It's not every day that someone with Lou Gherig's disease actually gets better. In fact, that never happens. Lou Gherig's disease or amyotrophic lateral sclerosis (ALS) attacks the nervous system out of nowhere and relentlessly, inexorably, paralyzes you totally until you literally cannot breathe. There is no cure, there is virtually no treatment, and there is no escape. For ALS patients, there has been no light at the end of the tunnel, that is, not until March 9, 2011.
On March 9, 2011, a man named Ted Harada became the final ALS patient of a group of 15 to participate in a phase I clinical trial of an injection of 500,000 stem cells directly into his spinal cord. The procedure and technology for the treatment were developed by Neuralstem (CUR), a small 16 year old company that has developed the technology to produce commercially viable amounts of human stem cells and inject them safely into the central nervous system.
Phase I trials are not designed to test efficacy. In other words, it wasn't even the goal of this trial for an ALS patient to respond to treatment. The only goal was to make sure the injection was actually safe and to monitor side effects. But Harada responded to treatment beyond anyone's expectations, and became the first ALS patient in history to actually regain strength and control of his muscles. From the report in Crains Detroit:
Two weeks after his operation, Harada thought he noticed a feeling of strength in his legs. "And I didn't feel as tired as I had before," he said. "So I asked my wife to come over and give me a test."
He sat down. She braced her hand against the top of his knee and he pushed. Instead of nothing happening, his leg went up in the air. They did it again. She pushed harder. He lifted his leg. On a third time, she pressed really hard and he raised his leg.
"It was shock. 'Is this real? This isn't supposed to happen,' "Harada said."No matter how hard she tried, even with two hands, she couldn't keep my leg on the ground."
He started crying, and so did his wife.
The procedure, developed by Neuralstem, is not simply taking a syringe and poking the spine. Doctors literally opened up the spinal column, the body's "holy of holies" and made 5 injections of 100,000 cells each. This screenshot from a Fox 5 report shows the injections. The tube from above contains the actual stem cells.
Harada's condition improved for about a year, and then a gradual decline set in. But Harada got a second set of injections on August 22 this year, and his symptoms are, yet again, in retreat.
Being only one of 15 patients that saw dramatic improvement, the question of course is how the results can be replicated. Doctors suspect that one of the reasons that only Harada showed such a level of improvement compared to others in the study is that Harada's ALS had not progressed to the level of other patients, that he was ambulatory, meaning his motor neurons were still partially functional at the time. The stem cells are designed to help living neurons repair themselves, not bring dead ones back to life, and therefore the later stage ALS patients were not helped as much.
Equally important, Dr. Eva Feldman who designed the clinical trial, explained that the conditions of eight of the remaining 10 patients in the study have not changed, meaning their disease has not progressed, which is an anomaly with ALS.
The next step for Neuralstem is a phase II trial of over 30 patients, which has yet to be approved by FDA, but is expected to clear in the near future given the safety of the phase I trials. One possible timeline put forward by Smith on Stocks puts a phase II trial in 2013, followed by a phase III in 2014, and if all goes well, final approval by 2017. Asked back in 2011 what she realistically expected, Dr. Feldman gave an estimation of 5 years until final approval if all trials go well, which is a big if.
On the investment side, it will be at least 5 years until Neuralstem sees any serious revenues, so any investment in CUR is essentially speculation. They have over $106M of accumulated losses in 16 years of operation, which puts an average annual burn rate of $6.6M a year (which varies greatly due to the extra-company costs of clinical trials). With close to $10M in cash on hand, that gives the Company about two years at least before they have to refinance, more than enough time to move on to phase II and reset the clock.
Aside from the ALS news, CUR is armed with an intellectual property portfolio that makes their proprietary stem cell technology very valuable for the stem cell industry as a whole. Regardless of what happens with phase II and beyond that, Neuralstem does have collateral so to speak if something goes wrong.
As for the fact that they are "only" on phase I, what they have that other development stage microcaps at this stage do not, is a human prototype, Ted Harada, the first human being ever to see ALS be beaten back, at least temporarily. The more people who hear his story, the more attention CUR will be getting, and the more investor eyes will be honed in on that upcoming phase II trial. If they can replicate the proportion of patients to have their ALS stall as it seems they have in phase I, and perhaps show the world another Ted Harada or two, their $80M market cap will likely get a sizable jolt, and the light at the end of the tunnel for ALS patients everywhere will get just a bit brighter.