Company Overview
BrainStorm Cell Therapeutics Inc. is a leading biotechnology company committed
to the development and commercialization of best-in-class autologous cellular
therapies for the treatment of neurodegenerative diseases including: Amyotrophic
Lateral Sclerosis ("ALS", also known as Lou Gehrig's disease); Progressive
Multiple Sclerosis ("PMS"); Alzheimer's disease ("AD"); and other
neurodegenerative diseases. NurOwn®, our proprietary platform, leverages cell
culture methods to induce autologous bone marrow-derived mesenchymal stem cells
(MSCs) to secrete high levels of neurotrophic factors (NTFs), modulate
neuroinflammatory and neurodegenerative disease processes, promote neuronal
survival and improve neurological function.
NurOwn® has been evaluated in completed Phase 3 ALS and Phase 2 PMS clinical
trials. On November 17, 2020, we announced top-line data from our Phase 3 ALS
trial. On March 24, 2021, we announced positive topline data from our Phase 2
trial evaluating three repeated intrathecal administrations of NurOwn®, each
given 2 months apart, as a treatment for PMS. On June 24, 2020, we announced a
new clinical program focused on the development of NurOwn® as a treatment for
AD. We are currently evaluating next steps based on emerging scientific insights
and the rapidly changing regulatory landscape for AD following the recent FDA
decision on Aducanumab.
Our wholly-owned Israeli subsidiary, BrainStorm Cell Therapeutics Ltd. ("Israeli
Subsidiary"), holds exclusive rights to commercialize NurOwn® technology through
a licensing agreement with Ramot ("Ramot"), the technology transfer company of
Tel Aviv University, Israel.
NurOwn® has a strong and comprehensive intellectual property portfolio and was
granted Fast Track designation by the U.S. Food and Drug Administration (FDA)
and Orphan Drug status by the FDA and the European Medicines Agency (EMA) for
ALS. For more information, visit BrainStorm's website at
www.brainstorm-cell.com.
Our human capital resources objectives include, as applicable, identifying,
recruiting, retaining, incentivizing and integrating our existing and new
employees, advisors and consultants. The principal purposes of our equity and
cash incentive plans are to attract, retain and reward personnel through the
granting of stock-based and cash-based compensation awards, in order to increase
stockholder value and the success of our company by motivating such individuals
to perform to the best of their abilities and achieve our objectives. We
currently employ 40 employees in the United States and in Israel. Most of the
senior management team is based in the United States, and all of our clinical
trial sites for ALS and PMS are in the United States. Our R&D center is located
in Petach Tikva, Israel. In addition, we currently lease a GMP certified
manufacturing facility in Jerusalem, Israel, and have recently leased a new GMP
certified cleanroom facility, which includes three state-of-the-art cleanrooms,
at the Tel Aviv Sourasky Medical Center to manufacture NurOwn®. These two
facilities more than doubles our capacity to manufacture and ship NurOwn® into
the EU and local Israeli markets.
The pandemic caused by the novel strain of coronavirus, SARS-CoV 2 (COVID-19)
disease has currently impacted and may continue to adversely impact our
business, including our preclinical studies and clinical trials. In December
2019, a novel strain of coronavirus, surfaced in Wuhan, China. Since then,
COVID- 19 has spread worldwide, significantly impacting the United States,
Europe and Israel, where the Company conducts its operations, as well as its
clinical trials for NurOwn®. In response to the spread of COVID-19 and to ensure
safety of employees and continuity of business operations, we closed our
offices, with our administrative employees continuing their work remotely and
limited the number of staff in any given research and development laboratory.
Our research and development laboratory in Israel and manufacturing sites in
U.S. and in Israel remained open. Post vaccination, our administrative offices
in Israel and the U.S. are now open. The full extent to which the COVID-19
pandemic will directly or indirectly impact our business, results of operations
and financial condition will depend on future developments that are highly
uncertain and cannot be accurately predicted at this time, including new
information that may emerge concerning COVID-19, the actions taken to contain it
or treat its impact and the economic impact on local, regional, national and
international markets. Our management team is actively monitoring this situation
and the possible effects on our financial condition, liquidity, operations,
suppliers, industry, and workforce. For additional information on risks posed by
the COVID-19 pandemic, please see Part II, Item 1A - Risk Factors - Risks
Related to the COVID-19 Pandemic.
Recent Highlights
We have made significant progress in the past 12 months by completing our
? NurOwn® Phase 3 ALS and Phase 2 PMS clinical trials in the United States (see
details below).
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On June 24, 2020, we announced a new clinical program focused on the
development of NurOwn® as a treatment for Alzheimer's disease, or AD. We are
? currently evaluating next steps based on emerging scientific insights and the
changing regulatory landscape for AD following the recent FDA decision on
Aducanumab.
On July 23, 2020, we announced the results of a groundbreaking pre-clinical
study of NurOwn® derived Exosome-based treatment for COVID-19 acute respiratory
distress syndrome (ARDS). Intratracheal administration of exosomes extracted
? from MSC-NTF cells (NurOwn®) resulted in statistically significant improvement
in multiple lung parameters in a mouse model. With this study, the Company
successfully completed its first milestone in developing an innovative
exosome-based platform-technology for the treatment of severe COVID-19 related
infection.
On September 25, 2020, we entered into an Amended and Restated Distribution
Agreement (the "Distribution Agreement") with SVB Leerink LLC ("Leerink") and
Raymond James & Associates, Inc. ("Raymond James" and, together with Leerink,
the "Agents") pursuant to which the Company may sell from time to time, through
the Agents, shares of Common Stock, having an aggregate offering price of up to
$45,000,000, which aggregate amount includes any amount unsold pursuant to the
March 6, 2020, ATM (the "September 25, 2020, ATM"). Sales under the September
25, 2020, ATM are made by any method permitted by law that is deemed to be an
"at the market" offering as defined in Rule 415 promulgated under the
? Securities Act, including, without limitation, sales made directly on the
Nasdaq Capital Market, on any other existing trading market for the Shares,
through a market maker or as otherwise agreed by the Company and the Agents.
The Distribution Agreement amends and restates in its entirety the Company's
prior agreement in connection with the March 6, 2020, ATM. During the quarter
ended September 30, 2021, the Company did not sell any additional shares of its
Common Stock pursuant to the September 25, 2020, ATM. Since inception and as of
September 30, 2021, the Company has sold 4,721,282 shares of Common Stock for
gross proceeds of approximately $29.1 million under the September 25, 2020,
ATM.
On November 17, 2020, we announced top-line data from our Phase 3 ALS trial in
the U.S. Results from the trial showed that NurOwn® was generally well
tolerated in the population of rapidly progressing ALS patients. While showing
a numerical improvement in the treated group compared to placebo across the
primary and key secondary efficacy endpoints, the trial did not reach
statistically significant results. In an important, pre-specified subgroup with
early disease based on the ALSFRS-R baseline total score of 35, we believe
NurOwn® demonstrated a clinically meaningful treatment response across the
primary and key secondary endpoints and remained consistent with our pre-trial,
data-derived assumption. In this subgroup, there were 34.6% responders who met
the primary endpoint definition on NurOwn and 15.6% on Placebo (p=0.288), and
? the average change from baseline to week 28 in ALSFRS-R total score was -1.77
on NurOwn and -3.78 on Placebo (p=0.198), an improvement of 2.01 ALSFRS-R
points favoring NurOwn®. No new safety concerns were identified. On February
22, 2021, we announced high-level FDA feedback on our NurOwn® ALS Clinical
Development Program. The FDA concluded from their initial review that the
current level of clinical data does not provide the threshold of substantial
evidence that FDA is seeking to support a Biologics License Application (BLA).
In addition, the FDA advised that this recommendation does not preclude
Brainstorm from proceeding with a BLA submission. We are in active consultation
with principal investigators, ALS experts, expert statisticians, regulatory
advisors, and ALS advocacy groups to assess the benefit/risk of a BLA
submission before making a final decision.
On January 20, 2021, we announced the peer-reviewed publication of a
preclinical study in the journal Stem Cell and Research Therapy. The study,
? entitled "MSC-NTF (NurOwn®) exosomes: a novel therapeutic modality in the mouse
LPS-induced ARDS model," evaluated the use of NurOwn® (MSC-NTF cell) derived
exosomes in a mouse model of acute respiratory distress syndrome (ARDS).
On February 9, 2021, we announced feedback from our Type-C Meeting with FDA to
? review specific aspects of our planned manufacturing modifications to support
the development of a semi-automated manufacturing process for NurOwn® (MSC-NTF
cells).
