Brainstorm Cell Therapeutics Inc. (NASDAQ:BCLI) Q1 2025 Earnings Call Transcript

Brainstorm Cell Therapeutics Inc. (NASDAQ:BCLI) Q1 2025 Earnings Call Transcript May 19, 2025

Operator: Greetings, and welcome to the Brainstorm Cell Therapeutics First Quarter 2025 Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this call is being recorded. I would now like to introduce your host for today’s call, Joyce Lonergan of LifeSci Advisors. Joyce, you may begin.

Joyce Lonergan: Thank you, Holly. Good morning, and thank you for joining us today. Before passing the call to company management for prepared remarks, I would like to remind listeners that this conference call will contain numerous statements, descriptions, forecasts and projections regarding Brainstorm Cell Therapeutics and its potential future business operations and performance, statements regarding the market potential for the treatment of neurodegenerative disorders such as ALS, the sufficiency of the company’s existing capital resources for continuing operations in 2025 and beyond, the safety and clinical effectiveness of the NurOwn technology platform, clinical trials of NurOwn and related clinical development programs, and the company’s ability to develop strategic collaborations and partnerships to support their business planning efforts.

Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond Brainstorm’s control, including the risks and uncertainties described from time to time in its SEC filings. The company’s results may differ materially from those projected on today’s call. The company undertakes no obligation to publicly update any forward-looking statements. Joining us on the call today will be Chaim Lebovits, President and Chief Executive Officer of BrainStorm; Dr. Haro Hartounian, Executive Vice President and Chief Operating Officer; Dr. Bob Dagher, Executive Vice President and Chief Medical Officer; and Dr. Netta Blondheim-Shraga, Senior Vice President of Research & Development. I would now like to turn the call over to Mr. Lebovits.

Please go ahead.

Chaim Lebovits: Thank you, Joyce. Good morning or good afternoon, everyone. Thank you for joining us today. We appreciate your continued interest and support in Brainstorm. We published our Q1 2025 earnings release after the market closed last Thursday, and my colleagues and I are pleased to provide a corporate update today. Our unwavering primary focus remains the execution of the clinical development plan for NurOwn and the initiation of our pivotal Phase 3b trial designed to confirm its therapeutic benefit for individuals in the early stages of ALS. Hopefully, you will have seen the press release we released this morning announcing that U.S. FDA has cleared us to initiate the trial. This follows the amendments we submitted to our investigational new drug application, which included comprehensive technical transfer documentation, robust quality assurance, and stringent quality control processes.

This regulatory clearance marks significant milestone, bringing us closer to commencing patient enrollment. As previously disclosed, the trial design has been carefully agreed upon with the FDA under a Special Protocol Assessment, or SPA. This SPA is a crucial element as we believe it substantially derisks the regulatory pathway for NurOwn. It provides confirmation that the trials endpoints and our statistical analysis plan are deemed appropriate for the FDA to potentially support approval contingent upon the trial meeting its pre-specified expectations. We also announced previously that in a face-to-face Type C meeting, we had achieved alignment with the FDA and CMC, a particularly vital aspect for an advanced cell therapy like NurOwn. Our CMC team is always advancing its development and continues to work as regulatory guidance directs.

To provide further detail on our operational readiness for the upcoming trial, I’d like to turn the call over to our Chief Operating Officer, Dr. Haro Hartounian. Haro?

Haro Hartounian: Thank you, Chaim. As previously discussed, we plan to initiate our initial manufacturing for the Phase 3b trial at the Tel Aviv Sourasky Medical Center. To scale up our manufacturing capabilities, we’ll then proceed with a technology transfer to Pluri, which will provide additional cleanroom facilities. We have signed letter of intent with Pluri and anticipate moving forward to a definitive contract soon. Furthermore, the team and I have secured a leading U.S. clinical site that has successfully passed FDA inspection. We are in the process of finalizing an LOI, and we’ll be announcing the details of this important site shortly. We are all very excited about the progress and remain hopeful that we can begin treating patients soon. Back to you, Chaim.

