Brainstorm Cell Therapeutics: Upcoming BLA In ALS (NASDAQ:BCLI)

Thesis

On August 15, 2022, Brainstorm Cell Therapeutics (NASDAQ:BCLI) caught the funding neighborhood unexpectedly, asserting that it might file a BLA for ALS. Brainstorm’s NurOwn failed to achieve a main endpoint in its Phase 3 trial in ALS. Yet, corrections to the preliminary knowledge had been reported and an erratum to the preliminary publication was revealed. Those corrections, though minor, did imply that statistical significance was shown in a predefined subgroup that had a baseline ALSFRS-R rating of ≥35. Additionally, NurOwn additionally confirmed profit in sufferers with ALSFRS-R scores of a minimum of 26-35. Higher ALSFRS-R rating imply much less neurodegeneration, that means NurOwn exhibits profit in sufferers that haven’t but reached the ultimate levels of ALS illness.

In ALS, a fancy, heterogeneous and multifactorial illness with a very quick neurodegenerative course of, these outcomes are outstanding. Yet once more, they originate from a remedy candidate specializing in decreasing neuroinflammation and modifying glial exercise. Only a number of corporations within the neurodegenerative house have proven promising outcomes of late, and I see this mix returning as a trademark.

NurOwn was proven to cut back the neurodegenerative biomarker NfL by 82% over the course of 5 months. Amylyx’s Albriova obtained a detrimental recommendation from the FDA, partially as a result of it didn’t present change of this biomarker over placebo, indicating no underlying change within the illness was going down. Biogen’s Tofersen did present a discount on this biomarker, albeit not as substantial as NurOwn. Despite additionally lacking its main endpoint in a Phase, Biogen has determined to file a BLA in ALS partially on the idea of Tofersen’s outcomes on this biomarker.

I consider the funding neighborhood will not be a lot conscious of the latest FDA’s view on NfL as a biomarker in neurodegenerative ailments. NurOwn’s BLA, when filed, could also be eligible for accelerated approval. And it’s presumably the most effective remedy candidate on the market to date.

I ought to add that Brainstorm can also be in want of money at this level however does has an ATM financing facility which it considers it’ll name upon when the market is correct.

Brainstorm Cell Therapeutics And NurOwn

Brainstorm Cell Therapeutics is an Israeli/US-based firm growing NurOwn, an autologous stem-cell primarily based remedy candidate for the remedy of a number of neurodegenerative ailments. This is its present pipeline.

NurOwn works as follows. Mesenchymal stem cells or MSC’s are harvested from the affected person’s physique after which cryopreserved. Outside of the affected person, Brainstorm’s proprietary expertise differentiates them to secrete a excessive quantity of neurotrophic elements or NTFs in addition to immunomodulatory cytokines, with out genetically modifying the MSC’s. The so-called MSC-NTF’s which can be created because of this will be cryopreserved for years to ship ongoing remedy, and are re-injected within the affected person by means of intrathecal injections.

NurOwn’s aim is to cut back neuroinflammation and to switch glial exercise in several neurodegenerative ailments. In ALS, microglia because the resident immune cells of the central nervous system (CNS) provoke a persistent heightened inflammatory burden by means of cytokines, a mind cell cytokine storm so to talk, and astrocytes lose their nerve-cell supporting perform. Both microglia and astrocytes are glial cells. Across neurodegenerative ailments, the lack of supporting motion by glial cells within the CNS is the place many of the field is currently looking at. Articles on neuroinflammation and glial activity in all neurodegenerative diseases are popping out virtually every day at this level, although the investing world appears not but on board with this. NurOwn is reinjected by means of a spinal wire injection, which apparently is manageable. The aim of NurOwn is to help nerve cells and dampen irritation. Patients in remedy obtain remedy each two months.

The beneath Vimeo-video as proven on Brainstorm’s web site explains that is in additional element.

This is the corporate’s three-year chart, which exhibits a major sell-off in the middle of 2021, which I’ll cowl beneath as it’s associated to the part 3 ALS trial readout.

Brainstorm has a $137 million market cap on the time of writing and a stock worth of $3.76.