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On March 24, 2021, we announced positive top-line data in our Phase 2 Study
trial evaluating three repeated administrations of NurOwn®, each given 2 months
apart, as a treatment for PMS. The 28-week open-label Phase 2 clinical trial
enrolled 20 primary and secondary PMS patients based on the 2017 revised
McDonald Criteria, ages 18-65, with baseline Expanded Disability Status Scale
(EDSS) scores between 3-6.5, without evidence of relapse within 6 months of
enrollment, able to walk 25 feet in 60 seconds or less and were permitted to be
on a stable dose of disease modifying therapy. Of the 20 patients enrolled, 18
were treated and 16 (80%) completed the study. Two patients discontinued
related to procedure-related AEs. There were no study deaths or AEs related to
multiple sclerosis worsening. The mean age of study patients was 47, 56% were
female, and mean baseline EDSS score was 5.4. The clinical trial compared
clinical efficacy outcomes with a 48-patient matched clinical cohort from the
Comprehensive Longitudinal Investigations in MS at the Brigham & Woman's
Hospital (CLIMB Study). MS Function and Cognition measures in the top-line
results included the timed 25-foot walk (T25FW); 9-hole peg test (9-HPT); Low
Contrast Letter Acuity (LCLA); Symbol Digit Modality Test (SDMT); and the 12
item MS Walking Scale (MSWS-12). Prespecified response thresholds of 25%
improvement in the T25FW and 9-HPT from baseline to 28 weeks were observed in
14% and 13% of NurOwn® treated patients, respectively, and was observed in 0%
? of the pre-specified matched historical controls in the CLIMB registry. Thirty
eight percent of NurOwn® treated patients showed at least a 10-point
improvement in the MSWS-12 from baseline to week 28, a patient-reported outcome
that evaluates walking function. In addition, 47% of treated patients showed
at least an 8-letter improvement across 28 weeks in the LCLA, a visual function
test, and 67% showed at least a 3-point improvement in the SDMT, a measure of
cognitive processing. In addition, NurOwn® treated patients showed a mean
improvement from baseline of 10% in T25FW and a 4.8% improvement from baseline
on the 9-HPT dominant hand, compared to 1.8% and 1.4% worsening respectively in
matched historical controls from the CLIMB registry. Also, NurOwn® treated
patients showed a 6% improvement from baseline in MSWS-12. All results reported
are based on observed data. Cerebrospinal fluid (CSF) biomarkers were obtained
at 3 consecutive time points, just prior to each intrathecal administration of
NurOwn®. We observed increases in neuroprotective molecules (VEGF, HGF) and
decreases in neuroinflammatory biomarkers (MCP-1, and Osteopontin) in the CSF
samples. Additionally, we recently completed analyses of secondary efficacy
data, and detailed CSF and blood biomarker analyses. As described further,
below, we presented a detailed summary of the study outcomes at the 37th
Congress of the European Committee for Treatment and Research in Multiple
Sclerosis (ECTRIMS) on October 14, 2021 and intend to publish our findings in a
peer-reviewed journal. We are currently considering how best to advance NurOwn®
as an innovative treatment option in PMS.
On May 25, 2021, we made a scientific presentation of NurOwn® Exosome
preclinical ARDS data at the ISCT 2021 New Orleans Virtual Meeting
? demonstrating that intrathecal administration of NurOwn-derived exosomes
resulted in statistically significant improvements in multiple lung parameters
in a mouse model of acute respiratory distress syndrome (ARDS).
On June 15, 2021, we announced the expansion of NurOwn® IP Portfolio with grant
and allowance of multiple patents and applications in major markets. These
? include EU Patent No. 2880151, Hong-Kong patent No. HK1209453, Israel Patent
Application No 246943, Canadian patent application No. 2,937,305, U.S. patent
No. 10,869,899, U.S. Patent Application No. 16/047,129. For more details,
please refer to our "Intellectual Property" section below.
On July 27, 2021, we announced approval of GMP certification for a second
production site in Israel from the Israel Ministry of Health (MOH) for three
state-of-the-art cleanrooms leased by us at the Tel Aviv Sourasky Medical
? Center ("Sourasky Hospital"). The GMP approval confirms that these cleanrooms
are compliant with Israeli GMPs, which are aligned with European Union (EU)
GMPs, and more than doubles the Company's capacity to manufacture and ship
NurOwn® into the EU and local Israeli markets.
On October 14, 2021, Dr. Jeffery Cohen, Director of Experimental Therapeutics
at the Cleveland Clinic Mellen Center for Multiple Sclerosis, presented the
findings from the Phase 2 PMS study as an oral presentation at the fully
? digital 37th Congress of the ECTRIMS. The study achieved the primary endpoint
of safety and tolerability. It demonstrated a reduction of neuroinflammatory
biomarkers and an increase in neuroprotective biomarkers in the CSF and
consistent improvement across Multiple Sclerosis functional outcome measures,
including measures of walking, upper extremity function, vision and cognition.
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NurOwn® Proprietary Technology
NurOwn® technology is based on an innovative manufacturing protocol, which
induces the differentiation of purified and expanded bone marrow-derived
mesenchymal stem cells ("MSC") and consistently generates cells that release
high levels of multiple neurotrophic factors ("MSC-NTF" cells) to modulate
neuroinflammatory and neurodegenerative disease processes, promote neuronal
survival and improve neurological function. These factors are known to be
critical for the growth, survival and differentiation of neurons, including:
glial-derived neurotrophic factor ("GDNF"); brain-derived neurotrophic factor
("BDNF"); vascular endothelial growth factor ("VEGF"); and hepatocyte growth
factor ("HGF"), among others. VEGF is one of the most potent neuronal and motor
neuron survival factors and has demonstrated important neuroprotective effects
in ALS and several other neurodegenerative diseases.
NurOwn® manufacturing involves a multi-step process that includes the following:
harvesting and isolating undifferentiated stem cells from the patient's own bone
marrow; processing of cells at the manufacturing site; cryopreservation of MSC
to enable multiple treatments from a single bone marrow sample; and intrathecal
("IT") administration of MSC-NTF cells into the same patient by standard lumbar
puncture. This administration procedure does not require hospitalization and has
been shown to be generally well tolerated in multiple CNS clinical trials to
date. The completed NurOwn® U.S. Phase 3 ALS and the NurOwn® U.S. Phase 2 PMS
trials evaluated the therapeutic potential of repeated intrathecal MSC-NTF cell
administration (three doses at bi-monthly intervals). The planned EU Phase 2
clinical trial will evaluate biomarkers and safety of NurOwn® in prodromal to
mild AD patients also using repeated intrathecal MSC-NTF cell administration
(three doses at bi-monthly intervals).
The proprietary technology and manufacturing processing of NurOwn® (MSC-NTF
cells) for clinical use is conducted in full compliance with current Good
Manufacturing Practice ("cGMP"). The NurOwn® proprietary technology is fully
owned or developed by our Israeli Subsidiary. All granted patents related to
NurOwn® (MSC-NTF cells) manufacturing process are fully assigned to or owned by
our Israeli Subsidiary (please see Intellectual Property section for details).
The NurOwn® Transplantation Process
? Bone marrow aspiration from the patient;
? MSC Isolation and propagation;
? MSC Cryopreservation;
? MSC thawing and differentiation into neurotrophic-factor secreting (MSC-NTF;
NurOwn®) cells; and
? Intrathecal administration into the patient's cerebrospinal fluid by standard
lumbar puncture.
Differentiation before Transplantation
We believe that the ability to induce autologous adult mesenchymal stem cells
into differentiated MSC-NTF cells makes NurOwn® uniquely suited for the
treatment of neurodegenerative diseases.
The specialized MSC-NTF cells secrete multiple neurotrophic factors and
immunomodulatory cytokines that may result in:
? Protection of existing neurons;
? Promotion of neuronal repair;
? Neuronal functional improvement; and
? Immunomodulation and reduced neuroinflammation.
Autologous (Self-transplantation)
The NurOwn® technology platform is autologous, using the patient's own
bone-marrow derived stem cells for "self-transplantation." In autologous
cellular treatment, there is no introduction of unrelated donor antigens that
may lead to alloimmunity, no risk of rejection and no need for treatment with
immunosuppressive agents, which can cause severe and/or long-term side effects.
In addition, the use of adult stem cells is free of several ethical concerns
associated with the use of embryonic-derived stem cells in some countries.
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NurOwn® ALS Clinical Program
We announced top-line data from the Phase 3 clinical trial of NurOwn® in ALS on
November 17, 2020. We have been granted Fast Track designation by the U.S. Food
and Drug Administration ("FDA") for this indication, and been granted Orphan
Drug Status, in the U.S. and Europe, which provides us the potential for an
extended period of exclusivity.
Phase 1/2 ALS Open Label Trials
We have completed two early stage Phase 1/2 and 2 open-label clinical trials of
NurOwn® in patients with ALS at the Hadassah Medical Center ("Hadassah") in
Jerusalem, Israel, as well as a Phase 2 double-blind, placebo-controlled,
multicenter clinical trial at three prestigious U.S. Medical centers - the
Massachusetts General Hospital (MGH) in Boston, Massachusetts Memorial Hospital
in Worcester, Massachusetts, and the Mayo Clinic in Rochester, Minnesota - all
highly experienced in the management and investigation of ALS.