Chaim Lebovits: Thank you, Haro, for that important update on our manufacturing and site selection progress. Currently, we’re actively engaged in negotiations for the clinical trial agreements with approximately 15 leading clinical centers across the United States. Each poised to serve as a site for our Phase 3b trial. The strong interest we are getting from numerous renowned ALS clinicians and researchers underscores their conviction in the potential of NurOwn. We will make announcements regarding these agreements as they are finalized. As noted in our earnings press release, the details of the trial, which we are calling ENDURANCE, have now been posted on clinicaltrials.gov. On this website, you will see the study plan, including primary and secondary endpoints, as well as a list of clinical sites that we expect will participate.

Publication of these details is important for transparency and allows the medical community and mainly ALS patients who are interested in participating as well as caregivers to review the structure of the study. We fully recognize the urgency felt by patients and clinicians for innovative therapeutic options in ALS. Our commitment is absolute in executing this trial with the highest level of scientific rigor. With the limited treatment options currently available for ALS patients, we firmly believe that NurOwn, if successful in the study and subsequently approved, holds the promise of becoming a significant and valuable treatment. In parallel with our dedicated NurOwn development efforts, our scientific team remains actively engaged with the academic community and our industry peers, sharing the latest data and insights.

Last week, we participated in the annual ALS Drug Development Summit in Boston, a crucial gathering that brought together over 200 scientific leaders to address the most pressing challenges in the therapeutic development for this devastating disease. The discussions at this year’s meeting were centered on critical areas such as target validation, effective utilization of biomarkers and optimization of clinical trial design. I want to take a moment to speak about our incredible team at Brainstorm. Despite facing significant financial constraints, a reality for many small biotech companies in the current environment, their dedication and tireless efforts are truly remarkable. We heard a very powerful message at the ALS Summit from Wendy, a courageous individual living with ALS, who eloquently referred to every ALS patient as a warrior.

At Brainstorm, we see it as part of our mission to join the ranks of these warriors working every single day to advance preparations for the critical trial. We are succeeding in making substantial progress with the limited financial resources we currently have, thanks in large to the outstanding support of our dedicated partners. This positions us to move forward with significant agility once we secure a strategic funding deal, which remains our key priority. We understand that members of the investment community and the ALS community are eager to know precisely when the first patient will be enrolled. Please note that our focus remains clearly on diligently completing the necessary steps, including securing adequate funding as we are working to advance various funding opportunities that include potential strategic investments and non-dilutive grants.

We’re simultaneously proceeding on many fronts be able to initiate the trial as swiftly as responsibly as possible. We are deeply committed to this endeavor and we continue to provide updates as they become available. I’ll now turn the call over to Dr. Bob Dagher, Brainstorm’s Chief Medical Officer, who will give a brief summary of his presentation at the ALS Summit last week. Bob?

Bob Dagher: Thank you, Chaim. Hi, everyone. As part of my presentation last week, I provided a detailed overview of the design of our planned Phase 3b trial and explain the significant changes we made versus our trialed Phase 3 trial in order to increase the probability of success. As we have previously disclosed, the new trial will be conducted in two parts. Part A is a 24-week double-blind period, which will be followed by Part B, a 24-week open-label extension designed to evaluate long-term effects on survival and biomarkers. We have set the entry criteria to enroll patients who have early stage ALS, in other words, those with less advanced level of functional decline. The primary endpoint will be the change from baseline to week 24, so at the end of Part A, in the ALSFRS-R total score, which is now considered the gold standard in recent registrational trials.

The results from Part A at 24 weeks, if they meet our expectations, should be sufficient to support a new BLA. This is covered specifically in our SPA agreement with the FDA. In the Phase 3b trial, we eliminated the three month run-in period from the previous study and also shortened the screening period from 20 weeks to now nine weeks to minimize changes between screening and baseline. I will now turn the call over to my colleague, Dr. Blondheim-Shraga to discuss the ALS biomarkers analysis. Netta?

