BrainStorm Cell Therapeutics Inc. (NASDAQ:BCLI) Q3 2018 Earnings Conference Call October 29, 2018 8:30 AM ET
Joseph Petroziello – Vice President-Scientific and Corporate Communications
Chaim Lebovits – President and Chief Executive Officer
Eyal Rubin – Executive Vice President and Chief Financial Officer
Ralph Kern – Chief Operating Officer and Chief Medical Officer
David Bautz – Zacks Investment Research
Caroline Palomeque – Maxim Group
Jason Kolbert – H.C. Wainwright
Good day and welcome to the BrainStorm Cell Therapeutics' Third Quarter 2018 Earnings Call. Today's conference is being recorded.
At this time, I would like to turn the conference over to Joseph Petroziello, Vice President of Scientific and Corporate Communications at BrainStorm. Please go ahead.
Thank you, operator. And thank you everyone for dialing into today's Q3 2018 results call. Earlier today released its financial results for Q3 2018 by means of a press release that could be also accessed on our company website.
Before we get started, I would like to remind listeners that this quarterly call contains numerous statements, descriptions, forecast and projections regarding Brainstorm Cell Therapeutics, its potential future business operations and performance including financial results for the most recent fiscal quarter, statements regarding the market potential for treatment of neurodegenerative disorders such as ALS, the sufficiency of our existing capital resources for continuing operations in 2018 and beyond, the safety and clinical effectiveness of our NurOwn proprietary technology, our clinical trials of NurOwn and its related development programs, and our ability to develop strategic collaborations and partnerships to support our business planning efforts.
Forward-looking statements are subject to numerous risks and uncertainties many of which are beyond our control, including the risks and uncertainties described from time to time in our SEC filings. Our risks in this regard may differ materially from those projected here on today's call. We undertake no obligation to publicly update any forward looking statements.
Joining me on today's call will be Chaim Lebovits, CEO of brainstorm. Dr. Ralph Kern, Chief Operating Officer and Chief Medical Officer; and Eyal Rubin our Chief Financial Officer of BrainStorm. They're all available to take questions during the Q&A Session thereafter.
At this time, I'll turn the call over to Chaim.
Thank you, Joe. And congratulations for handing the first call in your job.
Good morning and thank you for joining us today for our Q3 2018 results call. An exciting time at BrainStorm after many years of research and clinical trials, it's so exciting to see how our well-designed Phase 3 trial is slowly but surely advancing towards the finish line. I will of course elaborate some more.
In addition to the ALS trial, as you know, our goal is to be able to present treatment and hopefully even cure across the CNS space for millions of patients with unmet need. BrainStorm aims to be an innovative biotech company focused on developing potentially life changing autologous cellular therapies for neurodegenerative diseases of high unmet need like ALS. Similarly, to what was achieved over the last few years with a chimeric antigen receptor or CAR-T cells therapies for cancer.
These are breakthrough advances in the field of autologous cellular therapies with widely published reports from leading biotech companies like Kite, Juno and Bloomberg, and recent FDA approvals for cell and gene therapies, each of which represent significant step forward in changing the practice of clinical medicine. As you know even though the CAR-T space has a different method of action, but they do pave the way for BrainStorm and others who are focused on developing best-in-class autologous stem cell therapies for treating debilitating diseases, like ALS.
From a CMC standpoint, they prove to be viable, and economical and approved by the agency. We see the long-term clinical potential of neuron in a very similar way to these success stories in the CAR-T field.
For the new comers on this call, I would just add a sort summary about the Company's lead clinical program utilizing neuron has received fast track designation from the U.S. FDA in ALS and additionally being granted Orphan Status by the FDA and the European Medicines Agency, EMA. NurOwn is currently in a pivotal Phase 3 trial in ALS in the U.S. NurOwn uses propriety cell culture conditions to induce mesenchymal stem cells to secrete high level of neurotrophic factors to promote survival of neurons.
At BrainStorm we believe that we are poised to do something that is comparable to the CAR-T cell therapies with our propriety NurOwn technology platform in ALS. Treatment of neurodegenerative diseases like ALS remains one of the biggest challenges facing modern medicine today.
We also plan to file an IND for a second clinical indication. We’ve also developed and patented propriety methods to engineer, produce and purified MSC-NTF, mesenchymal neurotrophic factor cells at the scale and quality necessary to bring neuron therapeutics to U.S. commercialization for patients with debilitating neurodegenerative diseases.
Let me spend a few minutes discussing some of the Tuesday highlights. As of August the independent Data Safety Monitoring Board, the DSMB, overseeing the ongoing Phase 3 trial in ALF completed the pre-specified interim analysis of safety outcomes who had been treated with NurOwn in this study at that point. The DSMB indicated that there were no significant safety concerns and recommended that the trial continuous plans without any modifications to the study protocol. At the time of this announcement, the Chairperson of the DSMB, Dr. Carlayne Jackson, commented that the DSMB appreciates the continued commitment of Brainstorm and the research team to conducting this trial in such an exemplary manner. We commend them on their outstanding enrollment and the quality of data collection. Top-line efficacy data is expected in the first half of 2020.
