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Trading over 12 years, with an emphasis in small cap biotech. Passionate about science and cooking. 

"Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money."

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  • With Interim Data In April, A Huge Catalyst Lies Ahead For Neuralstem 22 comments
    Mar 19, 2014 1:40 PM | about stocks: CUR

    Neuralstem's (NASDAQ:CUR) CEO Richard Garr recently gave investors insight into when Dr. Eva Feldman will be presenting phase 2 interim data for their ALS therapy using their NSI-566 stem cells.

    Dr. Eva Feldman MD, PhD, Principle Investigator of the Phase 2 Trial, Director of the A. Alfred Taubman Medical Research Institute, Director of Research of the ALS Clinic at the University of Michigan Health System, and President of the American Neurological Association, in April. From what we can gather so far, the first release will be on April 9th at the Keystone Symposia on Molecular and Cellular Biology and also at the Pan Pacific Symposium on Stem Cells and Cancer Research on April 12th where Dr. Feldman will be a keynote speaker.

    The Phase 2 dose escalation trial is designed to treat up to 15 ambulatory patients in five different dosing cohorts, under an accelerated dosing schedule. The first 12 patients will be divided into four cohorts and will receive injections only in the cervical region of the spinal cord, where breathing function is controlled. The first cohort of three patients have received 10 cervical injections of 200,000 cells per injection. The second cohort of three patients received 20 cervical injections of 200,000 cells per injection The third cohort of three patients received 20 cervical injections of 300,000 cells per injection. The fourth cohort will receive 400,000 cells per injection with 20 cervical injections which should be ongoing this month of March. The last three Phase 2 patients will receive injections in both the cervical and the lumbar spinal regions. These patients will receive 20 injections of 400,000 cells each in the lumbar region in addition to the 20 injections they will already have received in their cervical region. The trial is on an accelerated treatment schedule, and is designed to progress at the rate of one cohort per month with a one month observation period between cohorts.

    What we can gather so far is that the phase 2 trial is moving along smoothly with a timeline of finishing up the final cohort in July with interim results to be released next month. An interesting point to ponder here is the timing of the phase 2 interim results release in April by Dr. Feldman. The 4th cohort is receiving their 20 cervical injections of 400,000 cells each this month, and there will be a month break between treating the final cohort. What is interesting is that the last cohort will not have had their injections yet before the data is released.

    Why this is interesting is that the last cohort according to Neuralstem is going to be receiving the maximum therapeutic dose. So why wouldn't Dr. Feldman wait until August or so to release interim data? After all, in the phase 1 trial, the patients that showed the best results from NSI 566 are the three patients that received both cervical and lumbar injections seen in the graph below.

    For a possible answer here we must look at what the secondary endpoints are for the phase 2 trial regarding efficacy.

    The secondary objectives of the study are to evaluate spinal stem cell transplantation therapy in this patient population for:

    1) attenuation of motor function loss

    2) maintenance of respiratory capacity

    3) stabilization of ALSFRS-R

    4) reduction of spasticity/rigidity if present

    5) graft survival at autopsy if and when there is mortality.

    The endpoint I would like to focus on here is number 2 as I believe it is one of the most important efficacy points that is trying to be achieved. Most ALS patients suffer from breathing issues related to the loss of muscle function in their upper respiratory system. Mouth function also correlates into this category as the throat and tongue is essential for proper breathing at rest and during eating.

    What Neuralstem is trying to achieve here with their phase 2 trial is to protect these muscles from atrophy by way of coddling the motor neurons in the spinal cord. In ALS, the motor neurons in the brain and spine die off and cause a loss of muscle function because of the communication lost between the brain and voluntary muscle movement.

    Also, the way that Neuralstem set up the trial design should allow for the best possible outcome for these patients regarding breathing and mouth function. The Phase 2 trial is designed in a way to benefit breathing and mouth function by injecting all patients in the cervical region of the spinal cord. Here is some good info on what regions of the body are affected after a spinal cord injury to a certain area of the spinal cord. It gives us some insight into why Neuralstem is injecting these patients in this area and what functions can be effected in the cervical spinal region.

    The trial is also only treating patients that are early stage because Neuralstem believes that these patients still have enough motor neurons to be coddled by their stem cells. What is seen in patients that did not respond to treatment in the first phase is that they just do not have enough of these neurons to be brought back to function properly.