The first two open-label trials were approved by the Israeli MoH. The
first-in-human trial, a Phase 1 safety and efficacy trial of NurOwn®
administered either intramuscularly or intrathecally in 12 ALS patients, was
initiated in June 2011. In the Phase 2 dose-escalating study, 14 ALS patients
were administered NurOwn® by a combined route of intramuscular and intrathecal
administration. These studies demonstrated the safety of NurOwn® by both routes
of administration and showed preliminary signs of efficacy.
In January 2016, the results of the two completed Phase 1/2 study and Phase 2
open label trials were published in JAMA Neurology. This demonstrated a slower
rate of disease progression following MSC-NTF cell transplantation as measured
by the ALSFRS-R, the gold standard for the evaluation of ALS functional status,
and Forced Vital Capacity ("FVC"), a measure of pulmonary function, as well as
positive trends in the rate of decline of muscle volume and the compound motor
axon potential ("CMAPs"). This was the first published clinical data using
autologous mesenchymal stem cells, induced under culture conditions to produce
NTFs, with the potential to deliver a combined neuroprotective and
immunomodulatory therapeutic effect in ALS and potentially modify the course of
this disease.
Phase 2 ALS Randomized Trial
The Phase 2 U.S. study was conducted under an FDA Investigational New Drug
("IND") application. This randomized, double-blind, placebo-controlled
multi-center U.S. Phase 2 clinical trial evaluating NurOwn® in ALS patients was
conducted at three clinical sites: (i) the Massachusetts General Hospital (MGH)
in Boston, (ii) Massachusetts Memorial Hospital in Worcester, Massachusetts, and
(iii) the Mayo Clinic in Rochester, Minnesota. For this trial, NurOwn® was
manufactured at the Connell and O'Reilly Cell Manipulation Core Facility at the
Dana Farber Cancer Institute in Boston and at the Human Cellular Therapy Lab at
the Mayo Clinic. In this study, 48 patients were randomized 3:1 to receive
NurOwn® or placebo.
Results of this Phase 2 Study were published in the peer reviewed Journal
'Neurology'. The publication entitled "NurOwn, Phase 2, Randomized, Clinical
Trial in Patients with ALS: Safety, Clinical, and Biomarker Results" was
published in December 2019.
Key findings from the trial were as follows:
The study achieved its primary objective, demonstrating that NurOwn®
transplantation was well-tolerated. There were no discontinuations from the
trial due to AEs and there were no deaths in the study. The most common adverse
events (mild or moderate severity), were transient procedure-related AEs such as
headache, back pain, pyrexia arthralgia and injection-site discomfort, which
were more commonly seen in the NurOwn®-treated participants compared to placebo.
NurOwn® achieved multiple secondary efficacy endpoints, showing evidence of a
clinically meaningful benefit. Notably, response rates in the ALS functional
rating scale (48-point ALSFRS-R outcome measure) were higher in NurOwn®-treated
participants, compared to placebo, at all study timepoints over 24 weeks.
A pre-specified responder analysis examined percentage improvements in the post
treatment ALSFRS-R slope (in points change per month) compared to pre-treatment
slope and demonstrated that a higher proportion of NurOwn® treated participants
achieved a 100% improvement in the post-treatment vs. pre-treatment slope,
compared to the placebo group. This analysis also demonstrated that a higher
proportion of the NurOwn® treated participants achieved a 1.5 point per month or
greater improvement in the post-treatment vs. pre-treatment ALSFRS-R slope,
compared to the placebo group.
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The treatment effects were greater in the rapid progressor subgroup (in which
pretreatment ALSFRS-R declined by 2 or more points in the three months
pre-treatment).
As an important confirmation of NurOwn®'s mechanism of action, levels of
neurotrophic factors and inflammatory markers were measured in the cerebrospinal
fluid ("CSF") samples collected from participants pre and two weeks post
treatment. In the samples of those participants treated with NurOwn®,
statistically significant increases in levels of neurotrophic factors VEGF, HGF
and LIF and a statistically significant reduction in inflammatory markers MCP-1,
SDF-1 and CHIT-1 were observed post-treatment. Furthermore, the observed
reduction in inflammatory markers correlated with ALS functional improvements.
These clinical-biomarker correlations were not seen in placebo-treated
participants, consistent with the proposed combined neuroprotective and
immunomodulatory mechanism of action of NurOwn® in ALS.
In summary, a higher proportion of NurOwn® treated participants, particularly
those with more rapid disease progression, experienced stabilization or
improvement in ALS function, as measured by the post-treatment vs. pre-treatment
ALSFRS-R slope change.
Phase 3 ALS Clinical Trial
Following successful completion of the Phase 2 study, we conducted a Phase 3
trial (a multi-dose double-blind, placebo-controlled, multicenter trial
protocol) that was designed to generate data to potentially support a Biologic
License Application ("BLA") submission in the U.S. for NurOwn® in ALS. The
clinical trial completed enrollment in October 2019 of an enriched patient
population of rapid progressors based on superior outcomes observed in the
Phase-2 pre-specified sub-group. The study is registered at
www.clinicaltrials.gov (ClinicalTrials.gov Identifier: NCT03280056).
We announced top-line data from our Phase 3 ALS trial on November 17, 2020.
Results from the trial showed that NurOwn® was generally well tolerated in the
population of rapidly progressing ALS patients. However, the trial did not reach
statistically significant results. No new safety concerns were identified. On
February 9, 2021, we announced feedback from our Type-C Meeting with FDA to
review specific aspects of our planned manufacturing modifications to support
the development of a semi-automated commercial manufacturing process for NurOwn®
(MSC-NTF cell). On February 22, 2021, we announced high-level FDA feedback on
NurOwn® ALS clinical development program. The FDA concluded from their initial
review that the current level of clinical data does not provide the threshold of
substantial evidence that FDA is seeking to support a BLA. In addition, the FDA
advised that this recommendation does not preclude the Company from proceeding
with a BLA submission. We are in active consultation with principal
investigators, ALS experts, expert statisticians, regulatory advisors, and ALS
advocacy groups to assess the benefit/risk of a BLA submission before making a
final decision.
Key findings from the trial were as follows:
? NurOwn® was generally well tolerated in this population of rapidly progressing
ALS patients.
While showing a numerical improvement in the treated group compared to placebo
? across the primary and key secondary efficacy endpoints, the trial did not
reach statistically significant results.
The primary efficacy endpoint, a responder analysis evaluating the proportion
of participants who experienced a 1.25 points per month improvement in the
post-treatment ALSFRS-R slope compared to pre-treatment, was powered on assumed
treatment response rates of 35% on NurOwn® versus 15% on Placebo. These
estimates were based on available historical clinical trial data and the
? NurOwn® Phase 2 data. The primary endpoint was achieved in 34.7% of NurOwn®
participants versus 27.7% for Placebo (p=0.453). Therefore, the trial met the
expected 35% NurOwn® treatment group efficacy response assumption, however the
high placebo response exceeded the placebo response expected based on
contemporary ALS trials. When following the SAP to implement sensitivity to the
primary endpoint, there is a slight change in the percentage of responders
(32.6%), but no P value change.
The secondary efficacy endpoint measuring average change in ALSFRS-R total
? score from baseline to Week 28, was -5.52 with NurOwn® versus -5.88 on Placebo,
a difference of 0.36 (p= 0.693).
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In an important, pre-specified subgroup early in the disease course based on
ALSFRS-R baseline score greater than 35, NurOwn® demonstrated a clinically
meaningful treatment response across the primary and key secondary endpoints
? and remained consistent with our pre-trial, data-derived assumptions. In this
subgroup, there were 34.6% responders who met the primary endpoint definition
on NurOwn® and 15.6% on Placebo (p=0.288), and the average change from baseline
to week 28 in ALSFRS-R total score was -1.77 on NurOwn® and -3.78 on Placebo
(p=0.198), an improvement of 2.01 ALSFRS-R points favoring NurOwn®.
Cerebrospinal fluid (CSF) biomarker analyses confirmed that treatment with
NurOwn® resulted in a statistically significant increase of neurotrophic
? factors (VEGF and HGF) and reduction in neurodegenerative (neurofilament) and
neuroinflammatory biomarkers (MCP-1) that was not observed in the placebo
treatment group.
Pre-specified statistical modeling designed to predict clinical response with
? high sensitivity and specificity based on ALS biomarkers and ALS Function
confirmed that NurOwn® treatment outcomes could be predicted by baseline ALS
function as well as key CSF neurodegenerative and neuroinflammatory biomarkers.
On October 6, 2021 we announced that a scientific abstract titled "CSF biomarker
correlations with primary outcome in NurOwn Phase 3 clinical trial" would be
presented as a scientific poster at the fully digital 2021 Northeast Amyotrophic
Lateral Sclerosis Consortium® (NEALS) conference. The presentation was
delivered by James Berry, M.D. MPH, Winthrop Family Scholar in ALS Sciences,
Director of the Massachusetts General Hospital (MGH) multidisciplinary ALS
clinic and Chief of the Division of ALS and Motor Neuron Diseases, Boston MA.
