Brainstorm Cell Therapeutics Inc. (BCLI) Q4 2024 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals significant challenges: delayed Phase 3b trial, financial constraints, and reliance on external partners. Despite cost-cutting and a warrant inducement agreement, the cash position is weak, and substantial funding is still needed. The Q&A highlights uncertainties in trial timelines and financing. These factors, coupled with market and manufacturing risks, suggest a negative sentiment, likely leading to a stock price decline.
Key Financial Performance
Research and Development Expenditures $4.7 million (down from $10.7 million in 2023) - The decrease is attributed to cost management efforts and prioritization of key projects.
General and Administrative Expenses $7 million (down from $10.7 million in 2023) - The reduction reflects ongoing cost-cutting measures and operational efficiencies.
Net Loss $11.6 million or $2.31 per share (down from $17.2 million or $6 per share in 2023) - The improvement in net loss is due to reduced expenses in R&D and G&A.
Cash Position $0.4 million (down from $1.5 million in 2023) - The decline in cash is a result of ongoing operational expenses and funding needs for the Phase 3b trial.
Warrant Inducement Agreement Expected to raise approximately $1.64 million in gross proceeds - This is part of the company's strategy to secure funding for ongoing operations.
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Operating Highlights
NurOwn Technology Platform: The company is advancing preparations to initiate the Phase 3b trial of NurOwn, aimed at confirming its potential to significantly slow disease progression in early-stage ALS patients.
Market Positioning: The company is actively pursuing multiple funding avenues, including licensing non-core assets and exploring non-dilutive financing opportunities such as grant funding.
Clinical Trial Agreements: Negotiations are ongoing with approximately 15 leading clinical centers across the U.S. for clinical trial agreements.
Manufacturing Partnerships: The company has partnered with IQVIA for trial management and Pluri Inc. for GMP compliant production of NurOwn.
Funding Strategy: The company anticipates needing approximately $20 million to $30 million annually to complete the Phase 3b trial and is committed to securing necessary funding.
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Risk or Challenges
Regulatory Risks: The company faces risks related to regulatory compliance and the complexity of the FDA approval process for the NurOwn treatment, despite having secured a special protocol assessment.
Financial Risks: BrainStorm is under significant financial constraints, requiring $20 million to $30 million annually for the Phase 3b trial, which may be challenging to raise given the current market conditions.
Operational Risks: The company is negotiating clinical trial agreements with multiple centers, which may pose risks if not finalized promptly, potentially delaying trial execution.
Market Risks: The biotech market is currently challenging for non-revenue companies, which may impact the company's ability to secure necessary funding and partnerships.
Manufacturing Risks: The reliance on external partners for clinical trial management and manufacturing (IQVIA and Pluri Inc.) introduces risks related to operational execution and quality control.
Employee Retention Risks: Significant salary reductions among staff to manage financial constraints may affect employee morale and retention, impacting the company's operational capabilities.
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Guidance & Outlook
Phase 3b Trial Preparation: Advancing preparations to initiate the Phase 3b trial of NurOwn, focusing on patient enrollment and collaboration with ALS experts.
Regulatory Compliance: Secured a special protocol assessment from the FDA, aligning on chemistry, manufacturing, and controls.
Clinical Trial Agreements: Negotiating clinical trial agreements with approximately 15 leading clinical centers in the U.S.
Manufacturing Partnerships: Partnered with IQVIA for trial management and Pluri Inc. for GMP compliant production.
Funding Strategy: Pursuing multiple funding avenues, including licensing non-core assets and exploring non-dilutive financing opportunities.
Annual Funding Needs: Anticipate needing approximately $20 million to $30 million annually to complete the Phase 3b trial.
Market Valuation Expectations: Expect market valuation to increase as key milestones are achieved, including IND model submission and patient enrollment.
Financial Position: Cash, cash equivalents, and restricted cash were approximately $0.4 million as of December 2024.
Warrant Inducement Agreement: Expected to raise approximately $1.64 million in gross proceeds from a warrant inducement agreement.
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Shareholder Return Plan
Warrant Inducement Agreement: The company announced a warrant inducement agreement expected to raise approximately $1.64 million in gross proceeds.
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Key Q&A
Q:Can you please provide more clarity on the timeline and the reasons for the perceived delays in initiating the Phase 3b trial?
A:The perceived delays are primarily due to the intricate and time-consuming nature of updating and submitting the necessary models to the IND, which involves complex scientific and manufacturing processes. Additionally, the negotiation and finalization of clinical trial agreements with multiple sites take time.
Q:Can you elaborate on the financial situation and how you plan to secure the necessary funding for the trial?
A:We're actively pursuing multiple funding avenues, including raising approximately $1.64 million through warrant inducement and exploring licensing of non-core assets. We anticipate needing approximately $20 million to $30 million annually for the trial.
Q:How do you plan to address concerns about the efficacy of NurOwn?
A:We feel strongly about our probability of success with the Phase 3b trial, which is designed to provide definitive evidence of NurOwn's efficacy. We have strong support from key opinion leaders and are committed to providing data that will speak for itself.
Q:What is the status of the manufacturing facilities and how will you ensure a consistent supply of NurOwn?
A:We have established a robust manufacturing strategy, contracting with Pluri Inc. for clinical manufacturing and planning to bring an additional US-based manufacturing center online.
Q:How is the company ensuring operational continuity and maintaining its commitment to starting the Phase 3b trial given financial constraints?
A:We've implemented strategic cost-saving measures, including salary reductions and periods of unpaid work for senior leadership, to prioritize the trial's progress.
Q:Why don't you just refile the original BLA?
A:Refiling the BLA at this time would not be the most strategic path forward. We're focused on generating robust data required by the FDA through the Phase 3b trial.
Q:Can you speak about your thoughts on the changing environment in the cell therapy space?
A:We try to stay away from the political limelight and focus on scientific data. We believe that all parties would support good scientific results.
Q:Should the prior Phase 3 data be used to support the Phase 3b if you're able to complete that trial and file a BLA?
A:Yes, the previous data will support the next Phase 3b trial, specifically in the early disease population.
Q:Is there an ongoing effort to open a manufacturing facility in the US?
A:Yes, we are working on a site that's ready for inspection by the FDA to get commercialized as soon as possible.
Q:What percentage of financing do you want to have in place before you're comfortable with getting the trial started?
A:We are having discussions with partners and believe they see the upside of this product. We have other funding in the pipeline that we cannot discuss at this time.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the specific percentage of financing needed before starting the trial and the timeline for enrolling the first patient after funding is secured.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ALS patient
BrainStorm Cell
Chaim President
Chief Financial
Chief Medical
Chief Officer
Dr EVP
EVP Chief
Executive Vice
Financial Officer
IND
Medical Officer
NurOwn potential
Officer Chief
Officer Executive
President Chief
Vice President
agreement
application
belief NurOwn
capability
cash
compliance
dedication
enrollment
expertise
financing
funding
interest
milestone
model
production
quality
relationship
stem cell
submission
therapy trial
transfer
trial IQVIA
trial NurOwn
trial manufacturing
BCLI Transcript
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The earnings call reveals significant financial constraints, with only $0.4 million in cash and an annual funding need of $20-$30 million. Despite positive regulatory milestones and strategic partnerships, the company's financial health is precarious, and funding is critical to trial commencement. The Q&A highlights concerns about funding and manufacturing capacity, with management providing unclear responses. The negative financial outlook and uncertainties in trial execution and funding overshadow positive developments, suggesting a negative stock price reaction.
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BCLI Report
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