Since the DSMB met the company has continued the strong momentum in enrolling patients into the Phase 3 trial, we now have more than twice as many patients enrolled in this study and active as we added at the time of the DSMB reviewed. We plan to complete the enrollment in the first half of 2019.
Earlier in September we announced that we had hired Arturo Araya, as Chief Commercial Officer. Arturo is highly talented and very experienced pharmaceutical executive, who brings 20 years of global marketing and commercialization experience, mostly having been the Global Head of Commercial at Novartis Cell and Gene Therapies Unit. His appointment on this of course is our commitment to preparing for U.S. commercialization of neuron inhaler.
On September 12, our Chief Medical Officer, Dr. Ralph Kern presented at the FDA Rare disease workshop in Washington, D.C. on the “ALS Case Study: Clinical Trial Designs for Small Patient Populations.” On October 3 Dr. James Berry of Massachusetts General Hospital was one of the Principal Investigators in our ongoing trial, presented a clinical poster entitled, “MicroRNA Changes in the NurOwn Phase 2 ALS Randomized Clinical Trial: Relationship to Neuroprotection and Innate Immunity at the Annual Northeast ALS conference, known as the acronym of NEALS. The clinical poster received the “Best clinical abstract award” at the conference.
Moving forward, we remain focused on taking the steps necessary to cross the finish line with a potential U.S. FDA approval for neuron ALS. We’re also excited to report that we are on track to file an additional IND for NurOwn, in a second clinical indication by the end of 2018. As usual to provide some ransom of the portion to be on the threshold of great innovation and continue to look forward for optimism, with exciting months ahead as each day moves us a stop closer to the potential U.S. approval and commercial launch of NurOwn. Our goal is to bring this potentially life changing cellular therapy to ALS patients who are in desperate need of options.
In Q4 2018 we're also planning to continue highlighting our scientific advances and sharing our progress with the clinical community at planed medical conferences. We plan present at the Society of Neuroscience annual meetings, which will take place in San Diego, November 3 to November 7 Dr. Kern will present there. And we are also at the ALS MND International Symposium, which is the largest international ALS conference, which will take place in Glasgow, Scotland December, 7 through December 9. We'll also have our own Principal Investigators meeting in sidelines of that meeting.
To complete all of this work successfully and in executing a lead Phase 3 pivotal clinical program in ALS towards U.S. commercialization and submitting IND filings and additional clinical indications and the establishing a world-class leadership positions and innovative cellular manufacturing requires capabilities and capital. We have built such a strong senior management team at BrainStorm with deep expertise in stem cells and autologous cellular therapies overall as evidenced by the recent hires from Juno and Novartis, and the long-standing Board members from Kite and a strong commitment to deliver for patients suffering with debilitating neurodegenerative diseases.
As you also know we finally funded through the Phase 3 trial and funded for the other indications that we are proceeding.
We look forward to delivering for those patients and for our shareholders as we advance our clinical programs toward FDA approval and commercialization.
Just before handing over the call to our CFO I do want to also address some of the recent investors write to me about the share price. And even though you have seen everything else that the company has done like wonderful, couldn't be better and we are still happy on the advancements. Of course, no one is happy with the share prices. But a biotech company in this stage and times let's look at what happened to biotech business in last two months. Probably we’re even better off that we didn't announce some of the great things happening here, which would anyway go unnoticed that Petroziello tell us. I can also tell you that we are proceeding and we're going to make a major facelift with our PIIR, which we will announce in our shareholders meeting upcoming in November 29.
I'd like to turn over the call to Eyal Rubin for a short synopsis of the financial summary and then we'll open the call for questions and answers. Eyal?
Thank you, Chaim. Research and development expenses, net for the three months ended September 30 were about approximately $2 million compared to $1.2 million net for the three months ended September 30, 2017. Excluding the funds received in the form of grants from the Israel Innovation Authorities and CIRM, R&D expenses were $4.1 million in the third quarter of 2018 compared with $1.6 million in the third quarter of 2017. The increase year-over-year was primarily due to expenses in connection with our ongoing Phase 3 clinical trial.
G&A expenses for the three months ended September 30, 2018 were $1.3 million just in line with $1.2 million reported in the three months ended September 30, 2017. Net loss for the three months ended September 30, 2018 was $3.2 million or $0.15 per share as compared to a net loss of $2.4 million or $0.13 per share for the three months ended September 30.
Cash, cash equivalents including short-term bank deposits amounted to approximately $10.9 million compared with $7.7 million as of the end of the 2017. Our total available funding which includes cash on hand and as well as remaining non-dilutive CIRM and the Israel Innovation Authority grants amounted to over $19 million, which will allow us not – to not only fund the ongoing Phase 3 but as Chaim mentioned, to introduce new indication in products as previously mentioned. For further details on our finances, please refer to the Form 10-Q filed with the SEC.
Operator, could you open the call up for questions and answers?
