Q2 2021 Brainstorm Cell Therapeutics Inc Earnings Call

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Good day, ladies and gentlemen, and welcome to the Brainstorm cell Therapeutics second quarter 2021 earnings call.

At this time, all participants have been placed on the listen only mode.

The floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor your host Thomas glossy Sir the floor is yours.

Good morning, and thank you for joining us before we begin the opening remarks, we would like to remind listeners that this conference call contains numerous statements descriptions of forecast and projections regarding brainstorm cell therapeutics and its potential future business operations and performance statements regarding the market potential for the treatment of narrowed in on it.

Of the sorters, such as a L. S M S.

The sufficiency of the company's existing capital resources for continuing operations in 2021 on beyond the <unk>.

Safety and clinical effectiveness of the neuro on technology platform clinical trials of neuro and related clinical development programs and the companies the bill of ability to develop strategic collaborations and partnerships to support their business planning efforts.

We're looking statements are subject to numerous risks and uncertainties many of which are beyond brainstorm control, including the risks and uncertainties described from time to time in its SEC filings.

The company's results may differ materially from those projected on today's call. The company undertakes no obligation to publicly update any forward looking statements.

Joining me on the call today will be hind leawood, President and CEO Brainstorm, Dr. Ralph <unk>, President and Chief Medical Officer, and Dr. Preterm Shah Executive Vice President and CFO. In addition, Dr. Stacy Lindbergh.

The Vice President and head of global clinical research and Dr. David <unk> Executive Vice President and Chief Operating Officer are also on the call and will be available to answer your questions. During the Q&A session.

Now I would like to turn the call over to Mr. Louis. Please go ahead.

Thank you Tom.

Thanks to all of listening for joining us to discuss our second quarter financial results on our.

Copper to the highlights.

There were several important business development of brainstorm.

We'd like to cover today, but let me begin with a brief review.

Of the congressional hearing on neuro degenerative diseases, which.

Which took place last week.

Last Thursday Thursday July 29.

The U S.

Energy income on Commerce Subcommittee on health I hold the public hearing on <unk>.

Total the.

Fast forward advancing treatments and cures for Neurodegenerative diseases.

The hearing feature testimony from several experts neurologists.

The relative.

Patient advocates pls patients the FDA and NIH.

Chairwoman at Schuh opened the hearing, stating and I quote on it.

The work to date is to help create the fighting chance against these deadly diseases.

I think every member of our committee has heard from patients who are fed up with the lack of options.

2 drugs Amex all of the 3.5 and neuron have.

We have captured the attention and sparked a debate over whether the potential benefits of the drugs outweigh the risks.

Everyone here share the same goal.

Total approval for effective drugs.

On the question before are still sense, how do we get there end of quote.

The areas of presents a pivotal development for the Lf community.

And is the culmination of the work of the entirety of advocacy community advil.

Advocating for a policy change.

We were all reminders.

There are real people.

There is an untold human suffering from behind these.

Section of the cruel diseases.

This hearing of the Clarion call flow greater collaboration.

And the urgency.

On the industry government and advocacy to deliver treatments for Neurodegenerative diseases.

Patients and their families do not have time to wait.

For Brainstorm, it's reinforced our sense of urgency to work with governments and all stakeholders to make innovative treatments neurodegenerative disease.

Available to patients in need as quickly as possible.

The hearings may prove.

To be a watershed moment in the.

The history.

Yes.

Turkey development.

While it brings some did not participate directly in the hearings.

We along with our consultants follow them closely.

And what's the likely implications for us.

Of the patients so desperately in need of solutions.

The we're testimonials from highly respected AOS experts.

Who has been closely involved with neuron development.

Doctor merits of Covid.

The chair of the department of Neurology of Mass General Hospital.

And a principal investigator for neuro.

Also from Dr. Ginger the Andrews.

The director of neuromuscular of clinical trials of Columbia University.

A member of the ALS Association Board of Trustees, and the culture of Neil the northeastern AOS consortium.

Dr. The soft goods delivered compelling testimony.

She explained how the advances in understanding of brain disease, and an expanding pipeline of potential of treatments have already brought us to major therapeutic turning points for the therapeutics Alice.