Netta Blondheim-Shraga: Thank you, Bob. My presentation at the ALS Summit focused on biomarkers in ALS and specifically how the experiments we have conducted with biomarkers support the potential multimodal mechanism of action of NurOwn. There is currently no established universal marker for ALS as it is a complex disease that may require combinations of biomarkers for accurate assessment. We hypothesize that NurOwn exerts its biological effects across multiple pathways. Analysis of CSF samples from patients who participated in the prior Phase 3b — Phase 3a study provided us with valuable insight into how NurOwn may be exerting its effect. CSF samples were collected at seven time points from all participants in the study and analysis of these samples showed significant changes in biomarkers that are relevant to ALS pathology.

Treatment with NurOwn was associated with a reduction in neuroinflammatory and neurodegenerative biomarkers and with increase in anti-inflammatory and neuroprotective biomarkers. At the ALS Summit, we presented the results from three sets of preclinical experiments to investigate the immunomodulation, neuroprotectant and [neuroregenerative] (ph) properties of NurOwn. The first of these was an in vitro experimental model of immune-activated peripheral blood mononuclear cells, or PBMCs, that were co-cultured with NurOwn cells. We demonstrated that NurOwn inhibits the secretion of pro-inflammatory cytokines and decrease the proliferation of certain types of T cells, CD4 cells and CD8 cells, that are involved in the inflammatory process. The second was an in vitro hypoxia model that examined the effect of NurOwn on a motor neuron cell line that had been subjected to hypoxic stress in a low oxygen environment and resulted in about one in three cells dying.

We showed here that when these cells were co-cultured with condition media collected from NurOwn cell cultures, viability was restored to 96.5% of normoxic conditions or 96.5% of normal, providing evidence of a neuroprotective effect. Finally, we studied an experimental neurite outgrowth model in which human neuroblastoma cells were co-cultured in a no-contact transwell system with NurOwn cells. We showed that NurOwn enhanced growth of neurites supporting a neuroregenerative role for NurOwn. As disclosed previously, we reviewed the clinical utility of neurofilament light, or NfL, as a biomarker of disease progression and treatment monitoring in ALS. Ten patients who completed the prior Phase 3 trial enrolled in an open-label expanded access program that spanned two 28-week periods.

We showed that early treatment with NurOwn resulted in greater reductions in NfL levels. Among the six participants who received NurOwn in both Phase 3 and the EAP, a continual group level reduction in NfL was observed. In contrast, for the four patients who received placebo in the Phase 3, the group median NfL change was higher at the end of the study indicating worsening neurodegeneration. After these patients switched to NurOwn in the EAP, the majority showed a stabilization in NfL levels. As these results were from a very small group, we view them as hypothesis generating, and will continue to explore long-term effects of treatment in our upcoming Phase 3b study. At the conference, we also shared results from a genetic sub-study conducted during our Phase 3 study.

We have examined the underlying genetics of ALS and how it may determine the clinical response to NurOwn. We’re particularly interested in a gene called UNC13A, which has been widely studied in ALS. Patients who were enrolled in the prior Phase 3 trial had the option to participate in a genetic sub-study and 124 consented. We showed in these patients that the UNC13A, the UNC13A genotype appeared to influence the response to NurOwn therapy. Patients who were heterozygous, carriers of [risk allele] (ph), had a statistically significant response rate to NurOwn treatment compared with placebo, supporting further investigation of UNC13A and other genetic factors and their correlation to treatment effect of NurOwn in our next trial. I will now turn the call back to Chaim for closing comments.

Chaim Lebovits: Thank you, Netta. For the details on Brainstorm’s financials for the quarter ended March 31, 2025, I would refer you to the press release we issued on Thursday and also to our 10-Q filed with the SEC. We’re now ready for the Q&A. Joyce?

A – Joyce Lonergan: Yes. Thank you, Chaim. We have four written questions. The first one, can you start the trial without proper funding?

Chaim Lebovits: Thank you. That’s a very good question. While our financials over the past year and a half have reflected a very challenging environment, we have nonetheless been able to make significant strides in preparing for the trial, including technology transfer, FDA regulatory submissions, site selections and CRO engagements. However, initiating a successfully executing a clinical trial of this nature demands a robust and sustainable cash flow. Therefore, while we have diligently progressed to this point with relatively limited resources, securing proper funding is an essential to commence the trial. As communicated in our recent press release, we are actively pursuing multiple funding avenues to ensure the timely commencement of the trial.