Thank you. [Operator Instructions] And we'll take our first question from David Bautz with Zacks Investment Research.
Good morning everybody. I just want to make sure I understood you correctly, but you said that there are now more than twice as many patients enrolled as when the DSMB meeting took place is that correct?
Okay. And are you seeing a difference in enrollment at the different clinical sites?
Well there are some that started earlier and another started later, but more or less we see a pressure on all the side. We are trying to allocate manufacturing clubs for the site based on their pressures so we have no problem with patients.
And we activated our second manufacturing site, so that’s assisting us in a lot more slot. So the enrollment phase is even going to take it – it’s already taken on October a faster pace as we are trying to reach our goal of enrolling all 200 patients by mid-2019.
Great. Now for patients that have completed dosing in the Phase 3 study, is there any type of a compassionate use that they can tap into to continue treatment or anything like that for them?
That's a very good question. And just unfortunately, as you know, since it's a blinded trial, we have no idea who was on the seat. So we'll have to wait until after unblinding, it’s only at the end of the trial. So even though yes, there are patients that finished all treatments but we have to wait until unblinding, until taking a decision on this issue.
Okay. All right, well thanks for taking my question.
Of course, thank you. Next question.
Next we'll move to Caroline Palomeque with Maxim Group.
Good morning, thanks for taking the question. Just to follow up on enrollment. So is it safe to say that right now there's currently about 80% enrolled and then something maybe around 160 patients that are currently enrolled? I'm just wanting to kind of clarify on that.
No, we enrolled less and just you should understand there, we screened double that number of patient a little bit less, but from screening to enrollment there are exclusion criteria and run-in periods et cetera. But as I said, we do anticipate to enroll 200 patients by mid-2019. We're not disclosing to any exact number of how many patients were enrolled as of today.
Okay. And then just quickly moving on to safety and I know you haven't seen any side effects or anything, but what are some, you know – just any, any kind of safety signals at all that you're seeing or any kind of trends?
Well, it's very similar to Phase 2, but I would like Dr. Kern to please elaborate on that. Ralph?
Yeah, sure. Fine. Thank you Caroline for the question. Yeah, we're seeing a safety pattern that looks very similar to what we saw in Phase 2. As you know, the Phase 3 study has more procedures, but we're very, very happy and comfortable with what is being seen overall and as you know, Dr Jackson, who is the Chair of the DSMB concluded that they're very comfortable with the safety profile and obviously asked us to continue the trial without any protocol amendments.
So very comforting to see that repeat injection produces a very good safety profile. So I think we'll wait for more data as more patients enrolled down the road.
Great. And then just one last question if I may, and just on the new presentations that you'll be doing at the upcoming conferences next month, I'm just wondering if there will be any new analysis in prior data or is there something else that you hope to present?
Ralph, you are presenting.
Yes, sure. So thank you for that question. At the Society for Neuroscience we will be presenting data on new product that we have in our pipeline. At the meeting in the Motor Neurone Disease meeting in Glasgow, we will be discussing in a clinical trial enrichment strategies which are obviously something that we're very focused on and how to best conduct ALS trial. We believe that our clinical design is really a state-of-the-art and one of our investigators will be presenting that in Glasgow.
Great. Thanks for taking the question.
Next, we will move to Jason Kolbert with H.C. Wainwright.
Thank you. Congratulations on all the progress. I just like to talk a little bit about the Commercial hirer, Arturo and given his experience in the CAR-T space, can he talk or can you talk a little bit about what commercial plans you're making in terms of having manufacturing capacity ready, given the fact that you could complete enrollment by mid-2019, which puts you in a position to file a BLA and potentially look at a commercial operation, maybe late 2020.
Thanks Jason for that question. I'm not underlying today, but yes, definitely, that's why we hired him and he's exactly preparing to understand totally the whole commercialization space and how we should file the BLA and we are preparing for that, but we do have on the line, Joe Petroziello who from Juno and also was involved in the commercialization there. If you want to comment, Joe, please go ahead.
Yes, sure. Hey Jason, thanks for the question. Yes, I think, as Chaim just alluded to, I think a Arturo’s first objective is to take up some of the learnings from the CAR-T cell space and apply those efficiencies to the point in time where we are here as we're preparing for the BLA.
I think one of the definite points of emphasis is a lot of the excellent work we did upfront with the CMC a proprietary platform, so I think we are, in some respects and even a better situation that we are in the CAR-T field was early on. So I think our CMC, we're pretty confident that that's bucked up were just looking now to actually scope out what scalability of that would be.
Congratulations. That's an amazing amount of progress. Thank you.
And there are no further questions. I would like to turn the call back over to the speakers for any additional or closing remarks.
No nothing, nothing. Thank you very, very much for everyone listening in and we hope to see – make you happy with the share price as well. But as I said in the beginning, everything is going wonderful in the company, nothing negative happening here and on the contrary, only very exciting different product and another IND, which we touched on, which we're not going to the floor today yet, but everything is preceding even better than anticipated. So thank you very much all and have a wonderful day.
And that will conclude today's call. We thank you for your participation.