She calls for increased funding for a lot of science clinical trials of standard assets and very importantly.

For the new policies and processes that will accelerate the regulatory approval of new and innovative treatments to address the unmet medical need of ALS patients and their families.

People with ALS and prescribing physicians.

Want drugs on the market, where we have reasonable confidence on both efficacy and safety.

The safety.

But the Andrew spoke eloquently of the need for transformational change on the <unk> field.

She acknowledged the challenges around making the approval decisions.

Promising treatments of notice of the people with ALS.

Maybe the third to FDA and Congress.

They are willing to accept greater risks.

And that of any treatment that retains function and provides more time was meaningful.

Most importantly patients currently effects of the bayless pathway for future solutions, the need effective solutions today.

Because of 2 it's also mentioned of course neural net analytics by the name.

We don't want to go into further detail on this call.

The full transcripts of the testimonies and the archived hearings can be viewed on the web side of the energy and Commerce Committee and the house of Congress.

We look forward to our continued on productive dialogue the day LLS experts patient.

Patient advocates and the FDA with the goal of the dreams on the <unk>.

Viable path forward for neural net AOS.

In parallel.

With our <unk> development program.

We're also developing neuro on other treatments of progressive Ms.

At the end of March we had announced very encouraging top line data from our phase 2 study and the certification.

I will ask of the Ralph turn our President and Chief Medical Officer to provide a brief update on where our progressive Ms programs times per day.

Thanks, and good morning true all as we previously communicated there are compelling reasons to advance our program in progressive Ines.

And we're in the process of preparing a manuscript for peer reviewed publication.

And we plan to present the data at an upcoming scientific Congress.

We also believe that consistent evidence in MFS and AOS.

Firms debt neuron by simultaneously targeting inflammation of the neuro degeneration.

Truly a platform technology and were learning much from the progressive and the study in that regard.

As a quick refresher.

We designed the progressive MF study to optimally identify functional gains over 28 weeks by studying progressive patients without recent relapses and by comparing this group 2 of prior matched progressive Ms Group of MF patients from the client study at the Brigham and women's hospital in Boston.

We focused on evaluating validated and objective measures of walking arm function and cognition vision as well as patients own the evaluation of the or walking impairment. We also obtained CSF and serum biomarkers known to be important in MFS to confirm neurons mechanism of action.

At the end of the study we were able to demonstrate safety and consistent changes with neuron across all functional measures with the number of participants meeting criteria for clinical improvements.

This is a unique observation and progressive and mass of disease, where the natural history is 1 of gradual and relentless deterioration.

We also observed consistent changes across Biomarkers supporting the proposed mechanism of action in Progressive Ms.

Following the study conclusion, we had the opportunity to present and discuss the data with our study of principal investigators with a wide range of external experts.

And with the leadership of MFS advocacy organizations and I must say that we have received very strong support and encouragement to take next steps.

At this point, we plan to review the phase II data with the FDA.

And based on these discussions we will carefully consider and announced the next steps.

<unk> back to you.

Thank you so much Ralph.

Also had important news on our manufacturing.

We announced last week that we have received GMP approval from the Israeli Ministry of Health plus of these state of the art.

That's the rough guess hospitals institutes for advanced cellular therapies.

The GMP approval confirm that these clean rooms are complying with the Israeli Gmp's and importantly, these are also aligned with European unions GMP.

Approval of this new facility and more than doubles, our capacity to manufacture and ship neuron into the EU and local Israeli market if approved in these markets.

Finally, we recently provided an update on our RV portfolio and announced a series of pattern on patent applications have been granted or allowed the territories, including the United States, The EU, Canada, Israel and Dan Kong from 2020 on 2021.

The <unk> of these patents are result of our world class expertise in it.

<unk> cell therapy to treat neurodegenerative disorders, and the balance firm.

Other strengthen our overall IP position in these markets.

I'll now turn over the call to Dr. Hsiao, Chief Financial officer to provide the financial update the freedom.

Thank you <unk> and good morning to all of it is my pleasure now to walk you through our second quarter 2021 financial performance.

Research and development expenses net for the 3 months ended June 32021 were $3.5.9 million compared to $569 million net for the 3 months ended June 32020.

