Company Overview

BrainStorm Cell Therapeutics Inc. is a leading biotechnology company committedto the development and commercialization of best-in-class autologous cellulartherapies for the treatment of neurodegenerative diseases including: AmyotrophicLateral Sclerosis ("ALS", also known as Lou Gehrig's disease); ProgressiveMultiple Sclerosis ("PMS"); Alzheimer's disease ("AD"); and otherneurodegenerative diseases. NurOwn, our proprietary platform, leverages cellculture methods to induce autologous bone marrow-derived mesenchymal stem cells(MSCs) to secrete high levels of neurotrophic factors (NTFs), modulateneuroinflammatory and neurodegenerative disease processes, promote neuronalsurvival and improve neurological function.

NurOwn has been evaluated in completed Phase 3 ALS and Phase 2 PMS clinicaltrials. On November 17, 2020, we announced top-line data from our Phase 3 ALStrial. On March 24, 2021, we announced positive topline data from our Phase 2trial evaluating three repeated intrathecal administrations of NurOwn, eachgiven 2 months apart, as a treatment for PMS. On June 24, 2020, we announced anew clinical program focused on the development of NurOwn as a treatment forAD. We are currently evaluating next steps based on emerging scientific insightsand the rapidly changing regulatory landscape for AD following the recent FDAdecision on Aducanumab.

Our wholly-owned Israeli subsidiary, BrainStorm Cell Therapeutics Ltd. ("IsraeliSubsidiary"), holds exclusive rights to commercialize NurOwn technology througha licensing agreement with Ramot ("Ramot"), the technology transfer company ofTel Aviv University, Israel.

NurOwn has a strong and comprehensive intellectual property portfolio and wasgranted 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) forALS. For more information, visit BrainStorm's website

Our human capital resources objectives include, as applicable, identifying,recruiting, retaining, incentivizing and integrating our existing and newemployees, advisors and consultants. The principal purposes of our equity andcash incentive plans are to attract, retain and reward personnel through thegranting of stock-based and cash-based compensation awards, in order to increasestockholder value and the success of our company by motivating such individualsto perform to the best of their abilities and achieve our objectives. Wecurrently employ 40 employees in the United States and in Israel. Most of thesenior management team is based in the United States, and all of our clinicaltrial sites for ALS and PMS are in the United States. Our R&D center is locatedin Petach Tikva, Israel. In addition, we currently lease a GMP certifiedmanufacturing facility in Jerusalem, Israel, and have recently leased a new GMPcertified cleanroom facility, which includes three state-of-the-art cleanrooms,at the Tel Aviv Sourasky Medical Center to manufacture NurOwn. These twofacilities more than doubles our capacity to manufacture and ship NurOwn intothe 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 ourbusiness, including our preclinical studies and clinical trials. In December2019, 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 itsclinical trials for NurOwn. In response to the spread of COVID-19 and to ensuresafety of employees and continuity of business operations, we closed ouroffices, with our administrative employees continuing their work remotely andlimited the number of staff in any given research and development laboratory.Our research and development laboratory in Israel and manufacturing sites inU.S. and in Israel remained open. Post vaccination, our administrative officesin Israel and the U.S. are now open. The full extent to which the COVID-19pandemic will directly or indirectly impact our business, results of operationsand financial condition will depend on future developments that are highlyuncertain and cannot be accurately predicted at this time, including newinformation that may emerge concerning COVID-19, the actions taken to contain itor treat its impact and the economic impact on local, regional, national andinternational markets. Our management team is actively monitoring this situationand the possible effects on our financial condition, liquidity, operations,suppliers, industry, and workforce. For additional information on risks posed bythe COVID-19 pandemic, please see Part II, Item 1A - Risk Factors - RisksRelated 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

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


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


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,


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

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


BRAINSTORM CELL THERAPEUTICS INC. Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q) -...

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