    On March 17th, Neuralstem released their final data from their phase 1 trial with remarkable results. Dr. Feldman noted that:

    "Pre-surgical disease progression rates for the various functional outcome measures were calculated to create slopes for each patient, so that we could determine if post-surgical data points, at 6, 9, 12 and 15 months, improved relative to predicted points. We also did analyses to determine which, if any, functional outcome assessment most closely correlated with the overall ALSFRS-R scores," said Dr. Feldman. "Comparison of the outcome data to predicted outcome points in group E (patients who received both lumbar and cervical injections) revealed improvements in a significant number of measures at 6, 9, 12 and 15 months post-surgery. Overall, 50% of the patients in the trial showed improvement across multiple clinical measures at the same time points. We also found that a measure of grip strength correlated most closely with the overall ALSFRS-R scores.

    Remember that in ALS, let alone in a phase 1 trial, it is quite rare to see any disease regression. Especially when you consider how the phase 1 trial was designed. A great overview of the trial can be found here by analyst J. Napodano.

    So to see 50% of patients from a trial designed to not even show efficacy is quite stunning and should show us how powerful these neural stem cells are.

    We now have confirmation from one of the patients in the second cohort of the phase 2 trial that not only has her breathing improved but she is also able to eat easier because her tongue has stopped the atrophy process. This is huge for ALS patients, and would give them a much better quality of life going forward with the disease.

    The small things in life that most of us take for granted, or just do not really think about losing is mouth function. Imagine for a moment that the muscles in your mouth begin to atrophy and you start to lose feeling in your tongue. Every time you eat would be a struggle as the tongue would not be able to transfer the food into the place that you need to chew. This would be a very demoralizing loss for any patient with ALS because it means that a liquid food diet ensues..

    So what is a Phase 3 trial worth to Neuralstem should it be approved for one?

    And how might the stock react to positive news?

    We can take a look back at some of the failed drug trials of ALS and see what they were worth at the time or what they may have been worth.

    First, let's look at Trophos's olesoxime. Back in December 2011 Trophos released disappointing phase 3 data and lost a deal in which Actelion would acquire the company for upwards of $260 million dollars. We should note that Trophos's pipeline is quite limited, and the company had next to no cash at the time of the announcement.

    Also, in December 2012 Biogen's Dexpramipexole failed to show improvement for the treatment of ALS in their phase 3 trial. Analysts were expecting the drug to eventually see sales of $1 billion dollars a year.

    It's tough to gauge just how much a phase 3 trial could be worth for Neuralstem because their treatment is so revolutionary. They could literally capture this entire market with astounding pricing of their therapy if it proves that it works for years in beating back ALS. My last SA article covers what NSI-566 could be worth for Neuralstem's ALS indication if they receive approval. So, it really comes down to timing and results in correlation to the price of the stock.

    I believe if the phase 2 interim results are shown to be as or more positive as the first phase (which I believe I have given good reason to believe they will be) then we should start to pull in some of that value from an approval. Anyone that has traded biotechs for a relative amount of time knows that these stocks run up into anticipation of milestones or approvals. By the time approvals are achieved, most of the time at least 2 years of revenues are already priced into the stock.

    So, if CUR were to be worth $10 billion after approval and a ramp in sales like my last article concludes could happen. Then we could assume a phase 3 trial should be worth at least 10% of that price which would give us a price for CUR of around $10 with fully diluted shares accounted for.

    The question would be here is, when would that 10% begin to be priced in? My guess would be that after we get a good feel for what the phase 2 trial is going to look like. This should be April 9th when interim results are released.

    The phase 2 interim data will be the biggest catalyst to date for Neuralstem and should propel the stock higher as the anticipation mounts for a coming phase 3 trial. However, a wild card could be thrown into the mix here, if the company were to file for a Breakthrough Therapy Designation. There has been some speculation from analysts covering Neuralstem that they will file for a BTD before years end.

    The risk

    If the data were to come out as a failure then the stock would take a major hit, as it appears this news is beginning to be priced into the stock. I believe this risk is low however, as it would not make a whole lot of sense to release interim data if that were the case. Especially when the maximum therapeutic dose had not even been given yet.

    In summary...

    Dr. Feldman will be presenting interim data on the Phase 2 trial before the maximum therapeutic dose is given to the final cohort. Wouldn't it make more sense to just wait a couple of more months to release this after all patients have been treated? I guess it wouldn't matter if the results look promising already.. I will let you read into this what you may..

    Another thing that we know is that there is a Phase 2 patient that is blogging about her everyday life with ALS and is showing improvement in the exact areas that this trial and therapy is designed to improve.

    These results should be the biggest catalyst in the company's history and should have a sizeable impact on the way the stock trades.

