Brainstorm Cell Therapeutics Inc (BCLI) 2014 Q3 法說會逐字稿

Good day and welcome to the Brainstorm Cell Therapeutics third-quarter 2014 financial results conference call. Today's conference is being recorded, and after speaker remarks there will be a question-and-answer session.

At this time, I would like to turn the call over to Michael Wood at LifeSci Advisors. Please go ahead, Sir.

Thank you and good morning. This morning, Brainstorm announced financial results for the third quarter of 2014. If you have not yet received this news release or if you would like to be added to Brainstorm's distribution list, please visit the Investor Relations section of Brainstorm's website at www.brainstorm-cell.com.

Before turning the call over to Brainstorm's management team, I would like to make the following remarks concerning forward-looking statements. Please note that the information we are about to discuss on this call includes forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties. The Company's actual results could differ materially from those discussed on this call.

Factors that could contribute to such differences include, but are not limited to, those items noted and included in the Company's SEC filings, including the Company's annual report on Form 10-K and quarterly reports on Form 10-Q. The forward-looking information that is provided by the Company in this call represents the Company's outlook as of today, and the Company does not undertake any obligation to update forward-looking statements made on this call. Subsequent events and developments may cause the Company's outlook to change.

At this time, it is my pleasure to turn the call over to Dr. Tony Fiorino, Chief Executive Officer of Brainstorm Cell Therapeutics.

Tony, please go ahead.

Thanks, Michael. Good morning, everyone. I am happy to welcome you to Brainstorm's third-quarter 2014 earnings conference call. Joining me today from Israel is Liat Sossover, our Chief Financial Officer.

I would like to begin by providing an overview of some of our significant accomplishments in the quarter. On the corporate side, we achieved a major goal in the quarter with the uplisting to NASDAQ, which followed our 1 for 15 reverse split. We're gratified to trade on the same exchange as so many of our biotechnology peers. And we believe the NASDAQ listing has many benefits for Brainstorm: it allows a much broader set of investors to take a look at the Company. It increases our financing options. And it should facilitate increased trading volume in our shares.

In the quarter, we also received a notice of allowance from the US patent office on a pending patent application, and we were granted a patent in the EU, both relating to the production and uses of our proprietary neurotrophic factor-secreting mesenchymal stem cells. We will continue to work on extending the patent portfolio around our novel platform technologies.

The third quarter was an eventful one for the clinical development of the NurOwn. After having initiated our multicenter, randomized, double-blind, placebo-controlled Phase II 2 ALS study in the second quarter at Mass General, our second site, UMass Worcester, began enrolling subjects in the third quarter. And we also received FDA clearance for manufacturing at our third site, the Mayo Clinic.

Also this quarter, our ALS program received Fast Track designation from the FDA, which provides several tangible benefits to us, the most important of which at this time is the ability to have more frequent dialogue with the agency as we move NurOwn forward in the clinic.

I am pleased to say that the ongoing hard work of the Brainstorm team, our CRO, our investigators, and the site staff and the manufacturing sites, has really been rewarded with a study that for all its complexity is running very well. To date, 13 subjects have enrolled in the study, many of whom have already received treatment with cells or placebo, and with the others still in the three-month run-in period.

There is a long waiting list for entry into the study, which we believe reflects both the lack of therapeutic options for ALS and a great deal of helpfulness and enthusiasm on the part of the patient community for our treatment. We continue to expect enrollment to run through Q3 of next year, and for the final study visits to occur six months later in Q1 2016.

I want to acknowledge the ALS patients who have made themselves available to our study, and for other clinical trials, as well. It is together with you that we are trying to find a way to slow or even stop the progression of this disease.

Right around the end of the quarter, the last subject in the Phase IIa trial from Hadassah completed the last follow-up visit. We closed out the site shortly thereafter, and we have already received the database from this study and have passed it over to our statisticians. Next week, I will be in Israel and meeting with our team; the principal investigator, Professor Karussis; and the statisticians, and we will move as quickly as possible through the analysis. Although this was a relatively small study of 14 subjects, there are still a lot of data to go through.

We are, of course, working in parallel on a presentation and publication plan for these data. And I expect that we will have the opportunity to present the results at one or more medical conferences in 2015.

I should remind our listeners that Professor Karussis did already present a preliminary interim report of this study at the Joint Congress of European Neurology in June of this year, which included data from almost all the subjects in the study. So we don't expect any important shifts in the top line: that NurOwn was, first and foremost, safe and well-tolerated at doses of up to 140 million cells given intrathecally, and 48 million cells given intramuscularly; and that there was an impressive improvement in the rate of decline in both ALSFRS and FVC.

Finally, with regard to the clinical development program, we have also begun planning for a multidose study to launch in 2015 that will use, for the first time, cryopreserved cells. The goal of this study will be to provide important safety and efficacy data for multiple doses -- most likely, three doses given at two- or three-month intervals -- and for the clinical use of frozen cells. We plan to bring those results, together with the results of the current US study, to the FDA in 2016 in order to discuss the design of our next US trial, which we hope will serve as a pivotal study in ALS.

With that update, I would like to turn the call over to Liat for the financials.

Thank you, Tony, and thank you to our investors and others who have joined us to on the call today. Research and development expenses for third-quarter 2014 were $1.6 million, an increase of $768,000 from the third year (sic - see Form 10-Q, page 26, "third quarter") of 2013. The increase in R&D expenses is primarily due to the launch of the US clinical trial, offset in part by a decrease in clinical trial and payroll costs in Israel, and also by an increase in the support received under our grant from the Office of the Chief Scientist, which increased to $161,000 received in the third quarter of 2014.

