BCLI.OQBBrainstorm Cell Therapeutics INC
10-Q: Brainstorm Cell Therapeutics Reports First Quarter 2024 Results, Secures SPA Agreement with FDA for NurOwn Phase 3b Trial
Sentiment:
Quarterly Report
Brainstorm Cell Therapeutics announced its first quarter 2024 financial results and highlighted a Special Protocol Assessment (SPA) agreement with the FDA for its NurOwn Phase 3b trial in ALS.
Capital raiseThe company raised $2.539 million through at-the-market (ATM) offerings during the quarter.The company anticipates needing to raise substantial additional financing in the future to fund operations.The company is considering multiple alternatives, including, but not limited to, additional public and private sales of its Common Stock and warrants, the exercise of warrants, the issuance of convertible promissory notes, sales of Common Stock via its August 9, 2021 ATM program and other funding transactions.
Worse than expectedThe company reported a net loss of $3.4 million for the quarter, indicating that the company is not yet profitable.The company's cash and cash equivalents are relatively low at $779,000, raising concerns about its ability to fund future operations.The company has a significant accumulated deficit of approximately $218 million, indicating a history of losses.
Summary
- Brainstorm Cell Therapeutics reported a net loss of $3.4 million for the first quarter of 2024, compared to a net loss of $5.059 million for the same period in 2023.
- Research and development expenses decreased to $961,000 from $2.924 million year-over-year, primarily due to reduced clinical trial costs.
- General and administrative expenses also decreased to $1.513 million from $2.227 million year-over-year, mainly due to lower payroll and rent costs.
- The company's cash and cash equivalents stood at $779,000 as of March 31, 2024, with total assets of $3.348 million and a stockholders deficit of $5.550 million.
- Brainstorm raised $2.539 million through at-the-market (ATM) offerings during the quarter.
- The company secured a Special Protocol Assessment (SPA) agreement with the FDA for its planned Phase 3b trial of NurOwn in ALS, validating the trial's design and statistical analysis.
- Brainstorm is actively exploring the next steps for NurOwn, including the publication of emerging clinical data and the development of a protocol for an additional clinical study.
Sentiment
Score: 5
Explanation: The document presents a mixed picture. While there are positive developments like the SPA agreement and reduced operating expenses, the company's ongoing losses, low cash reserves, and need for further capital raises temper the overall sentiment. The delisting risk also adds a negative element.
Positives
- The company's net loss decreased year-over-year, indicating improved financial performance.
- Research and development expenses were significantly reduced, suggesting cost-saving measures.
- The SPA agreement with the FDA for the Phase 3b trial of NurOwn in ALS is a major regulatory milestone.
- The company successfully raised capital through ATM offerings.
- The company has optimized its manufacturing capabilities by leasing a GMP-certified cleanroom manufacturing center at Sourasky Hospital.
Negatives
- The company continues to operate at a loss, with a net loss of $3.4 million for the quarter.
- The company's cash and cash equivalents are relatively low at $779,000.
- The company has a significant accumulated deficit of approximately $218 million.
- The company is still in the development and clinical stage and has not yet generated revenues.
- There is no assurance that the company will be able to raise additional capital in the future on a timely basis on terms acceptable to the company.
Risks
- The company's ability to continue as a going concern is dependent on raising additional capital.
- There is no guarantee that the company will be able to obtain regulatory approval for NurOwn.
- The company faces risks related to the outcome of derivative lawsuits filed by shareholders.
- The company's stock may be delisted from Nasdaq if it fails to regain compliance with listing requirements.
- The company is subject to risks related to the success of its product development programs and research.
Future Outlook
The company plans to move forward with a Phase 3b registrational trial for NurOwn in ALS, supported by the SPA agreement with the FDA. They are also exploring the next steps for NurOwn, including the publication of emerging clinical data and the development of a protocol for an additional clinical study. The company anticipates needing to raise substantial additional financing in the future to fund operations.
Management Comments
- Management's plan includes raising funds from outside potential investors via its ATM program and other potential funds.
- Management expects that the Company will continue to generate losses from the clinical development and regulatory activities, which will result in a negative cash flow from operating activity.
Industry Context
The company is operating in the competitive biotechnology sector, focusing on developing cell therapies for neurodegenerative diseases. The SPA agreement with the FDA is a significant step forward, as regulatory approvals are critical for commercial success in this industry. The company's focus on ALS, PMS, and AD aligns with the growing need for effective treatments for these conditions.
Comparison to Industry Standards
- The company's financial results, with ongoing losses and reliance on capital raises, are typical for a clinical-stage biotechnology company.
- The SPA agreement with the FDA for the Phase 3b trial is a positive development, as it provides a clear regulatory pathway for NurOwn in ALS, similar to other companies seeking FDA approval for novel therapies.
- The company's focus on autologous cell therapies aligns with a growing trend in the industry, where personalized medicine is gaining traction.
- The company's research into exosomes is also in line with industry trends, as exosomes are being explored as a potential therapeutic modality.
