This level of disease stabilization has not been observed to this date in approved or investigational ALS therapies.

- Mr. Chaim Lebovits, CEO, Brainstorm Cell Therapeutics

In May of this year, I published an article on Brainstorm Cell Therapeutics (BCLI). This small company is developing a mesenchymal stem cell product called NurOwn, which is in late phase 3 trials targeting amyotrophic lateral sclerosis (ALS) or Lou Gehrig's disease. My article was bearish, deploring not only the company's cash position but also phase 2 trial data. The article can be read here.

That article received a lot of critical comments from the ALS community. That made me realize that a fair overview of the issues could be best addressed by going through the comments, as well as my own coverage, and by asking BCLI management, specifically its CEO, Chaim Lebovits, to clarify some of these issues. So, that's what I did. I emailed a set of 11 questions to Mr. Lebovits, and he was kind enough to respond to them in great detail. The entire interview, sans any edits, is available to Total Pharma Tracker members.

Mr. Lebovits has been with BCLI for well over 12 years, joining in 2007 as president and also becoming the CEO in 2015. He has helped develop NurOwn through its preclinical stage to its current stage and is, therefore, just the right person to talk to if we want to understand NurOwn and BCLI.

I began by asking him to locate NurOwn in the ALS therapy space and where it stands with respect to competitors. What's its mechanism of action, and how does that MOA distinguish it from the competition?

Mr. Lebovits said that there are "currently 4 products active in phase 3 ALS clinical trials (Brainstorm (NurOwn, autologous MSC-NTF cells secreting neurotrophic factors), Orion (levosimendan, muscle troponin calcium sensitizer), Orphazyme (arimochlomol, heat shock protein enhancer), and Biogen (SOD1, antisense oligonucleotide)." Top-line data from these ALS phase 3 trials is expected in 2020 (Q4 2020 for Brainstorm) and Orion, 2021 (Orphazyme), and 2022 (Biogen). He discussed a number of earlier-stage compounds as well as various stem cell therapies. He said that what distinguishes NurOwn among ALS therapies is that it "confers both neuroprotection and immunomodulation by delivering neuronal survival factors and immune regulatory molecules, including microRNA directly to the CNS compartment at or near the site of disease, and therefore directly addresses two important ALS disease mechanisms."

Among stem cell therapies, Mr. Lebovits said that NurOwn distinguishes itself by being autologous and because it can produce high levels of neurotrophic factors. Moreover, unlike most stem cell competitors, it's delivered directly into the spinal fluid through bimonthly lumbar punctures, unlike others that need an invasive surgical procedure "that carries considerable morbidity."

This feature it shares with a competing product from Corestem. However, it's differentiated from Corestem because "NurOwn is more convenient than the Corestem product as a single bone marrow cell harvest due to validated cryopreservation, whereas the Corestem product requires repeat bone-marrow aspiration for each treatment."

My next question was a technical question about pharmacoresistance. I wanted to know how NurOwn is managing to cross the blood-spinal cord barrier despite the strong pharmacoresistance (body's resistance to drugs) seen in ALS, specifically for disease-modifying neurotrophic factors. What was it about NurOwn's delivery mechanism that the company thinks is overcoming this natural resistance. So I asked: "Talking about MOA, pharmacoresistance is a disease driving mechanism in ALS. Can you discuss NurOwn's delivery mechanism vis-a-vis the inability of neurotrophic factors to effectively cross the blood-brain barrier, or, specifically, the blood-spinal cord barrier (BSCB)? Please correlate that discussion regarding the observed increase in CSF NTFs post-treatment as seen in the phase 2 trial."

Mr. Lebovits explained this with great clarity - for his entire response, take a look at the complete interview. Broadly, what he said was that NurOwn, being delivered through lumbar puncture directly into the spinal fluid, has an advantage. Moreover, the cells secrete neuronal survival factors as well as molecules that regulate the immune system, so that they are able to survive and overcome the pharmacoresistance. Systemically administered NTFs are unable to do that.

As he said, "In the phase 2 trial, CSF biomarkers obtained just prior to treatment and two weeks afterward demonstrated that MSC-NTF cell-secreted neurotrophic factors were significantly increased post-treatment and correlated with the reduction in inflammatory biomarkers, consistent with the proposed mechanism of action."

My third and fourth questions related to aspects of the phase 2 study. One, comparison of safety and efficacy data with competitors, and two, the relevance of the reported caspase-3 reduction of 60% in responders versus 30% in non-responders.

