysis of the planned Phase 3b trial of NurOwn, demonstrating the Companys adequacy in addressing objectives that support a future BLA in ALS."
• "This Type C meeting builds upon the positive momentum established in April 2024, when the FDA granted BrainStorm a SPA agreement for its NurOwn Phase 3b trial."
• "The FDA concluded from their initial review that the current level of clinical data does not provide the threshold of substantial evidence that the FDA is seeking to support a BLA."
• "For 160 years, there has been no hope for those diagnosed with ALS. That changed tonight. Tonight, as a result of tens of thousands of ALS advocates working nonstop to make their voices heard and demanding the chance to live, hope has finally come to people living with ALS." (Quote from Brian Wallach, ALS patient and co-founder of I AM ALS, regarding ACT for ALS passage)

Industry Context

StockSavvy.ai notes that Brainstorm Cell Therapeutics operates in the highly competitive and risky biotechnology sector, specifically targeting neurodegenerative diseases like ALS, PMS, and AD. The company's focus on autologous cellular therapies and exosome-based technologies aligns with broader industry trends exploring advanced therapeutic modalities beyond traditional small molecules. The regulatory landscape for novel cell and gene therapies, as evidenced by the FDA's rigorous review of NurOwn and the withdrawal of its BLA, remains challenging. The company's delisting from Nasdaq and reliance on the OTCQB Venture Market highlights the significant financial pressures and capital intensity inherent in drug development, particularly for companies without approved commercial products. The ongoing legal proceedings further underscore the scrutiny faced by biotech firms, especially concerning clinical trial disclosures and regulatory interactions.

Comparison to Industry Standards

• NurOwn's Phase 3 ALS trial did not meet statistically significant results, contrasting with the high bar for efficacy set by regulatory bodies for new drug approvals.
• The Advisory Committee's overwhelming 'no' vote (17-1-1) on NurOwn's effectiveness for mild to moderate ALS indicates a significant gap compared to the evidence typically required for FDA approval, similar to other challenging drug candidates in neurodegenerative fields.
• The withdrawal of the BLA for NurOwn in ALS, while 'without prejudice,' reflects a common hurdle for novel therapies that fail to demonstrate substantial evidence of effectiveness in pivotal trials, a fate shared by many experimental treatments in complex diseases like ALS.
• The company's financial position, with only $29,000 in cash and an accumulated deficit of $237 million, is significantly weaker than established biotech firms or those with late-stage, de-risked assets, making it comparable to early-stage, highly speculative ventures.
• The delisting from Nasdaq to OTCQB Venture Market places the company in a less liquid and less visible trading environment, a common outcome for companies failing to meet exchange listing requirements, unlike larger, more stable biotech companies listed on major exchanges.
• Competitors in the ALS space include Corestem (NEURONATA-R inj. commercialized in South Korea, Phase 3 in South Korea), Kadimastem (AstroRx, completed Phase 1/2, Phase 2a planned in US), Coya and Rapa Therapeutics (Tregs in Phase 2 and Phase 1/2), AB Science (masitinib Phase 3), and Ionis/Biogen (Ionis 363 in FUS-ALS Phase 3). The Healy platform trial includes Zilucoplan (stopped for futility), Pridopidine, Trehalose, Verdiperstat, CNM-Au8, ABBV-CLS-7262, and DNL343, none of which have met primary or secondary endpoints to date.
• Approved ALS therapies (Riluzole, Radicava, Relyvrio, Qalsody) offer modest improvements, setting a benchmark for efficacy that NurOwn has struggled to meet in its Phase 3 trial. Relyvrio was withdrawn in 2024 after Phase 3 failure, highlighting the high attrition rate in ALS drug development.

Management Changes

Corporate Governance

Legal Proceedings

• Sporn v. Brainstorm Cell Therapeutics Inc., et al.: A putative securities class action complaint filed on November 1, 2023, alleging violations of Sections 10(b) and 20(a) of the Exchange Act related to NurOwn's FDA approval prospects and company communications. On September 15, 2025, the Court granted in part and denied in part the motion to dismiss, allowing claims regarding specific FDA views on trial design, prespecified subgroup analysis, floor effects, and safety profile to proceed.
• In Re Brainstorm Cell Therapeutics, Inc. Derivative Litigation: Four consolidated derivative actions filed between February and April 2024, alleging state law claims for breach of fiduciary duty and unjust enrichment against officers and directors, and Section 14(a) violations and contribution claims against officers. These actions are currently stayed until April 13, 2026.
• 3D Communications, LLC v. Brainstorm Cell Therapeutics, Inc.: A breach of contract lawsuit filed on November 22, 2024, alleging unpaid invoices for consulting services. The case is in the discovery phase, with fact discovery to be completed by October 31, 2025, and dispositive motions due by January 30, 2026.