- The company's intellectual property portfolio, with 27 granted patents and 23 patent applications, is comparable to other companies in the biotechnology space.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Executive Vice President and Chief Medical Officer | Chief Development Officer | Dr. Bob Dagher | 2024-04-16 | Strategic management change as the company prepares to embark on a registrational Phase 3b trial for NurOwn. |
| Co-Chief Executive Officer | Dr. Stacy Lindborg | NA | 2024-04-16 | Dr. Stacy Lindborg stepped down from the role of Co-Chief Executive Officer and will remain with the Company as a member of its Board. |
Legal Proceedings
- The company is involved in a securities class action lawsuit and several derivative lawsuits filed by shareholders.
- The lawsuits allege violations of securities laws and breach of fiduciary duties related to the company's NurOwn program and communications with the FDA.
- The company intends to vigorously defend against the lawsuits.
Stakeholder Impact
- Shareholders are impacted by the company's financial performance, the potential for stock delisting, and the ongoing litigation.
- Employees are impacted by the company's financial stability and the potential for future growth.
- Patients with ALS are impacted by the progress of the NurOwn clinical development program and the potential for a new treatment option.
- The company's suppliers and partners are impacted by the company's financial health and ability to continue operations.
Next Steps
- The company will proceed with the Phase 3b trial of NurOwn in ALS, based on the SPA agreement with the FDA.
- The company will continue to explore the next steps for NurOwn, including the publication of emerging clinical data and the development of a protocol for an additional clinical study.
- The company will seek additional funding to support its operations and clinical development programs.
- The company will participate in the expedited review process provided by the Nasdaq Hearings Panel to appeal the delisting determination.
Key Dates
| Date | Description |
|---|---|
| 2004 | The company entered into a Research and License Agreement with Ramot. |
| 2006-11-15 | The Company was incorporated in the State of Delaware. |
| 2011-06 | Initiation of the first-in-human Phase 1 safety and efficacy trial of NurOwn in ALS patients. |
| 2017-07 | The company was awarded a grant from the California Institute for Regenerative Medicine (CIRM). |
| 2018-12-15 | FDA approved the company's IND to conduct a Phase 2 open-label trial of repeated intrathecal administration of NurOwn in PMS. |
| 2019-10 | The Phase 3 ALS clinical trial completed enrollment. |
| 2020-06-24 | The company announced a new clinical program focused on the development of NurOwn as a treatment for AD. |
| 2020-11-17 | The company announced top-line data from its Phase 3 ALS trial. |
| 2021-03-24 | The company announced positive top-line data from its Phase 2 trial evaluating NurOwn for PMS. |
| 2021-08-09 | The company entered into an Amended and Restated Distribution Agreement for at-the-market offerings. |
| 2022-08-15 | The company announced its decision to submit a Biologics License Application (BLA) to the FDA for NurOwn for the treatment of ALS. |
| 2022-09-09 | The company filed a BLA to the FDA for NurOwn for the treatment of ALS. |
| 2022-11-10 | The company announced that it had received a refusal to file (RTF) letter from the FDA regarding its BLA. |
| 2023-02-07 | The FDA re-filed the BLA for NurOwn for ALS over Protest. |
| 2023-03-27 | The company announced that the FDA will hold an ADCOM to discuss the company's BLA for NurOwn for the treatment of ALS. |
| 2023-07-17 | The company entered into a Securities Purchase Agreement for a public offering. |
| 2023-09-27 | The Advisory Committee voted that NurOwn did not demonstrate substantial evidence of effectiveness for treatment of mild to moderate ALS. |
| 2023-10-18 | The company announced that the BLA for NurOwn would be withdrawn. |
| 2023-11-03 | The BLA for NurOwn was withdrawn. |
| 2023-11-20 | The company announced that the FDA granted the company a meeting to discuss the regulatory path forward for NurOwn in ALS. |
| 2023-12-06 | The company had a meeting with the FDA to discuss the regulatory path forward for NurOwn in ALS. |
| 2023-12-07 | The company announced the completion of a productive meeting with the FDA to discuss NurOwn. |
| 2024-02-23 | The company announced that it submitted the SPA request to the FDA for the planned Phase 3b clinical trial of NurOwn for the treatment of ALS. |
| 2024-03-31 | End of the reporting period for the first quarter of 2024. |
| 2024-04-09 | The company announced that it received written agreement from the FDA, under a SPA, on the design for a Phase 3b trial of NurOwn in ALS. |
| 2024-04-10 | The company received a notification letter from Nasdaq indicating that the company has regained compliance with the minimum market value of listed securities requirement. |
| 2024-04-16 | The company announced the promotion of Dr. Bob Dagher to Executive Vice President and Chief Medical Officer. |
| 2024-04-25 | The Court consolidated the Derivative Actions into a consolidated action. |
| 2024-04-29 | The company had until this date to regain compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2). |
| 2024-05-01 | The company received a staff determination letter from Nasdaq indicating that the company had not regained compliance with the Minimum Bid Price Requirement. |
| 2024-05-02 | The company submitted a hearing request to the Nasdaq Hearings Panel to appeal the Staff's determination. |
| 2024-05-12 | As of this date, the number of shares outstanding of the company's Common Stock was 70,080,523. |
| 2024-05-13 | The company has raised aggregate gross proceeds of approximately $187 under the ATM Distribution Agreement from April 1, 2024 through this date. |
Keywords
NurOwn, ALS, Phase 3b trial, SPA, FDA, Biotechnology, Neurodegenerative diseases, Cell therapy, Clinical trials, Mesenchymal stem cells, Financial results, Regulatory approval
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