The presentation highlighted CSF biomarkers that demonstrate high accuracy in
predicting the primary clinical outcome using an unbiased stepwise logistic
regression analysis.
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NurOwn® Clinical Manufacturing
We have developed a validated cryopreservation process for the long-term storage
of MSC, that allows multiple doses of NurOwn® to be created from a single bone
marrow harvest procedure in the multi-dose clinical trials and to avoid the need
for patients to undergo repeated bone marrow aspiration. A validation study was
conducted in 2017 comparing NurOwn® derived from fresh MSC to those derived from
cryopreserved MSC. Company scientists were successful in showing that the MSC
can be stored in the vapor phase of liquid nitrogen for prolonged periods of
time, while maintaining their characteristics. Cryopreserved MSC are capable of
differentiating into NurOwn®, similar to the NurOwn® derived from fresh MSC from
the same patient/donor, prior to cryopreservation and maintain their key
functional properties including immunomodulation and neurotrophic factor
secretion.
We contracted with City of Hope's Center for Biomedicine and Genetics to
manufacture clinical supplies of NurOwn® adult stem cells for our Phase 3
clinical study. City of Hope supported the manufacturing of NurOwn® and placebo
for the participants treated in the Phase 3 study. The Connell and O'Reilly Cell
Manipulation Core Facility at the Dana Farber Cancer Institute (DFCI) in Boston
was also contracted to manufacture NurOwn® and placebo for our Phase 3 ALS
clinical study participants and commenced manufacturing in October 2018. DFCI
core manufacturing facility also supplied NurOwn® for our Phase 2 PMS study.
On October 22, 2020, we announced a partnership with Catalent, the leading
global provider of advanced delivery technologies, to manufacture NurOwn®, which
has been evaluated for the treatment of ALS in our Phase 3 clinical trial. If we
decide to file a BLA and are granted approval, Catalent will be our partner for
manufacturing commercial quantities of NurOwn® to treat patients with ALS. Our
tech transfer to Catalent has already been initiated and will allow for
continuous supply of NurOwn® for future clinical trials. On October 26, 2020, we
announced the selection of RR&D as our partner to expedite site selection and
design services for a state-of-the-art manufacturing facility for NurOwn®
(autologous MSC-NTF) in the U.S. Our partnership with RR&D to help us establish
in-house manufacturing capabilities will accelerate once a regulatory pathway is
clear. These partnerships will ensure an ongoing cGMP clinical supply of NurOwn®
and enable us to provide rapid treatment access to patients if we obtain
regulatory approval.
In addition, we currently lease a GMP certified manufacturing facility in
Jerusalem, Israel. On July 27, 2021, we announced the approval of GMP
certification for a second production site in Israel from the Israel Ministry of
Health (MOH) for three state-of-the-art cleanrooms leased by us at the Tel Aviv
Sourasky Medical Center ("Sourasky Hospital"). The GMP approval confirms that
these cleanrooms are compliant with Israeli GMPs, which are aligned with
European Union (EU) GMPs, and more than doubles the Company's capacity to
manufacture and ship NurOwn® into the EU and local Israeli markets.
Meetings with the FDA and FDA Senior Management
In July 2019, the BrainStorm management team was invited to participate in a
special in-person, high-level meeting with the senior management of the FDA Drug
and Biologics Centers and, 'I AM ALS', a grassroots ALS advocacy group
advocating for an ALS cure. FDA's Dr. Peter Marks, Director of the Center for
Biologics Evaluation and Research (CBER) and Dr. Janet Woodcock Director of the
Center for Drug Evaluation and Research (CDER) were in attendance with senior
FDA staff. BrainStorm's Phase 3 ALS principal Investigators Dr. Robert Brown
(Massachusetts Memorial Hospital, Worcester, Massachusetts) and Dr. Merit
Cudkowicz (Massachusetts General Hospital, Boston) joined by teleconference. The
meeting's purpose was to discuss BrainStorm's ongoing Phase 3 ALS clinical trial
as well as efforts to speed treatment access to the ALS patient community. The
meeting enabled an open and effective dialogue between the FDA and BrainStorm,
setting the stage for future meetings to explore practical options to quickly
bring our investigational treatment to those living with ALS.
On February 11, 2020, we announced that we held a high-level meeting with the
FDA to discuss potential NurOwn® regulatory pathways for approval in ALS. In the
planned meeting with senior CBER leadership and several leading U.S. ALS
experts, the FDA confirmed that the Phase 3 ALS trial was collecting relevant
data critical to the assessment of NurOwn® efficacy. The FDA indicated that they
would look at the "totality of the evidence" in the expected Phase 3 clinical
trial data.
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On February 9, 2021, we announced feedback on a Type-C Meeting with FDA on
future NurOwn® manufacturing plans and to review specific aspects of our planned
manufacturing modifications to support the development of a semi-automated
commercial manufacturing process for NurOwn® (MSC-NTF cell). The meeting
included a detailed review of the requirements for comparability testing to
support future modifications along with geographic considerations in the
sourcing of starting materials and future manufacturing production. We plan to
incorporate feedback from the FDA meeting and our experience from Phase 3
manufacturing to finalize a robust comparability plan that could enable
semiautomatic manufacturing to be introduced at the appropriate time in the
future. We also plan to finalize the remaining steps necessary to proceed with
running NurOwn® conformance batches. The FDA also provided comments on several
key aspects of the current manufacturing process, which we will use as we
continue our work to enable operations at our commercial manufacturing partner,
Catalent.
On February 22, 2021, we announced high-level FDA feedback on NurOwn® ALS
Clinical Development Program. The FDA concluded from their initial review that
the current level of clinical data does not provide the threshold of substantial
evidence that FDA is seeking to support a BLA. In addition, the FDA advised that
this recommendation does not preclude the Company from proceeding with a BLA
submission. We are in active consultation with principal investigators, ALS
experts, expert statisticians, regulatory advisors, and ALS advocacy groups to
assess the benefit/risk of a BLA submission before making a final decision.
ALS Expanded Access Program
On December 14, 2020, we announced the NurOwn® Expanded Access Program (EAP)
through which NurOwn® will be made available for ALS patients who completed all
Phase 3 scheduled treatments and follow-up assessments and meet specific
eligibility criteria.
The protocol for the EAP was developed in partnership with the FDA to provide
access to NurOwn® for Phase 3 clinical trial participants who meet specific
eligibility criteria. Initially, patients less severely affected by ALS, as
measured by ALSFRS-R, will be the first to receive treatment. This approach is
informed by recently announced top-line data from the Company's Phase 3 clinical
trial. According to the FDA, EAPs, alternatively known as "compassionate use"
programs, provide a pathway for patients to receive an investigational medicine
for a serious disease or condition outside of a clinical trial.
Through the EAP, the six clinical centers participating in the Phase 3 NurOwn®
trial will each have the opportunity to treat ALS patients who completed the
trial. These six centers are: University of California, Irvine; Cedars-Sinai
Medical Center; California Pacific Medical Center; Massachusetts General
Hospital; University of Massachusetts Medical School; and the Mayo Clinic. EAP
treatment of ALS patients who have completed the Phase 3 clinical trial will not
interfere with data or regulatory timelines. The Cell manipulation Core Facility
(CMCF) at the Dana Farber Cancer Institute will manufacture the investigational
therapy, assisted by on-site BrainStorm personnel.
Patient Access Programs (ALS)
The Company, has worked collaboratively with the Tel Aviv Sourasky Medical
Center (Ichilov Hospital), to treat ALS patients with NurOwn®, under the Israel
Hospital Exemption (HE) regulatory pathway for Advanced Therapy Medicinal
Products (ATMP), which was adopted by the Israeli MoH from the EMA regulation.
Between Q1, 2019 and Q1, 2021, the Company enrolled and treated 12 ALS patients
with NurOwn®, under the HE pathway. Thus far, the Company has received $3.4
million in gross proceeds in connection with the treatment of the aforementioned
patients.
NurOwn® in Progressive Multiple Sclerosis (PMS)
On December 15, 2018, the FDA approved the Company's IND to conduct a Phase 2
open label trial of repeated intrathecal administration of NurOwn® in PMS
(www.clinicaltrials.gov Identifier NCT03799718). The study entitled "A Phase 2,
open-label, multicenter study to evaluate the safety and efficacy of repeated
administration of NurOwn® (Autologous Mesenchymal Stem Cells Secreting
Neurotrophic Factors; MSC-NTF cells) in participants with Progressive Multiple
Sclerosis (PMS)" was designed to recruit 20 PMS participants at 5 leading U.S.
Multiple Sclerosis centers.
On December 18, 2019, the clinical trial independent Data Safety Monitoring
Board (DSMB) for the U.S. Phase 2 PMS study completed the first, pre-specified
interim analysis, of safety outcomes for the first 9 participants enrolled in
the study. After careful review of all available clinical trial data, the DSMB
unanimously concluded "the study should continue as planned without any protocol
modification".