These efforts are in various stages encompassing a promising $15 million non-dilutive grant currently will be under review alongside ongoing negotiations for strategic partnerships. We are focusing on strategic partnerships. Our priority to secure the necessary capital through such partnerships to confidently initiate and complete this clinical study. Thank you.

Joyce Lonergan: Thank you, Chaim. We have a second question. We see you called the trial ENDURANCE. What’s the meaning of that?

Chaim Lebovits: Thank you for that. The name ENDURANCE was carefully chosen to deeply resonate with ALS community. It stands as a tribute to the remarkable strength, tenacity and unwavering spirit demonstrated by individuals living with ALS and their families. For Brainstorm, ENDURANCE also underscores our steadfast commitment to persevere in our scientific endeavors and generate robust data required for regulatory approval of NurOwn. We believe that this trial embodies the collective resilience of patients and our determined mission to deliver a potentially meaningful therapeutic option for ALS. Thank you.

Joyce Lonergan: Thank you for that, Chaim. The third question is, will the company also be producing in the U.S.?

Chaim Lebovits: Thank you. Haro, you want to take that?

Haro Hartounian: Sure. Thank you so much for the question. Absolutely expanding our manufacturing footprint through the United States is a key strategic objective for us. We’re pleased to share that we will be announcing a letter of intent in the coming days with a U.S.-based facility that has a proven track record having already successfully passed FDA inspection for the production of other products. This signifies an important step in our plans for future commercialization and supply chain security.

Chaim Lebovits: Thank you.

Joyce Lonergan: Thank you for that. Question four is, can you update on any advances in the exosome program, or are you not proceeding with that at this time?

Chaim Lebovits: Thank you. Netta, please take that one.

Netta Blondheim-Shraga: Sure. Thank you for this question. We are highly encouraged by the progress of our exosome program as the field of exosome-based therapeutics continues to show strong potential in the treatment of respiratory and inflammatory diseases. Our proprietary allogeneic exosome platform has yielded promising preclinical data demonstrating both therapeutic and preventative effects in models of lung disease. To support these findings, we are preparing a manuscript detailing the efficacy of our exosomes in a preclinical model of COPD, which would join our existing publication about the efficacy of exosomes in a model of ARDS. Together, these works outline the wide potential of our allogeneic exosome technology, which is derived from NurOwn cells.

Briefly, our new findings demonstrate that early treatment with exosomes significantly reduces lung inflammation in response to bleomycin as a chemotherapy agent with known lung toxicity and significantly reduced lung fibrosis two weeks later compared to untreated controls. In light of these exciting results, we are actively pursuing strategic partnerships to advance the exosome program towards clinical development. In parallel, we are expanding our global intellectual property portfolio and anticipate announcing the issuance of additional patents that will further strengthen the protection of our innovations.

Chaim Lebovits: Thank you, Netta. Holly, would you open the line for one or two questions, which we’ll take before 09:00 o’clock?

Operator: Certainly. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Your first question for today is from Jason McCarthy with Maxim Group.

Q&A Session

Jason McCarthy: Good morning, everybody. Thanks for taking the questions. If you can go back to the UNC13A discussion that you’re having, have you had any communications with FDA in terms of being able to stratify by UNC13A in the upcoming Phase 3b, or is that association that you’ve showed through the EAP more of an exploratory study? Kind of — are you locked in with the SPA, you don’t really have a lot of wiggle room around the ALSFRS to go for UNC13A stratification as well?

Chaim Lebovits: Thank you very much for that question, Jason. In general, the FDA is not yet approving any biomarker as a surrogate, but I would like Bob to elaborate more on that. Bob?