This decrease of approximately $2.1 million year over year was primarily due to a decrease in expenses related to our phase III and phase II clinical trials on a decrease in expenses in connection with the stock based compensation expenses materials ranked and other activity.

The decrease in expenses was partially offset by an increase in costs related to patent preclinical R&D activities travel and consultants and the decrease in grant participation by the Israel Innovation authority for IAA.

Excluding party of the patient from IAA and other grant research and good operating expenses decreased by $2.2 million from $6.1 million in the second quarter of 2020 to $3.1 million in the second quarter of 2021.

General and administrative expenses for the 3 months ended June 32021 to 5.2 million compared to $1.71 million in the 3 months ended June 30 <unk>.

This increase of approximately 816000 year over year was primarily due to an increase in payroll stock based compensation consultant rent and other costs, partially offset by a decrease in PR and travel expenses.

Net loss for the 3 months ended June 32021 was $6.2.7 million or <unk> 17 per share compared to a net growth of 739 million or <unk> 25 per share for the 3 months ended June 32020.

Cash cash equivalents and short term bank deposits were approximately $35 million as of June 32021, compared to approximately $40 million on March 31.2021.

During the quarter ended June 32021, the company did not raise any capital under the September 25, 2020 ATM on crude.

The reception has great growth proceeds of approximately $29.1 million under the facility.

For further details on our financial please refer to our form 10-Q filed with the SEC today.

To your line.

Thanks Barton I'll now this is Tom and I will now read questions that were submitted from investors.

So our first emission actually contains 2 questions there.

Start by saying Brainstorm previously communicated that will first consult with the principal investigators AOS experts expert statisticians regulatory advisors and analysts advocacy groups to assess the benefit risk of the BLA submission before making a final decision regarding next steps following advisory from the FDA.

What was the consensus regarding the BLA submission based off of your discussions with experts advocacy groups of regulatory advisors and when do you plan on submitting a BLA and they also are asking regarding phase III clinical testing for AOS have you continued testing and are you achieving results that should be acceptable to the FDA for approval.

Thank you very good questions, Tennessee of would you take this.

Sure.

So first I wanted to start with our ultimate goal remains to secure the approval of your line is.

The list and we remain confident in the effectiveness and safety of neurons.

On our near term priority remains the published the phase III data and of peer reviewed journal of the manuscript is currently moving through the review process.

Since our last earnings call on the update on this question reference we've continued to hold meetings with analysts experts and key opinion leaders. In addition to consortium leadership groups on.

None of which were part of the trial and do not hand have firsthand experience with your own.

Of the shared our data and receive feedback in fact, we received and valuable insights from these conversations and very positive feedback from the world renowned experts.

And I would actually Sunrise debt, there's widespread agreement from.

From the experts that we've spoken to that of our data support advancing <unk> as a treatment for AOS.

We are gathering new data from participant in our expanded access program all of whom completed the phase II trial and net.

Certain on eligibility criteria that the critical outlines on.

We share the urgency of Atlas patients around the world, who deserve rapid access to potentially promising treatments and we will make a decision regarding the filing of the BLA based on what and when we believe it will provide the best opportunity to reach patients as quickly as possible.

Thank you.

Thank you I'll now move on to the next question.

So this is also the submission also included multiple questions.

You received you recently more than doubled your capacity to supply around the ALS patients across Italy, Israel and Europe.

Will there be of clinical trial in Europe before it will be accessible for patients in Europe or is it possible to use the existing data from your previous trial to have it go through the approval process in Europe, and Additionally is there already an indication of when neuro on will be shipped to Europe and be available to ALS patients.

The only thing is 1 of them.

Sure.

We're sensitive to the on the.

On the patient need for access outside of the U S. We continue potential opportunities in geographies that are outside the U S. The U S.

And are evaluating the relevant regulatory strategy and pathways.

We will provide details on the strategies and once they've been finalized on which will be subject to discussions with pregnant on government agencies.

In parallel we will continue to assess the squeeze.

As already stated our FTE strategy.

Very important need across the world that we certainly will be reflecting on.

Thank you.

Okay moving on to our next submission.

This person would like to know when BLA submissions could be expected as well as the time frame for peer review.

It was included a little bit.