    Disclosure: I am long CUR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Stocks: CUR
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Comments (22)
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  • Josh Ginsburg
    , contributor
    Comments (99) | Send Message
     
    Excellent analysis and glad I took your advice back when you recommended them to me! Definitely looking up for CUR.
    19 Mar 2014, 02:03 PM Reply Like
  • JKenser
    , contributor
    Comments (565) | Send Message
     
    Author’s reply » Thanks Josh, I tried to get this published but SA editors found it too speculative.. Whats the market without speculation? I think they hold the biotech writers to a higher standard, but I guess that's a good thing in the end..
    19 Mar 2014, 02:06 PM Reply Like
  • Bio Bull
    , contributor
    Comments (252) | Send Message
     
    Thank GALE and Adam F for this current environment we find ourselves in :) I think it's good they're being more careful, but they are potentially cancelling out a lot of great ideas. Great post, Kenser!!!

     

    I may put something out pre - 4/9 if my time permits, but this captured some of what I wanted to include. Interim results are sort of going under the radar unfortunately.
    19 Mar 2014, 02:42 PM Reply Like
  • MichaelJ8
    , contributor
    Comments (857) | Send Message
     
    Red bull... did you ask the Chicago bulls organization if you could use their logo?
    19 Mar 2014, 07:10 PM Reply Like
  • Josh Ginsburg
    , contributor
    Comments (99) | Send Message
     
    To speculative? I think this stem cell company has already shown many of their cards in terms of efficacy and this article points that out rather clearly. SA's loss.
    19 Mar 2014, 02:18 PM Reply Like
  • Garrett Wankel
    , contributor
    Comments (15) | Send Message
     
    Solid work! In the neurodegenerative space I like both CUR and AEMD...their Hemopurifier is incredible technology.
    19 Mar 2014, 02:24 PM Reply Like
  • JKenser
    , contributor
    Comments (565) | Send Message
     
    Author’s reply » Thanks Garrett, I'll have a look at AEMD, thats a new one for me..
    19 Mar 2014, 02:32 PM Reply Like
  • sheldond
    , contributor
    Comments (1413) | Send Message
     
    Nice work. Did SA suggest you tone down or alter your language or were they just like no thanks.

     

    I get your thesis and think it is a good one.

     

    D
    19 Mar 2014, 04:18 PM Reply Like
  • JKenser
    , contributor
    Comments (565) | Send Message
     
    Author’s reply » They said it was too speculative and did not contain any new information.. The new information one threw me for a loop as I have not seen anyone discuss interim data results and what it could mean to the company.
    19 Mar 2014, 04:23 PM Reply Like
  • dannick
    , contributor
    Comments (109) | Send Message
     
    Again, great article. Thanks for continuing on from your last work, which was likewise, very informative.

     

    Some of the points you made here were things I had considered / read and were the reasons for me buying CUR but then you also bought some new ideas to the table. I'm particularly intrigued by the "why would she release results early if they weren't great" angle and I cannot fault the logic.

     

    I'm currently holding myself back from increasing my position a second time. Part of my brain is screaming "ALL-IN" for this stock.
    19 Mar 2014, 06:46 PM Reply Like
  • JKenser
    , contributor
    Comments (565) | Send Message
     
    Author’s reply » dannick, another point to make here is that Dr. Feldman is not an employee of Neuralstems. She is independent from the company so she does not have as much to gain as the company does. Just something to ponder about motive.
    19 Mar 2014, 06:49 PM Reply Like
  • dannick
    , contributor
    Comments (109) | Send Message
     
    Very good point. Sometimes I forget that when reading about CUR that Dr F is not an emplyee.
    20 Mar 2014, 10:09 AM Reply Like
  • petethepanzer
    , contributor
    Comments (1055) | Send Message
     
