On April 19, 2017, BrainStorm Cell Therapeutics (Nasdaq: BCLI) announced the publication of preclinical data on NurOwn® demonstrating potential utility in the treatment of autism. The research is published in Behavioural Brain Research and highlights the long-term beneficial effect of BrainStorm's NurOwn (neurotrophic factors-secreting mesenchymal stem cells) transplantation in the BTBR mouse model of autism (1). The company plans to pursue clinical development with NurOwn as a potential treatment for autism later this year. A Phase 3 clinical study with NurOwn as a potential treatment for amyotrophic lateral sclerosis (ALS) is also expected to begin in 2017.

Preclinical Autism Research

According to Autism Speaks, autism spectrum disorder (ASD) refers to a range of conditions characterized by challenges with social skills, repetitive behaviors, speech and nonverbal communication, as well as by unique strengths and differences. ASD is defined by a certain set of behaviors and is a "spectrum condition" that affects individuals differently and to varying degrees. There is no known single cause of autism, but increased awareness and early diagnosis/intervention and access to appropriate services/supports lead to significantly improved outcomes.

The CDC estimates autism’s prevalence as 1 in 68 children in the U.S. This includes 1 in 42 boys and 1 in 189 girls. Autism’s most obvious signs tend to appear between 2 and 3 years of age. In some cases, it can be diagnosed as early as 18 months, and some developmental delays associated with autism can be identified and addressed even earlier. Around one-third of people with autism remain nonverbal. Another one-third of people with autism have an intellectual disability.

BrainStorm's previous preclinical research found that mesenchymal stem cells (MSC) improve social function and induce long-lasting effects of amelioration of autistic-like behavior in BTBR mice (2). BTBR T+ Itpr3tf/J are an inbred strain of mice that demonstrate autistic-life behavioral phenotypes consistent with the diagnostic criteria for ASD. Use of BTBR mice to conduct preclinical research is a widely accepted animal model of disease (3). BTBR mice display impaired social interaction and communication as well as cognitive rigidity. Moreover, according to BrainStorm's manuscript, BTBR mice show biochemical disturbances consistent with findings seen in autistic patients, such as alterations in transcription and protein expression of brain-derived neurotrophic factor (BDNF) in the hippocampus and decreased hippocampal neurogenesis (4). 

These important findings led scientists at BrainStorm to investigate NurOwn as a potential treatment for ASD. NurOwn is MSC that express a number of neurotrophic factors, including GDNF, VEGF, HGF, and BDNF. In order to quantify the effects of NurOwn in this study, BrainStorm included a number of controls, including a sham injection (null control), normal MSCs (positive control), and normal B6 mice.

Results show that BTBR mice treated with MSCs and NurOwn demonstrate induced long-lasting effects of amelioration of autistic-like behaviors, including improved social interactions, reduced the repetitive behavior, and decreased cognitive rigidity compared to the sham injection. Imporantly, NurOwn demonstrated significant advantages over MSC transplantation in improving communication one and six months following treatment (see below) and NurOwn transplantation resulted in reduced stereotypic behavior that persisted for six months post treatment, compared to only one month observed in MSC-treated mice.

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BrainStorm's expansion of NurOwn into ASD is an intriguing opportunity. The company is still obviously focused on initiating the Phase 3 study with NurOwn for the treatment of ALS, but still to ALS, there are no truly effective pharmaceutical products for the treatment of ASD. I like the concept of trying to turn NurOwn into a platform technology for neurodegenerative diseases. In other preclinical studies, NurOwn was found efficient in treating a rat model of Parkinson’s disease (5) and a mouse model for Huntington's disease (6). 

Phase 3 ALS Study To Start Shortly

The U.S. randomized, double-blind, multi-dose, Phase 3 study is expected to commence later this year. In February 2017, the company announced that it will contract with City of Hope Center for Biomedicine and Genetics to produce clinical supplies of NurOwn for the study. City of Hope is located in Duarte, California, with community clinics throughout Southern California. City of Hope is expected to support all U.S. medical centers that will be participating in the Phase 3 trial.

Outside the U.S., management is looking at the potential for early and expanded access programs. For example, in February, the company announced it will collaborate with CCRM, a Toronto-based leader in developing and commercializing regenerative medicine technologies, and cell and gene therapies, to support the market authorization request for NurOwn in Canada.

BrainStorm and CCRM believe that NurOwn qualifies for early access in Canada under Health Canada's "Notice of Compliance with Conditions" (NOC/C) pathway, and if granted, it could be authorized for distribution in Canada in early 2018. NOC/C is designed to accelerate market authorization for new drugs targeting life-threatening or severely debilitating disease or condition for which there is promising evidence of clinical effectiveness. ALS is specifically noted by Health Canada as one of these conditions.

In February 2017, the company announced that it signed a Memorandum of Understanding (MOU) with The Medical Research, Infrastructure, and Health Services Fund of the Tel Aviv Sourasky Medical Center (Ichilov Hospital) to explore the possibility of making NurOwn available to ALS patients under the provisions of Hospital Exemption regulation. The MOU sets forth the basic terms under which Brainstorm and Tel Aviv Sourasky Medical Center would work together to submit an application to the Israeli Ministry of Health that will allow patient access to NurOwn and is subject to a definitive agreement. The agreement is expected to be formalized in the first half of 2017.

Financial Position

BrainStorm reported cash and investments on December 31, 2016, of $10.0 million. The company spent only $3.45 million on R&D in 2016 before research grants. Reported R&D was $2.25 million, meaning grant funding reimbursed approximately $1.2 million of these expenses. This is consistent with the company's press release in May 2016 noting the company was awarded a $1.47 million grant from the Israel Office of the Chief Scientist (OCS) for the investigation of NurOwn in ALS.

More importantly, I think the potential exists for additional grant funding to help support the planned U.S. Phase 3 study. Below is a snapshot from the Form 10K. Management just recently asked the OCS for $5.6 million in funds to support planned clinical activities in 2017. The OCS is expected to respond before June 30, 2017.

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Conclusion

BrainStorm’s next step in the development of NurOwn is to initiate a Phase 3 clinical study in the U.S. This will be a major milestone for the company and establish an important Catalyst for the shares once initiated. Moving NurOwn into the clinic for ASD represents another potential catalyst for the shares later this year.

The company has current Cash to begin the study and an excellent track record of bringing in non-dilutive grants to support clinical work. Warrant exercises could bring in another $26 million over the next 18 months. Additionally, the company has help a very clean Capital Structure with minimal shareholder dilution over the past few years. I'm also pleased to see the recent appointing of Dr. Ralph Kern to the position of Chief Operating Officer and Chief Medical Officer, and I believe that his presence adds significant Credibility to BrainStorm.