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In August 2021, the clinical trial independent Data Safety Monitoring Board
(DSMB) for the U.S. Phase 2 PMS study issued an end-of-study statement
concluding that, based on the data, the procedures and treatment involved in
BCT-101-US were relatively safe and tolerable. Given that the study was "open
label" with no active comparator arm(s), it was not possible to evaluate
efficacy, except through comparison to non-contemporaneous natural history data
sets or to prior clinical trials of similar populations. Therefore, no
evaluation of potential risk/benefit could be done.
Phase 2 PMS Clinical Trial
On March 24, 2021, the Company announced positive top-line data in the Phase 2
study evaluating three repeated administrations of NurOwn®, each given 2 months
apart, as a treatment for PMS. The 28-week open-label Phase 2 clinical trial
enrolled 20 primary and secondary progressive MS patients based on the 2017
revised McDonald Criteria, ages 18-65, with baseline Expanded Disability Status
Scale (EDSS) scores between 3-6.5, without evidence of relapse within 6 months
of enrollment, able to walk 25 feet in 60 seconds or less and were permitted to
be on a stable dose of disease modifying therapy. Of the 20 patients enrolled,
18 were treated and 16 (80%) completed the study. Two patients discontinued
related to procedure-related AEs. There were no study deaths or AEs related to
multiple sclerosis worsening. The mean age of study patients was 47, 56% were
female, and mean baseline EDSS score was 5.4. The clinical trial compared
clinical efficacy outcomes with a 48-patient matched clinical cohort from the
Comprehensive Longitudinal Investigations in MS at the Brigham & Woman's
Hospital (CLIMB Study). MS Function and Cognition measures in the top-line
results included the timed 25-foot walk (T25FW); 9-hole peg test (9-HPT); Low
Contrast Letter Acuity (LCLA); Symbol Digit Modality Test (SDMT); and the 12
item MS Walking Scale (MSWS-12).
Key findings from the trial were as follows:
Prespecified 25% improvements in the timed T25FW and 9-HPT (combined average)
from baseline to 28 weeks were observed in 14% and 13% of NurOwn® treated
? patients, respectively, and improvement in 9-HPT (combined average) was
observed in 0% of the pre-specified matched historical controls in the CLIMB
registry.
38% of NurOwn® treated patients showed at least a 10-point improvement in the
? MSWS-12 from baseline to week 28, a patient reported outcome that evaluates
walking function.
47% of NurOwn® treated patients showed at least an 8-letter improvement across
? 28 weeks in the LCLA binocular 1.25%, a visual function test. Additionally, 27%
of NurOwn® treated patients showed at least an 8-letter improvement across 28
weeks in the LCLA binocular 2.5%,
? 67% of NurOwn® treated patients showed at least a 3-point improvement in the
SDMT, a measure of cognitive processing.
NurOwn treated patients showed a mean improvement from baseline of 10% in T25FW
? and a 4.8% improvement from baseline on the 9-HPT dominant hand, compared to
1.8% and 1.4% worsening respectively in matched historical controls from the
CLIMB registry.
? NurOwn treated patients showed a 6% improvement from baseline in MSWS-12.
All results reported are based on observed data. Cerebrospinal fluid (CSF)
biomarkers were obtained at 3 consecutive time points, just prior to each
intrathecal administration of NurOwn®. We observed increases in neuroprotective
molecules (VEGF, HGF) and decreases in neuroinflammatory biomarkers (MCP-1, and
Osteopontin).
Additionally, we recently completed secondary efficacy data and detailed CSF and
blood biomarker analyses. We presented a detailed summary of the study outcomes
at the 37th Congress of the ECTRIMS on October 14, 2021 and expect to publish
our findings in a peer reviewed journal and consider how best to advance NurOwn®
as an innovative treatment option in PMS.
On November 14, 2019, we received a $495,330 grant from the National Multiple
Sclerosis Society, through its Fast Forward program, to advance BrainStorm's
Phase 2 open-label, multicenter clinical trial of repeated intrathecal
administration of NurOwn® in participants with progressive Multiple Sclerosis.
As of September 30, 2021, we received $396,264 on account of the grant.
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NurOwn® in Alzheimer's Disease (AD)
On June 24, 2020, we announced a new clinical program focused on the development
of NurOwn® as a treatment for Alzheimer's disease, or AD. We are currently
evaluating next steps based on emerging scientific insights and the changing
regulatory landscape for AD following the recent FDA decision on Aducanumab.
While many Alzheimer's therapies have focused on a single target such as tau or
beta-amyloid, we believe NurOwn® has the capability to simultaneously target
multiple relevant biological pathways and bring a comprehensive approach to this
multifactorial disease. Importantly, NurOwn®'s mechanism of action may allow the
therapy to enable synergistic combinations with anti-tau or anti-beta-amyloid
treatments, further underscoring its potential to address critical unmet needs
in AD. In such a complex disease, addressing inflammation and neuroprotection is
an innovative approach and a first in the world for this technology.
Non-Dilutive Funding
In July 2017, we were awarded a grant in the amount of $15,912,390 from the
California Institute for Regenerative Medicine (CIRM) to aid in funding the
Company's pivotal Phase 3 study of NurOwn®, for the treatment of ALS. We
received $12,550,000 of the CIRM grant from 2017 2019: $9,050,000 from 2017
through 2018, and an additional $3,500,000 in 2019. On March 16, 2020, we
received $2,200,000 from CIRM for achieving our pre-determined milestones. In
July 2020, we received an additional $700,000 for making further progress in our
Phase 3 study. On December 1, 2020, we received our final payment of $462,390.
We have now received in full the total amount of the $15,912,390 grant funding
awarded by CIRM. The grant does not bear a royalty payment commitment nor is the
grant otherwise refundable.
On November 14, 2019, we were awarded a $495,330 grant from the National
Multiple Sclerosis Society (NMSS), through its Fast Forward program, for serum
and CSF biomarkers analysis in BrainStorm's Phase 2 open-label, multicenter
clinical trial of repeated intrathecal administration of NurOwn® in participants
with PMS. As of September 30, 2021, we have received $396,264 out of the
$495,330 awarded.
On April 3, 2020, we announced that our wholly owned subsidiary, BrainStorm Cell
Therapeutics Ltd., has been awarded a new non-dilutive grant of approximately
$1.5 million by the Israel Innovation Authority ("IIA"). The grant enables the
Company to continue development of advanced cellular manufacturing capabilities,
furthers development of MSC-NTF derived exosomes as a novel therapeutic
platform, and will ultimately enable BrainStorm to expand the therapeutic
pipeline in neurodegenerative disorders. As of September 30, 2021, we have
received $1.3 million out of the $1.5 million awarded.
On June 9, 2020, we announced that The ALS Association and I AM ALS have awarded
us a combined grant of $500,000 to support an ALS biomarker research study. The
grant will be used to draw insights from data and samples collected from
patients who participated in BrainStorm's Phase 3 clinical trial and treated
with NurOwn®, and to further the understanding of critical biomarkers associated
with treatment response for people with ALS. As of September 30, 2021, we have
received $200,000 out of $500,000 awarded.
Intellectual Property
A key element of our overall strategy is to establish a broad portfolio of
patents and other methods described below to protect its proprietary
technologies and products. BrainStorm is the sole licensee or assignee of 25
granted patents, 1 allowed patent and 23 patent applications in the United
States, Canada, Europe, and Israel, as well as in additional countries
worldwide, including countries in the Far East and South America (in calculating
the number of granted patents, each European patent validated in multiple
jurisdictions was counted as a single patent).
On January 27, 2020, the Israeli patent Office allowed application number 246943
titled 'Method of Qualifying Cells'. The allowed claims cover a method of
qualifying whether a cell population is a suitable therapeutic for treating
Amyotrophic Lateral Sclerosis (ALS) and an isolated population of cells that
secrete neurotrophic factors which are qualified useful as a therapeutic for
treating ALS.
On January 29, 2020, the European Patent Office (EPO) communicated its intention
to grant a European patent titled 'Methods of Generating Mesenchymal Stem Cells
which secrete Neurotrophic Factors'. The allowed claims cover the method for
manufacturing MSC-NTF cells (NurOwn®).
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On February 18, 2020, the U.S. Patent and Trademark Office (USPTO) issued U.S.
Patent No. 10,564,149 titled 'Populations of Mesenchymal Stem Cells That Secrete
Neurotrophic Factors'. The allowed claims cover a pharmaceutical composition for
MSC-NTF cells secreting neurotrophic factors (NurOwn®) comprising a culture
medium as a carrier and an isolated population of differentiated bone
marrow-derived MSCs that secrete neurotrophic factors.
On September 1, 2020, the Israeli Patent Office issued Israeli Patent No. 246943
titled 'Method of Qualifying Cells'. The granted claims include a cell
population that secretes neurotrophic factors which is qualified useful as a
therapeutic for treating ALS, and a method for qualifying said population.
