Brainstorm Cell Therapeutics Set To Begin Phase 3 In Amyotrophic Lateral Sclerosis
Apr.18.17 | About: BrainStorm Cell (BCLI)
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Summary
Phase 2 AML data in July met primary endpoints.
City of Hope's Center for Biomedicine and Genetics to produce clinical supplies of NurOwn adult stem cells.
With 10 million in cash on hand, an offering or partnership is needed.
Brainstorm Cell Therapeutics, (NASDAQ:BCLI) is a biotechnology company developing stem cell therapies to treat neurodegenerative diseases. This technology converts mesenchymal stem cells into a proprietary drug delivery system, called NurOwn, designed to support damaged neurons. NurOwn cells dampen the immune system and secrete growth factors that help damaged neurons survive.
Mesenchymal stem cells (MSCs) are multipotent cells that can differentiate into bone, cartilage, muscle, and fat cells, but do not differentiate into blood cells or their precursors. Early clinical uses for MSCs included purposes of enhancing bone marrow grafts such as controlling graft versus host disease (Prochymal, remestemcel-L, was approved for use in Canada and New Zealand for steroid-refractory graft versus host disease, made by Osiris), but it was later discovered that MSCs are able to inhibit the immune system inflammation in other specific useful ways. Now, studies investigating the use of MSCs in inflammatory bowel disease, rheumatoid arthritis, multiple sclerosis, cardiovascular disease, stroke, kidney disease and many others are ongoing.
BCLI's patented NurOwn (publications link) technology makes use of MSCs by growing them under specific and proprietary conditions to stimulate secretion of a variety of neurotrophic factors. These factors support the survival and signal conduction of neurons and can be used to treat neurodegenerative diseases. Neurotrophic factors also have immunomodulatory characteristics. Factors of interest secreted by MSCs include protein signaling biomolecules BDNF, VEGF, HGF,and GDNF, which all primarily exert effects via tyrosine kinase signaling. Animal models show that NurOwn cells can help protect neurons from toxic damage in amyotrophic lateral sclerosis, sciatic nerve injury, Parkinson's disease, multiple sclerosis, optic nerve ischemia, and Huntington's disease.
ALS, also called Lou Gehrig's disease or motor neuron disease, is a specific neurodegenerative disease that destroys neurons causing lack of control of voluntary muscles. The cause of the disease is not fully known, though there is a genetic component in a 5-10% subset of the patient population. There is no cure. Sanofi produces a drug to treat AML, Riluzole (Rilutek, Teglutik), which delays the onset of ventilator-dependence and may increase survival by two to three months. The annual market for AML is expected to reach about 750 million dollars by 2018, however the Rilutek patent expiration is expected to decrease the total market starting in 2019.
2016 has been a year of progress for BCLI in ALS and phase 2 trials. According to CEO Chaim Lebovits, BCLI announced positive top-line phase 2 data of NurOwn in treatment of ALS, demonstrating the potential of this therapy not only to halt but also reverse ALS disease progression. Response rates (based on ALSFRS-R) responder analysis of halt or reverse of disease progression were higher in NurOwn-treated subjects compared to placebo at all time points to 24 weeks. The treatment was well tolerated and no serious adverse effects were observed. FDA agreed to accept the key elements of the phase 3 program to support a biologic license application for NurOwn. BCLI will enter phase 3 clinical trials in second quarter 2017 in the U.S. and Israel.
BCLI is seeking early regulatory approval for NurOwn for ALS in Canada, and has made efforts to make NurOwn available for ALS patients in Tel Aviv as a hospital exemption product. The company has also taken on some new personel to strengthen its management team. A closer look at the clinical trial sites for the company is encouraging as well, which includes Mayo clinic and Massachusetts General (both are top tier sites, with Mayo being ranked #1 and MSG ranked #4 in neurology according to US News and World Report). In addition the company was able to pull down a 1.5 million dollar non-dilutive grant from the Israeli government.
So investors are asking, is it time to go long on Brainstorm? As this article states (and its a gem), the strongest therapeutic effect was achieved in those patients whose disease was progressing the fastest (about half the patients in the study). This could lead to physicians being more likely to choose NurOwn for their patients. In addition the article does a nice comparator with Bluebird and Sarepta, two companies with neurodegenerative disorder gene and cell therapies with similar efficacy. The market values Bluebird and Sarepta with much higher market cap, making BCLI a great candidate for a contrarian long position.
This biotechnology chart has an unusual ascending pattern with good support over the last few years. In addition the market cap for BCLI is moving up from approximately 50 million to 70 million in recent months. That being said Strong Bio would wait until a partner or dilutive event materializes to take a long position. With phase 3 initiation now upon BCLI, this is a timely biotechnology long position candidate once they demonstrate they have funding to last through phase 3 trials. That being said, it is hard to object to taking a position as an angel investor if it helps the company and patients in this disease. It certainly appears as if the investment will be rewarded in coming years, if phase 3 data is as good as the pooled data for early trials.
Risks include FDA clinical trial failure, adverse events leading to trial delays, and standard biotechnology potential pitfalls. Dilution is certainly a risk for investors. Competition in the stem cell and neurodegenerative disease fields with larger and better funded companies should be noted as a risk as well, with market penetration being a significant challenge.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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.
Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.
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