Amyotrophic Lateral Sclerosis and Multiple Sclerosis

ALS is a fast-progressing neurodegenerative ailments that results in lack of motor perform and nerve cell loss of life. As many bear in mind from the 2014 ice bucket problem which provoked an unseen curiosity on this illness, there’s additionally a vibrant neighborhood looking for options to this illness. ALS is taken into account to be extremely heterogeneous in nature, with some sufferers shedding perform sooner than others. The quantity of neurodegeneration going down in ALS sufferers is usually seen as greater in comparison with different bigger neurodegenerative indications. Patients lose their lives on common in between two and 5 years after illness onset, though a small share of sufferers (10–20%) reside longer than 10 years. Although extra widespread in folks over sixty, ALS also can current in youthful sufferers. The FDA authorized two medicine, riluzole and edaravone. Both present a minor short-term profit at greatest in mortality and performance, and include side-effects. There is an unmet want for higher remedies. On June 23, 2022, the FDA unveiled its five-year action plan to seek out remedies for neurodegenerative ailments, with deal with ALS, together with the institution of a task-force and leveraging regulatory science efforts.

MS is a neurodegenerative illness markedly identified for demyelination, that means the myelin sheath that covers the nerves and neurons is rapidly being destroyed. The myelin sheath permits for insulation of nerves and axons and sign transmission. It is created by oligodendrocytes, one other immune or glial cell of the CNS. Currently approved therapies handle signs and permit for some slowing down of illness development.

The Initial Phase 3 Results in ALS

Failed Primary Endpoint

In November 2020, Brainstorm reported that regardless of being effectively tolerated, NurOwn’s Phase 3 trial ALS failed to achieve its main endpoint. The trial’s main endpoint was ALSFRS-R, the well-known and validated score scale for ALS. The trial was powered to see a 35% response price for NurOwn versus 15% for placebo. Patients eligible for the trial should have proven a minimal of three-point decline on that score scale over the 20 weeks main as much as the trial. The trial befell over the course of 16 weeks, then had a follow-up part as much as week 28. Secondary endpoints had been principally biomarker-related, together with inflammatory elements and cytokines.

The outcomes of the trial did present an enchancment within the general handled affected person inhabitants in comparison with placebo, but not one that led to statistical significance in that inhabitants. Shares of Brainstorm tanked because of this. NurOwn did reveal significant enchancment in comparison with placebo in a pre-specified subgroup of sufferers with early and fewer superior illness, however these simply missed reaching statistical significance. Additionally, NurOwn confirmed enhance in neurotrophic issue, and reduce in neurodegenerative and inflammatory biomarkers.

What adopted was that, after the FDA had initially stated that Brainstorm was amassing related knowledge essential to evaluation of NurOwn efficacy in its Phase 3 trial, it publicly stated in March 2021 that the NurOwn Phase 3 ends in ALS don’t present the stem cell remedy helps sufferers. The FDA did so publicly, I consider, in mild of the continuing stress it’s dealing with from ALS help teams.

At that time, regardless of the science being attention-grabbing, I had discarded Brainstorm Cell Therapeutics from my checklist of potential investments. Like many, I consider, I additionally didn’t choose up the information on the upcoming BLA that’s now simply been introduced; it was virtually hidden in quarterly outcomes, although the decision was just about solely about it. The latest evolutions within the subject of ALS, with Amylyx’s potential approval and Biogen’s BLA for Tofersen arising, present a subject with attention-grabbing developments.

The Announcement Of The upcoming Biologics License Application

On August 15, 2022, along with its quarterly outcomes, Brainstorm announced that it might file a BLA for NurOwn. How did that come about? Well, the initial publication of its Phase 3 readout had been corrected by an erratum, as the unique publication had reported outcomes that unintentionally deviated from the trial’s pre-specified statistical analysis plan. Following this correction, remedy distinction of greater than 2 factors for the common change in ALSFRS-R within the subgroup of sufferers with a baseline rating of a minimum of 35 was discovered. That subgroup confirmed 34.6% of responders assembly the first finish level on NurOwn versus and 15.6% of responders on placebo. This subgroup had been prespecified. The correction additionally demonstrated that each one subgroups that had a minimum of 26 to 35 as a baseline ALSFRS-R rating confirmed a statistically important profit.