On September 16, 2020, the Company announced that the Japanese Patent Office
(JPO) has granted Brainstorm's Japanese Patent No. 6,753,887, titled: "Methods
of Generating Mesenchymal Stem Cells Which Secrete Neurotrophic Factors". The
allowed claims cover a method of generating cells which secrete neurotrophic
factors from human undifferentiated mesenchymal stem cells (MSCs) derived from
the bone marrow of a single donor. The said neurotrophic factors includes: brain
derived neurotrophic factor (BDNF); glial derived neurotrophic factor (GDNF);
hepatocyte growth factor (HGF); and vascular endothelial growth factor (VEGF).
On December 15, 2020, the Canadian Patent office sealed Patent No. 2,937,305
titled 'Pharmaceutical composition comprising bone-marrow derived mesenchymal
stem cells'. The granted claims include a pharmaceutical composition for NurOwn®
(MSC-NTF cells, Mesenchymal Stem Cells secreting Neurotrophic Factors),
comprising a culture medium as a carrier and an isolated population of
differentiated bone marrow-derived MSCs that secrete neurotrophic factors
On February 19, 2021, the Hong Kong patent office sealed Patent No. HK1209453
titled 'Methods of Generating Mesenchymal Stem Cells which secrete Neurotrophic
Factors'. Allowed claims cover the method for manufacturing MSC-NTF cells
(NurOwn®).
On June 6, 2021, the US Patent and Trademark Office (USPTO) allowed US Patent
application No. 16/047,129 titled 'Mesenchymal stem cells for the treatment of
CNS diseases'. The allowed claims are for a method of treating a disease
selected from the group consisting of Parkinson's, epilepsy, amyotrophic lateral
sclerosis (ALS), Alzheimer's disease, schizophrenia, stroke and Huntington's
disease.
Patents protecting NurOwn® have been issued in the United States, Canada, Japan,
Europe, Hong Kong, and Israel.
For a complete list of our patent portfolio, please refer to the Annual Report
on Form 10-K for the fiscal year ended December 31, 2020.
Recent Scientific and Industry Presentations
Between October 12-16, 2020, Dr. Stacy Lindborg, Ph.D., delivered an on-demand
webinar at the 2020 Cell & Gene Meeting on the Mesa, held virtually.
On October 20, 2020, the Company presented a poster titled, "MSC-NTF (NurOwn®)
Exosomes: A Novel Therapeutic Modality in the Mouse LPS-induced ARDS model
Analysis" at the NYSCF Conference Meeting, being held virtually.
On December 9, 2020, the Company presented results from the Company's placebo
controlled, randomized, double-blind Phase 3 trial evaluating NurOwn® (MSC-NTF
cells) as a treatment for ALS at the 31st International Symposium on ALS/MND
virtual symposium.
On January 21, 2021, Dr. Ralph Kern, MD MHSc presented results from the
Company's placebo controlled, randomized, double-blind Phase 3 trial evaluating
NurOwn® (MSC-NTF cells) as a treatment for ALS at the California ALS Research
Summit.
On February 26, 2021, Dr. Stacy Lindborg, PhD, presented at the SVB Leerink 10th
Global Healthcare Conference.
On May 25, 2021, we presented a poster titled, "Molecular Mechanisms Underlying
MSC-NTF (NurOwn®) Exosome Benefits in a Mouse LPS-induced ARDS Model" at the
ISCT 2021 New Orleans Virtual Meeting.
On October 6, 2021 we announced that a scientific abstract titled "CSF biomarker
correlations with primary outcome in NurOwn Phase 3 clinical trial" was
presented as a scientific poster at the fully digital 2021 Northeast Amyotrophic
Lateral Sclerosis Consortium® (NEALS) conference.
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Between October 12-14, and October 19-20, 2021 Stacy Lindborg, Ph.D. delivered a
presentation (which was made available via virtual platform) at the 2021 Cell &
Gene Meeting on the Mesa, which was held as a hybrid conference. Dr. Lindborg's
presentation highlighted the expansion of Brainstorm's technology portfolio to
include autologous and allogeneic product candidates, covering multiple
neurological diseases. The most progressed clinical development program, which
includes a completed Phase 3 trial of NurOwn® in ALS patients, remains the
highest priority for Brainstorm. Dr. Lindborg emphasized that Brainstorm is
committed to pursuing the best and most expeditious path forward to enable
patients to access NurOwn®.
On October 14, 2021 the findings from the Phase 2 PMS study were presented by
Dr. Jeffrey Cohen, Director of Experimental Therapeutics at the Cleveland Clinic
Mellen Center for Multiple Sclerosis, as an oral presentation at the fully
digital 37th Congress of the ECTRIMS. The study achieved the primary endpoint of
safety and tolerability. It demonstrated a reduction of neuroinflammatory
biomarkers and an increase in neuroprotective biomarkers in the cerebrospinal
fluid (CSF) and consistent improvement across Multiple Sclerosis functional
outcome measures, including measures of walking, upper extremity function,
vision and cognition.
Research and Development
We are actively engaged in research and development to evaluate the potential
for clinical development of NurOwn® in various neurodegenerative disorders,
neurodegenerative eye disease and acute respiratory distress syndrome (ARDS).
Research is currently ongoing to develop additional specialized derivative cell
products such as MSC-NTF derived Exosomes. Exosomes are extracellular
nano-vesicles (secreted by the cells) that carry various molecular components of
their cell of origin, including nucleic acids, proteins and lipids. Exosomes can
transfer molecules from one cell to another, thereby mediating cell-to-cell
communication, ultimately regulating many cell processes, which are suitable for
clinical applications in multiple neurodegenerative diseases. NurOwn® derived
exosomes may possess unique features for the enhanced delivery of therapeutics
to the brain, due to their ability to cross the blood brain barrier and to
penetrate the brain and spinal cord.
The exosome research efforts are primarily focused on manufacturing of MSC-NTF
exosomes from bone marrow derived MSC:
1. Developing and optimizing large scale cell culture processes using
bioreactors, to generate exosomes.
2. Developing advanced scalable purification GMP methods that can be applied to
commercial use.
3. Quantification, characterization of phenotype and exosome cargo.
4. Assessment of MSC-NTF exosomes potency and stability.
5. Establishment of a method for exosomes modification.
6. Preclinical experiments in neurodegenerative and lung injury models.
NurOwn® derived exosomes have the potential to treat acute respiratory distress
syndrome (ARDS) due to their ability to penetrate deep tissues and decrease the
inflammatory response. ARDS is a type of respiratory failure associated with
widespread inflammation and lung damage mediated by dysregulated cytokine
production and is one of the severe features of COVID-19.
MSC exosomes may be delivered intravenously or directly into the lungs via
intratracheal administration have several practical advantages over cellular
therapy including ease of storage, stability, formulation and low
immunogenicity.
In a preclinical study, we evaluated MSCs and NurOwn® derived exosomes in an LPS
ARDS-mouse model, relevant to severe acute lung injury. The results from the
study showed that intratracheal administration of NurOwn® derived exosomes
resulted in a statistically significant improvement in multiple lung parameters.
These included the clinically relevant factors: functional lung recovery,
reduction in pro-inflammatory cytokines and most importantly, attenuation of
lung damage. Moreover, MSC-NTF cell derived exosomes exhibited a superior effect
when compared to treatment with exosomes derived from naïve MSCs from the same
donor. On January 20, 2021, we announced the peer-reviewed publication of this
preclinical study in the journal Stem Cell and Research Therapy. The study,
entitled "MSC-NTF (NurOwn®) exosomes: a novel therapeutic modality in the mouse
LPS-induced ARDS model," evaluated the use of NurOwn® (MSC-NTF cell) derived
exosomes in a mouse model of acute respiratory distress syndrome (ARDS).
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On May 25, 2021, we made a scientific presentation of NurOwn® Exosome
preclinical ARDS data at the ISCT 2021 New Orleans Virtual Meeting demonstrating
that intrathecal administration of NurOwn-derived exosomes resulted in
statistically significant improvements in multiple lung parameters in a mouse
model of acute respiratory distress syndrome (ARDS).
A poster titled, "Therapeutic Benefits of MSC-NTF (NurOwn®) Exosomes in Acute
Lung Injury Models" was presented on October 19, 2021 at the NYSCF 2021 Virtual
Meeting, which was held on October 19-20, 2021. Results in two different acute
lung injury models showed that the beneficial effects of intratracheal
administration of Exo MSC-NTF (MSC-NTF derived exosomes) were more active than
Exo MSC (MSC-derived Exosomes) in multiple parameters, including increase in
blood oxygen saturation and reduction in lung pathology, inflammatory
infiltration and levels of proinflammatory cytokines in bronchoalveolar lavage
fluid (BALF), in addition to reduction of lung fibrosis in the Bleomycin model.