Mr. Lebovits said that although the phase 2 study was not powered for efficacy, it exhibited a "level of disease stabilization (that) has not been observed to this date in approved or investigational ALS therapies." About the ongoing phase 3 study, he said the following:

Those who read my original article will recall I was particularly puzzled by the increased occurrence of serious adverse events in active-treatment groups than in placebo groups. 8/36 or 22.2% patients in the treatment arm had an SAE compared to only one out of 12 placebo patients, or 8.3%. Most SAEs were related to the progression of the underlying ALS, most commonly dysphagia. No SAEs were related to study treatment. So I asked Mr. Lebovits how this data could be interpreted in the most positive way.

According to him, this decline was not an effect of treatment itself and simply indicated the need for repeat dosing in this patient group. His exact response was as follows:

The MSC-NTF treated group had a slightly more rapid rate of decline compared to the placebo group in the three-month run-in period and most ALS disease progression in the treated group was seen toward the end of the clinical trial, long after a single transplantation. In fact, the bulbar subscale, that includes assessment of swallowing, was the subscale most improved after MSC-NTF treatment in rapid progressors, suggesting that the late decline in motor function was not an adverse effect of treatment per se. Hence the need for repeated dosing.

Last week, the DSMB recommended continuation of the phase 3 trial without any modification. This was major good news, so we asked him about this. Mr. Lebovits said that this was a second interim safety review, and there were no significant safety concerns. Therefore, the DSMB recommended no modification in protocol and no other interim analysis is planned. Phase 3 data will be available by mid-2020 according to this interviewer's reading of the press release.

Now we moved on to another critical aspect of our analysis - funds, or rather, the lack of it. Since this is an important issue, here's the exact exchange we had.

Dr. Ashok Dutta: How does the company plan to fund its operations through the next couple years until the lead development candidate is approved and commercialized? Given the weak financial position, does Brainstorm see the possibility for ATM operations, or thinks about selling rights in regions like China, Japan or Europe to increase the financial condition?

CEO Chaim Lebovits: As you are aware we do receive proceeds from the hospital exemption pathway and also receive grant funding from CIRM and IIA. These avenues have allowed to fund and continue with our trials over the years with non-dilutive financing. From a business standpoint as our ALS phase 3 trial is now fully enrolled, the management team continues to hold high level conversation with some of the leading global pharmaceutical and biotechnology companies. We are actively engaged in strategic partnering and collaboration discussions and although we cannot disclose the details of our conversations due to NDAs we signed with them... we are exploring several opportunities with key interested parties to advance the opportunities for NurOwn development and commercialization. As you have rightly pointed out, we have a $20mm ATM facility in place with Raymond James. We may activate the ATM as required and raise up to $20mm by selling our stock "at the market" only if the prices are attractive to us. So far as of end of Q3'19, we have not activated the ATM. If the need arises and the prices are attractive to us, we may employ this tool to raise capital.

This is reassuring that the company intends to focus on non-dilutive financing. The ATM facility, coupled with the grants, should ideally see them through the approval phase. We still wonder how they will manage marketing and sales. Perhaps those commercialization NDAs they have signed will help.

Next, we discussed market potential and a question about a recent patent grant. The CEO's detailed responses can be found in the complete interview material.

The strong involvement of the ALS community impressed us previously, so we now asked the CEO about the recent roundtable convention they had with ALS advocacy groups. Since this will be important for the ALS community as a whole, here's Mr. Lebovits' entire response on the question:

Finally, we asked him what we ask everyone: Give us three simple and straightforward reasons why investors would be interested. Here's what he said:

Thanks to the ALS community for inspiring us to conduct this interview, and to Mr. Chaim Lebovits, CEO of Brainstorm Cell Therapeutics, for answering our questions.

Thanks for reading. At the Total Pharma Tracker, we interview management of important small biotech doing disruptive work in healthcare. Our members are given exclusive access to these interviews, which helps them with additional primary resource in doing DD on their investments. Sometimes, extracts from these interviews may be published for everyone; but TPT members always get the exclusive view.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: General Disclaimer - This is to confirm that Avisol Capital Partners has neither requested, nor been offered, any monetary compensation for conducting this interview, by any party other than Seeking Alpha.

Also to be noted, this was an emailed questionnaire, and certain editorial material is present in this version, which may or may not reflect BCLI or its CEO's position on the issues discussed.

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Interview With Chaim Lebovits, CEO Of Brainstorm Cell Therapeutics - Seeking Alpha