The sufferers displaying profit share the widespread trait that they aren’t the furthest-progressed. As seen throughout neurodegenerative ailments, as soon as analysis is made on the idea of score scales of motor perform or cognition, the illness might have been smoldering within the physique for an extended time and is usually in late levels of development. Once the neurons are gone, there’s toddler can do. The aim of future remedy is to catch the illness in its earlier levels.

NurOwn’s Effects On Biomarkers

The above outcomes are supported by a number of reported biomarkers stepping into the identical route.

These embody biomarkers of neuroinflammation similar to MCP-1 and TREM2, or of neurotrophic help similar to VEGF.

Most importantly, in my eyes, is the readout NurOwn had on NfL, neurofilament mild chain, The readout for NfL, which NurOwn lowered by 82% in comparison with placebo over the course of 5 months of remedy, is proven on the left facet. Such share discount is main.

Brainstorm considers {that a} closing mannequin identifies biomarkers which can be extremely correct in predicting a statistically important remedy impact on its main endpoint.

Science And FDA’s Focus On Neurofilament Light

I consider the funding neighborhood within the subject of neurodegenerative ailments will not be but absolutely on board with NfL as a biomarker of neurodegeneration and neuronal damage. Science and the FDA are, and in the long run, that’s what issues. There are numerous publications on the matter, throughout neurodegenerative diseases. The rationale behind that’s that measurements of this biomarker, and solely this one, is greatest match to foretell each the rapidity of decline in untreated sufferers as the speed of success of any disease-modifying remedy, in a number of neurodegenerative ailments. It appears to be most predictive of decline in ALS and Alzheimer’s illness.

Discussions on a readout of NfL as made by a number of medical doctors on the advisory committee pop up on a number of event within the 300+ web page transcript of the FDA’s AdCom on Amylyx’s drug Albriova, slated for a PDUFA on September 29, 2022. Amylyx said, on this transcript:

This is Dr. Timmons from Amylyx. We do have knowledge on neurofilament mild. Similar to what we see with neurofilament heavy chain, we don’t see a distinction between the placebo and AMX0035 teams.

Billy Dunn, the FDA’s Director of the Office of Neuroscience, said that if Albriova had proven a constructive impact on plasma neurofilament heavy chain, it might have supplied essential contextual and supportive data of an ostensibly useful impact on the scientific measure. Amylyx did test for this biomarker in its Phase 3 trials for Albriova, which didn’t present any change over placebo as regards to NfL as a biomarker. This is the quote from the transcript originating from Billy Dunn (my very own highlighting):

I feel one thing essential to remember right here — I actually concur with what Dr. Buracchio mentioned — is neurofilament mild we really feel is a crucial side of the event program focused at mitigating neurodegeneration.

It is a marker of neurodegeneration or neuronal damage, and may we’ve seen an impact on neurofilament, we might have paid consideration to that. We requested about it straight, a number of occasions, throughout growth with the sponsor.

It is a measure that whereas not appropriate to be used as a stand-alone measure, one might actually envision a state of affairs the place an impact in what ostensibly is a useful route right here would have supplied essential contextual and supportive data of, once more, an ostensibly useful impact on the scientific measure.

Similarly, the shortage of an impact right here on that measure is one thing which we discovered to be a part of the general character of information that we see that doesn’t present sturdy help for the first measurement, so we expect it is applicable to seize right here.

Quite actually, within the curiosity of getting an efficient treatment obtainable to ALS sufferers, I feel all of us on this house would have most well-liked to have seen a directional profit there that was convincing. We did not, and we expect that’s of some concern within the general image that should not be construed as elevating using neurofilament to some form of unbiased measure that is appropriate by itself for evaluation. But we do suppose it is an important a part of the contextual image, and we do see it used pretty broadly in a majority of these ailments.