The observed positive preclinical results suggest that intratracheal
administration of Exo MSC-NTF may have clinical potential as a therapy for acute
lung related pathologies and has the potential to modify physiological,
pathological, and biochemical outcomes with greater activity than sEVs isolated
from naïve MSCs.
For the completed multidose clinical studies in ALS and PMS, the Company has
improved the efficiency of NurOwn® production and improved its stability,
allowing manufacturing to take place at centralized clean room facilities from
which NurOwn® is distributed to the clinical trial sites, where the cells are
then administered to patients. The Company is also engaged in several research
initiatives to further improve and scale-up manufacturing capacity and extend
the shelf life of NurOwn®.
Corporate Information
We are incorporated under the laws of the State of Delaware. Our principal
executive offices are located at 1325 Avenue of Americas, 28th Floor, New York,
NY 10019, and our telephone number is (201) 488-0460. We also maintain an office
in Petach Tikva, Israel. We maintain a website at
http://www.brainstorm-cell.com. The information on our website is not
incorporated into this Quarterly Report on Form 10-Q.
Results of Operations
For the period from inception (September 22, 2000) through September 30, 2021,
the Company has not earned any revenue from operations. The Company does not
expect to earn revenue from operations in the near-term. The Company has
incurred operating costs and other expenses of approximately $5,277,000 during
the three months ended September 30, 2021, compared to $4,485,000 during the
three months ended September 30, 2020.
Research and Development Expenses:
Research and development expenses, net for the three months ended September 30,
2021, and 2020 were $3,618,000 and $1,867,000, respectively, representing an
dincrease of $1,751,000. This increase is due to (i) a decrease of $2,229,000 in
participation of the Israel Innovation Authority ("IIA") and CIRM, under various
awarded grants and (ii) an increase of $178,000 in costs related to preclinical
R&D activities, rent. travel and consultants. This increase was partially offset
by (i) a decrease of $498,000 for costs related to payroll and stock-based
compensation expenses; (ii) a decrease of $158,000 for costs related to patents
and the Phase 3 and Phase 2 Clinical Trials.
Excluding participation from IIA and other grants, research and development
expenses decreased by $478,000 from $4,080,000 in the third quarter of 2020 to
$3,602,000 in the third quarter of 2021.
General and Administrative Expenses:
General and administrative expenses for the three months ended September 30,
2021, and 2020 were $1,659,000 and $2,618,000, respectively. The decrease in
general and administrative expenses of $959,000 is primarily due to a decrease
of $1,028,000 in payroll and stock-based compensation, and a decrease of
$217,000 in consultants, PR and other costs. This decrease was partially offset
by the increase of $286,000 in rent and travel costs.
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Other Income and Expenses:
Financial expense for the three months ended September 30, 2021, and 2020, were
$59,000 and $3,000, respectively. as a result of the adoption of the Accounting
Standard Update ASU 2016-02 "Leases" and due to conversion exchange rates.
Net Loss:
Net loss for the three months ended September 30, 2021, was $5,336,000, as
compared to a net loss of $4,488,000 for the three months ended September 30,
2020. Net loss per share for the three months ended September 30, 2021, and 2020
was $0.15 and $0.14, respectively.
The weighted average number of shares of Common Stock used in computing basic
and diluted net loss per share for the three months ended September 30, 2021,
was 36,304,878, compared to 31,154,101 for the three months ended September 30,
2020.
Liquidity and Capital Resources
The Company has financed its operations since inception primarily through public
and private sales of its Common Stock and warrants, the exercise of warrants,
the issuance of convertible promissory notes, sales via the ATM program and
through various grants.
Cash, Cash equivalents (including short-term bank deposits) amounted to
approximately $27,809,000 as of September 30, 2021.
Net cash used in operating activities was $6,460,000 for the three months ended
September 30, 2021. Cash used for operating activities was primarily attributed
to reduction in outstanding trades payables, cost of payroll, materials, rent,
legal expenses and PR expenses. Net cash provided by investing activities was
$1,696,000 for the three months ended September 30, 2021, mainly representing
net increase in purchase of property and equipment and decrease in short-term
interest-bearing bank deposits.
On June 8, 2018, we filed a shelf registration statement on Form S-3 (File No.
333-225517) (the "Shelf Registration Statement"), which was declared effective
by the SEC on June 29, 2018, relating to Common Stock, warrants and units that
we may sell from time to time in one or more offerings, up to a total dollar
amount of $100,000,000. Other than the supplements filed on June 11, 2019, March
6, 2020, and on September 25, 2020, in connection with the ATM offerings
discussed below, and the prospectus supplement filed on March 6, 2020, in
connection with the registered direct offering discussed below, we have not
filed any supplemental prospectus defining particular terms of securities to be
offered under the Shelf Registration Statement.
On August 9, 2021, we filed a shelf registration statement on Form S-3 (File No.
333-258640) (the "New Shelf Registration Statement"), which was declared
effective by the SEC on August 19, 2021, relating to Common Stock, warrants and
units that we may sell from time to time in one or more offerings, up to a total
dollar amount of $200,000,000. The New Shelf Registration Statement included a
distribution agreement prospectus relating to the offering, issuance and sale of
up to a total dollar amount of $100,000,000 of common stock that may be issued
and sold from time to time. We have not filed any supplemental prospectus
defining particular terms of securities to be offered under the New Shelf
Registration Statement.
At-the-market (ATM) Offerings:
On June 11, 2019, the Company entered into a distribution agreement with Raymond
James & Associates, Inc. ("Raymond James"), pursuant to which the Company sold,
through the Raymond James, shares of Common Stock having an aggregate offering
amount of $20,000,000 (the "June 11, 2019 ATM") in an "at the market" offering
as defined in Rule 415 promulgated under the Securities Act, including, without
limitation, by sales made directly on the Nasdaq Capital Market, on any other
existing trading market for the Shares, through a market maker or as otherwise
agreed by the Company and Raymond James.
On March 6, 2020, the Company entered into a new distribution agreement with
Raymond James (the "Agent"), pursuant to which the Company was able to sell from
time to time, through the Agent, shares of Common Stock, having an aggregate
offering price of up to $50,000,000 (the "March 6, 2020, ATM"). Sales under the
March 6, 2020, ATM were made by any method permitted by law that is deemed to be
an "at the market" offering as defined in Rule 415 promulgated under the
Securities Act, including, without limitation, sales made directly on the Nasdaq
Capital Market, on any other existing trading market for the Shares, through a
market maker or as otherwise agreed by the Company and Raymond James. Under the
March 6, 2020, ATM, the Company sold an aggregate of 2,446,641 shares of Common
Stock at an average price of $9.45 per share, raising gross proceeds of
approximately $23.11 million.
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On September 25, 2020, the Company entered into an Amended and Restated
Distribution Agreement (the "Distribution Agreement") with SVB Leerink LLC
("Leerink") and Raymond James & Associates (together with Leerink, the "Agents")
pursuant to which the Company may sell from time to time, through the Agents,
shares of Common Stock, having an aggregate offering price of up to $45,000,000,
which aggregate amount includes amount unsold pursuant to the March 6, 2020 ATM
(the "September 25, 2020, ATM"). Sales under the September 25, 2020, ATM are to
be made by any method permitted by law that is deemed to be an "at the market"
offering as defined in Rule 415 promulgated under the Securities Act, including,
without limitation, sales made directly on the Nasdaq Capital Market, on any
other existing trading market for the Shares, through a market maker or as
otherwise agreed by the Company and the Agents. The Distribution Agreement
amends and restates in its entirety the Company's prior agreement with Raymond
James entered on March 6, 2020 (the "March 6, 2020, ATM"). The Company
previously sold 2,446,641 shares of Common Stock for gross proceeds of
approximately $23.11 million of Common Stock under the March 6, 2020, ATM.
During the quarter ended September 30, 2021, the Company did not sell any
additional shares of its Common Stock pursuant to the September 25, 2020, ATM.
Since inception and as of September 30, 2021, the Company has sold 4,721,282
shares of Common Stock for gross proceeds of approximately $29.1 million under
the September 25, 2020, ATM.
The Company has no obligation under the September 25, 2020, ATM to sell any
shares and may at any time suspend sales or terminate the September 25, 2020,
ATM in accordance with its terms. Subject to the terms and conditions of the
Distribution Agreement, the Agents will use their commercially reasonable
efforts to sell on the Company's behalf, from time to time consistent with its
normal sales and trading practices, such Shares based upon instructions from the
Company (including any price, time or size limits or other customary parameters
or conditions the Company may impose). The Company has provided the Agents with
customary indemnification rights, and the Agents will be entitled to a fixed
commission of 3.0% of the aggregate gross proceeds from the Shares sold. The
Distribution Agreement contains customary representations and warranties, and
the Company is required to deliver customary closing documents and certificates
in connection with sales of the Shares. Shares sold under the ATMs are issued
pursuant to the Company's existing Shelf Registration Statement, and the
Prospectus Supplement to the Registration Statements filed June 11, 2019, March
6, 2020, and September 25, 2020, respectively.