For the first nine months of 2014, R&D expenses were $3.1 million compared to $2.1 million for the same period in 2013; again, primarily driven by the US clinical trial costs; and partially offset by support from the Office of the Chief Scientist, and reduced costs in Israel.

General and administrative expenses for the third quarter were $856,000 compared with $272,000 in the third quarter last year. This was driven by an increase in stock-based compensation of $410,000, as well as by fees associated with the uplisting to NASDAQ, and increases in payroll. For the first nine months of 2014, G&A expenses were unchanged from 2013 at $1.6 million.

Brainstorm's net loss for the third quarter of 2014 was $2.4 million, as compared to a net loss of $1.1 million last year. For the first nine months of 2014, the net loss was $6.5 million compared to $3.7 million in the same period of 2013. Net loss per share for the third quarter was $0.16 compared to a net loss last year of $0.10. For the nine-month period, net loss per share was $0.50 in 2014 compared to $0.36 in 2013.

The weighted average number of shares outstanding was 15.1 million in the third quarter of 2014, compared to 10.9 million last year, mainly reflecting the issuance of shares in our June 2014 financing.

As of September 30, 2014, the Company had $10.6 million in cash, cash equivalents, and short-term deposits, compared to $3.5 million at year-end 2013. The increase is mainly due to the equity financing completed in June 2014.

Thank you, Liat, for that update. So if I might summarize, I believe Brainstorm is in a great position. We have achieved much so far in 2014, with the ongoing rollout of our US Phase II study NurOwn in ALS, which has now received Fast Track designation; the uplisting to NASDAQ; and wrapping up our prior Israeli clinical trial that has demonstrated both safety and a very promising efficacy signal.

As I enter my sixth month as CEO, I have gained an even deeper understanding of this cutting-edge platform technology. I am more excited than ever about the prospects for NurOwn; not only in ALS, but in other neurodegenerative diseases, as well.

What we at Brainstorm have created is essentially a living biologic delivery system for neurotrophic factors. And I see many potential applications across neurologic diseases that represent an array of unmet medical needs and large market opportunities.

And with those concluding remarks, we will open the call up for a few questions.

Operator?

(Operator Instructions). Jason Napodano, Zacks Investment Research.

This is David calling in for Jason this morning. So I wanted to ask you a couple of questions about the interim data that we have seen so far from the Phase IIa study; particularly in the graph that you showed, where you have the responders versus the non-responders. So I have a couple questions about that. The first one is, what was the criteria, basically, for separating out the patients for responder versus non-responder?

Subjects who had an improved slope, post-treatment, were considered responders in that analysis, whether on ALSFRS or FVC.

Okay. How many of the responders, say, in the ALSFRS were also responders in the FVC? Was there a complete overlap there?

It's not a complete overlap. I don't have the numbers before me. Most ALSFRS responders also were FVC responders. But there were some subjects who were ALSFRS responders who didn't have FVC response, or vice versa.

Okay. And were there any characteristics that you can point to, for the responders versus the non-responders, that make you maybe be able to predict who would respond?

It's a great question. It's one of the issues that we are going to be looking at with the statisticians. We have a lot of data collected on these subjects, in terms of both the cell that they received and their baseline demographics, and to these characteristics. So we will be crunching all of those numbers to see if there is an association that we can pull out. It is not a huge number of subjects, so we will be very gratified if we see something -- if we see a strong association or strong predictor, that will be great. And what we're hoping, at least, is to generate some interesting concepts that we can look at in the analysis of the US study.

Okay. And my last question is about the multidose study that is going to be coming up next year. Is there data on how long the neuron cells stay viable in the patients? And is that going to kind of guide dosing frequency?

We don't have such data because it's not easy to collect. There's not a good biomarker for the activity of the cells. What we are working on right now, with samples from the current studies, is looking at pharmacodynamic markers that we would be able to use in the CSF. So the dosing interval is going to -- it will be determined more or less empirically based on some data that we have from animal studies. Of course, one of the points of this study also will be to collect more detailed pharmacodynamic data to inform future -- the dosing interval for future studies.

Okay. Great. Well, thanks for taking my questions.

(Operator Instructions). Adam Evertts, LifeSci Capital.

I was wondering if you could provide any additional details on timing of release for the Phase IIa data.

Sure, thanks. So, as I mentioned, the database was just handed over to the statisticians, and they do have many analyses to run on the data. I don't want to -- I am reluctant to put a specific timeframe on it, but it is a matter of weeks for them to crunch the numbers. And as I mentioned, as well, we are reviewing the conference schedule to find appropriate medical conferences at which to present the data. Though there are a lot of options there, from neurology meetings to ALS meetings to stem cell meetings. And, as well, we have a manuscript that is in preparation. So we do expect at least to be able to put out final topline results in the coming weeks; and then, subsequent to that, full presentation at a medical conference.

Thank you.

Currently, I have no questions in queue. (Operator Instructions).

With no additional questions, I would like to turn the call back to Tony for any additional or closing comments.

Thank you. I want to thank all of you for joining us on this call today. We remain extremely excited and upbeat about the prospects for NurOwn. And we look forward to providing you future updates on a quarterly basis. Thank you so much for joining us.

Thank you, sir. And that does conclude today's conference call. Thank you for everyone's participation.