This was in March 2022 and to me, it feels just like the FDA is giving steering to different drug builders right here. A month in the past, we noticed Biogen deciding to hunt accelerated approval merely on the idea of its reporting of NfL by Tofersen in sufferers with ALS. Tofersen initially didn’t attain its main endpoint in a Phase 3 trial, regardless of seeing lowered illness development throughout a number of secondary and exploratory endpoints. On June 2022, Biogen moreover reported in SOD1-ALS that, the sooner Tofersen remedy began, the upper slowing of decline was throughout measures of scientific and respiratory perform, power, and high quality of life. What Biogen appears to be doing right here, is utilizing the accelerated approval pathway to energy its request for approval on biomarkers. This can be a altering strategy in neurodegenerative ailments, however from what I’ve quoted above, I consider the FDA is prepared for it. By January 25, 2023 the FDA ought to have its resolution as regards to Tofersen prepared.

And not by coincidence I consider, lower than a month later, Brainstorm broadcasts to file its BLA, as reported here. Brainstorm’s outcomes are within the lead right here. Biogen’s Tofersen reported variations of NfL ranges of 67% and 48% in comparison with baseline respectively within the faster- and slower-progressing populations over the course of seven months. These outcomes are actually lower within the SOD1-ALS subpopulation as reported in June 2022, however they’re nonetheless remarkably excessive compared to different reportings I’ve seen. Brainstorm, nonetheless, reported a 82% discount over the course of 5 months. Amylyx’s Albriova didn’t present any impact right here. Tofersen additionally reported rather more opposed occasions than NurOwn.

In Alzheimer’s illness, I can add that INmune Bio has reported an 84% reduction over the course of three months in Alzheimer’s illness, and I’ve not seen any reporting coming even near that measure, positively not over such a brief time frame. This can also be partially why INmune Bio is my high-conviction play in AD and the sphere of neurodegenerative ailments as a complete. I might additionally add that it’s a disgrace that Biogen has not reported knowledge on NfL for Aduhelm.

Brainstorm’s Phase 2 ends in main progressive MS

Though not the subject of this text, I’ll briefly cowl the Phase 2 ends in MS, as they underscore the validity of NurOwn as a remedy candidate throughout neurodegenerative ailments.

In March 2021, Brainstorm reported Phase 2 knowledge, displaying that three repeated administrations of NurOwn each two months was secure and confirmed enhancements of neurologic perform, cognition, and biomarkers. Improvements by 25% had been proven within the timed 25-foot stroll take a look at and 9-hole peg take a look at, in contrast with none in historic controls. The MS strolling scale take a look at confirmed that 38% of sufferers had a minimum of a 10-point enchancment. The letter acuity take a look at and image digit modality take a look at reviews had been that 47% and 67% of sufferers confirmed respectively an 8-letter enchancment and a minimum of a 3 factors enchancment in cognitive processing. Increases in neuroprotective molecules VEGF and HGF, and reduces in inflammatory biomarkers MCP-1, SDF-1 and osteopontin had been proven.

Overall, these outcomes corroborate outcomes seen in ALS. They additionally help the science that, by dampening irritation and modifying glial exercise appropriately, one can considerably modify the course of neurodegenerative ailments.

Financials

On August 15, 2022, Brainstorm reported 2Q22 a web lack of $7M. It has at the moment $12.2M in money on its stability sheet. Brainstorm has 36.5 million widespread shares excellent, and absolutely diluted, has a share rely of 39.9 million shares. When requested about Brainstorm’s money place, that is what its CEO mentioned:

So, we’ve an ATM with Leerink and Raymond and if the market will permit, we’ll faucet into it. No strain for the second. In the final yr, we did not faucet into it, so we’ll see. But thanks. It’s an excellent query.

The at-the-market financing facility is with Raymond James, and Brainstorm can choose as much as $100 million tapping into it. In March 2022, Brainstorm talked about that, as its money burn is considerably lowered, it has sufficient money to go ahead a minimum of over a year-and-a-half.

If dilution had been to happen within the close to future, all will rely on the quantity of financing picked up. The financing facility is at-the-market. Seeing Brainstorm will not be utilizing an excessive amount of money right now, extra dilution and share worth strain could also be low, additionally in mild of the present market cap.