Bob Dagher: Yeah, thank you. And thank you, Jason, for the question. So, under the Special Protocol Assessment agreement with FDA, the protocol, I wouldn’t use the word lock, but it’s agreed on with all the details, including the population. It’s not impossible or difficult to go and add and make changes. It will require obviously discussions. However, scientifically speaking, the — and we’re very excited with the larger ALS community about these new genetic discoveries and the UNC13A story is evolving. However, it remains exploratory and not definitive. At this stage in the game with the trial design, innovations, et cetera, we are acutely aware of what’s going on. I presented data on our UNC13A two weeks ago in New Orleans at ISCT.

It was very well received in oral presentation. It was chosen for that target audience as well. So, excitement is there, but not yet at the level where it arises to become a stratification point. However, we’re going to be obviously exploring. We do post hoc analysis and we’ll cut the populations in however many ways we need to, to evaluate further the effect of NurOwn in the next study in the Phase 3b. Thank you for your question. Really appreciate it.

Jason McCarthy: Got it. And another, I guess, somewhat technical question. You had talked a bit about the hypoxic stress co-culture with NurOwn cells or the NurOwn media, if I caught that right. And did you say that it restored normoxic activity? And if so, can that mechanism of action be used as part of a data package when you refile — or file the BLA the next time around? Because I remember last time a lot of questions around growth factors and levels of this and levels of that came up, but is this more defining of the mechanism of action for NurOwn that would be supportive of the next BLA?

Chaim Lebovits: Very good question. Netta…

Bob Dagher: Yeah, thanks…

Chaim Lebovits: Yes, Netta can answer the first part and Bob can answer the second part.

Netta Blondheim-Shraga: Thank you. Yes, you’re correct. What we saw was the media that was enriched by ourselves had a protective effect and rescue effect really on cells under hypoxic conditions and restored them back to almost 100% of normoxic condition, so 96.5%. This is a cell culture. So, it’s a simplistic model. It’s not a human live model. It’s not a clinical model, but it is supportive, I think, of — and was included in our IND as well.

Jason McCarthy: Got it. And just last question on the manufacturing. I know you’re aiming to open up additional cleanrooms, but currently the Tel Aviv facility, how many, excuse me, therapies can it handle or produce?

Chaim Lebovits: Yeah. It depends how many rules we’re using. It will be a rolling enrollment as you know with the phases taken of the CTA. So, we’ll serve us for the first few months and then we’ll start with Pluri as Haro had specified before. And I believe that next year we’ll have the U.S. site also up and running.

Jason McCarthy: Got it. Thanks for taking the question, Chaim.

Chaim Lebovits: You’re very welcome. We have time for one more question, Holly.

Operator: Your next question is from David Bautz with Zacks Small-Cap.

David Bautz: Hey, good morning, everyone. Thanks for the update this morning. So, Chaim, I just want to make sure I heard correctly that you guys are looking to open up — is it 15 clinical trial sites? And then, for each of those sites, obviously financing aside, what needs to occur to try to get — or to get those sites up and running so that they can enroll patients? And then lastly, do you have any estimation of how many patients you can enroll, say, per month just based on manufacturing capacity?

Chaim Lebovits: Yeah. So, thank you very much for that question. So, on clinicaltrials.gov, you will see a listing of the sites. It’s out there, but we didn’t yet sign the CTAs. We’ll be announcing very soon gradually after we sign CTAs. And yes, as I just mentioned, we’ll start to grow side by side based on a grant or patient population that we’re going to be enrolling based on the manufacturing. So, we’re working in the final steps of those of that grant, so I can’t share exact numbers now. But the plan is, as you know, the 200-patient trial was included three years to have everyone enrolled and everyone treated the first part and will be deep into the second part as well. And I want to remind you that the BLA would be filed if we have statistical significant result of the first part of the trial.

David Bautz: Okay, great. Thanks. Thanks for taking the question.

Chaim Lebovits: Yeah. So, thank you very much. I want to thank everyone for being on the call today. We’re hoping to close this 09:00 o’clock. I see it’s exactly 09:00 o’clock. So, thank you very much and have a wonderful day.

Operator: This concludes today’s conference, and you may disconnect your lines at this time. Thank you for your participation.