BCLI: Filing a BLA for NurOwn® for the Treatment of ALS…

By David Bautz, PhD

NASDAQ:BCLI

READ THE FULL BCLI RESEARCH REPORT

Business Update

Filing a BLA for NurOwn® for the Treatment of ALS

On August 15, 2022, BrainStorm Cell Therapeutics, Inc. BCLI announced that the company will be filing a Biologics Licensing Application (BLA) with the U.S. Food and Drug Administration (FDA) for NurOwn® for the treatment of amyotrophic lateral sclerosis (ALS). Up until now, the company had remained quiet about its intentions for how best to advance NurOwn, while at the same time working diligently in the background preparing for a regulatory filing after examining the totality of evidence from NurOwn's clinical studies, along with feedback from various key opinion leaders (KOL), ALS experts, and leaders from patient advocacy groups. We anticipate updates from the company as the process moves forward, with the first update regarding whether the FDA accepts the BLA.

New Clinical Analyses of Phase 3 Data

On August 12, 2022, an erratum was published in Muscle & Nerve regarding the publication on the Phase 3 clinical trial of NurOwn® for the treatment of ALS. During a routine quality control check and preparations for the upcoming BLA filing, the company discovered an error in the statistical model utilized by the vendor in the analysis of a key secondary endpoint, which was the average change from baseline to week 28 in ALSFRS-R score for the pre-specified subgroup of patients with ALSFRS-R scores at baseline of ≥35 (an indication of less disease progression). Specifically, the original publication reported results for that endpoint using a model that unintentionally deviated from the pre-specified statistical analysis plan by erroneously incorporating interaction terms between the subgroup and treatment. This was the only outcome in which the statistical model was applied incorrectly, thus no other results changed. Applying the correct statistical model for that outcome resulted in the average difference between NurOwn- and placebo-treated patients going from 2.01 points to 2.09 points, but importantly this difference became statistically significant with a P-value of 0.05. In addition, a statistically significant benefit for NurOwn® compared to placebo for that endpoint is also seen for all subgroups with baseline ALSFRS-R scores of at least 26 through the pre-specified subgroup of 35. While the trial did not reach statistical significance on the primary or secondary endpoints, we believe these corrected analyses support the conclusion that NurOwn has a positive treatment effect for patients with ALS.

Utilizing ENCALS Model to Characterize Primary Outcome

In June 2022, Dr. Jonathan Katz presented data from NurOwn's Phase 3 ALS trial that discussed the application of the ENCALS model and the ALSFRS-R baseline value to identify and minimize the impact of participant data most impacted by floor effects of the ALSFRS-R scale. The ENCALS model was developed to predict survival in ALS patients and classifies patients into five categories: very short, short, intermediate, long, and very long (Westeneng et al., 2018). For the Phase 3 data, in participants predicted by the ENCALS model to have intermediate to very long survival a treatment effect was observed. These patients were also less likely to be influenced by the ALSFRS-R scale floor effects. However, for patients predicted by the ENCALS model to have very short or short survival along with a high rate of decline and low baseline ALSFRS-R values, the placebo group was favored in the Phase 3 ALS trial. This was most likely due to the ALSFRS-R scale floor effect, something that should be taken into effect in ALS clinical trials to avoid misclassifying treatment responses.

Financial Update

On August 15, 2022, BrainStorm announced financial results for the second quarter of 2022. As anticipated, the company did not report any revenues during the second quarter of 2022. Net R&D expenses for the second quarter of 2022 were $5.1 million, compared to $3.6 million during the second quarter of 2021. The increase was primarily due to an increase in costs associated with the expanded access program. Excluding participation from the Israeli Innovation Authority (IIA) and other grants, R&D expenses were $5.1 million in the second quarter of 2022 compared to $4.8 million in the first quarter of 2021. G&A expenses for the second quarter of 2022 and 2021 were $2.5 million.

The company exited the second quarter of 2022 with approximately $12/2 million in cash, cash equivalents, and short-term deposits. As of August 10, 2022, BrainStorm had approximately 36.5 million common shares outstanding and, when factoring in stock options and warrants, a fully diluted share count of approximately 39.9 million.

Conclusion

We're glad that BrainStorm will be filing a BLA for NurOwn for the treatment of ALS. For investors, this presents a number of potential upcoming inflection points for the stock, including: 1) whether or not the FDA accepts the BLA; 2) the outcome of an Advisory Committee meeting (which we are assuming would happen if the BLA is accepted); and 3) potential approval of NurOwn for the treatment of ALS. Despite what the FDA stated last year in that the agency did not support a regulatory filing for NurOwn, we believe the regulatory environment has changed enough in the past year that we are confident the BLA for NurOwn will be accepted. In support of this, last month the FDA accepted Biogen's NDA for tofersen for the treatment of ALS despite the fact the drug failed to reach the primary endpoint in a Phase 3 trial. Given the urgent need for additional therapies in ALS, we believe the most prudent action by the FDA would be to accept the BLA for NurOwn and hold an Advisory Committee meeting where the totality of the data can be discussed. With our increased confidence in NurOwn's BLA getting to an Advisory Committee meeting, we have increased the probability of approval to 50%, which has increased our valuation to $21 per share.

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