On Valuation

Brainstorm’s market cap is at the moment $134 million.

About 30,000 patients per year are recognized with the illness within the US alone, with 5,000 new circumstances recognized annually. A staff of researchers has reported in 2016 that the worldwide illness incidence is expected to increase by 69% from 2015 to 2040. Global ALS market measurement in 2021 was $681 million. A market revenue forecast for ALS for 2026 of $885 million has been reported. With efficient remedies forthcoming, I consider this market measurement can exceed expectations over time. Lacking substantial competitors, I’m projecting gross sales might attain $200 million as of 2026, with peak gross sales of $300 million or extra being lifelike by 2028.

The complete MS market is at the moment value $25.43 billion, and is projected to develop to $33.17 billion by 2029. The main progressive MS market, which Brainstorm is focusing on, is about 10% of the full MS market, which might then complete about $3.32 billion. The MS market is extra aggressive, and I consider 10% in peak gross sales, or $300 million, as of 2028 is lifelike.

In mild of each projected peak gross sales totaling $600 million in income per yr, Brainstorm can be drastically undervalued in case of success.

At this level, solely two analysts are overlaying the stock. Zack’s small cap analysis’s David Bauth offers Brainstorm a worth goal of $22. Maxim’s Jason McCarthy‘s price target is $8.

Risks

As always, investing in biotech companies with one lead asset coming with a risk. One can see from the above price chart of Brainstorm that that risk can be severe. The risk here involves primarily regulatory dependency and efficacy issues. I have explained above how NurOwn for ALS is basically a drug that failed to meet its primary endpoint, but that Brainstorm still believes it has a chance of going for approval in the same indication in light of recent corrected reporting and perhaps more clarity on the FDA’s stance right here.

I’m going to make this extra concrete right now. The FDA must facet with Brainstorm to make this occur. After having obtained a number of feedback from the ALS neighborhood, the FDA publicly stated in March 2021 that the NurOwn knowledge didn’t help approval and determined to supply additional readability. Brainstorm’s aim is now, however the FDA’s earlier stances, to have the FDA come again on that call. This won’t be a simple job, however I consider the info are there to help it. And if the FDA grants Biogen’s Tofersen a go-decision, then that might create precedent which will even be useful for all drug builders within the neurodegenerative house.

Conclusion

Brainstorm has selected August 15, 2022 that it might quickly file a biologics license software for its autologous stem-cell-based remedy candidate NurOwn in ALS. At first sight, that announcement got here as a shock, because the drug had failed to achieve a main endpoint in ALS. At second sight, it could not. Minor corrections to the preliminary readout, as a result of authentic publication having reported outcomes that unintentionally deviated from the trial’s pre-specified statistical analysis, led the corporate to report {that a} prespecified subgroup of sufferers with a baseline ALSFRS-R rating of ≥35 did report statistical profit. Additionally, this profit seemingly extends to all sufferers with scores from 26 to 35.

The FDA’s transcripts on Amylyx’s drug candidate Albriova present steering as to the significance of neurofilament mild chain as a biomarker. The FDA appears to seek out this biomarker of serious significance, as it’s partially as a result of Amylyx’s Albrovia was unable to reveal any change over placebo right here, that the FDA’s advisory committee voted towards the approval of Albrovia. Biogen determined to go for accelerated approval of its drug candidate Tofersen in ALS primarily based on measurements of the identical biomarker. NurOwn has proven a 82% discount of this biomarker over the course of 5 months, which is considerably higher than Biogen’s Tofersen.

I consider thrilling occasions are forward for the ALS house. Brainstorm Cell Therapeutics is now able to file for a BLA for NurOwn. Amylyx’s Albriova is up for a PDUFA on September 29, 2022. The FDA’s name on Tofersen is slated for January 25, 2023. My wager is that, if any of those would make it to approval, NurOwn really stands the most effective probabilities. But in mild of latest knowledge, it must transfer the FDA to revise its earlier resolution on NurOwn.

For all of the above, I’m score Brainstorm Cell Therapeutics as a purchase.