BrainStorm Cell Therapeutics, CFO Dudy Stolick Interview by EricDavid & Sons, Inc (OTCBB:BCLI)
EDS: Tell us about the science technology at work here and what truly separates Brainstorm from other competitors in this field?
BrainStorm‘s scientific team, led by Prof. Eldad Melamed and Dr. Daniel Offen from Tel-Aviv University, have successfully differentiated, in vitro, human bone marrow stem cells into dopaminergic–like and glial-like cells that produce neurotrophic factors.
We have also demonstrated long term survival of the cells and remarkable therapeutic benefit after transplantation of the dopaminergic–like cells into animal models of Parkinson Disease (PD). Implantation of the neural-like cells into brains of PD model mice and rats reduced their motor symptoms by more than 80%.
Compared to our competitors, BrainStorm has been the first to show that bone marrow cells can be differentiated into neuron-like cells that produce dopamine and GDNF, and…when implanted in mice and rats, show long term survival and function and demonstrate the ability of the implanted cells to reverse Parkinson’s behavioral symptoms in animal over the long term.
Further, as a Company that focuses on adult stem cell research, we enjoy a number of advantages compared to companies that focus their research on embryonic stem cells. The advantages include an easily harvestable source of stem cells (one’s own bone marrow), no ethical issues, the lack of tumor formation (as seen in embryonic cells), and the lack of cell rejection because our procedure is based on autologous (or self) transplantation.
EDS: What are the potential areas that we should watch for in terms of understanding clinical development?
BrainStorm is targeting adult stem cell therapy for neurodegenerative diseases based on our exclusive worldwide rights to use and commercialize the technology that we have licensed from Ramot at Tel-Aviv University.
The therapeutic concept comprises deriving bone marrow from the patient, isolating the stem cells, differentiating the cells into neuronal–like cells, and transplanting the differentiated cells into the patient. Based on our technology, BrainStorm focuses on Parkinson Disease and ALS, and believes the autologous transplantation approach will accelerate the path to clinical trials.
The potential market of neurodegenerative diseases and, Parkinson’s in particular, is extremely large. It is valued at $20 Billion for Parkinson Disease, ALS and Multiple Sclerosis.
EDS: What initiatives have you enacted to ensure success?
We are driving forward three initiatives in parallel:
1. We are working to reinforce our intellectual property. We have three patents applications in different stages of development. First, the patent covering our methods of generating neural cells that produce dopamine from bone marrow got PCT in 2003 and is now entering national phase. A second patent, covering our methods of generating GDNF-producing astrocytes from bone marrow, was filed last year and is expected to be in PCT this June. The third provisional patent was filed in December 2005 and is aimed at treating Multiple Sclerosis.
2. We have raised $2.6 Million in equity and loans, appointed an outstanding scientific advisory board, and recruited the best employees in the field in order to help us rapidly achieve our goals.
3. The Company is currently negotiating agreements with key service providers and consultants, such as an FDA regulatory consultant, a safety study consultant, a spoke person for the Company in US, and a business development person in both Europe and the US so that we may expedite achieving our goals.
EDS: What are your thoughts on making this a reality?
We are moving as quickly as possible to lay the groundwork for our first clinical trial. That means that we are focused on three major objectives: first, the Company is defining the scale-up process of extracting stem cells from bone marrow and then consistently differentiating them into dopaminergic-like neurons for transplantation. We are also determining the most efficient and effective process for storing and delivering the differentiated cells to clinical centers where the transplantations will take place. Third, we need to conduct a full safety study of the final product and address any FDA concern before we enter clinical trials.
EDS: In terms of moving through the clinical process, how would you outline the timeline?
We estimate that we will start clinical trials in patients with Parkinson Disease and ALS in 12 to 18 months. We think that within 3 to 4 years we will be able to commercialize the product.
EDS: In terms of competitors in your peer group, how would you compare and contrast BrainStorm to the other companies engaged in the field of adult stem cell therapies?
As I mentioned, as far as we know, the Company is the first to have shown differentiation of bone marrow cells to neuron-like cells that produce dopamine and GDNF. Based on the Company's treatment protocol, which uses the patient’s own cells, we think we have very meaningful advantages. We have shown efficacy and tenability of the cells for long periods. Thus, we think we are in a very good position compared to our competitors. If you combine our technology with our business model—which shares the Company’s profit with the medical centers, the surgeons and insurance companies—I think we are in a very good position compared to our peer group to deliver in the marketplace.
EDS: Is the company's progress thus far understood by the investment community and what are the company's needs for capital developments?
Recently, we have begun to invest efforts to reach the investment community. We feel that, although we have great science and have achieved astounding preclinical breakthroughs, the investment community doesn’t yet know about the company. We are in need of approximately $12 Million to reach the commercialize point.
We are now focusing our efforts to raise $3.5 Million to enable the Company to get ready for clinical trials, and in the second phase, we’ll look for another $8.5 Million to conduct the clinical trials and establish the commercial product. In order to raise this amount of capital, the Company must be sure that the investment community is aware of our potential in the marketplace.
EDS: When talking about the company from a pure stem cell play to those out there following the story, what are the most compelling reasons to get involved in the company today?
I think there are three primary reasons:
1. We are addressing a huge potential market. We are talking about a $20 Billion market in Parkinson Disease, ALS and MS …and we assume that BrainStorm’s potential is to cover 25 to 30% of this market value.
2. We are focused, focused, focused on quickly getting our technology into clinical trials in patients with devastating neurodegenerative diseases. We think our technology promises to be a breakthrough in treatment; we have good IP; and we are, as a group, driven to move research from the bench to the marketplace.
3. Because we are using the patient’s own bone marrow stem cells, we solve the ethical problems that plague embryonic stem cell research. But not only do we circumvent the moral issues (and the delays they are creating in moving research to clinical trials), we believe we offer a better treatment for patients because rejection will not be a problem and there is an easily harvestable supply of the patient’s own cells.
EDS: What is the structure of your stock? The authorized and outstanding shares along with the estimated public float?
The company has 200 millions authorized common shares.
We have 22.8 million outstanding common shares along with an estimated 3.7 million public float. Also, Ramot—the commercialization company of Tel-Aviv University—and the consultants have about 14 million warrant to purchase the Company’s common shares at a purchase price of $0.1.
The stock price at $0.51 currently, presenting a $11.5 Million market value or a $19 Million market value on a fully diluted basis.
15.7 M shares and warrants are under voluntary lock up agreement.
EDS: What % of insiders own the stock?
Directors and officers hold about 13% of the outstanding shares. About 10% is held by one director. Ramot and the leading research team owns about 30% of the shares in a fully diluted basis.
EDS: Is there anything else you would like to add?
Yes, I want to say that the Company's staff are working very hard to give the millions of people who suffer from these devastating diseases a hope for a cure, and I allow myself to quote Professor Melamed, our Chief Medical Advisor, who is passionate when he says " I want to see a cure for Parkinson’s and ALS in my life time."
Interview conducted by Steven J. Weiss President & SR Market analyst for EricDavid & Sons, Inc.
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