On the previous question, but will elaborate more so all of our managed scrip for the phase III trial is written.

And currently moving through the review process.

The time line associated with the review process and.

And ultimately publication of the manuscript.

He is not on our control.

And thus the Kendra marks on this however, I can assure you that we are doing everything.

Everything in all of the power to expedite the publication.

We've not made a decision regarding.

When and if to file the BLA.

It remains an option of the principal use.

If and when we believe that it's the most effective way to secure approval from the room.

There are many moving pieces.

As evidenced during the congressional hearings that took place last week.

<unk> influence on what the influence our strategy.

We are carefully monitoring these and remain prepared to act accordingly.

Bob.

Now for our next submission they ask FDA discussions of side and in light of the decision on the Alzheimer's drug out of home do you think there's enough evidence in the data already share to utilize the prognostic biomarkers are patient reported outcomes for use as a surrogate endpoint for accelerated approval.

Yes, Thank you Ralph.

Yeah.

Yes, as we said during the call. We look forward to continued dialogue with AOS experts with patient advocates and with the FDA with the ultimate goal of agreeing on a viable path forward for neuron in AOS are.

Our dataset must be viewed as a whole.

And while we won't be publicly commenting on the specifics of our complete data set until our manuscript has been published.

I will emphasize a point that I made earlier and say that there's widespread agreement among the experts we have spoken with.

Debt, our data support advancing your own as a treatment for ALS.

So we look forward to our manuscripts publication, so that the data can be more broadly shared and discussed with the.

The community.

Thank you.

Our next submission would like to know what are the next steps for progressive Ms.

All of that goes through all of again thanks.

As I mentioned earlier, there are compelling reasons to advance our program in progressive Ms based on our growing understanding of how neuron impacts of <unk> biology.

Truly the remarkable results from our phase 2 study and very strong support from MFS experts in the EMS advocacy community.

At this point in time, we plan to publish of peer reviewed manuscript, obviously deliver scientific presentations at an upcoming Congress.

And fully review of the phase II data with the FDA. Once these activities are completed we will announce next steps.

Thank you.

Thanks, So for our next emission, they're asking about expanded access.

Since the Fda's public statement in early March we have had remarkable testimonies from patients in the expanded access program.

In addition to other individuals from right to try coming forward.

It's highlighting that the trajectory of progression stabilized.

With this additional supporting evidence do you think it's accurate to say that the neuro on benefit is left the chance.

Okay.

Stacey.

I don't believe I would characterize the regulatory process of being lots of channel.

We've conducted a well designed phase 2 trial, which stands as the foundation really on top of of the early clinical trials, which stand 10 years of clinical experience with their own debt.

Creation of the expanded access.

Program.

Naples is to collect additional information about their own..1. 1 example is that since all participants in the expanded access program completed the phase 3 trial and the data collected as part of this program contains longer exposures of narrowed and in fact doubled the number of treatments studied in our trials.

On the timeline of the expanded access program allows us pixel of questions around durability on from the initial treatment in the phase 3 trial.

And while the patient testimonies that this this question references and the evidence of what's been posted on social media of really remarkable on.

This will be supportive of the foundational evidence that will come from the well designed the trial data.

Thanks Stacy.

Okay.

And our next submission as a financial question asking who paid for the expansion manufacturing capacity does the current company currently have any debt and how much money does it currently have on hand.

Good day.

Yes, thanks on filled with respect to the first part of the question who paid for expansion of the manufacturing capacity so on.

The recently announced increase in manufacturing capacity with each of the 3 state of the art clean room that brainstorm piece to Lee at the Tel Aviv throughout the medical center with even the TMT certification with regards to the second part of the question on cash and debt of debt as I mentioned earlier on the call our cash position.

As of the end of the second quarter was approximately $35 million and the company currently has no debt on its balance sheet.

Thank you.

So our net next emission asks what does the use do you expect your next clinical trial to be in.

Top priority again approval for neuro on for the treatment of ALS and then <unk>.

Aggressively pursue indications where the science indicates the probability of success is high.

As we shared on this call we have generated the exciting clinical data of progressive of mess.

And we believe that norm of the platform technology from Neurodegenerative diseases, who.