Related Party Transactions

• Research and License Agreement with Ramot: The Israeli subsidiary pays royalties (3-5% of net sales, 20-25% of sublicensing revenues) to Ramot (Tel Aviv University's technology transfer group) for NurOwn technology. Ramot converted exclusive licenses to outright transfers in 2016, granting ownership to the Israeli subsidiary.
• Investment Agreement with ACCBT: ACCBT Corp., controlled by CEO Chaim Lebovits, holds 128,031 shares and warrants for 134,444 shares. ACCBT has rights including appointing 30% of Board members, preemptive rights for new securities (excluding equity incentive plans), and consent rights for transactions over $500,000.
• Loan Agreement with a related party: In October 2025, the company entered into a loan agreement with a related party for a principal amount of $220,000, bearing 8.5% annual interest, and required to be repaid in full no later than December 31, 2026. A previous non-material loan from a related party in November 2024 was repaid in May 2025.

Stakeholder Impact

• Shareholders: Significant negative impact due to Nasdaq delisting, reduced liquidity on OTCQB, stock price volatility, potential dilution from future capital raises, and ongoing litigation. Long-term value remains highly speculative and dependent on future clinical and regulatory success.
• Employees: Potential impact from cash preservation measures, including deferred salaries for some executives, but also continued incentives through stock-based compensation plans.
• Patients (ALS, PMS, AD): Continued hope for NurOwn development, but significant delays and setbacks in the regulatory approval process for ALS. The Expanded Access Program provides limited access to some patients.
• Creditors: Increased risk due to the 'going concern' doubt and the company's reliance on future capital raises to meet its financial obligations, including repayment of short-term loans.
• Regulatory Authorities (FDA, EMA): Ongoing engagement and scrutiny of clinical trial design, manufacturing processes, and data integrity, requiring significant resources and compliance efforts from the company.

Next Steps

• Initiate and complete a Phase 3b registrational trial for NurOwn in ALS.
• Seek regulatory approval for NurOwn in ALS following successful completion of the Phase 3b trial.
• Advance clinical development of NurOwn in Progressive Multiple Sclerosis (PMS).
• Evaluate the optimal approach for NurOwn in Alzheimer's Disease (AD).
• Strategically expand exosome-based platform technology to explore new therapeutic applications.
• Remediate the identified material weakness in internal control over financial reporting by implementing a defined, tiered governance structure for short-term loan approval.
• Continue to raise additional capital to fund operations and clinical trials.
• Vigorously defend against ongoing securities class action and derivative lawsuits.

Key Dates

Recommendation

Brainstorm Cell Therapeutics faces severe financial distress, evidenced by a critically low cash balance of $29,000, an accumulated deficit of $237 million, and an auditor's 'going concern' doubt. The company's primary drug candidate, NurOwn for ALS, suffered a major setback with the BLA withdrawal after an overwhelming negative advisory committee vote, indicating a very challenging path to market. The delisting from Nasdaq to the less liquid OTCQB Venture Market further diminishes investor confidence and access. While a new Phase 3b trial is planned, it requires substantial capital, and the company's ability to secure this funding on favorable terms is highly uncertain, especially given its current financial state and ongoing shareholder litigation. The combination of significant regulatory hurdles, precarious financial health, and legal challenges presents an exceptionally high-risk profile with limited near-term upside potential, making it a strong sell for seasoned investors.

Keywords

Brainstorm Cell Therapeutics, BCLI, NurOwn, ALS, Amyotrophic Lateral Sclerosis, Neurodegenerative Diseases, Cell Therapy, Mesenchymal Stem Cells, MSC-NTF, FDA, BLA, Phase 3b Trial, Orphan Drug, Fast Track, Exosomes, PMS, Progressive Multiple Sclerosis, Alzheimer's Disease, AD, Biotechnology, Clinical Trials, Regulatory Approval, OTCQB, Nasdaq Delisting, Capital Raise, Intellectual Property, Corporate Governance, Financial Reporting, Risk Management