On August 9, 2021, the Company entered into an Amended and Restated Distribution
Agreement (the "New Distribution Agreement") with the Agents pursuant to which
the Company may sell from time to time, through the Agents, shares of Common
Stock, having an aggregate offering price of up to $100,000,000 (the "August 9,
2021, ATM"). Sales under the August 9, 2021, ATM are to be made by any method
permitted by law that is deemed to be an "at the market" offering as defined in
Rule 415 promulgated under the Securities Act, including, without limitation,
sales made directly on the Nasdaq Capital Market, on any other existing trading
market for the Shares, through a market maker or as otherwise agreed by the
Company and the Agents. In connection with the New Distribution Agreement, the
Company terminated the previous Distribution Agreement and the September 25,
2020 ATM. During the quarter ended September 30, 2021, the Company did not sell
any shares of its Common Stock pursuant to the August 9, 2021, ATM.
Registered Direct Offering:
On March 6, 2020, the Company entered into and closed a $10.0 million registered
direct offering of 1,250,000 shares of Common Stock at a per share purchase
price equal to $8.00. Purchaser also received a three-year warrant to purchase
up to 250,000 shares of Common Stock at any exercise price of $15.00 per share.
Recent Sales of Unregistered Securities:
Exercises of 2018 Amended Warrants:
On June 6, 2018, the Company entered into a Warrant Exercise Agreement (the
"2018 Warrant Exercise Agreement") with certain holders (the "2018 Warrant
Holders") of warrants (the "2015 Warrants") to purchase Common Stock. The 2015
Warrants were originally issued in the Company's January 8, 2015, private
placement. Pursuant to the 2018 Warrant Exercise Agreement, the 2018 Warrant
Holders exercised their 2015 Warrants for a total of 2,458,201 shares of Common
Stock at an amended exercise price of $5 per share. The warrant exercises
generated gross cash proceeds to the Company of $12.3 million. In addition, the
Company issued new warrants to the 2018 Warrant Holders to purchase an aggregate
2,458,201 unregistered shares of Common Stock, at an exercise price of $9.00,
with an expiration date of December 31, 2020 (the "2018 Warrants"). In
connection with the issuance of the 2019 Warrants (described below), certain
2018 Warrants were amended on August 2, 2019, to reduce the exercise price to
$7.00 per share and to extend the expiration date to December 31, 2021 (the
"Amended 2018 Warrants").
Between July 20, 2020, and July 24, 2020, 2018 Warrant Holders exercised an
aggregate of 280,000 shares of the Amended 2018 Warrants (the "2018 Exercised
Shares"), which exercises generated gross cash proceeds to the Company of
$1,960,000.
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The 2018 Warrants have not been registered under the Securities Act of 1933, as
amended (the Securities Act), or state securities laws. The shares issuable upon
exercise of the Amended 2018 Warrants have been registered for resale on the
Company's registration statement on Form S-3 (File No. 333-225995). The
exercised shares have been registered for resale on the Company's registration
statement on Form S-3 (File No. 333-201704). The issuance of the exercised
shares and 2018 Warrants was exempt from the registration requirements of the
Securities Act pursuant to the exemption for transactions by an issuer not
involving any public offering under Section 4(a)(2) of the Securities Act and
Rule 506 of Regulation D promulgated under the Securities Act. The Company made
this determination based on the representations that each party is an
"accredited investor" within the meaning of Rule 501 of Regulation D.
Exercises of 2019 Warrants:
On August 2, 2019, the Company entered into a Warrant Exercise Agreement which
generated gross cash proceeds to the Company of approximately $3.3 million.
Pursuant to the agreement, certain holders (the "2019 Warrant Holders") of the
2018 Warrants agreed to exercise 842,000 shares of Common Stock of their 2018
Warrants, at an amended exercise price of $3.90 per share, and the Company
agreed to issue new warrant shares to the Holders to purchase 842,000 shares of
Common Stock (the "2019 Warrants"), at an exercise price of $7.00, with an
expiration date of December 31, 2021. The 2018 Warrants held by the 2019 Warrant
Holders, to the extent not exercised, were also amended to reduce the exercise
price to $7.00 per share and to extend the expiration date to December 31, 2021
(the "Amended 2018 Warrants").
Between July 15, 2020, and July 24, 2020, 2019 Warrant Holders exercised an
aggregate of 620,000 shares of the 2019 Warrants (the "2019 Exercised Shares"),
which exercises generated gross cash proceeds to the Company of $4,340,000.
The Amended 2018 Warrants and 2019 Warrants have not been registered under the
Securities Act of 1933, as amended (the Securities Act), or state securities
laws. The shares issuable upon exercise of the 2019 Warrants have been
registered for resale on the Company's registration statement on Form S-3 (File
No. 333-233349), and the shares issuable upon exercise of the Amended 2018
Warrants have been registered for resale on the Company's registration statement
on Form S-3 (File No. 333-225995). The exercised shares have been registered for
resale on the Company's registration statement on Form S-3 (File No.
333-225995). The issuance of the exercised shares, Amended 2018 Warrants and
2019 Warrants is exempt from the registration requirements of the Securities Act
pursuant to the exemption for transactions by an issuer not involving any public
offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation
D promulgated under the Securities Act. The Company made this determination
based on the representations that each party is an "accredited investor" within
the meaning of Rule 501 of Regulation D.
Company Cash Needs
We have recently completed our Phase 3 ALS and Phase 2 PMS trials in the U.S.
Our material cash needs for the next 12 months, will include (i) costs of the
pre-clinical R&D activities and to conduct additional trials, if needed, (ii)
employee salaries, (iii) payments for rent and operation of the GMP facilities
and manufacturing of NurOwn®, and (iv) fees to our consultants and legal
advisors, patents, and fees for facilities to be used in our research and
development.
We believe our existing cash will be sufficient to fund our anticipated
operating cash requirements for at least twelve months following the date of
this filing. We currently have sufficient cash to support our operating
activities. We expect that we will continue to generate losses from the clinical
development and regulatory activities, which will result in a negative cash flow
from operating activity. If we decide to file a BLA for our ALS program and
granted a BLA approval, additional capital raise will be needed to commercialize
NurOwn® for ALS, and to conduct additional trials, if needed . The actual amount
of cash that the Company will need to operate is subject to many factors,
including, but not limited to, the timing, design and conduct of clinical trials
for our product candidates along with cost to commercialize these product
candidates.
We anticipate that we will need to raise substantial additional financing in the
future to fund our operations. In order to meet these additional cash
requirements, we may incur debt, license certain intellectual property, and seek
to sell additional equity or convertible securities that may result in dilution
to our stockholders. If we raise additional funds through the issuance of equity
or convertible securities, these securities could have rights or preferences
senior to those of our common stock and could contain covenants that restrict
our operations. There can be no assurance that we will be able to obtain
additional equity or debt financing on terms acceptable to us, if at all. Our
future capital requirements will depend on many factors, including:
?our ability to obtain funding from third parties, including any future
collaborative partners;
?the scope, rate of progress and cost of our clinical trials and other research
and development programs;
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?the time and costs required to gain regulatory approvals;
?the terms and timing of any collaborative, licensing and other arrangements
that we may establish;
?the costs of filing, prosecuting, defending and enforcing patents, patent
applications, patent claims, trademarks and other intellectual property rights;
?any product liability or other lawsuits related to our product candidates;
?the expenses needed to attract and retain skilled personnel;
?the costs and timing of future commercialization activities, including product
manufacturing, marketing, sales, and distribution, for any of our product
candidates for which we receive marketing approval;
?the revenue, if any, received from commercial sales of our product candidates
for which we receive marketing approval;
?the general and administrative expenses related to being a public company;
?the effect of competition and market developments; and
?future pre-clinical and clinical trial results.
The full extent to which the COVID 19 pandemic will directly or indirectly
impact our business, results of operations, financial condition, liquidity and
capital resources will depend on future developments that are highly uncertain
and cannot be accurately predicted at this time, including new information that
may emerge concerning COVID 19, the actions taken to contain it or treat its
impact and the economic impact on local, regional, national and international
markets. Our management team is actively monitoring this situation and the
possible effects on our financial condition and liquidity.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations
are based on our financial statements, which have been prepared in accordance
with accounting principles generally accepted in the U.S. The preparation of
these financial statements requires us to make judgments, estimates, and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements as well as the reported revenue and expenses during the reporting
periods. We continually evaluate our judgments, estimates and assumptions. We
base our estimates on the terms of underlying agreements, our expected course of
development, historical experience and other factors we believe are reasonable
based on the circumstances, the results of which form our management's basis for
making judgments about the carrying value of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.
There were no significant changes to our critical accounting policies during the
quarter ended September 30, 2021. For information about critical accounting
policies, see the discussion of critical accounting policies in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2020.
Off Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future material effect on our financial condition, changes in
financial condition, revenue or expenses, results of operations, liquidity,
capital expenditures, or capital resources.
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