We will provide additional updates on our future clinical plans as they become finalized.

Thanks time.

4 of last pre submitted questions. We have are you evaluating partner partnering opportunities and for which portfolio.

Yes.

David.

Sure. So we are receiving interest from partners and we are having continuous discussion.

The wide set of partners.

Show of the interest in the different parts of flower.

Pipeline the <unk>.

The leveraging the readout in the mess.

And in the Elas as well.

It comes from the.

Ex system technology.

Thanks.

Thank you <unk> I will turn it now to questions on answers.

Yes.

From the listeners.

Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments. Please press star 1 on your phone at this time.

We ask that law posing your question you. Please pick up your handset of listening on speaker phone should provide optimum sound quality.

Please hold while we poll for questions.

Your first question for today is coming from Jason Mccarthy. Please announce your affiliation then pose your question.

Hi, This is Mike look and of which on the line for Jason Mccarthy from Maxim Group.

Thanks for taking my question.

I wanted to ask just on the.

Kind of on the path forward.

It seems like a cross cell therapy pretty much across the board cell therapies seem to be more effective in the earlier stage patients where theres more function to preserve.

Would a potential.

Second study in that specific subgroup via potential direct from you could go for AOS.

<unk> in the future.

Thank you Stacey.

Yeah, Michael I think that we've seen across lots of the visa on.

The degenerative diseases, including Alzheimer's on that.

You can have more effective treatments more more.

More effective.

Zoltan trials when patients have not progressed as far so I think your statement is on is certainly I think very valid and as we've shared in the public domain, we do see in pre specified subgroups of patients that arent has progressed.

On responding more more substantially.

I don't want to speculate on on trial designs on for the future. We're obviously really laser focused on.

On gaining approval from our trial, that's completed but I think the the logic that you're expressing on is very much matches I think what the scientific community has been dealing with these horrible diseases.

Thank you so much thank you very much.

Next question please operator.

Your next question is coming from David ballots. Please announce your affiliation then pose your question.

Hello, and good morning, or on the big bounce from Mac small cap research.

I'm curious if.

You have had any additional interactions with the FDA.

Last call and do you plan on having any more interactions with them before potentially filing of BLA.

I'm not sure we're ready types of these questions and those interactions between us and the agency.

1 of them to respect the comfort.

With respect to us and we wanted to speak of them as well.

So good question on Bill David could try.

Alright understood.

Is the hospital exemption program still active in Israel.

And will you be able to use any of that data and a potential BLA filing.

Very good question. So definitely we will use the totality of the data if and when we would submit for approval.

In addition to that.

Hospitals on the program is not ongoing now, but we are in discussions with Israeli ministry of at the time of different regulatory path as well.

Alright, great. Thanks for the update this morning, and thanks for taking the questions.

So much for joining.

All of these your next question please.

Your next question is coming from Brian Schneider. Please announce your affiliation then pose your question.

Hi, Thanks for taking my question, Brian Schneider from Morgan Stanley wealth.

Like the 2 of the change probably because there's 3 treatments was and some of the Biomarkers was was greater.

And.

When we look at the comparison between a L S and M. S. We see similar consistency. So for example, we see reductions in inflammatory biomarkers increases the Neuroprotective Biomarkers and then modifications of Neurodegenerative Biomarkers So are <unk>.

<unk> the conclusions that we've drawn so far and I can only go so far today, because we do have some publications that are pending is that we truly believe that in your own as a platform technology and neurodegenerative diseases, where inflammation plays an important role.

And that the changes and Neuroprotective, nor degenerative an inflammatory biomarkers are very consistent in several across studies within the disease, such as Alice and between diseases, such as a O S and progressive M. S. So we're very encouraged by this and we we plant.

To share more information as it becomes available.

Thank you so much and all.

Any other questions or if he was on hold with the router.

There are no question. Thank you.

Well. Thank you very very much on I think everyone from listen again, all of those listening on the phone and all of the.

Listening through the web.

And hopefully we will have a better news.

Stronger nose on the next quarter. Thanks.

Thank you all.

Thank you ladies and gentlemen, this does conclude today's conference call. You may disconnect. Your phone line at this time and have a wonderful day. Thank you for your participation.

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