    "I’m still very much enjoying the improvement in dexterity and strength in my right hand and arm. I’ve been hesitant about mentioning my arm, but the improved strength is no doubt there. I can hold a plate of food long enough to set it down only using my right side. I can play with Abby easier. I can eat and put a fork through a piece of pineapple. I could not do these thing before. I used my left hand, that had more strength. It has even improved. I can still project my voice louder and speak longer without becoming hoarse for much longer. My speech is most often very intelligible. I have a couple of things I think cause the occasional major slur, mispronouncing words here and there. One is that the right side of my tongue is still a little atrophied even though it seems stronger when moving food. The second is the roof of my mouth. You can slide your tongue along the middle roof of your mouth and feel the bony separator in the middle. The left side of mine curves up which is how it has always been. The right side only has a very slight curve up. It’s like it’s collapsing on that side. The differences in the tongue, even though it is mildly atrophied, has the sensation of being thicker. Between the tongue and the roof of mouth flattening down on that side, if not being very aware, some words will sound slurred. Other than feeling my tongue is a little stronger moving food, there seems to be no real difference in tongue or roof of mouth since surgery. This is my opinion, I haven’t been told this. I feel this was something actively progressing at a noticeable rate to me before surgery. Since surgery it seems to have just stopped. Eating and drinking water was at the beginning stages and I was preparing for continued worsening speech and swallowing water which Tony had already started thickening because even though I was never in a real choking situation I was having more sudden coughs from feeling like it was going down wrong pretty often . It still happens once in a while now but I don’t use thickener anymore. I was noticing more trouble with coordinating the chew to swallow process. I deal with that much less and eat with more ease. It’s either a slight improvement or a complete halt of these things and staying at the point I am used to working with. I’m doing my best to explain what I’m experiencing. I have no other reason to believe this stopped or possibly improved other than participating in the Neuralstem, stem cell study. The improvement in my speech and my right hand is obvious to people who knew me before surgery. What I’m experiencing with my soft palate and tongue are much more difficult to get across, but these are very important issues regarding quality of life and even extending life. That’s why I’m attempting to explain the feeling of it and what losing these abilities mean. The ability to speak and swallow liquid and food longer is amazing to a person with ALS. A lot of the things I’m experiencing as improvement or halt of progression is not as obvious, especially to people who weren’t around me much. The people who know me all noticed improvement in speech, people can see very clearly my ability to use my right hand better. It’s hard to see and understand a soft palate stops collapsing and better tongue control."

     

    http://bit.ly/1g4HtGX

     

    sounds like it works as well as in the phase 1
    20 Mar 2014, 11:53 AM Reply Like
  • JKenser
    , contributor
    Comments (565) | Send Message
     
    Author’s reply » I'd say better Pete.. We'll all see on the 9th.. The suspense is building..
    20 Mar 2014, 12:05 PM Reply Like
  • petethepanzer
    , contributor
    Comments (1055) | Send Message
     
    10b company in the making with probable conditional approval in q3 2014 very nice situation
    20 Mar 2014, 12:36 PM Reply Like
  • petethepanzer
    , contributor
    Comments (1055) | Send Message
     
    why no mention of a conditional approval post pii...fda would be outrageous to not give strong credence to that possibility considering its more widely useful than sareptas drug and the evidence could be incontrovertible with another ted harada appearing in the high dose groups

     

    when is final topline for the pii expected
    21 Mar 2014, 02:39 PM Reply Like
  • JKenser
    , contributor
    Comments (565) | Send Message
     
    Author’s reply » That's definitely a possibility Pete. Unfortunately this is so revolutionary that there is not many therapies you can compare it to. For Seeking Alpha, that would be way too speculative. This article was already too speculative to publish. Interim data is April 9th.
    21 Mar 2014, 03:15 PM Reply Like
  • petethepanzer
    , contributor
    Comments (1055) | Send Message
     
    coddled...what does this term refer to how do you coddle motor neurons why didnt you simply say protect
    29 Mar 2014, 05:28 PM Reply Like
  • JKenser
    , contributor
    Comments (565) | Send Message
     
    Author’s reply » Pete, I believe the CEO used this word. Kind of stole it from him, I just dont remember when I heard him say it.
    29 Mar 2014, 06:26 PM Reply Like
  • petethepanzer
    , contributor
    Comments (1055) | Send Message
     
    ok i was just saying it sounded like a peculiar term

     

    april 9 is approaching fast i hope your right about them presenting an update on clinical data...did the ceo say this in a webcast its not in a press release

     

    think it will get a 3b cap in july on topline

     

    if late q4 approval then 8-14b cap is where were heading its hard to speculate since theres no company in a similar position other than pharmacyclics with their astounding b cell treatment ibrutinib
    29 Mar 2014, 09:42 PM Reply Like
  • Bio Bull
    , contributor
    Comments (252) | Send Message
     
    He's right... from the CEO's mouth in the January San Francisco presentation, and I can tell you the exact moment he says it.

     

    If he's not right, it's because the CEO either lied or changed his mind :)
    29 Mar 2014, 09:45 PM Reply Like
  • petethepanzer
    , contributor
    Comments (1055) | Send Message
     
    how would the idea of accelerated approval come to light would the fda suggest it to the company when they meet to discuss a phase 3 since that is what the ceo said was the plan
    6 Apr 2014, 10:25 AM Reply Like
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